II 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Rural Entrepreneur 

5 and Microenterprise Assistance Act’’. 

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1 SEC. 2. RURAL ENTREPRENEUR AND MICROENTERPRISE 

2 ASSISTANCE PROGRAM. 

3 Subtitle D of the Consolidated Farm and Rural De4 velopment Act is amended by inserting after section 364 

5 (7 U.S.C. 2006f) the following: 

6 ‘‘SEC. 365. RURAL ENTREPRENEUR AND MICROENTER7 PRISE ASSISTANCE PROGRAM. 

8 ‘‘(a) DEFINITIONS.—In this section: 

9 ‘‘(1) ECONOMICALLY DISADVANTAGED MICRO10 ENTREPRENEUR.—The term ‘economically disadvan11 taged microentrepreneur’ means an owner, majority 

12 owner, or developer of a microenterprise that has the 

13 ability to compete in the private sector but has been 

14 impaired because of diminished capital and credit 

15 opportunities, as compared to other microentre16 preneurs in the industry. 

17 ‘‘(2) INDIAN TRIBE.—The term ‘Indian tribe’ 

18 has the meaning given the term in section 4 of the 

19 Indian Self-Determination and Education Assistance 

20 Act (25 U.S.C. 450b). 

21 ‘‘(3) INTERMEDIARY.—The term ‘intermediary’ 

22 means a private, nonprofit entity that provides as23 sistance— 

24 ‘‘(A) to a microenterprise development or25 ganization; or 

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1 ‘‘(B) for a microenterprise development 

2 program. 

3 ‘‘(4) LOW-INCOME INDIVIDUAL.—The term low4 income individual means an individual with an in5 come (adjusted for family size) of not more than the 

6 greatest of— 

7 ‘‘(A) 80 percent of median income of an 

8 area; 

9 ‘‘(B) 80 percent of the statewide non-met10 ropolitan area median income; or 

11 ‘‘(C) 80 percent of the national median in12 come. 

13 ‘‘(5) MICROCREDIT.—The term ‘microcredit’ 

14 means a business loan or loan guarantee of not more 

15 than $50,000 that is provided to a rural entre16 preneur. 

17 ‘‘(6) MICROENTERPRISE.—The term ‘micro18 enterprise’ means— 

19 ‘‘(A) a sole proprietorship; or 

20 ‘‘(B) a business entity with not more than 

21 10 full-time-equivalent employees. 

22 ‘‘(7) MICROENTERPRISE DEVELOPMENT ORGA23 NIZATION.— 

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1 ‘‘(A) IN GENERAL.—The term ‘microenter2 prise development organization’ means a pri3 vate, nonprofit entity that— 

4 ‘‘(i) provides training and technical 

5 assistance to rural entrepreneurs; and 

6 ‘‘(ii) facilitates access to capital or an7 other service described in subsection (b) 

8 for rural entrepreneurs. 

9 ‘‘(B) INCLUSIONS.—The term ‘microenter10 prise development organization’ includes an or11 ganization described in subparagraph (A) with 

12 a demonstrated record of delivering services to 

13 economically disadvantaged microentrepreneurs, 

14 or an effective plan to develop a program to de15 liver microenterprise services to rural entre16 preneurs effectively, as determined by the Sec17 retary. 

18 ‘‘(8) MICROENTERPRISE DEVELOPMENT PRO19 GRAM.—The term ‘microenterprise development or20 ganization’ means a program administered by an or21 ganization serving a rural area. 

22 ‘‘(9) MICROENTREPRENEUR.—The term ‘micro23 entrepreneur’ means the owner, operator, or devel24 oper of a microenterprise. 

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1 ‘‘(10) PROGRAM.—The term ‘program’ means 

2 the rural entrepreneur and microenterprise program 

3 established under subsection (b)(1). 

4 ‘‘(11) QUALIFIED ORGANIZATION.—The term 

5 ‘qualified organization’ means— 

6 ‘‘(A) a microenterprise development orga7 nization or microenterprise development pro8 gram that has a demonstrated record of deliv9 ering microenterprise services to rural entre10 preneurs, or an effective plan to develop a pro11 gram to deliver microenterprise services to rural 

12 entrepreneurs effectively, as determined by the 

13 Secretary. 

14 ‘‘(B) an intermediary that has a dem15 onstrated record of delivery assistance to micro16 enterprise development organizations or micro17 enterprise development programs; 

18 ‘‘(C) a microenterprise development orga19 nization or microenterprise development pro20 gram that serves rural entrepreneurs; 

21 ‘‘(D) an Indian tribe, the tribal govern22 ment of which certifies to the Secretary that no 

23 microenterprise development organization or 

24 microenterprise development program exists 

25 under the jurisdiction of the Indian tribe; 

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1 ‘‘(E) a group of 2 or more organizations or 

2 Indian tribes described in any of subparagraphs 

3 (A) through (D) that agree to act jointly as a 

4 qualified organization under this section; or 

5 ‘‘(F) for purposes of subsection (b), a pub6 lic college or university. 

