110 HR 3020 : PRIME Act U.S. House of Representatives 2007-09-05 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
IIB 110th CONGRESS 1st Session H. R. 3020 IN THE SENATE OF THE UNITED STATES September 5, 2007 Received; read twice and referred to the Committee on Small Business and Entrepreneurship AN ACT To amend the Small Business Act to improve the Microloan program, and for other purposes.
1.
Short title; table of contents
(a)
Short title
This Act may be cited as the Microloan Amendments and Modernization Act. (b)
Table of contents
The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Title I—Microloan Sec. 101. Transmission of credit reporting information. Sec. 102. Flexible credit. Sec. 103. Intermediary eligibility requirements. Sec. 104. Average loan size. Sec. 105. Technical assistance. Sec. 106. Entrepreneurs with disabilities. Title II—PRIME Sec. 201. Short title. Sec. 202. PRIME. Sec. 203. Conforming repeal.
<enum>I</enum><header>Microloan</header> <section display-inline="no-display-inline" id="H55A11FCC7DC7425BB87F2C69DA3E9F1D"><enum>101.</enum><header>Transmission of credit reporting information</header><text display-inline="no-display-inline">Section 7(m) of the Small Business Act (15 U.S.C. 636(m)) is amended by adding at the end the following:</text> <quoted-block display-inline="no-display-inline" id="H9347AF457F23436B9D99EF86ED5CAA1F" style="OLC"> <paragraph id="H7B15DD6FA4CB4E07B12698A84D6400D4"><enum>(14)</enum><header>Credit reporting information</header><text>The Administrator shall establish a process, for use by a lender making a loan to a borrower under this subsection, under which the lender provides to the major credit reporting agencies the information about the borrower that is relevant to credit reporting, such as the payment activity of the borrower on the loan.</text> </paragraph><after-quoted-block>.</after-quoted-block></quoted-block> </section><section id="HB6E4A4B8AA164CFE974823E2E5D60959"><enum>102.</enum><header>Flexible credit</header><text display-inline="no-display-inline">Section 7(m) of the Small Business Act (<external-xref legal-doc="usc" parsable-cite="usc/15/636">15 U.S.C. 636(m)</external-xref>) is amended, in each of paragraphs (1)(B)(i) and (11)(B), by striking <quote>short-term,</quote>.</text> </section><section id="HB3EDA4DCFC3E44568765B3155C6EFD02"><enum>103.</enum><header>Intermediary eligibility requirements</header><text display-inline="no-display-inline">Section 7(m)(2) of the Small Business Act (15 U.S.C. 636(m)(2)) is amended—</text> <paragraph id="H65F0D6F5687643A4A06F361BC193CFBA"><enum>(1)</enum><text>in subparagraph (A) by striking <quote>paragraph (10)</quote> and inserting <quote>paragraph (11)</quote>; and</text> </paragraph><paragraph id="HCFBB01BBF4EA46C4BEE3CB9B5EFFEEE"><enum>(2)</enum><text>by amending subparagraph (B) to read as follows:</text> <quoted-block display-inline="no-display-inline" id="H78A0D9BE01C9471DB707248712C56E8B" style="OLC"> <subparagraph id="H6C34CB7764A04EF780EA74DD6EE80084"><enum>(B)</enum><text display-inline="yes-display-inline">has—</text> <clause id="H67CF597DBE9240E8AAD7D051B657FCE"><enum>(i)</enum><text>at least—</text> <subclause id="HC790F30A335545B78F5EB00F373AC71"><enum>(I)</enum><text>1 year of experience making microloans to startup, newly established, or growing small business concerns; or</text> </subclause><subclause id="HD3041C9E47404BAFB38251EFF1AC97CA"><enum>(II)</enum><text>1 full-time employee who has not less than 3 years experience making microloans to startup, newly established, or growing small business concerns; and</text> </subclause></clause><clause id="H396965291FCE44DF870616BA8100DAD6"><enum>(ii)</enum><text>at least 1 year of experience providing, as an integral part of its microloan program, intensive marketing, management, and technical assistance to its borrowers.</text> </clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></section><section id="HA249782A13C64EFFB02983D93F9907DF"><enum>104.