Establishes the microenterprise development act to assist very small businesses and low-income business people; appropriates funds therefor.
TITLE OF BILL: An act to amend the economic development law, in relation to microenterprise development; and making an appropriation therefor
PURPOSE OR GENERAL IDEA OF BILL: Establishes the microenterprise development act to assist very small businesses and low-income entrepreneurs.
SUMMARY OF SPECIFIC PROVISIONS: This bill amends the economic development law by adding a new article 9-B. Section 217(a) provides definitions for terms. Section 217(b) (1) requires the commissioner of the department of economic development to establish a grant program for microenterprise technical assistance. In addition, it mandates an annual appropriation of no less than one million dollars. Subparagraph (2) establishes that the organizations receiving funding shall use the grants to provide training and technical assistance to the microenterprise entrepreneurs. Subparagraph (3) provides that not less than fifty percent of the funds made available are used to benefit person whose income is not more than 150% of the poverty line as defined in 42 use 9902(2). Subparagraph (4) requires the training organizations to have received at least one dollar in matching funds for every dollar received from the state. Section 4 of the legislation requires an initial allocation of $1.5 million.
JUSTIFICATION: Development and expansion of businesses in economically distressed communities in both rural and urban areas can assist residents who are unemployed, underemployed or in low-income jobs. Microenterprises are an important factor is addressing this need for development. However, many low-income entrepreneurs lack access to capital, training and technical assistance. This legislation will provide vital funding to local support organizations that can leverage charitable foundation and private sector support, to provide the much needed these entrepreneurs with vital assistance.
The recent awarding of the Nobel Peace Prize to Muhammad Yunus, a pioneer in microfinancing, has brought attention to the lack of financing for these well deserving businesses. An estimated 22 million micro enterprises operate throughout the country, and provide 18% of all private U.S. employment. This legislation will strengthen the state economy by enabling new businesses and giving them the tools needed to succeed.
PRIOR LEGISLATIVE HISTORY: 2011-12: S.4204 Referred to Finance 2009-10: A.1639 Referred to Economic Development 2007-08: Referred to Economic Development
FISCAL IMPLICATIONS: $1.5 million appropriation.
This act shall take effect on the first of July next succeeding the date on which it shall have become law.
STATE OF NEW YORK ________________________________________________________________________ 1224 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________Introduced by Sen. PERKINS -- read twice and ordered printed, and when printed to be committed to the Committee on Finance AN ACT to amend the economic development law, in relation to microenter- prise development; and making an appropriation therefor THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Short title. This act shall be known and may be cited as the "microenterprise development act". S 2. Legislative findings and purpose. (a) The legislature finds as follows: 1. Development and expansion of businesses in economically distressed communities in both rural and urban areas can assist residents who are unemployed, underemployed or in low-income jobs. 2. Microenterprises provide a means for unemployed, underemployed or low-income individuals to find and sustain productive work, and they provide opportunities for economically distressed communities to thrive. 3. Low-income microentrepreneurs lack access to capital, training and technical assistance. Many low-income microentrepreneurs need lending services and technical assistance to start, operate or expand their businesses. 