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 determined
annually 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 the
microenterprise partnership program fund established by section 7 of
this 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 12
of this chapter; or
(2) board of directors of a corporation described in section 13
of 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 local
investment pool established under section 12 of this chapter and a
local 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 in
Indiana and who is described in one (1) or more of the following
categories:
(1) Persons whose employment has been terminated or who
have been laid off and who have limited opportunities for
employment or reemployment in the same or a similar
occupation in the area in which they reside.
(2) Persons who are employed but whose family income is not
greater than one hundred twenty-five percent (125%) of the
federal income poverty level for the same size family.
(3) Single parents whose family income is not greater than one
hundred twenty-five percent (125%) of the federal income
poverty 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 less
than twenty-four (24) years of age.
(8) Welfare recipients.
(9) Owners or operators of existing businesses with less than
twenty-five (25) employees.
(10) Persons who by reason of physical or mental disability are
unable to achieve full vocational participation.
(11) Members of family farms undergoing economic adjustment
and 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 of
fact:
(1) There exists in Indiana an inadequate amount of locally
managed, pooled investment capital in the private sector
available to invest in new and existing business ventures,
including business ventures by nontraditional entrepreneurs.
(2) Investing capital and business management advice in new
and existing business ventures, including business ventures by
nontraditional entrepreneurs, will enhance economic
development and create and retain employment in Indiana. This
investment will enhance the health and general welfare of the
people of Indiana, and it constitutes a public purpose.
(3) Nontraditional entrepreneurs have not engaged in
entrepreneurship and self-employment to the extent found in the
mainstream of Indiana's population. Realizing the potential of
these nontraditional entrepreneurs will enhance Indiana's
economic vitality.
(b) It is the policy of the state to promote economic development
and entrepreneurial talent of Indiana's inhabitants by the creation of
the microenterprise partnership program fund for the public purpose
of promoting opportunities for gainful employment and business
opportunities.
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 is
established within the state treasury. The fund is a revolving fund to:
(1) provide loans approved by the corporation under this
chapter and IC 5-28-17;
(2) provide loans or loan guarantees under the small and
minority business financial assistance program established by
IC 5-28-20-9; and
(3) carry out the microenterprise partnership program under
IC 5-28-19.
(b) The fund consists of appropriations from the general assembly
and loan repayments.
(c) The corporation shall administer the fund. The following may
be paid from money in the fund:
(1) Expenses of administering the fund.
(2) Nonrecurring administrative expenses incurred to carry out
the purposes of this chapter, IC 5-28-19, and IC 5-28-20.
(d) Earnings from loans made under this chapter shall be
deposited in the fund.
(e) The treasurer of state shall invest the money in the fund not
currently needed to meet the obligations of the fund in the same
manner as other public funds may be invested. Interest that accrues
from these investments shall be deposited in the state general fund.
(f) Money in the fund at the end of a state fiscal year does not
revert to the state general fund.
(g) The fund is subject to an annual audit by the state board of
accounts. 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 be
used by the corporation in the administration of the fund.
(2) Subject to section 10 of this chapter, establish criteria for
awarding loans from the fund.
(3) Review and approve or disapprove applications for loans
from the fund.
(4) Establish the terms of loans from the fund, which must
include 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 implement
this chapter.
(7) Prepare and distribute to appropriate entities throughout
Indiana requests for proposals for the organization and
operation of local pools.
(8) Conduct conferences and seminars concerning the fund.
(9) Submit a report concerning the fund to the general assembly
before November 1 of each year. The report must include
detailed information concerning the structure, operation, and
financial condition of the fund. The report must be in an
electronic format under IC 5-14-6.
(b) The corporation may enter into contracts necessary for the
administration of this chapter, including contracts for servicing loans
from 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 following
information:
(1) The total amount of the loan requested from the fund.
(2) The total amount of matching funds to be provided from the
local pool operated by the local board and the sources of those
matching funds.
