Sec. 309. Urban entrepreneur and microenterprise assistance program
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Subtitle D of the Consolidated Farm and Rural Development Act is amended by inserting after section 365 ( 7 U.S.C. 2008 ) the following: In this section: 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. 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 ).
The term intermediary means a private, nonprofit entity that provides assistance— to a microenterprise development organization; or for a microenterprise development program. The term low-income individual means an individual with an income (adjusted for family size) of not more than the greatest of— 80 percent of median income of an area; 80 percent of the statewide non-metropolitan area median income; or 80 percent of the national median income. The term microcredit means a business loan or loan guarantee of not more than $50,000 that is provided to an urban entrepreneur.
The term microenterprise means— a sole proprietorship; or a business entity with not more than 10 full-time-equivalent employees. The term microenterprise development organization means a private, nonprofit entity that— provides training and technical assistance to urban entrepreneurs; and facilitates access to capital or another service described in subsection
(b)for urban entrepreneurs. 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 urban entrepreneurs effectively, as determined by the Secretary. The term microenterprise development organization means a program administered by an organization serving an urban area. The term microentrepreneur means the owner, operator, or developer of a microenterprise. The term program means the urban entrepreneur and microenterprise program established under subsection (b)(1). The term qualified organization means— a microenterprise development organization or microenterprise development program that has a demonstrated record of delivering microenterprise services to urban entrepreneurs, or an effective plan to develop a program to deliver microenterprise services to urban entrepreneurs effectively, as determined by the Secretary; an intermediary that has a demonstrated record of delivery assistance to microenterprise development organizations or microenterprise development programs; a microenterprise development organization or microenterprise development program that serves urban entrepreneurs; 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; 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 for purposes of subsection (b), a public college or university. The term urban area means any community that is urban in character and has— a population of more than 25,000 individuals; or an average population density of at least 1,000 individuals per square mile. The term urban capacity building service means a service provided to an organization that— is, or is in the process of becoming, a microenterprise development organization or microenterprise development program; and serves urban areas for the purpose of enhancing the ability of the organization to provide training, technical assistance, and other related services to urban entrepreneurs. The term urban entrepreneur means a microentrepreneur, or prospective microentrepreneur— the principal place of business of which is in a urban area; and that is unable to obtain sufficient training, technical assistance, or microcredit elsewhere, as determined by the Secretary. The term Secretary means the Secretary of Agriculture, acting through the Rural Business-Cooperative Service. The term tribal government means the governing body of an Indian tribe. The Secretary shall establish an urban entrepreneurship and microenterprise program. The purpose of the program shall be to provide low-income individuals and moderate-income individuals with— the skills necessary to establish new small businesses in urban areas; and continuing technical and financial assistance as individuals and business starting or operating small businesses. The Secretary may make a grant under the program to a qualified organization— to provide training, operational support, or an urban 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; to assist in researching and developing the best practices in delivering training, technical assistance, and microcredit to urban entrepreneurs; and to carry out such other projects and activities as the Secretary determines to be consistent with the purposes of this section. 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. In making grants under this paragraph, the Secretary shall ensure, to the maximum extent practicable, that grant recipients include qualified organizations— of varying sizes; and that serve racially- and ethnically-diverse populations. The Federal share of the cost of a project carried out using funds from a grant made under this paragraph shall be 75 percent. The non-Federal share of the cost of a project described in clause
(i)may be provided— in cash (including through fees, grants (including community development block grants), and gifts); or in kind. In carrying out the program, the Secretary may carry out an urban microloan program. The purpose of the urban microloan program shall be to provide technical and financial assistance to sole proprietorships and small businesses located in urban areas with a particular focus on those businesses with 5 or fewer full-time equivalent employees. In carrying out the urban microloan program, the Secretary may— make direct loans to qualified organizations for the purpose of making short-term, fixed interest rate microloans to startup, newly established, and growing urban microbusiness concerns; and 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. A loan made by the Secretary under this paragraph shall be for a term of 20 years. A loan made by the Secretary under this paragraph to a qualified organization shall bear an annual interest rate of at least 1 percent. 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. 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. 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. 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. 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. 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. Not later than 30 days after the date of enactment of this section, and on October 1, 2013, and each October 1 thereafter through October 1, 2017, 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. Of the amount made available by paragraph
(1)for each fiscal year— not less than $30,000,000 shall be available for use in carrying out subsection (b)(3); and 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. 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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