[Congressional Record Volume 144, Number 80 (Thursday, June 18, 1998)]
[Senate]
[Pages S6567-S6570]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KENNEDY (for himself, Mr. Domenici, Mr. Kerry, and Mr. 
        Bingaman):
  S. 2190. A bill to authorize qualified organizations to provide 
technical assistance and capacity building services to microenterprise 
development organizations and programs and to disadvantaged 
entrepreneurs using funds from the Community Development Financial 
Institutions Fund, and for other purposes; to the Committee on Banking, 
Housing, and Urban Affairs.


 THE PROGRAM FOR INVESTMENT IN MICRO-ENTREPRENEURS (PRIME) ACT OF 1998

  Mr. KENNEDY. Mr. President, it is a privilege to join Senator 
Domenici, Senator Kerry, and Senator Bingaman in introducing the ``The 
Program for Investment in Micro-Entrepreneurs'' Act--the PRIME Act. 
This legislation will encourage investment in micro-entrepreneurs by 
supporting the kinds of education and training needed to help build new 
small businesses.
  Today, the nation's entrepreneurial spirit is thriving, fueled by the 
extraordinary economic growth and prosperity we currently enjoy. But 
new entrepreneurs still face challenges that limit their ability to 
turn innovative ideas into successful businesses and create new jobs. 
They deserve assistance in learning the basics to take their ideas to 
the next level--starting their own firms.
  The ``PRIME'' Act is designed to help small entrepreneurs bridge the 
gap between worthwhile ideas and successful businesses. It will offer 
$105 million over the next five years to build business skills in key 
areas such as record-keeping, planning, management, marketing and 
computer technology.
  The Clinton Administration strongly supports these initiatives. The 
Treasury Department's Community Development Financial Institutions Fund 
has become a lead agency for micro-enterprise activities across the 
country, and First Lady Hillary Rodham Clinton is one of their 
strongest advocates.
  The PRIME Act will enhance all of these efforts. It will provide 
grants for micro-enterprise organizations across the country to assist 
disadvantaged and low-income entrepreneurs and provide them with 
essential training and education.
  It will encourage the development of new micro-enterprise 
organizations, and expand existing ones to reach more micro-
entrepreneurs.
  It will sponsor research on the most innovative and successful ways 
of encouraging these new businesses and enabling them to succeed.
  Under the Act, grants will be available each year to organizations 
that work with entrepreneurs. Local groups will leverage these funds 
with private and local resources to increase the impact of the federal 
seed money.
  Massachusetts and New Mexico are leaders in this effort. The business 
community and local banks have made a significant investment in 
creating loan capital for micro-entrepreneurs to start their 
businesses.
  By investing in micro-entrepreneurs, we will be harnessing the spirit 
and ideas of large numbers of Americans and creating new opportunities 
for self-sufficiency. We will be encouraging new small businesses that 
will strengthen the local economy in communities across the country. 
And that

[[Page S6568]]

result in turn will help to keep our national economy strong as well. I 
look forward to working closely with our colleagues in the Senate and 
the House to enact this important measure.
  I ask unanimous consent that the text of the legislation be printed 
in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2190

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. PROVISION OF TECHNICAL ASSISTANCE TO 
                   MICROENTERPRISES.

       Title I of the Riegle Community Development and Regulatory 
     Improvement Act of 1994 (12 U.S.C. 4701 et seq.) is amended 
     by adding at the end the following new subtitle:

    ``Subtitle C--Microenterprise Technical Assistance and Capacity 
                            Building Program

     ``SEC. 171. SHORT TITLE.

       ``This subtitle may be cited as the `Program for Investment 
     in Microentrepreneurs Act of 1998', also referred to as the 
     `PRIME Act'.

     ``SEC. 172. DEFINITIONS.

