CHAPTER 18. MICROENTERPRISE PARTNERSHIP PROGRAM FUND
IC 5-28-18
Chapter 18. Microenterprise Partnership Program Fund
IC 5-28-18-1
"Federal income poverty level"
Sec. 1. As used in this chapter, "federal income poverty level"means the nonfarm income official poverty line as determinedannually by the federal Office of Management and Budget.
As added by P.L.4-2005, SEC.34.
IC 5-28-18-2
"Fund"
Sec. 2. As used in this chapter, "fund" refers to themicroenterprise partnership program fund established by section 7 ofthis chapter.
As added by P.L.4-2005, SEC.34.
IC 5-28-18-3
"Local board"
Sec. 3. As used in this chapter, "local board" means the:
(1) governing body of an eligible entity described in section 12of this chapter; or
(2) board of directors of a corporation described in section 13of this chapter.
As added by P.L.4-2005, SEC.34.
IC 5-28-18-4
"Local pool"
Sec. 4. As used in this chapter, "local pool" includes both a localinvestment pool established under section 12 of this chapter and alocal opportunity pool established under section 13 of this chapter.
As added by P.L.4-2005, SEC.34.
IC 5-28-18-5
"Nontraditional entrepreneur"
Sec. 5. As used in this chapter, "nontraditional entrepreneur"means a person who operates or seeks to establish a business inIndiana and who is described in one (1) or more of the followingcategories:
(1) Persons whose employment has been terminated or whohave been laid off and who have limited opportunities foremployment or reemployment in the same or a similaroccupation in the area in which they reside.
(2) Persons who are employed but whose family income is notgreater than one hundred twenty-five percent (125%) of thefederal income poverty level for the same size family.
(3) Single parents whose family income is not greater than onehundred twenty-five percent (125%) of the federal incomepoverty level for the same size family.
(4) Minorities. (5) Women.
(6) Persons who are at least sixty-five (65) years of age.
(7) Persons who are at least eighteen (18) years of age but lessthan twenty-four (24) years of age.
(8) Welfare recipients.
(9) Owners or operators of existing businesses with less thantwenty-five (25) employees.
(10) Persons who by reason of physical or mental disability areunable to achieve full vocational participation.
(11) Members of family farms undergoing economic adjustmentand seeking sources of income in addition to the farm.
As added by P.L.4-2005, SEC.34.
IC 5-28-18-6
Findings of fact; state policy
Sec. 6. (a) The general assembly makes the following findings offact:
(1) There exists in Indiana an inadequate amount of locallymanaged, pooled investment capital in the private sectoravailable to invest in new and existing business ventures,including business ventures by nontraditional entrepreneurs.
(2) Investing capital and business management advice in newand existing business ventures, including business ventures bynontraditional entrepreneurs, will enhance economicdevelopment and create and retain employment in Indiana. Thisinvestment will enhance the health and general welfare of thepeople of Indiana, and it constitutes a public purpose.
(3) Nontraditional entrepreneurs have not engaged inentrepreneurship and self-employment to the extent found in themainstream of Indiana's population. Realizing the potential ofthese nontraditional entrepreneurs will enhance Indiana'seconomic vitality.
(b) It is the policy of the state to promote economic developmentand entrepreneurial talent of Indiana's inhabitants by the creation ofthe microenterprise partnership program fund for the public purposeof promoting opportunities for gainful employment and businessopportunities.
As added by P.L.4-2005, SEC.34.
IC 5-28-18-7
Fund established; administration; investment; reversion; audit
Sec. 7. (a) The microenterprise partnership program fund isestablished within the state treasury. The fund is a revolving fund to:
(1) provide loans approved by the corporation under thischapter and IC 5-28-17;
(2) provide loans or loan guarantees under the small andminority business financial assistance program established byIC 5-28-20-9; and
(3) carry out the microenterprise partnership program underIC 5-28-19. (b) The fund consists of appropriations from the general assemblyand loan repayments.