4. Local microenterprise support organizations have demonstrated cost- effective delivery methods for providing lending services and technical assistance. 5. Charitable foundation support, federal program funding and private sector support can be leveraged by a statewide program for development of microenterprises. (b) The purpose of this act is to strengthen the state economy and enable low-income residents to become self-sufficient by encouraging microenterprise development. S 3. The economic development law is amended by adding a new article 9-B to read as follows: ARTICLE 9-B MICROENTERPRISE DEVELOPMENTEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD04143-01-3 S. 1224 2
SECTION 217. MICROENTERPRISE DEVELOPMENT. S 217. MICROENTERPRISE DEVELOPMENT. (A) AS USED IN THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS: 1. "COMMISSIONER" MEANS THE COMMISSIONER OF THE DEPARTMENT OF ECONOMIC DEVELOPMENT. 2. "MICROENTERPRISE" MEANS A SOLE PROPRIETORSHIP, PARTNERSHIP, OR CORPORATION THAT HAS FEWER THAN FOUR EMPLOYEES AND GENERALLY LACKS ACCESS TO CONVENTIONAL LOANS, EQUITY, OR OTHER BANKING SERVICES. 3. "MICROENTERPRISE DEVELOPMENT ORGANIZATION" OR "MICROENTERPRISE DEVELOPMENT PROGRAM" MEANS A NONPROFIT ENTITY OR A PROGRAM ADMINISTERED BY SUCH AN ENTITY, INCLUDING COMMUNITY DEVELOPMENT CORPORATIONS OR OTHER NONPROFIT DEVELOPMENT ORGANIZATIONS AND SOCIAL SERVICE ORGANIZATIONS, THAT PROVIDES SERVICES TO LOW-INCOME MICROENTERPRISES. 4. "TRAINING AND TECHNICAL ASSISTANCE" MEANS SERVICES AND SUPPORT PROVIDED TO LOW-INCOME OWNERS AND OPERATORS OF MICROENTERPRISES, SUCH AS ASSISTANCE FOR THE PURPOSE OF ENHANCING BUSINESS PLANNING, MARKETING MANAGEMENT, FINANCIAL MANAGEMENT SKILLS, AND ASSISTANCE FOR THE PURPOSE OF ACCESSING FINANCIAL SERVICES. 5. "LOW-INCOME PERSON" MEANS A PERSON WITH INCOME ADJUSTED FOR FAMILY SIZE THAT DOES NOT EXCEED: A. FOR METROPOLITAN AREAS, EIGHTY PERCENT OF MEDIAN INCOME; OR B. FOR NONMETROPOLITAN AREAS, THE GREATER OF EIGHTY PERCENT OF THE AREA MEDIAN INCOME OR EIGHTY PERCENT OF THE STATEWIDE NONMETROPOLITAN AREA MEDIAN INCOME. (B) 1. THE COMMISSIONER SHALL ESTABLISH A MICROENTERPRISE TECHNICAL ASSISTANCE AND CAPACITY BUILDING GRANT PROGRAM, WHICH SHALL RECEIVE AN ANNUAL APPROPRIATION FROM THE LEGISLATURE OF NO LESS THAN ONE MILLION DOLLARS, TO PROVIDE ASSISTANCE IN THE FORM OF GRANTS TO MICROENTERPRISE DEVELOPMENT ORGANIZATIONS. 2. A MICROENTERPRISE DEVELOPMENT ORGANIZATION SHALL USE GRANTS MADE UNDER THIS PROGRAM TO PROVIDE TRAINING AND TECHNICAL ASSISTANCE TO LOW- INCOME ENTREPRENEURS OPERATING MICROENTERPRISES. 3. THE COMMISSIONER SHALL ENSURE THAT NOT LESS THAN FIFTY PERCENT OF THE FUNDS MADE AVAILABLE ARE USED TO BENEFIT PERSONS WHOSE INCOME, ADJUSTED FOR FAMILY SIZE, IS NOT MORE THAN ONE HUNDRED FIFTY PERCENT OF THE POVERTY LINE AS DEFINED IN 42 U.S.C. 9902(2). 4. A MICROENTERPRISE DEVELOPMENT ORGANIZATION MUST PROVIDE AT LEAST ONE DOLLAR IN MATCHING FUNDS FOR EVERY DOLLAR OF STATE FINANCIAL ASSIST- ANCE. FEES, GRANTS, AND GIFTS FROM PUBLIC OR PRIVATE SOURCES MAY BE USED TO COMPLY WITH THE MATCHING FUNDS REQUIREMENT. 5. THE COMMISSIONER SHALL ESTABLISH BY REGULATION SUCH REQUIREMENTS AS MAY BE NECESSARY TO CARRY OUT THE PROVISIONS OF THIS SECTION. S 4. The sum of one million five hundred thousand dollars ($1,500,000), or so much thereof as may be necessary, is hereby appro- priated to the department of economic development out of any moneys in the state treasury in the general fund to the credit of the state purposes account, not otherwise appropriated, and made immediately available, for the purpose of carrying out the provisions of this act. Such moneys shall be payable on the audit and warrant of the comptroller on vouchers certified or approved by the commissioner of economic devel- opment, or his or her designee, in the manner prescribed by law. S 5. This act shall take effect on the first of July next succeeding the date on which it shall have become a law.