110th CONGRESS
1st Session
S. 566
To amend the Consolidated Farm and Rural Development Act to establish
a rural entrepreneur and microenterprise assistance program.
IN THE SENATE OF THE UNITED STATES
February 13, 2007
Mr. NELSON of Nebraska (for himself and Mr. SALAZAR) introduced the following
bill; which was read twice and referred to the Committee on Agriculture,
Nutrition, and Forestry
A BILL
To amend the Consolidated Farm and Rural Development Act to establish
a rural entrepreneur and microenterprise assistance program.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Rural Entrepreneur and Microenterprise Assistance
Act'.
SEC. 2. RURAL ENTREPRENEUR AND MICROENTERPRISE ASSISTANCE PROGRAM.
Subtitle D of the Consolidated Farm and Rural Development Act is amended
by inserting after section 364 (7 U.S.C. 2006f) the following:
`SEC. 365. RURAL ENTREPRENEUR AND MICROENTERPRISE ASSISTANCE PROGRAM.
`(a) Definitions- In this section:
`(1) ECONOMICALLY DISADVANTAGED MICROENTREPRENEUR- The term `economically
disadvantaged microentrepreneur' means an owner, majority owner, or developer
of a microenterprise that has the ability to compete in the private sector
but has been impaired because of diminished capital and credit opportunities,
as compared to other microentrepreneurs in the industry.
`(2) INDIAN TRIBE- The term `Indian tribe' has the meaning given the term
in section 4 of the Indian Self-Determination and Education Assistance
Act (25 U.S.C. 450b).
`(3) INTERMEDIARY- The term `intermediary' means a private, nonprofit
entity that provides assistance--
`(A) to a microenterprise development organization; or
`(B) for a microenterprise development program.
`(4) LOW-INCOME INDIVIDUAL- The term low-income individual means an individual
with an income (adjusted for family size) of not more than the greatest
of--
`(A) 80 percent of median income of an area;
`(B) 80 percent of the statewide non-metropolitan area median income;
or
`(C) 80 percent of the national median income.
`(5) MICROCREDIT- The term `microcredit' means a business loan or loan
guarantee of not more than $50,000 that is provided to a rural entrepreneur.
`(6) MICROENTERPRISE- The term `microenterprise' means--
`(A) a sole proprietorship; or
`(B) a business entity with not more than 10 full-time-equivalent employees.
`(7) MICROENTERPRISE DEVELOPMENT ORGANIZATION-
`(A) IN GENERAL- The term `microenterprise development organization'
means a private, nonprofit entity that--
`(i) provides training and technical assistance to rural entrepreneurs;
and
`(ii) facilitates access to capital or another service described in
subsection (b) for rural entrepreneurs.
`(B) INCLUSIONS- The term `microenterprise development organization'
includes an organization described in subparagraph (A) with a demonstrated
record of delivering services to economically disadvantaged microentrepreneurs,
or an effective plan to develop a program to deliver microenterprise
services to rural entrepreneurs effectively, as determined by the Secretary.
`(8) MICROENTERPRISE DEVELOPMENT PROGRAM- The term `microenterprise development
organization' means a program administered by an organization serving
a rural area.
`(9) MICROENTREPRENEUR- The term `microentrepreneur' means the owner,
operator, or developer of a microenterprise.
`(10) PROGRAM- The term `program' means the rural entrepreneur and microenterprise
program established under subsection (b)(1).
`(11) QUALIFIED ORGANIZATION- The term `qualified organization' means--
`(A) a microenterprise development organization or microenterprise development
program that has a demonstrated record of delivering microenterprise
services to rural entrepreneurs, or an effective plan to develop a program
to deliver microenterprise services to rural entrepreneurs effectively,
as determined by the Secretary.
`(B) an intermediary that has a demonstrated record of delivery assistance
to microenterprise development organizations or microenterprise development
programs;
`(C) a microenterprise development organization or microenterprise development
program that serves rural entrepreneurs;
`(D) an Indian tribe, the tribal government of which certifies to the
Secretary that no microenterprise development organization or microenterprise
development program exists under the jurisdiction of the Indian tribe;
`(E) a group of 2 or more organizations or Indian tribes described in
any of subparagraphs (A) through (D) that agree to act jointly as a
qualified organization under this section; or
`(F) for purposes of subsection (b), a public college or university.
`(12) RURAL AREA- The term `rural area' means any community that is rural
in character and has a population of not more than 25,000 individuals.
`(13) RURAL CAPACITY BUILDING SERVICE- The term `rural capacity building
service' means a service provided to an organization that--
`(A) is, or is in the process of becoming, a microenterprise development
organization or microenterprise development program; and
`(B) serves rural areas for the purpose of enhancing the ability of
the organization to provide training, technical assistance, and other
related services to rural entrepreneurs.
`(14) RURAL ENTREPRENEUR- The term `rural entrepreneur' means a microentrepreneur,
or prospective microentrepreneur--
`(A) the principal place of business of which is in a rural area; and
`(B) that is unable to obtain sufficient training, technical assistance,
or microcredit elsewhere, as determined by the Secretary.
`(15) SECRETARY- The term `Secretary' means the Secretary of Agriculture,
acting through the Rural Business-Cooperative Service.
`(16) TRIBAL GOVERNMENT- The term `tribal government' means the governing
body of an Indian tribe.