7 ‘‘(12) RURAL AREA.—The term ‘rural area’ 

8 means any community that is rural in character and 

9 has a population of not more than 25,000 individ10 uals. 

11 ‘‘(13) RURAL CAPACITY BUILDING SERVICE.— 

12 The term ‘rural capacity building service’ means a 

13 service provided to an organization that— 

14 ‘‘(A) is, or is in the process of becoming, 

15 a microenterprise development organization or 

16 microenterprise development program; and 

17 ‘‘(B) serves rural areas for the purpose of 

18 enhancing the ability of the organization to pro19 vide training, technical assistance, and other re20 lated services to rural entrepreneurs. 

21 ‘‘(14) RURAL ENTREPRENEUR.—The term 

22 ‘rural entrepreneur’ means a microentrepreneur, or 

23 prospective microentrepreneur— 

24 ‘‘(A) the principal place of business of 

25 which is in a rural area; and 

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1 ‘‘(B) that is unable to obtain sufficient 

2 training, technical assistance, or microcredit 

3 elsewhere, as determined by the Secretary. 

4 ‘‘(15) SECRETARY.—The term ‘Secretary’ 

5 means the Secretary of Agriculture, acting through 

6 the Rural Business-Cooperative Service. 

7 ‘‘(16) TRIBAL GOVERNMENT.—The term ‘tribal 

8 government’ means the governing body of an Indian 

9 tribe. 

10 ‘‘(b) RURAL ENTREPRENEURSHIP AND MICRO11 ENTERPRISE PROGRAM.— 

12 ‘‘(1) ESTABLISHMENT.—The Secretary shall es13 tablish a rural entrepreneurship and microenterprise 

14 program. 

15 ‘‘(2) PURPOSE.—The purpose of the program 

16 shall be to provide low-income individuals and mod17 erate-income individuals with— 

18 ‘‘(A) the skills necessary to establish new 

19 small businesses in rural areas; and 

20 ‘‘(B) continuing technical and financial as21 sistance as individuals and business starting or 

22 operating small businesses. 

23 ‘‘(3) GRANTS.— 

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1 ‘‘(A) IN GENERAL.—The Secretary may 

2 make a grant under the program to a qualified 

3 organization— 

4 ‘‘(i) to provide training, operational 

5 support, or a rural capacity building serv6 ice to a qualified organization to assist the 

7 qualified organization in developing micro8 enterprise training, technical assistance, 

9 market development assistance, and other 

10 related services, primarily for business with 

11 5 or fewer full-time-equivalent employees; 

12 ‘‘(ii) to assist in researching and de13 veloping the best practices in delivering 

14 training, technical assistance, and micro15 credit to rural entrepreneurs; and 

16 ‘‘(iii) to carry out such other projects 

17 and activities as the Secretary determines 

18 to be consistent with the purposes of this 

19 section. 

20 ‘‘(B) SUBGRANTS.—Subject to such regu21 lations as the Secretary may promulgate, a 

22 qualified organization that receives a grant 

23 under this paragraph may use the grant to pro24 vide assistance to other qualified organizations, 

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1 such as small or emerging qualified organiza2 tions. 

3 ‘‘(C) DIVERSITY.—In making grants under 

4 this paragraph, the Secretary shall ensure, to 

5 the maximum extent practicable, that grant re6 cipients include qualified organizations— 

7 ‘‘(i) of varying sizes; and 

8 ‘‘(ii) that serve racially- and eth9 nically-diverse populations. 

10 ‘‘(D) COST SHARING.— 

11 ‘‘(i) FEDERAL SHARE.—The Federal 

12 share of the cost of a project carried out 

13 using funds from a grant made under this 

14 paragraph shall be 75 percent. 

15 ‘‘(ii) FORM OF NON-FEDERAL

16 SHARE.—The non-Federal share of the 

17 cost of a project described in clause (i) 

18 may be provided— 

19 ‘‘(I) in cash (including through 

20 fees, grants (including community de21 velopment block grants), and gifts); or 

22 ‘‘(II) in kind. 

23 ‘‘(4) RURAL MICROLOAN PROGRAM.— 

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1 ‘‘(A) ESTABLISHMENT.—In carrying out 

2 the program, the Secretary may carry out a 

3 rural microloan program. 