</enum><header>Average loan size</header><text display-inline="no-display-inline">Section 7(m) of the Small Business Act (15 U.S.C. 636(m)) is amended by striking <quote>$7,500</quote> and inserting <quote>$10,000</quote> in each of the following places: paragraph (3)(F)(iii), paragraph (6)(C)(i), and paragraph (6)(C)(ii).</text> </section><section id="HB2B202E495034355A4CA5C488845008C"><enum>105.</enum><header>Technical assistance</header><text display-inline="no-display-inline">Section 7(m)(4)(E) of the Small Business Act (<external-xref legal-doc="usc" parsable-cite="usc/15/636">15 U.S.C. 636(m)(4)(E)</external-xref>) is amended as follows:</text> <paragraph id="H3E28BF968C714699AEC7489B50FBC089"><enum>(1)</enum><header>Pre-loan</header><text>Clause (i) is amended by striking <quote>25 percent</quote> and inserting <quote>35 percent</quote>.</text> </paragraph><paragraph id="HD7F93765879342EBB4DEE0B0C025006F"><enum>(2)</enum><header>Third party contracts</header><text>Clause (ii) is amended by striking <quote>25 percent</quote> and inserting <quote>35 percent</quote>.</text> </paragraph></section><section id="H4802FC42B6714A58BF958C753F6CEF9"><enum>106.</enum><header>Entrepreneurs with disabilities</header><text display-inline="no-display-inline">Section 7(m)(1)(A)(i) of the Small Business Act (<external-xref legal-doc="usc" parsable-cite="usc/15/636">15 U.S.C. 636(m)(1)(A)(i)</external-xref>) is amended by inserting <quote>disabled,</quote> before <quote>and minority entrepreneurs</quote>.</text> </section><enum>II</enum><header>PRIME</header> <section display-inline="no-display-inline" id="HCFAB53A8F83B4F9E9BE5B64AEE8A5A3" section-type="subsequent-section"><enum>201.</enum><header>Short title</header><text display-inline="no-display-inline">This title may be cited as the <quote><short-title>Program for Investment in Microentrepreneurs Act</short-title></quote> or the <quote><short-title>PRIME Act</short-title></quote>.</text> </section><section id="H6EFDBD630C804EB29EFA2F11CD1161CB"><enum>202.</enum><header>PRIME</header><text display-inline="no-display-inline">The Small Business Act is amended—</text> <paragraph id="H41B4FE9AE2D747DD8980ED08C8A6D52D"><enum>(1)</enum><text>by redesignating section 37 as 99; and</text> </paragraph><paragraph id="HB596CD120817472F949D649C374F8000"><enum>(2)</enum><text>by inserting after section 36 the following:</text> <quoted-block id="HCBC3BE8F44D543F19B394814BAD91167"> <section id="H2F1E143C8E204CD4811E4662481B23C2"><enum>37.</enum><header>PRIME Program</header> <subsection id="H28FD4BFD167740EDB84855BF5BC4AAF6"><enum>(a)</enum><header>Definitions</header><text display-inline="yes-display-inline">For purposes of this section, the following definitions shall apply:</text> <paragraph id="H929B76C8BB99490CB410883580EE5569"><enum>(1)</enum><header>Capacity building services</header><text>The term <term>capacity building services</term> means services provided to an organization that is, or that is in the process of becoming, a microenterprise development organization or program, for the purpose of enhancing its ability to provide training and services to disadvantaged entrepreneurs.</text> </paragraph><paragraph id="HE86938A90178499DB515D545A944F18C"><enum>(2)</enum><header>Disadvantaged entrepreneur</header><text>The term <term>disadvantaged entrepreneur</term> means a microentrepreneur that is—</text> <subparagraph id="H9FA9464D07C94B5B9B36A55EC5F74D9"><enum>(A)</enum><text>a very low-income person;</text> </subparagraph><subparagraph id="H77D1F3DA3C594FEFAB6548C2DC7CE5C"><enum>(B)</enum><text>a low-income person; or</text> </subparagraph><subparagraph id="HE32BE2F849C7401288D14593ECA39ED4"><enum>(C)</enum><text>an entrepreneur that lacks adequate access to capital or other resources essential for business success, or is economically disadvantaged, as determined by the Administrator.