Promoting Microenterprises: SB 1156 (Alarcón)
Introduced January 28, 2004

SUMMARY: SB 1156 promotes the development of microenterprises. SB 1156 codifies the definition of microenterprise enabling community agencies to access additional federal resources to develop microenterprises.

BACKGROUND: Though microenterprises by definition are very small businesses (fewer than five employees), they are vital to California’s economy. Between 1995 and 2000, 44 percent of all new job growth in California was created by microenterprises. Microenterprises are generally started by low- and moderate-income individuals for the purpose of creating their own job or extra income for themselves and their families. Examples of some common microenterprises are businesses that provide child development services, landscaping services, building maintenance, specialty food products, as well as home-based businesses. Microenterprise development is a process of providing services to microbusinesses to help them grow quickly at a reduced risk. These services such as business training, technical assistance to create a business plan and microloans are usually provided by nonprofit and government agencies.

PROBLEM: Federal funds are available to provide business training, technical assistance and microloans to emerging and expanding microenterprises. Microenterprise development programs are available throughout the state to provide these services to microenterprises. State and local agencies are often unaware of the importance of microenterprises in the community and the availability of funds and services to development them.

SOLUTION: SB 1156 declares microenterprises as important to California’s economy as a job creator and community development strategy. Further, it codifies the definition of microenterprises as a business of five or fewer employees. SB 1156 encourages local agencies such as Workforce Investment Boards and economic development agencies to work with microenterprise development programs in order to increase jobs and income opportunities in their communities.

SPONSORS: California Association for Microenterprise Opportunity (CAMEO), Catherine Marshall, CEO, 510.238.8360

STAFF: Nick Hardeman, Legislative Aid, 916.445.7928