(c) The corporation shall administer the fund. The following maybe paid from money in the fund:
(1) Expenses of administering the fund.
(2) Nonrecurring administrative expenses incurred to carry outthe purposes of this chapter, IC 5-28-19, and IC 5-28-20.
(d) Earnings from loans made under this chapter shall bedeposited in the fund.
(e) The treasurer of state shall invest the money in the fund notcurrently needed to meet the obligations of the fund in the samemanner as other public funds may be invested. Interest that accruesfrom these investments shall be deposited in the state general fund.
(f) Money in the fund at the end of a state fiscal year does notrevert to the state general fund.
(g) The fund is subject to an annual audit by the state board ofaccounts. The fund shall bear the full costs of the audit.
As added by P.L.4-2005, SEC.34.
IC 5-28-18-8
Powers and duties of corporation
Sec. 8. (a) The corporation shall perform the following duties:
(1) Establish and implement the policies and procedures to beused by the corporation in the administration of the fund.
(2) Subject to section 10 of this chapter, establish criteria forawarding loans from the fund.
(3) Review and approve or disapprove applications for loansfrom the fund.
(4) Establish the terms of loans from the fund, which mustinclude the conditions set forth in section 11 of this chapter.
(5) Award the loans approved under this chapter.
(6) Provide the staff and other resources necessary to implementthis chapter.
(7) Prepare and distribute to appropriate entities throughoutIndiana requests for proposals for the organization andoperation of local pools.
(8) Conduct conferences and seminars concerning the fund.
(9) Submit a report concerning the fund to the general assemblybefore November 1 of each year. The report must includedetailed information concerning the structure, operation, andfinancial condition of the fund. The report must be in anelectronic format under IC 5-14-6.
(b) The corporation may enter into contracts necessary for theadministration of this chapter, including contracts for servicing loansfrom the fund.
As added by P.L.4-2005, SEC.34.
IC 5-28-18-9
Loan application; requirements
Sec. 9. A local board may apply for a loan from the fund. A local
board's application for a loan must include the followinginformation:
(1) The total amount of the loan requested from the fund.
(2) The total amount of matching funds to be provided from thelocal pool operated by the local board and the sources of thosematching funds.
(3) A detailed description of the local pool, including itsinvestment criteria.
(4) The impact of the proposed loan on job production in thearea served by the local pool.
(5) Any other information requested by the corporation.
As added by P.L.4-2005, SEC.34.
IC 5-28-18-10
Loan award criteria
Sec. 10. The corporation's criteria for awarding loans from thefund to a local board must include the following factors:
(1) The extent to which local financial institutions invest andparticipate in the local pool.
(2) The extent to which the local pool is used as a secondarysource of financing that complements conventional financingprovided by existing financial institutions.
(3) The local board's knowledge of successful businesspractices.
(4) The extent to which the local board will target the proceedsof the loan toward nontraditional entrepreneurs.
(5) The extent to which the local board intends to use the loanproceeds for investment in debt, equity, debt with equityattributes, or other forms of creative financing.
(6) The extent to which the local board's proposed program willencourage clustering of small business programs throughproximity to small business incubators and other sources ofsmall business assistance and technology transfer.
(7) Other criteria established by the corporation.
As added by P.L.4-2005, SEC.34.
IC 5-28-18-11
Loan conditions
Sec. 11. A loan from the fund to a local board is subject to thefollowing conditions:
(1) The local board may use the loan from the fund only tomake and service grants, equity investments, loans, and loanguarantees to persons who are establishing or operatingbusinesses in Indiana. However, the local board may not spendany part of the loan from the fund to defray the expenses ofservicing grants, loans, and loan guarantees unless thatexpenditure is specifically authorized in the loan agreementwith the corporation.
(2) The term of the loan may not exceed twenty (20) years.
(3) The loan must require the local board to provide matching
funds in an amount determined by the corporation. However,the total of the loan plus the matching funds must be at least:
(A) one million dollars ($1,000,000) for a local investmentpool established under section 12 of this chapter; or
(B) five hundred thousand dollars ($500,000) for a localopportunity pool established under section 13 of thischapter.
