Micro-Enterprise Assistance

Creates, under the DBEDT, technical assistance grants to
nonprofit business development organizations to enable them to
provide technical assistance and loans to microenterprises.

HOUSE OF REPRESENTATIVES                H.B. NO.1364       
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  The legislature finds that small businesses
 2 often provide the backbone of any state's economy.  This is
 3 certainly true in Hawaii.  Small businesses are the locus for
 4 many innovative ideas.  However, it is not always easy to
 5 shepherd an innovative business idea to fruition without
 6 assistance, especially where the micro-entrepreneur lacks
 7 sufficient resources of technical expertise.  The purpose of this
 8 Act is to spur job creation in Hawaii by establishing a mechanism
 9 by which entrepreneurial microenterprises are afforded the
10 technical assistance required to nurture their businesses by
11 giving grants to nonprofit business development organizations to
12 enable them to provide technical assistance and certain business
13 expenses.
14      SECTION 2.  The Hawaii Revised Statutes is amended by adding
15 a new chapter to be appropriately designated and to read as
16 follows:
17                             "CHAPTER
19         -1 Microenterprise technical assistance grants; loans.



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                                     H.B. NO.1364       

 1 The director of business, economic development, and tourism shall
 2 make grants to qualified nonprofit business development
 3 organizations to provide technical assistance to individuals with
 4 entrepreneurial plans that require microenterprise loans in an
 5 amount ranging from $1,000 to $25,000, and for loan
 6 administration costs related to those microenterprise loans.  For
 7 the purposes of this chapter, "microenterprise" means a small
 8 business that employs fewer than five employees in addition to
 9 the owner of the business and that requires less than $25,000 in
10 start-up costs.
11         -2 Eligibility for grants; application.  (a)  A
12 nonprofit business development organization that wishes to apply
13 for grants under this chapter shall apply to the department of
14 business, economic development, and tourism on forms prescribed
15 by the director.  To be eligible, a nonprofit business
16 development organization must demonstrate to the director that it
17 has the appropriate technical expertise.  The director shall give
18 preference for grants to nonprofit business development
19 organizations that target nontraditional entrepreneurs such as
20 women, members of a minority, low-income individuals, or persons
21 seeking work who are currently receiving or have recently stopped
22 receiving public assistance.
23      (b)  The application shall include:

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                                     H.B. NO.1364       

 1      (1)  An explanation of the local need for microenterprise
 2           support;
 3      (2)  Proposed criteria for business eligibility for
 4           assistance from the nonprofit business development
 5           organization;
 6      (3)  Proposals for identifying and serving eligible
 7           businesses; and
 8      (4)  A description of technical assistance to be provided to
 9           eligible businesses.
10         -3 Technical assistance.  A nonprofit business
11 development organization receiving a grant under this chapter
12 shall make loans to microenterprises in order to improve the
13 prospects of the business's longevity.  Technical assistance may
14 include:
15      (1)  Assisting business owners to evaluate their abilities
16           or needs of their businesses, or both;
17      (2)  Assisting business owners to make knowledgeable choices
18           about their business operations;
19      (3)  Developing new management or operations skills; and
20      (4)  Underwriting expenses related to the implementation of
21           business plans.
22         -4 Rules.  The director shall adopt rules in accordance
23 with chapter 91 to carry out the purposes of this chapter,

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                                     H.B. NO.1364       

 1 including eligibility criteria for nonprofit business development
 2 organizations to receive grants, and microenterprises to receive
 3 assistance."
 4      SECTION 3.  There is appropriated out of the general
 5 revenues of the State of Hawaii the sum of $          , or so
 6 much thereof as may be necessary for fiscal year 1999-2000, and
 7 the same sum, or so much thereof as may be necessary for fiscal
 8 year 2000-2001, for the purposes of this Act.
 9      The sums appropriated shall be expended by the department of
10 business, economic development, and tourism for the purposes of
11 this Act.
12      SECTION 4.  This Act shall take effect upon its approval,
13 except that section 3 shall take effect on July 1, 1999.
15                           INTRODUCED BY:  _______________________