4 ‘‘(B) PURPOSE.—The purpose of the rural 

5 microloan program shall be to provide technical 

6 and financial assistance to sole proprietorships 

7 and small businesses located in rural areas with 

8 a particular focus on those businesses with 5 or 

9 fewer full-time equivalent employees. 

10 ‘‘(C) AUTHORITY OF SECRETARY.—In car11 rying out the rural microloan program, the Sec12 retary may— 

13 ‘‘(i) make direct loans to qualified or14 ganizations for the purpose of making 

15 short-term, fixed interest rate microloans 

16 to startup, newly established, and growing 

17 rural microbusiness concerns; and 

18 ‘‘(ii) in conjunction with those loans, 

19 provide grants in accordance with subpara20 graph (E) to those qualified organizations 

21 for the purpose of providing intensive mar22 keting, management, and technical assist23 ance to small business concerns that are 

24 borrowers under this paragraph. 

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1 ‘‘(D) LOAN DURATION; INTEREST RATES; 

2 CONDITIONS.— 

3 ‘‘(i) LOAN DURATION.—A loan made 

4 by the Secretary under this paragraph 

5 shall be for a term of 20 years. 

6 ‘‘(ii) APPLICABLE INTEREST RATES.— 

7 A loan made by the Secretary under this 

8 paragraph to a qualified organization shall 

9 bear an annual interest rate of at least 1 

10 percent. 

11 ‘‘(iii) DEFERRAL OF INTEREST AND

12 PRINCIPAL.—The Secretary may permit 

13 the deferral of payments, for principal and 

14 interest, on a loan made under this para15 graph for a period of not more than 2 

16 years, beginning on the date on which the 

17 loan was made. 

18 ‘‘(E) GRANT AMOUNTS.— 

19 ‘‘(i) IN GENERAL.—Except as other20 wise provided in this section, each qualified 

21 organization that receives a loan under this 

22 paragraph shall be eligible to receive a 

23 grant to provide marketing, management, 

24 and technical assistance to small business 

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1 concerns that are borrowers or potential 

2 borrowers under this subsection. 

3 ‘‘(ii) MAXIMUM AMOUNT OF GRANT

4 FOR MICROENTERPRISE DEVELOPMENT

5 ORGANIZATIONS.—Each microenterprise 

6 development organization that receives a 

7 loan under this paragraph shall receive an 

8 annual grant in an amount equal to not 

9 more than 25 percent of the total out10 standing balance of loans made to the 

11 microenterprise development organization 

12 under this paragraph, as of the date of 

13 provision of the grant. 

14 ‘‘(iii) MATCHING REQUIREMENT.— 

15 ‘‘(I) IN GENERAL.—As a condi16 tion of any grant made to a qualified 

17 organization under this subparagraph, 

18 the Secretary shall require the quali19 fied organization to match not less 

20 than 15 percent of the total amount 

21 of the grant. 

22 ‘‘(II) SOURCES.—In addition to 

23 cash from non-Federal sources, a 

24 matching share provided by the quali25 fied organization may include indirect 

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1 costs or in-kind contributions funded 

2 under non-Federal programs. 

3 ‘‘(c) ADMINISTRATIVE EXPENSES.—Not more than 

4 10 percent of assistance received by a qualified organiza5 tion for a fiscal year under this section may be used to 

6 pay administrative expenses. 

7 ‘‘(d) FUNDING.— 

8 ‘‘(1) IN GENERAL.—Not later than 30 days 

9 after the date of enactment of this Act, and on Octo10 ber 1, 2008, and each October 1 thereafter through 

11 October 1, 2012, out of any funds in the Treasury 

12 not otherwise appropriated, the Secretary of the 

13 Treasury shall transfer to the Secretary to carry out 

14 this section $50,000,000, to remain available until 

15 expended. 

16 ‘‘(2) ALLOCATION OF FUNDS.—Of the amount 

17 made available by paragraph (1) for each fiscal 

18 year— 

19 ‘‘(A) not less than $30,000,000 shall be 

20 available for use in carrying out subsection 

21 (b)(3); and 

22 ‘‘(B) not less than $20,000,000 shall be 

23 available for use in carrying out subsection 

24 (b)(4), of which not more than $7,000,000 shall 

25 be used to support direct loans. 

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1 ‘‘(C) RECEIPT AND ACCEPTANCE.—The 

2 Secretary shall be entitled to receive, shall ac3 cept, and shall use to carry out this section the 

4 funds transferred under paragraph (1), without 

5 further appropriation.’’. 

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