</text> </subparagraph></paragraph><paragraph id="HEE9C614512844744B2BD1C490396D5BD"><enum>(3)</enum><header>Collaborative</header><text>The term <term>collaborative</term> means 2 or more nonprofit entities that agree to act jointly as a qualified organization under this section.</text> </paragraph><paragraph id="H55D3803DD7224EA68400B063DC25E002"><enum>(4)</enum><header>Indian tribe</header><text display-inline="yes-display-inline">The term <term>Indian tribe</term> means any Indian tribe, band, pueblo, nation, or other organized group or community, including any Alaska Native village or regional or village corporation, as defined in or established pursuant to the Alaska Native Claims Settlement Act, which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians.</text> </paragraph><paragraph id="H2BA72CF249DA4D0FA075F7573DB2F24F"><enum>(5)</enum><header>Intermediary</header><text>The term <term>intermediary</term> means a private, nonprofit entity that seeks to serve microenterprise development organizations and programs as authorized under subsection (d).</text> </paragraph><paragraph id="H35F5BBB3BC614E1C9300FE2938493F7E"><enum>(6)</enum><header>Low-income person</header><text>The term <term>low-income person</term> means a person having an income, adjusted for family size, of not more than—</text> <subparagraph id="H0F91020D175648609FDD5D8659007C7E"><enum>(A)</enum><text>for metropolitan areas, 80 percent of the area median income; and</text> </subparagraph><subparagraph id="H67CC29EAD3DA46FEAEF9A369CF4BD47D"><enum>(B)</enum><text>for nonmetropolitan areas, the greater of—</text> <clause id="HA78AAB0153D84669A9E411007440006B"><enum>(i)</enum><text>80 percent of the area median income; or</text> </clause><clause id="H5CB783829E674BD4AA3C303E2F99C6AF"><enum>(ii)</enum><text>80 percent of the statewide nonmetropolitan area median income.</text> </clause></subparagraph></paragraph><paragraph id="H455DCD559D16444AA940F9DA062DEDE6"><enum>(7)</enum><header>Microentrepreneur</header><text>The term <term>microentrepreneur</term> means the owner or developer of a microenterprise.</text> </paragraph><paragraph id="H9D8C7550FE5B41788645E3D5BE75EBEF"><enum>(8)</enum><header>Microenterprise</header><text>The term <term>microenterprise</term> means a sole proprietorship, partnership, or corporation that—</text> <subparagraph id="H674F161CF05C45788DF43518DC70006"><enum>(A)</enum><text>has fewer than 5 employees; and</text> </subparagraph><subparagraph id="H68324D9826BA46AE92EAC789D887E286"><enum>(B)</enum><text>generally lacks access to conventional loans, equity, or other banking services.</text> </subparagraph></paragraph><paragraph id="HD6A3DC723CD74FF59719233D89054523"><enum>(9)</enum><header>Microenterprise development organization or program</header><text>The term <term>microenterprise development organization or program</term> means a nonprofit entity, or a program administered by such an entity, including community development corporations or other nonprofit development organizations and social service organizations, that provides services to disadvantaged entrepreneurs.</text> </paragraph><paragraph id="H775324376E7C4F30BD2DD5E7244DFC71"><enum>(10)</enum><header>Poverty line</header><text display-inline="yes-display-inline">The term <term>poverty line</term> means the official poverty line defined by the Office of Management and Budget based on the most recent data available from the Bureau of the Census. The Administrator shall revise annually (or at any shorter interval the Administrator determines to be feasible and desirable) the poverty line. The required revision shall be accomplished by multiplying the official poverty line by the percentage change in the Consumer Price Index for All Urban Consumers during the annual or other interval immediately preceding the time at which the revision is made.