SENATE BILL REPORT

2SSB 5203

BYSenate Committee on Ways & Means (originally sponsored by Senators Anderson and Lee)

Establishing the Washington state self-employment loan program.

Senate Committee on Economic Development & Labor

Senate Hearing Date(s):January 18, 1989; January 26, 1989; January 18, 1990; January 23, 1990

Majority Report:  That Third Substitute Senate Bill No. 5203 be substituted therefor, and the third substitute bill do pass.

      Signed by Senators Lee, Chairman; Anderson, Vice Chairman; McMullen, Matson, Murray, Saling, Smitherman, Warnke, West, Williams.

Senate Staff:Jonathan Seib (786-7427)

                  January 23, 1990

AS REPORTED BY COMMITTEE ON ECONOMIC DEVELOPMENT & LABOR, JANUARY 23, 1990

BACKGROUND:

Beginning in the early 1980's, a number of programs were developed in this country and throughout the world based on the assumption that some low income persons, many dependent on traditional welfare programs, have the potential for self-sufficiency through self-employment.  These programs suggest that appropriate training and minimal financial assistance can help those possessing such potential.  The Washington Department of Employment Security is involved in a federal Department of Labor demonstration project to assist unemployed persons in establishing their own business.  No program exists to build this capacity on the local level.

SUMMARY:

The self-employment loan program committee is established in the Department of Community Development.  The committee will solicit and approve applications for funds from local development organizations to use as a revolving loan fund to finance the small businesses of low income persons.

The committee will award funds to local organizations on a competitive basis.  Applications to the committee must include: 1) a detailed description of the need for a self-employment program in the particular community; 2) a detailed description of the applicant organization and its capacity to administer a program; and 3) a detailed description of the loan procedure and the self-employment training and support program into which the loan fund will be incorporated.

The committee may not approve any application for greater than $60,000.  The committee may grant up to two awards to a single organization, but only one per biennium.  The committee may withdraw an award if an organization fails to meet the purposes of the act.  It must report biannually to the Legislature on the progress and status of the overall program.

An organization may provide loans from awarded funds of no greater than $1,000.  It must report annually to the committee on the progress and status of its program.

EFFECT OF PROPOSED SUBSTITUTE:

Organizations are allowed to provide loans from awarded funds of no greater than $5,000.

The appropriation of $40,000 is stricken.  If funding is not provided by June 30, 1990 in the omnibus supplemental appropriations, the act will be null and void.

Appropriation:    none

Revenue:    none

Fiscal Note:      available

Senate Committee - Testified: Janet Threat, Snohomish County Private Industry Council; Carol Bergin, Puget Sound Cooperative Federation