       ``For purposes of this subtitle--
       ``(1) the term `Administrator' has the same meaning as in 
     section 103;
       ``(2) the term `capacity building services' means services 
     provided to an organization that is, or 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;
       ``(3) the term `collaborative' means 2 or more nonprofit 
     entities that agree to act jointly as a qualified 
     organization under this subtitle;
       ``(4) the term `disadvantaged entrepreneur' means a 
     microentrepreneur that is--
       ``(A) a low-income person;
       ``(B) a very low-income person; or
       ``(C) an entrepreneur that lacks adequate access to capital 
     or other resources essential for business success, or is 
     economically disadvantaged, as determined by the 
     Administrator;
       ``(5) the term `Fund' has the same meaning as in section 
     103;
       ``(6) the term `Indian tribe' has the same meaning as in 
     section 103;
       ``(7) the term `intermediary' means a private, nonprofit 
     entity that seeks to serve microenterprise development 
     organizations and programs as authorized under section 175;
       ``(8) the term `low-income person' has the same meaning as 
     in section 103;
       ``(9) the term `microentrepreneur' means the owner or 
     developer of a microenterprise;
       ``(10) the term `microenterprise' means a sole 
     proprietorship, partnership, or corporation that--
       ``(A) has fewer than 5 employees; and
       ``(B) generally lacks access to conventional loans, equity, 
     or other banking services;
       ``(11) the term `microenterprise development organization 
     or program' 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 or prospective 
     entrepreneurs;
       ``(12) the term `training and technical assistance' means 
     services and support provided to disadvantaged entrepreneurs 
     or prospective 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; and
       ``(13) the term `very low-income person' means having an 
     income, adjusted for family size, of not more than 150 
     percent of the poverty line (as defined in section 673(2) of 
     the Community Services Block Grant Act (42 U.S.C. 9902(2), 
     including any revision required by that section).

     ``SEC. 173. ESTABLISHMENT OF PROGRAM.

       ``The Administrator shall establish a microenterprise 
     technical assistance and capacity building grant program to 
     provide assistance from the Fund in the form of grants to 
     qualified organizations in accordance with this subtitle.

     ``SEC. 174. USES OF ASSISTANCE.

       ``A qualified organization shall use grants made under this 
     subtitle--
       ``(1) to provide training and technical assistance to 
     disadvantaged entrepreneurs;
       ``(2) 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;
       ``(3) to aid in researching and developing the best 
     practices in the field of microenterprise and technical 
     assistance programs for disadvantaged entrepreneurs; and
       ``(4) for such other activities as the Administrator 
     determines are consistent with the purposes of this subtitle.

     ``SEC. 175. QUALIFIED ORGANIZATIONS.

       ``For purposes of eligibility for assistance under this 
     subtitle, a qualified organization shall be--
       ``(1) 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;
       ``(2) an intermediary;
       ``(3) 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
       ``(4) 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.

     ``SEC. 176. ALLOCATION OF ASSISTANCE; SUBGRANTS.

       ``(a) Allocation of Assistance.--
       ``(1) In general.--The Administrator shall allocate 
     assistance from the Fund under this subtitle to ensure that--
       ``(A) activities described in section 174(1) are funded 
     using not less than 75 percent of amounts made available for 
     such assistance; and
       ``(B) activities described in section 174(2) are funded 
     using not less than 15 percent of amounts made available for 
     such assistance.
       ``(2) Limit on individual assistance.--No single 
     organization or entity may receive more than 10 percent of 
     the total funds appropriated under this subtitle in a single 
     fiscal year.
       ``(b) Targeted Assistance.--The Administrator shall ensure 
     that not less than 50 percent of the grants made under this 
     subtitle are used to benefit very low-income persons, 
     including those residing on Indian reservations.
       ``(c) Subgrants Authorized.--
       ``(1) In general.--A qualified organization receiving 
     assistance under this subtitle 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.
       ``(2) Limit on administrative expenses.--Not more than 7.5 
     percent of assistance received by a qualified organization 
     under this subtitle may be used for administrative expenses 
     in connection with the making of subgrants under paragraph 
     (1).
       ``(d) Diversity.--In making grants under this subtitle, the 
     Administrator shall ensure that grant recipients include both 
     large and small microenterprise organizations, serving urban, 
     rural, and Indian tribal communities and racially and 
     ethnically diverse populations.

     ``SEC. 177. MATCHING REQUIREMENTS.

       ``(a) In General.--Financial assistance under this subtitle 
     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 Fund.
       ``(b) Sources of Matching Funds.--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 subsection (a).
       ``(c) Exception.--
       ``(1) In general.--In the case of an applicant for 
     assistance under this subtitle with severe constraints on 
     available sources of matching funds, the Administrator may 
     reduce or eliminate the matching requirements of subsection 
     (a).
       ``(2) Limitation.--Not more than 10 percent of the total 
     funds made available from the Fund in any fiscal year to 
     carry out this subtitle may be excepted from the matching 
     requirements of subsection (a), as authorized by paragraph 
     (1) of this subsection.

     ``SEC. 178. APPLICATIONS FOR ASSISTANCE.

       ``An application for assistance under this subtitle shall 
     be submitted in such form and in accordance with such 
     procedures as the Fund shall establish.