`(b) Rural Entrepreneurship and Microenterprise Program-
`(1) ESTABLISHMENT- The Secretary shall establish a rural entrepreneurship
and microenterprise program.
`(2) PURPOSE- The purpose of the program shall be to provide low-income
individuals and moderate-income individuals with--
`(A) the skills necessary to establish new small businesses in rural
areas; and
`(B) continuing technical and financial assistance as individuals and
business starting or operating small businesses.
`(A) IN GENERAL- The Secretary may make a grant under the program to
a qualified organization--
`(i) to provide training, operational support, or a rural capacity
building service to a qualified organization to assist the qualified
organization in developing microenterprise training, technical assistance,
market development assistance, and other related services, primarily
for business with 5 or fewer full-time-equivalent employees;
`(ii) to assist in researching and developing the best practices in
delivering training, technical assistance, and microcredit to rural
entrepreneurs; and
`(iii) to carry out such other projects and activities as the Secretary
determines to be consistent with the purposes of this section.
`(B) SUBGRANTS- Subject to such regulations as the Secretary may promulgate,
a qualified organization that receives a grant under this paragraph
may use the grant to provide assistance to other qualified organizations,
such as small or emerging qualified organizations.
`(C) DIVERSITY- In making grants under this paragraph, the Secretary
shall ensure, to the maximum extent practicable, that grant recipients
include qualified organizations--
`(i) of varying sizes; and
`(ii) that serve racially- and ethnically-diverse populations.
`(i) FEDERAL SHARE- The Federal share of the cost of a project carried
out using funds from a grant made under this paragraph shall be 75
percent.
`(ii) FORM OF NON-FEDERAL SHARE- The non-Federal share of the cost
of a project described in clause (i) may be provided--
`(I) in cash (including through fees, grants (including community
development block grants), and gifts); or
`(4) RURAL MICROLOAN PROGRAM-
`(A) ESTABLISHMENT- In carrying out the program, the Secretary may carry
out a rural microloan program.
`(B) PURPOSE- The purpose of the rural microloan program shall be to
provide technical and financial assistance to sole proprietorships and
small businesses located in rural areas with a particular focus on those
businesses with 5 or fewer full-time equivalent employees.
`(C) AUTHORITY OF SECRETARY- In carrying out the rural microloan program,
the Secretary may--
`(i) make direct loans to qualified organizations for the purpose
of making short-term, fixed interest rate microloans to startup, newly
established, and growing rural microbusiness concerns; and
`(ii) in conjunction with those loans, provide grants in accordance
with subparagraph (E) to those qualified organizations for the purpose
of providing intensive marketing, management, and technical assistance
to small business concerns that are borrowers under this paragraph.
`(D) LOAN DURATION; INTEREST RATES; CONDITIONS-
`(i) LOAN DURATION- A loan made by the Secretary under this paragraph
shall be for a term of 20 years.
`(ii) APPLICABLE INTEREST RATES- A loan made by the Secretary under
this paragraph to a qualified organization shall bear an annual interest
rate of at least 1 percent.
`(iii) DEFERRAL OF INTEREST AND PRINCIPAL- The Secretary may permit
the deferral of payments, for principal and interest, on a loan made
under this paragraph for a period of not more than 2 years, beginning
on the date on which the loan was made.
`(i) IN GENERAL- Except as otherwise provided in this section, each
qualified organization that receives a loan under this paragraph shall
be eligible to receive a grant to provide marketing, management, and
technical assistance to small business concerns that are borrowers
or potential borrowers under this subsection.
`(ii) MAXIMUM AMOUNT OF GRANT FOR MICROENTERPRISE DEVELOPMENT ORGANIZATIONS-
Each microenterprise development organization that receives a loan
under this paragraph shall receive an annual grant in an amount equal
to not more than 25 percent of the total outstanding balance of loans
made to the microenterprise development organization under this paragraph,
as of the date of provision of the grant.
`(iii) MATCHING REQUIREMENT-
`(I) IN GENERAL- As a condition of any grant made to a qualified
organization under this subparagraph, the Secretary shall require
the qualified organization to match not less than 15 percent of
the total amount of the grant.
`(II) SOURCES- In addition to cash from non-Federal sources, a matching
share provided by the qualified organization may include indirect
costs or in-kind contributions funded under non-Federal programs.
`(c) Administrative Expenses- Not more than 10 percent of assistance received
by a qualified organization for a fiscal year under this section may be
used to pay administrative expenses.
`(1) IN GENERAL- Not later than 30 days after the date of enactment of
this Act, and on October 1, 2008, and each October 1 thereafter through
October 1, 2012, out of any funds in the Treasury not otherwise appropriated,
the Secretary of the Treasury shall transfer to the Secretary to carry
out this section $50,000,000, to remain available until expended.
`(2) ALLOCATION OF FUNDS- Of the amount made available by paragraph (1)
for each fiscal year--
`(A) not less than $30,000,000 shall be available for use in carrying
out subsection (b)(3); and
`(B) not less than $20,000,000 shall be available for use in carrying
out subsection (b)(4), of which not more than $7,000,000 shall be used
to support direct loans.
`(C) RECEIPT AND ACCEPTANCE- The Secretary shall be entitled to receive,
shall accept, and shall use to carry out this section the funds transferred
under paragraph (1), without further appropriation.'.
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