AN ACT ESTABLISHING A PILOT MICROLOAN PROGRAM FOR MICROENTERPRISES.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) (Effective October 1, 2006) As used in sections 2 to 5, inclusive, of this act and section 32-235 of the 2006 supplement to the general statutes, as amended by this act:

(1) "Community Economic Development Fund" means the entity established pursuant to subsection (b) of section 8-240k of the general statutes to accomplish the community economic development program.

(2) "Microenterprise" means any business, new or existing, with ten or fewer employees and annual gross revenues of less than five hundred thousand dollars, including home-based and owner-operated businesses.

(3) "Microloan generation organization" means any community-based nonprofit organization that is capable of providing the services enumerated in section 3 of this act.

(4) "Program" means the microloan program for microenterprises established in section 2 of this act.

Sec. 2. (NEW) (Effective October 1, 2006) There is established a pilot microloan program for microenterprises under which the Commissioner of Economic and Community Development shall make a grant or grants to the Community Economic Development Fund. Said fund shall use said grants to provide grants, not to exceed twenty-five thousand dollars, to microloan generating organizations in accordance with section 3 of this act.

Sec. 3. (NEW) (Effective October 1, 2006) Grants made by the Community Economic Development Fund to microloan generating organizations shall be used to:

(1) Identify appropriate microloan applicants state-wide;

(2) Evaluate the need for a prospective microloan applicant's business in the community in which the microenterprise is or would be located;

(3) Evaluate community support for a prospective microloan applicant's business in the community in which the microenterprise is or would be located;

(4) Work in conjunction with other community-based nonprofit organizations, state and federal agencies and with the Community Economic Development Fund to assist prospective microloan applicants in preparing and finalizing business plans;

(5) Assist prospective microloan applicants in identifying and accessing other appropriate business resources, including those providing business management training;

(6) Track client data, level of service and outcome of services provided; and

(7) Submit regular reports to the Community Economic Development Fund based on the grant agreement with the microloan generating organization.

Sec. 4. (NEW) (Effective October 1, 2006) The Community Economic Development Fund shall consider the following criteria in making a grant to a microloan generating organization:

(1) Sources and sufficiency of operating funds for the microloan generating organization;

(2) The ability of the microloan generating organization to provide the services required under section 3 of this act; and

(3) The proven ability of the microloan generating organization to identify and prepare successful applicants to economic assistance programs similar to the program established in section 3 of this act.

Sec. 5. (Effective October 1, 2006) Not later than June 30, 2006, the Community Economic Development Fund shall submit a report, in accordance with section 11-4a of the general statutes, on the status and results of sections 1 to 4, inclusive, of this act to the joint standing committee of the General Assembly having cognizance of matters relating to economic development.

Sec. 6. (Effective July 1, 2006) The sum of fifty thousand dollars is appropriated to the Department of Economic and Community Development, from the General Fund, for the fiscal year ending June 30, 2007, for grants to microloan generating organization for the purposes of section 3 of this act.

Statement of Purpose:

To create a program to provide funding and other assistance to foster microenterprises.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]