(4) The corporation may forgive or defer payment of all or partof the interest and principal on the loan.
(5) The loan agreement must require the local board, through itsstaff or consultants, to perform the following duties with respectto recipients of financial assistance from the local pool:
(A) Provide training in business and financial managementtechniques.
(B) Oversee the fiscal operations of the recipients offinancial assistance for at least one (1) year following thereceipt of that assistance.
(C) Provide fiscal management assistance to recipients offinancial assistance when necessary for at least one (1) yearfollowing the receipt of the assistance, including assistancein the preparation and filing of federal and state tax returns.
(6) The local board must make a report concerning the localpool to the corporation before September 1 of each year. Thereport must include detailed information concerning thestructure, operation, and financial condition of the local pool.
(7) Any other conditions that the corporation considersappropriate.
As added by P.L.4-2005, SEC.34.
IC 5-28-18-12
"Eligible entity"; establishment of local investment pool;requirements of articles of incorporation or bylaws
Sec. 12. (a) As used in this section, "eligible entity" means anypartnership, unincorporated association, corporation, or limitedliability company, whether or not operated for profit, that isestablished for the purpose of establishing a local investment pool.
(b) A local investment pool may be established only by an eligibleentity. A political subdivision may participate in the establishmentof an eligible entity but may not be the sole member of the eligibleentity.
(c) The articles of incorporation or bylaws of the eligible entity,as appropriate, must provide the following:
(1) The exclusive purpose of the eligible entity is to establish alocal investment pool to:
(A) attract private equity investment to provide grants,equity investments, loans, and loan guarantees for theestablishment or operation of businesses in Indiana; and
(B) provide a low to moderate rate of return to investors inthe short term, with higher rates of return in the long term.
(2) The governing body of the eligible entity must include: (A) persons who are qualified by professional backgroundand business experience to make sound financial andinvestment decisions in the private sector; and
(B) representatives of nontraditional entrepreneurs.
(3) The eligible entity may receive funds from:
(A) equity investors;
(B) grants and loans from local units of government;
(C) grants and loans from the federal government;
(D) donations; and
(E) loans from the fund.
As added by P.L.4-2005, SEC.34.
IC 5-28-18-13
Establishment of local opportunity pool; requirements of articlesof incorporation or bylaws
Sec. 13. (a) A local opportunity pool may be established only bya nonprofit corporation or a for-profit corporation established for thatpurpose. A political subdivision may participate in the establishmentof such a corporation but may not be the sole member of thecorporation.
(b) The articles of incorporation or bylaws of a corporationdescribed in subsection (a), as appropriate, must provide thefollowing:
(1) The exclusive purpose of the corporation described insubsection (a) is to establish a local opportunity pool to:
(A) attract sources of funding other than private equityinvestment to provide grants, loans, and loan guarantees forthe establishment or operation of nontraditionalentrepreneurial endeavors in Indiana; and
(B) enter into financing agreements that seek the return ofthe principal amounts advanced by the pool, with thepotential for a greater return.
(2) The board of directors of the corporation described insubsection (a) must include:
(A) persons who are actively engaged in Indiana in privateenterprise, organized labor, or state or local governmentalagencies and who are qualified by professional backgroundand business experience to make sound financial andinvestment decisions in the private sector; and
(B) representatives of nontraditional entrepreneurs.
(3) The corporation described in subsection (a) may receivefunds from:
(A) philanthropic foundations;
(B) grants and loans from local units of government;
(C) grants and loans from the federal government;
(D) donations;
(E) bequests; and
(F) loans from the fund.
As added by P.L.4-2005, SEC.34.
IC 5-28-18-14
Loans not lending of state credit
Sec. 14. The making of loans from the fund does not constitute thelending of credit by the state for purposes of any other statute or theConstitution of the State of Indiana.
As added by P.L.4-2005, SEC.34.