[Congressional Record Volume 145, Number 48 (Thursday, March 25, 1999)]
[Senate]
[Pages S3565-S3566]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         MAKING TECHNICAL CORRECTIONS TO THE MICROLOAN PROGRAM

  Mr. ENZI. Mr. President, I ask unanimous consent that the Committee 
on Small Business be discharged from further consideration of H.R. 440, 
and that the Senate proceed to its immediate consideration.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report.
  The legislative clerk read as follows:

       A bill (H.R. 440) to make technical corrections in the 
     Microloan Program.

  The PRESIDING OFFICER. Is there objection to the immediate 
consideration of the bill?
  There being no objection, the Senate proceeded to consider the bill.
  Mr. KERRY. Mr. President, tonight the Senate will vote on H.R. 440, 
the Microloan Program Technical Corrections Act of 1999. I urge my 
colleagues to support this Act which, including my amendment, makes 
important changes to the Small Business Administration's (SBA) 
Microloan program. It revises the loan loss reserve requirement for 
microlenders and makes changes that will more equitably distribute the 
microloan dollars available to each state. Ultimately, these changes 
will allow microlenders and intermediaries to make more loans and offer 
more technical assistance to our nation's small businesses.
  Most of my colleagues know that microloans and technical assistance 
are effective and powerful economic development tools because they 
voted to make the SBA's microloan program a permanent part of the 
Agency's lending programs in 1997.
  Let's look at the record since the SBA's microloan pilot program was 
launched in 1991. It has provided more than 7,900 microloans, worth 
some $80.3 million. For every microloan, 1.7 jobs are created. And, if 
a borrower was a welfare recipient, it is common for them to hire other 
welfare recipients. As the program was intended to do, a great 
percentage of microloans have gone to traditionally underserved groups, 
including 45 percent to women-owned businesses, 39 percent to minority-
owned businesses and 11 percent to veteran-owned businesses. Voting for 
these measures will be a vote to make a good program better.
  Specifically, this legislation revises the loan loss reserve 
requirement (a cash reserve to guarantee that the government is paid 
back if a loan defaults) for microlenders by setting a 15-percent 
ceiling and a 10-percent floor. After a microloan intermediary has 
participated in the SBA Microloan program for five years and 
demonstrated its ability to maintain a healthy loan fund, it can 
request that SBA review and, when appropriate, reduce its loan loss 
reserve from 15 percent to a percentage based on its average loan loss 
rate for the five-year period. The proposed change would continue to 
protect the government's interest in microloans as well as enhance the 
program by freeing up cash which microlenders could reprogram for more 
microloans or technical assistance to small business owners.
  With my amendment, this legislation establishes a floor for the 
distribution of microloan funds available to the states, including the 
District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin 
Islands, Guam, and American Samoa. Depending on the amount of 
appropriations, the SBA must provide the lesser of either $800,000 or 
the even division of the funds among the 55 states. For any monies that 
exceed $44 million ($800,000 x 55 states), the Administration has the 
discretion to decide how to distribute the microloan funds. The 
Administration also has the discretion to distribute any additional 
money that is left over at the beginning of the third quarter of a 
fiscal year.
  Mr. President, in Massachusetts and across the country, microloans 
and technical assistance are working; assisting individuals with the 
tools to successfully start and manage their own business. I thank my 
colleagues for their past support of small business and urge them to 
vote for H.R. 440 as amended.


                           Amendment No. 248

   (Purpose: To provide for the equitable allocation of appropriated 
                                amounts)

  Mr. ENZI. Mr. President, I send an amendment to the desk and ask for 
its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Wyoming [Mr. Enzi], for Mr. Kerry, 
     proposes an amendment numbered 248.

  Mr. ENZI. Mr. President, I ask unanimous consent that reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       On page 2, strike lines 7 through 20, and insert the 
     following:
       (1) in paragraph (7), by striking subparagraph (B) and 
     inserting the following:
       ``(B) Allocation.--
       ``(i) Minimum allocation.--Subject to the availability of 
     appropriations, of the total amount of new loan funds made 
     available for award under this subsection in each fiscal 
     year, the Administration shall make available for award in 
     each State (including the District of Columbia, the 
     Commonwealth of Puerto Rico, the United States Virgin 
     Islands, Guam, and American Samoa) an amount equal to the sum 
     of--
       ``(I) the lesser of--
       ``(aa) $800,000; or

[[Page S3566]]

       ``(bb) \1/55\ of the total amount of new loan funds made 
     available for award under this subsection for that fiscal 
     year; and
       ``(II) any additional amount, as determined by the 
     Administration.
       ``(ii) Redistribution.--If, at the beginning of the third 
     quarter of a fiscal year, the Administration determines that 
     any portion of the amount made available to carry out this 
     subsection is unlikely to be made available under clause (i) 
     during that fiscal year, the Administration may make that 
     portion available for award in any 1 or more States 
     (including the District of Columbia, the Commonwealth of 
     Puerto Rico, the United States Virgin Islands, Guam, and 
     American Samoa) without regard to clause (i).''; and

  Mr. ENZI. Mr. President, I ask unanimous consent that the amendment 
be agreed to, the motion to reconsider be laid upon the table, the 
bill, as amended, be considered read the third time, passed, and the 
motion to reconsider be laid upon the table, all without any 
intervening action or debate.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 248) was agreed to.
  The bill (H.R. 440), as amended, was considered read the third time 
and passed.

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