</text> </paragraph><paragraph id="H340BDB1DF5844BE4B9B9CC8E125E5FFF"><enum>(11)</enum><header>Training and technical assistance</header><text>The term <term>training and technical assistance</term> means services and support provided to disadvantaged entrepreneurs, such as assistance for the purpose of enhancing business planning, marketing, management, financial management skills, and assistance for the purpose of accessing financial services.</text> </paragraph><paragraph id="H35F2C71C0D8F4CF09D24EE672E3FB431"><enum>(12)</enum><header>Very low-income person</header><text>The term <term>very low-income person</term> means having an income, adjusted for family size, of not more than 150 percent of the poverty line.</text> </paragraph></subsection><subsection id="H3A18F87A08004B4AA0FB350AB958225"><enum>(b)</enum><header>Establishment of program</header><text>The Administrator shall establish a microenterprise technical assistance and capacity building grant program to provide assistance from the Administration in the form of grants to qualified organizations in accordance with this section.</text> </subsection><subsection id="H446B2B02041041959CB28E2C13DA88D6"><enum>(c)</enum><header>Uses of assistance</header><text>A qualified organization shall use grants made under this section—</text> <paragraph id="H5DE0C74A18874F109FAD0070D86D2F6F"><enum>(1)</enum><text>to provide training and technical assistance to disadvantaged entrepreneurs;</text> </paragraph><paragraph id="HCB3E527AA9AD4426B7C6B7D0DCF8EE7F"><enum>(2)</enum><text>to provide training and capacity building services to microenterprise development organizations and programs and groups of such organizations to assist such organizations and programs in developing microenterprise training and services;</text> </paragraph><paragraph id="HE0A1C2DB44D84C4EA2EF21BD896C37AE"><enum>(3)</enum><text>to aid in researching and developing the best practices in the field of microenterprise and technical assistance programs for disadvantaged entrepreneurs; and</text> </paragraph><paragraph id="H5E8C11389F114FBB8C9800DD448FF259"><enum>(4)</enum><text>for such other activities as the Administrator determines are consistent with the purposes of this section.</text> </paragraph></subsection><subsection id="H1E8D1F6D06E74FC295D7B0B62110A23E"><enum>(d)</enum><header>Qualified organizations</header><text>For purposes of eligibility for assistance under this section, a qualified organization shall be—</text> <paragraph id="HB1D0AC53388D4FE49DBFA408D6CEFD9C"><enum>(1)</enum><text>a nonprofit microenterprise development organization or program (or a group or collaborative thereof) that has a demonstrated record of delivering microenterprise services to disadvantaged entrepreneurs;</text> </paragraph><paragraph id="H8554AAD684F24AC99D4BD8C4545E1641"><enum>(2)</enum><text>an intermediary;</text> </paragraph><paragraph id="H264CFBB97BFF4B8890E2FDB330A1A578"><enum>(3)</enum><text>a microenterprise development organization or program that is accountable to a local community, working in conjunction with a State or local government or Indian tribe; or</text> </paragraph><paragraph id="H37D2119A6DD64D8A928FA99ECD7288C9"><enum>(4)</enum><text>an Indian tribe acting on its own, if the Indian tribe can certify that no private organization or program referred to in this paragraph exists within its jurisdiction.</text> </paragraph></subsection><subsection id="H22E7C761A0754BB59C81A56295E6F4FE"><enum>(e)</enum><header>Allocation of assistance; subgrants</header> <paragraph id="HA7D8AADD68C742378DD6153C9389D467"><enum>(1)</enum><header>Allocation of assistance</header> <subparagraph id="H634AB7B3F6DE4189905ED5D2A5DE3E1E"><enum>(A)</enum><header>In general</header><text>The Administrator shall allocate assistance from the Administration under this section to ensure that—</text> <clause id="H3B8B4A10C3A84FBA989CC1EFFE61A95D"><enum>(i)</enum><text>activities described in subsection (c)(1) are funded using not less than 75 percent of amounts made available for such assistance; and</text> </clause><clause id="H623E9CA6A5A941D98EB7E8C61D494943"><enum>(ii)</enum><text>activities described in subsection (c)(2) are funded using not less than 15 percent of amounts made available for such assistance.