[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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