     ``SEC. 179. RECORDKEEPING.

       ``The requirements of section 115 shall apply to a 
     qualified organization receiving assistance from the Fund 
     under this subtitle as if it were a community development 
     financial institution receiving assistance from the Fund 
     under subtitle A.

     ``SEC. 180. AUTHORIZATION.

       ``In addition to funds otherwise authorized to be 
     appropriated to the Fund to carry out this title, there are 
     authorized to be appropriated to the Fund to carry out this 
     subtitle--
       ``(1) $15,000,000 for fiscal year 1999;
       ``(2) $25,000,000 for fiscal year 2000;
       ``(3) $30,000,000 for fiscal year 2001; and
       ``(4) $35,000,000 for fiscal year 2002.

     ``SEC. 181. IMPLEMENTATION.

       ``The Administrator shall, by regulation, establish such 
     requirements as may be necessary to carry out this 
     subtitle.''.

     SEC. 2. ADMINISTRATIVE EXPENSES.

       Section 121(a)(2)(A) of the Riegle Community Development 
     and Regulatory Improvement Act of 1994 (12 U.S.C. 
     4718(a)(2)(A)) is amended--
       (1) by striking ``$5,550,000'' and inserting 
     ``$6,100,000''; and
       (2) in the first sentence, by inserting before the period 
     ``, including costs and expenses associated with carrying out 
     subtitle C''.

     SEC. 3. CONFORMING AMENDMENTS.

       Section 104(d) of the Riegle Community Development and 
     Regulatory Improvement Act of 1994 (12 U.S.C. 4703(d)) is 
     amended--
       (1) in paragraph (2)--
       (A) by striking ``15'' and inserting ``17'';
       (B) in subparagraph (G)--
       (i) by striking ``9'' and inserting ``11'';
       (ii) by redesignating clauses (iv) and (v) as clauses (v) 
     and (vi), respectively; and
       (iii) by inserting after clause (iii) the following:

[[Page S6569]]

       ``(iv) 2 individuals who have expertise in microenterprises 
     and microenterprise development;''; and
       (2) in paragraph (4), in the first sentence, by inserting 
     before the period ``and subtitle C''.
  Mr. DOMENICI. Mr. President, it is a pleasure to join with Senator 
Kennedy in support of the PRIME Act, ``Program for Investment in Micro-
Entrepreneurs Act of 1998.''
  Starting one's own business is a part of the American dream. There 
are thousands of creative and hardworking men and women who believe 
they have a solid idea for building a new business. The realities of 
beginning a business are that it takes more than luck, hard labor, and 
dedication to make it work. There are often overwhelming obstacles for 
would-be small and micro entrepreneurs, due in part of the complexity 
of local, state and federal laws, the necessity of understanding the 
intricacies of marketing, feasibility studies, and bookkeeping 
practices, as well as finding a source for capital. Entrepreneurs 
usually need basic assistance to bring their idea to a viable business 
enterprise. They need training, technical assistance, and mentoring.
  Under this bill grants will be available through the Community 
Development Financial Institutions Fund, matched at least 50 percent in 
non-federal funds, to help experienced non-profit organizations provide 
the assistance these new businesses so urgently require. Fifty percent 
of these grants will be awarded to applicants serving low-income 
clients, and those serving equally both urban and rural areas. From so 
many case studies and histories of successful businesses, we know that 
enthusiastic entrepreneurs can sustain and build their businesses when 
these organizations are available to provide critical training and 
professional, technical assistance.
  I have had the pleasure of visiting countless new micro-level 
businesses in my State of New Mexico, a great majority of whom received 
assistance from the very competent WEEST Corp organization, now located 
in five different sites throughout our State. This organization not 
only provides key technical assistance and training and access to low 
interest revolving loans, but it also provides mentoring and 
information about sound business practices to ensure their creative 
ideas become viable business entities.
  Micro and small businesses are an absolutely critical component of 
our national economic growth. The Small Business Administration, for 
example, lends excellent support to entrepreneurs. At the small time, 
the PRIME Act will establish a complimentary program by enabling 
intermediary organizations to serve a more micro-level entrepreneurs 
who need specialized and hands-on assistance. This is a good investment 
for the future, and will be returned many fold by the creation of 
businesses that can contribute to the growth of the family, local, and 
national economies.
  There are many success stories we can all point to about the business 
that began with an idea and eventually grew into a major global 
corporation. It all began with the basic tenacity of a businessman, 
woman, or family. We have no way of knowing how many more such success 
stories will be told in the future. It is guaranteed, however, that 
there are thousands of such extraordinary entrepreneurs willing to 
provide the ideas and hard labor to make it happen, and with a little 
help, they will be successful.
  Again, I am pleased to join Senator Kennedy in cosponsoring the PRIME 
Act. Whatever we can do to assist who want to be self-reliant, 
successful entrepreneurs, with a piece of the American dream, is an 
investment well worth taking.
  Mr. BINGAMAN. Mr. President, I rise today to offer my very 
enthusiastic support for the micro-enterprise bill being introduced by 
Senator Kennedy. Programs of this type provide technical support and 
funding to thousands of potentially productive Americans who are 
struggling to make ends meet and are looking for a way out of their 
current precarious economic situation.
  I have visited microenterprise businesses in my state and know they 
work. These individuals possess energy, ingenuity, desire, and vision 
but currently lack access to three important ingredients that will 
allow them to be successful in their entrepreneurial efforts: business 
management training, knowledge of the market, and affordable capital. 
This bill will provide all three ingredients, and will do so in areas 
of the country that need economic assistance.
  Microenterprise is not charity and it does not foster dependence. 
Instead, it encourages individuals to use their specific strengths and 
creativity to support themselves and their community. It is a market-
based approach to economic empowerment and self-reliance that has 
proven to be successful both here and overseas, and it deserves to be 
expanded. It offers an alternative to poverty and provides the means 
by which individuals and communities can be saved from cycles of 
isolation, violence, and despair.

