[Congressional Record Volume 145, Number 49 (Monday, April 12, 1999)]
[House]
[Pages H1817-H1818]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          MICROLOAN PROGRAM TECHNICAL CORRECTIONS ACT OF 1999

  Mr. PEASE. Mr. Speaker, I move to suspend the rules and concur in the 
Senate amendment to the bill (H.R. 440) to make technical corrections 
to the Microloan Program.
  The Clerk read as follows:
       Senate Amendment:
       Page 2, strike out all after line 6 down to and including 
     line 20 and insert:
       (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
       ``(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

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Indiana (Mr. Pease) and the gentlewoman from New York (Ms. Velazquez) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Indiana (Mr. Pease).
  Mr. PEASE. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, let me begin by thanking my colleagues, the chairman of 
the committee, the gentleman from Missouri (Mr. Talent), and the 
ranking member of the committee, the gentlewoman from New York (Ms. 
Velazquez). I appreciate their assistance in moving this bill and their 
help in fashioning it.
  Mr. Speaker, this is a technical corrections bill, and though it is 
important work, it need not occupy a great deal of the House's time. 
H.R. 440 is the same bill that the House passed on February 9 of this 
year by an overwhelming margin. H.R. 440 corrects the provisions of the 
loan loss reserve requirements of the microloan program at the Small 
Business Administration.
  The microloan program was established as a pilot program in 1991 and 
made permanent in 1997. It provides small loans under $25,000 to the 
Nation's smallest entrepreneurs. These loans are made through SBA-
certified and -approved nonprofit lending and business development 
intermediaries. These intermediaries borrow funds from the SBA and, in 
turn, lend those funds to small businesses. In order to protect 
taxpayer assets, the intermediaries are required to maintain a loss 
reserve based on the amount of microloans they have outstanding.
  Mr. Speaker, the Senate amendment made some clarifications to the 
House-passed version of the bill. These changes make no substantive 
changes in the purpose of the bill, but they do tighten the language 
that provides for some minimum allocation for States with microloan 
programs. The amendment is necessary to make doubly sure that there is 
no mistake between congressional intent and agency execution.
  The amendment makes clear that subject to appropriations, all State 
microloan programs shall have access to at least 1/55th of all new 
funds allocated for the program. This amount will be available until 
the beginning of the third quarter, at which point all funds will be 
available to any eligible intermediary.
  Mr. Speaker, this bill is not headline material but it is important 
work nonetheless. It will have a real impact on the very smallest of 
businesses in this country seeking start-up financing and at the end of 
the day that is the most important part of our job on the Committee on 
Small Business.
  Let me again thank my colleagues, the gentleman from Missouri 
(Chairman Talent) and ranking member, the gentlewoman from New York 
(Ms. Velazquez), and the committee staff for their assistance in moving 
the measure before us.
  Mr. Speaker, I urge my colleagues to support H.R. 440.
  Mr. Speaker, I reserve the balance of my time
  Ms. VELAZQUEZ. Mr. Speaker, I yield myself such as time as I may 
consume.
  Mr. Speaker, I would like to begin by thanking the gentleman from 
Missouri (Chairman Talent) for working with me to move quickly to pass 
the Microloan Program Technical Corrections Act. These changes are 
important for small entrepreneurs because they would allow lenders to 
make more loans and increase technical assistance.
  Everyone agrees that the challenge facing most entrepreneurs is 
access to capital. Now, consider the special challenges to 
microenterprises. It is often more difficult, if not impossible, for 
many microenterprises to get the financing they need. Microborrowers 
are either start-up or growth-phase businesses which are unable to meet 
a lender's collateral or credit requirements. For many private lenders, 
it is simply not feasible to make the small loans that entrepreneurs 
need to start or expand their business.
  To address this problem, the Small Business Administration launched 
the microloan pilot project in 1992. This program was designed to help 
underserved start-up and existing small business owners that do not 
have access to financing. Since its inception, the microloan program 
has helped countless businesses start up and grow. Today, with over 100 
participating intermediaries, the SBA microloan program is the largest 
Federal program of its kind. It has a proven record of giving small 
businesses the support they need to succeed.
  One of the most important aspects of the microloan program is its 
ability to reach women and minorities. Often women and minorities do 
not have the credit history or necessary capital to get a loan from a 
bank or other traditional channel. This is where the microloan program 
steps in and provides the tools to help these business owners achieve 
the American dream. In fact, the microloan program has become a 
traditional funding source for women entrepreneurs.
  That is why today's legislation is so important. The first thing that 
the Microloan Program Technical Corrections Act will do is remove the 
State formula caps. The caps were put in place in order to ensure 
equitable distribution of funds, but resulted in just the opposite. By 
removing the cap, we will be ensuring that all States have access to 
the program.
  Additionally, the most recent Senate amendments make sure that every 
State and territory gets its fair share of microloan funding. Under the 
latest change, if the program is fully funded, each State will receive 
an equal part of the full appropriations. In the case that each State 
receives its $800,000, any extra microloan funding will be distributed 
by SBA at the administrator's discretion.
  I would say to my colleague, by allowing lenders with successful loan 
portfolios to make more loans and to provide additional technical 
assistance, today's legislation will only help

[[Page H1818]]

more microenterprises grow. Providing additional technical assistance 
to businesses will enable entrepreneurs who are on the threshold of 
moving forward the opportunity to do so.
  The microloan program has proved invaluable in helping America's 
small businesses grow. I am glad that we are moving quickly to pass 
this crucial legislation and that we are looking for ways to improve 
this important program.
  Mr. Speaker, I yield back the balance of my time.
  Mr. PEASE. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I wish to acknowledge again the work of the gentlewoman 
from New York (Ms. Velazquez) and the work of the chairman of our 
committee, the gentleman from Missouri (Mr. Talent), on this important 
piece of legislation. I urge the support of our colleagues for its 
passage.


                             general leave

  Mr. PEASE. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days within which to revise and extend their remarks 
on H.R. 440.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Indiana?
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Indiana (Mr. Pease) that the House suspend the rules and 
concur in the Senate amendment to the bill, H.R. 440.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the Senate amendment was 
concurred in.
  A motion to reconsider was laid on the table.

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