</text> </clause></subparagraph><subparagraph id="HC5BFA5FAC9AF446BBCE2A3CD827FB900"><enum>(B)</enum><header>Limit on individual assistance</header><text>No single person may receive more than 10 percent of the total funds appropriated under this section in a single fiscal year.</text> </subparagraph></paragraph><paragraph id="HDB7DE13D2D3F4719BE6D98D27914AE6E"><enum>(2)</enum><header>Targeted assistance</header><text>The Administrator shall ensure that not less than 50 percent of the grants made under this section are used to benefit very low-income persons, including those residing on Indian reservations.</text> </paragraph><paragraph id="HBD453F82664D4401A30253832E54E4DE"><enum>(3)</enum><header>Subgrants authorized</header> <subparagraph id="HE219B8C6B4DC4A91A69D27397FAB0003"><enum>(A)</enum><header>In general</header><text>A qualified organization receiving assistance under this section may provide grants using that assistance to qualified small and emerging microenterprise organizations and programs, subject to such rules and regulations as the Administrator determines to be appropriate.</text> </subparagraph><subparagraph id="HA508A26041B64B84971CC6B1B92E733D"><enum>(B)</enum><header>Limit on administrative expenses</header><text>Not more than 7.5 percent of assistance received by a qualified organization under this section may be used for administrative expenses in connection with the making of subgrants under subparagraph (A).</text> </subparagraph></paragraph><paragraph id="H1AAD805FCF774896A279FCBD27DE6A"><enum>(4)</enum><header>Diversity</header><text>In making grants under this section, the Administrator shall ensure that grant recipients include both large and small microenterprise organizations, serving urban, rural, and Indian tribal communities serving diverse populations.</text> </paragraph><paragraph id="HEA23358B463341B28B00903571AD2EC"><enum>(5)</enum><header>Prohibition on preferential consideration of certain SBA Program participants</header><text>In making grants under this section, the Administrator shall ensure that any application made by a qualified organization that is a participant in the program established under section 7(m) does not receive preferential consideration over applications from other qualified organizations that are not participants in such program.</text> </paragraph></subsection><subsection id="HDBD262FA59A443298F5ED354F0D4B406"><enum>(f)</enum><header>Matching requirements</header> <paragraph id="H9DCD120DE783462B00005B346CB75527"><enum>(1)</enum><header>In general</header><text>Financial assistance under this section shall be matched with funds from sources other than the Federal Government on the basis of not less than 50 percent of each dollar provided by the Administration.</text> </paragraph><paragraph id="HD493013507C84D68006681158BD9E574"><enum>(2)</enum><header>Sources of matching funds</header><text>Fees, grants, gifts, funds from loan sources, and in-kind resources of a grant recipient from public or private sources may be used to comply with the matching requirement in paragraph (1).</text> </paragraph><paragraph id="H70EC17BC835F46B59679611300513892"><enum>(3)</enum><header>Exception</header> <subparagraph id="H07440372CE5D411200070418367C09AD"><enum>(A)</enum><header>In general</header><text>In the case of an applicant for assistance under this section with severe constraints on available sources of matching funds, the Administrator may reduce or eliminate the matching requirement in paragraph (1).</text> </subparagraph><subparagraph id="HA41811050A8D4F84A74CC2E47C6987FA"><enum>(B)</enum><header>Limitation</header><text>Not more than 10 percent of the total funds made available from the Administration in any fiscal year to carry out this section may be excepted from the matching requirement in paragraph (1), as authorized by subparagraph (A).