(3) A detailed description of the local pool, including its
investment criteria.
(4) The impact of the proposed loan on job production in the
area 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 the
fund to a local board must include the following factors:
(1) The extent to which local financial institutions invest and
participate in the local pool.
(2) The extent to which the local pool is used as a secondary
source of financing that complements conventional financing
provided by existing financial institutions.
(3) The local board's knowledge of successful business
practices.
(4) The extent to which the local board will target the proceeds
of the loan toward nontraditional entrepreneurs.
(5) The extent to which the local board intends to use the loan
proceeds for investment in debt, equity, debt with equity
attributes, or other forms of creative financing.
(6) The extent to which the local board's proposed program will
encourage clustering of small business programs through
proximity to small business incubators and other sources of
small 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 the
following conditions:
(1) The local board may use the loan from the fund only to
make and service grants, equity investments, loans, and loan
guarantees to persons who are establishing or operating
businesses in Indiana. However, the local board may not spend
any part of the loan from the fund to defray the expenses of
servicing grants, loans, and loan guarantees unless that
expenditure is specifically authorized in the loan agreement
with 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 investment
pool established under section 12 of this chapter; or
(B) five hundred thousand dollars ($500,000) for a local
opportunity pool established under section 13 of this
chapter.
(4) The corporation may forgive or defer payment of all or part
of the interest and principal on the loan.
(5) The loan agreement must require the local board, through its
staff or consultants, to perform the following duties with respect
to recipients of financial assistance from the local pool:
(A) Provide training in business and financial management
techniques.
(B) Oversee the fiscal operations of the recipients of
financial assistance for at least one (1) year following the
receipt of that assistance.
(C) Provide fiscal management assistance to recipients of
financial assistance when necessary for at least one (1) year
following the receipt of the assistance, including assistance
in the preparation and filing of federal and state tax returns.
(6) The local board must make a report concerning the local
pool to the corporation before September 1 of each year. The
report must include detailed information concerning the
structure, operation, and financial condition of the local pool.
(7) Any other conditions that the corporation considers
appropriate.
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 any
partnership, unincorporated association, corporation, or limited
liability company, whether or not operated for profit, that is
established for the purpose of establishing a local investment pool.
(b) A local investment pool may be established only by an eligible
entity. A political subdivision may participate in the establishment
of an eligible entity but may not be the sole member of the eligible
entity.
(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 a
local investment pool to:
(A) attract private equity investment to provide grants,
equity investments, loans, and loan guarantees for the
establishment or operation of businesses in Indiana; and
(B) provide a low to moderate rate of return to investors in
the 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 background
and business experience to make sound financial and
investment 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 articles
of incorporation or bylaws
Sec. 13. (a) A local opportunity pool may be established only by
a nonprofit corporation or a for-profit corporation established for that
purpose. A political subdivision may participate in the establishment
of such a corporation but may not be the sole member of the
corporation.
(b) The articles of incorporation or bylaws of a corporation
described in subsection (a), as appropriate, must provide the
following:
(1) The exclusive purpose of the corporation described in
subsection (a) is to establish a local opportunity pool to:
(A) attract sources of funding other than private equity
investment to provide grants, loans, and loan guarantees for
the establishment or operation of nontraditional
entrepreneurial endeavors in Indiana; and
(B) enter into financing agreements that seek the return of
the principal amounts advanced by the pool, with the
potential for a greater return.
(2) The board of directors of the corporation described in
subsection (a) must include:
(A) persons who are actively engaged in Indiana in private
enterprise, organized labor, or state or local governmental
agencies and who are qualified by professional background
and business experience to make sound financial and
investment decisions in the private sector; and
(B) representatives of nontraditional entrepreneurs.
(3) The corporation described in subsection (a) may receive
funds 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 the
lending of credit by the state for purposes of any other statute or the
Constitution of the State of Indiana.
As added by P.L.4-2005, SEC.34.