§2008s — Title 7 Agriculture | U.S. Code

Summary

The Secretary must set up a rural microentrepreneur assistance program that gives loans and grants to help people start and run very small businesses in rural areas. Key terms: "Indian tribe" is defined in another law; "microentrepreneur" is an owner or hopeful owner who can’t get enough help elsewhere; "microenterprise development organization" is a nonprofit, a certified tribal government, or a public college that trains and helps rural microentrepreneurs; "microloan" is a business loan up to $50,000; "rural microenterprise" is a sole proprietor or a business with 10 or fewer full‑time workers in a rural area. The program must teach skills and provide ongoing technical and financial help. The Secretary will lend money to development organizations so they can make fixed‑rate microloans. Those loans to organizations can be up to 20 years and must carry at least 1 percent interest. Recipients must keep a loan loss reserve equal to at least 5 percent of outstanding loans and may defer payments for up to 2 years. The Secretary will also give grants for training, planning, marketing, and other support, with priority for areas that lost many people and with diverse grantees. Grants for loan clients must be 20–25 percent of the organization’s outstanding microloan balance, and at most 10 percent of a grant may pay admin costs. Federal funding may cover up to 75 percent of project costs; grantees must match at least 15 percent. Recipients must report yearly by December 1. Congress authorized $20,000,000 for each year 2019 through 2023.

Title 7, §2008s

Agriculture — Source: USLM XML via OLRC

(a)In this section:

(1)The term “Indian tribe” has the meaning given the term in section 5304 of title 25.

(2)The term “microentrepreneur” means an owner and operator, or prospective owner and operator, of a rural microenterprise who is unable to obtain sufficient training, technical assistance, or credit other than under this section, as determined by the Secretary.

(3)The term “microenterprise development organization” means an organization that—

(A)is—

(i)a nonprofit entity;

(ii)an Indian tribe, the tribal government of which certifies to the Secretary that—

(I)no microenterprise development organization serves the Indian tribe; and

(II)no rural microentrepreneur assistance program exists under the jurisdiction of the Indian tribe; or

(iii)a public institution of higher education;

(B)provides training and technical assistance to rural microentrepreneurs;

(C)facilitates access to capital or another service described in subsection (b) for rural microenterprises; and

(D)has a demonstrated record of delivering services to rural microentrepreneurs, or an effective plan to develop a program to deliver services to rural microentrepreneurs, as determined by the Secretary.

(4)The term “microloan” means a business loan of not more than $50,000 that is provided to a rural microenterprise.

(5)The term “program” means the rural microentrepreneur assistance program established under subsection (b).

(6)The term “rural microenterprise” means—

(A)a sole proprietorship located in a rural area; or

(B)a business entity with not more than 10 full-time-equivalent employees located in a rural area.

(b)(1)The Secretary shall establish a rural microentrepreneur assistance program to provide loans and grants to support microentrepreneurs in the development and ongoing success of rural microenterprises.

(2)The purpose of the program is to provide microentrepreneurs with—

(A)the skills necessary to establish new rural microenterprises; and

(B)continuing technical and financial assistance related to the successful operation of rural microenterprises.

(3)(A)The Secretary shall make loans to microenterprise development organizations for the purpose of providing fixed interest rate microloans to microentrepreneurs for startup and growing rural microenterprises.

(B)A loan made by the Secretary to a microenterprise development organization under this paragraph shall—

(i)be for a term not to exceed 20 years; and

(ii)bear an annual interest rate of at least 1 percent.

(C)The Secretary shall require each microenterprise development organization that receives a loan under this paragraph to—

(i)establish a loan loss reserve fund; and

(ii)maintain the reserve fund in an amount equal to at least 5 percent of the outstanding balance of such loans owed by the microenterprise development organization, until all obligations owed to the Secretary under this paragraph are repaid.

(D)The Secretary may permit the deferral of payments on principal and interest due on a loan to a microenterprise development organization made under this paragraph for a 2-year period beginning on the date the loan is made.

(4)(A)(i)The Secretary shall make grants to microenterprise development organizations to—

(I)provide training, operational support, business planning, and market development assistance, and other related services to rural microentrepreneurs; and

(II)carry out such other projects and activities as the Secretary determines appropriate to further the purposes of the program.

(ii)In making grants under clause (i), the Secretary shall—

(I)place an emphasis on microenterprise development organizations that serve microentrepreneurs that are located in rural areas that have suffered significant outward migration, as determined by the Secretary; and

(II)ensure, to the maximum extent practicable, that grant recipients include microenterprise development organizations—

(aa)of varying sizes; and

(bb)that serve racially and ethnically diverse populations.

(B)(i)The Secretary shall make grants to microenterprise development organizations to provide marketing, management, and other technical assistance to microentrepreneurs that—

(I)received a loan from the microenterprise development organization under paragraph (3); or

(II)are seeking a loan from the microenterprise development organization under paragraph (3).

(ii)A microenterprise development organization shall be eligible to receive an annual grant under this subparagraph in an amount equal to not less than 20 percent and not more than 25 percent of the total outstanding balance of microloans made by the microenterprise development organization under paragraph (3), as of the date the grant is awarded, subject to—

(I)satisfactory performance by the microenterprise development organization under this section, and

(II)the availability of funding.

(C)Not more than 10 percent of a grant received by a microenterprise development organization for a fiscal year under this paragraph may be used to pay administrative expenses.

(c)(1)(A)Subject to subparagraph (B), the Federal share of the cost of a project funded under this section shall not exceed 75 percent.

(B)As a condition of any grant made under this subparagraph, the Secretary shall require the microenterprise development organization to match not less than 15 percent of the total amount of the grant in the form of matching funds, indirect costs, or in-kind goods or services.

(C)The non-Federal share of the cost of a project funded under this section may be provided—

(i)in cash (including through fees, grants (including community development block grants), and gifts); or

(ii)in the form of in-kind contributions.

(2)At a minimum, not later than December 1 of each fiscal year, a microenterprise development organization that receives a loan or grant under this section shall provide to the Secretary such information as the Secretary may require to ensure that assistance provided under this section is used for the purposes for which the loan or grant was made.

(d)There are authorized to be appropriated to carry out this section $20,000,000 for each of fiscal years 2019 through 2023.

Notes & Related Subsidiaries

Editorial Notes

Codification Pub. L. 110–234 and Pub. L. 110–246 enacted identical sections. Pub. L. 110–234 was repealed by section 4(a) of Pub. L. 110–246.

Amendments

2018—Subsec. (b)(4)(B)(ii). Pub. L. 115–334, § 6422(1), substituted “Amount” for “Maximum amount” in heading and, in text, inserted “not less than 20 percent and” before “not more than 25 percent”, substituted “, subject to—” for period at end, and added subcls. (I) and (II). Subsec. (d). Pub. L. 115–334, § 6422(2), added subsec. (d) and struck out former subsec. (d) which related to funding for fiscal years 2009 through 2018. 2014—Subsec. (d)(1)(C). Pub. L. 113–79, § 6023(1), added subpar. (C). Subsec. (d)(2). Pub. L. 113–79, § 6023(2), substituted “2018” for “2012”.

Statutory Notes and Related Subsidiaries

Effective Date

Enactment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, see section 4 of Pub. L. 110–246, set out as a note under section 8701 of this title.

§2008s Rural Microentrepreneur Assistance Program