  In New Mexico, I have seen the tangible results of microenterprise 
programs. One organization we have interacted with, ACCION, provided 
funds for Michael and Jamie Ford to begin a very successful business 
selling flies for fly-fishing in their community and over the Internet. 
They were recently named the Small Business Administration's Welfare-
to-Work Entrepreneur of the Year in New Mexico. Another organization, 
the New Mexico Business Resource Center, recommended that funds be 
provided through New Mexico Community Development Loan Fund to Kevin 
Bellinger, who created a unique art and dance program for disadvantaged 
youths called Harambe. Here, low-income individuals are taught to 
interact in non-violent and constructive ways and give back to the 
community in which they live. Mr. Bellinger was recently selected by 
New Mexico Newspaper as one of the top ten people in Santa Fe making a 
real difference in their community.
  In Taos, the Taos County Economic Development Corporation providing 
funding for the Taos Food Center, a commercial kitchen that acts as an 
incubator for small-scale food producers and farmers in the region.
  Previously, these individuals could not afford to rent space, buy 
commercial and office equipment, or market their products. With the 
assistance of microenterprise funds, the Taos Food Center provides the 
space and the equipment and provides on-site technical and business 
assistance. This allows individuals to rent the facility by the hour, 
and convert their crops into marketable products.
  Other microenterprise organizations in New Mexico--the Rio Grande 
Community Development Corporation, La Jicarita Enterprise Community, 
WESST Corp., and so on--have had similarly stellar results. They play 
essential roles in their communities, and they should be commended for 
their efforts.
  In April, I organized a roundtable discussion of all the 
microenterprise organizations operating in New Mexico. This was the 
first time representatives from these organizations met in the same 
location to discuss their respective philosophies, objectives, and 
strategies concerning microenterprise, and it was very beneficial to 
all of us. The dialogue with the organizations that began that day has 
continued to the present, and has only reinforced by commitment to 
these programs. The simple fact is: the work, and they work well.
  The bill we are introducing today would accomplish several important 
tasks:
  First, it will provide training, technical assistance, and start-up 
funds to potential entrepreneurs who are currently disadvantaged but 
eager to change their economic condition;
  Second, it will provide training and capacity building services to 
microenterprise development organizations, an activity that will lead 
directly to the expansion of microenterprise funding and an increased 
number of clients being served;
  Third, it will identify best practices in microenterprise technical 
and lending services, an activity that will further enhance efforts to 
provide funds to individuals in an efficient and effective manner;
  Finally, it will ensure that microenterprise lending occurs in all 
areas that require assistance--meaning both rural and urban 
communities.
  Let me conclude by thanking my colleague from Massachusetts and his 
staff for their work on this bill. I have been pleased to work with 
Senator Kennedy on the development of the

[[Page S6570]]

components contained within the bill, in particular those related to 
rural communities and Indian reservations. I believe that this bill 
will have a profound effect on the ability of low-income individuals to 
establish businesses, develop new products and services, and create new 
jobs. All of these activities can only help individuals and communities 
in the United States in a positive way.
                                 ______