</text> </subparagraph></paragraph></subsection><subsection id="HAE94C4A98E71452785CE05FA9FA8D09E"><enum>(g)</enum><header>Applications for assistance</header><text>An application for assistance under this section shall be submitted in such form and in accordance with such procedures as the Administrator shall establish.</text> </subsection><subsection id="H1C47D0B3A98B411D8BA6906DEFB0022"><enum>(h)</enum><header>Recordkeeping</header> <paragraph display-inline="no-display-inline" id="H578736126EE44FDABD5478B3EE16B5D"><enum>(1)</enum><header>In General</header><text>A qualified organization receiving assistance from the Administration under this section shall keep such records, for such periods as may be prescribed by the Administrator and necessary to disclose the manner in which any assistance under this section is used and to demonstrate compliance with the requirements of this section.</text> </paragraph><paragraph id="HB3772B47C86D4F3F97EBB707C0C1119B"><enum>(2)</enum><header>User Profile Information</header><text>The Administrator shall require each qualified organization receiving assistance from the Administration under this section to compile such data, as is determined to be appropriate by the Administrator, on the gender, race, ethnicity, national origin, or other pertinent information concerning individuals that utilize the services of the assisted organization to ensure that targeted populations and low-income residents of investment areas are adequately served.</text> </paragraph><paragraph id="H371F751D59BB401697CA124C58B21B9E"><enum>(3)</enum><header>Access to Records</header><text>The Administrator shall have access on demand, for the purpose of determining compliance with this section, to any records of a qualified organization that receives assistance from the Administration under this section.</text> </paragraph><paragraph id="H729B0BD0A5A0431CAE0047007478B871"><enum>(4)</enum><header>Review</header><text>Not less than annually, the Administrator shall review the progress of each assisted organization in carrying out its strategic plan, meeting its performance goals, and satisfying the terms and conditions of its assistance agreement.</text> </paragraph><paragraph id="H9FE1DF1DA1AD45898C6E2E87A75DDE00"><enum>(5)</enum><header>Reporting</header> <subparagraph id="H69708A790F4C4994A56FEE403D997E92"><enum>(A)</enum><header>Annual reports</header><text>The Administrator shall require each qualified organization receiving assistance from the Administration under this section to submit an annual report to the Administrator on its activities, its financial condition, and its success in meeting performance goals, in satisfying the terms and conditions of its assistance agreement, and in complying with other requirements of this section, in such form and manner as the Administrator shall specify.</text> </subparagraph><subparagraph id="H03876AC72231458FBE14CAE43BBDE22C"><enum>(B)</enum><header>Availability of reports</header><text>The Administrator, after deleting or redacting any material as appropriate to protect privacy or proprietary interests, shall make such reports submitted under subparagraph (A) available for public inspection.</text> </subparagraph></paragraph></subsection><subsection id="H23A4040378EC4193B031E008DB968500"><enum>(i)</enum><header>Implementation</header><text>The Administrator shall, by regulation, establish such requirements as may be necessary to carry out this section.</text> </subsection></section><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></section><section id="HBDA3DC20177E448AB21734FFC498A667"><enum>203.</enum><header>Conforming repeal</header><text display-inline="no-display-inline">Subtitle C (15 U.S.C. 6901 et seq.) of title I of the Riegle Community Development and Regulatory Improvement Act of 1994 is repealed.</text> </section> Passed the House of Representatives September 4, 2007. Lorraine C. Miller, Clerk.Jorge E. Sorensen, Deputy Clerk.