SENATE BILL REPORT
SB 5203
BYSenators 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
Majority Report: That Substitute Senate Bill No. 5203 be substituted therefor, and the substitute bill do pass and be referred to Committee on Ways & Means.
Signed by Senators Lee, Chairman; Anderson, Vice Chairman; Murray, Saling, Smitherman, Warnke, West, Williams.
Senate Staff:Jonathan Seib (786-7427)
January 26, 1989
Senate Committee on Ways & Means
Senate Hearing Date(s):March 6, 1989
Majority Report: That Second Substitute Senate Bill No. 5203 be substituted therefor, and the second substitute bill do pass.
Signed by Senators McDonald, Chairman; Craswell, Vice Chairman; Amondson, Bailey, Bluechel, Cantu, Fleming, Hayner, Johnson, Lee, Matson, Newhouse, Saling, Williams.
Senate Staff:Lynn French (786-7715)
March 7, 1989
AS REPORTED BY COMMITTEE ON WAYS & MEANS, MARCH 6, 1989
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 applicant organization and its capacity to be a program administrator, and 2) 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 $5,000. It must report annually to the committee on the progress and status of its program.
EFFECT OF PROPOSED SUBSTITUTE:
"Low income individuals" means those eligible for welfare and those whose income is no greater than 50 percent of their county's median income. Applications to the committee must describe the need for a self-employment program in the particular community. Organizations are to charge a reasonable rate of interest on loans from program funds. The appropriation to the Department of Community Development is increased from $625,000 to $650,000 and the portion of that which the department may use for program administration is increased from $25,000 to $50,000.
EFFECT OF PROPOSED SECOND SUBSTITUTE:
The loan amount that may be made to any individual is limited to $1,000 and the total appropriation from the public facility construction loan account is reduced from $650,000 to $40,000.
Appropriation: $40,000
Revenue: none
Fiscal Note: available
Senate Committee - Testified: ECONOMIC DEVELOPMENT & LABOR: Meg Van Schoorl, DCD; PRO: Emily Duncan, Snohomish County PIC; Patricia Cristy, self-employed person; Donald Comstock, WACED; Sondra Kornblatt, Puget Sound Cooperative Federation; Roger Yoekey, WACED (Genesis Fund)
Senate Committee - Testified: WAYS & MEANS: No one