[Congressional Record (Bound Edition), Volume 150 (2004), Part 19]
[Senate]
[Pages 25367-25369]
[From the U.S. Government Publishing Office, www.gpo.gov]




         MICROENTERPRISE RESULTS AND ACCOUNTABILITY ACT OF 2004

  Mr. FRIST. I ask unanimous consent the Senate proceed to the 
immediate consideration of S. 3027, introduced earlier today by Senator 
DeWine.
  The PRESIDING OFFICER. The clerk will report the bill by title.
  The assistant legislative clerk read as follows:

       A bill (S. 3027) to amend the Foreign Assistance Act of 
     1961 to improve the results and accountability of 
     microenterprise development assistance programs, and for 
     other purposes.

  There being no objection, the Senate proceeded to consider the bill.
  Mr. FRIST. I ask unanimous consent the bill be read a third time and 
passed, the motion to reconsider be laid upon the table, and any 
statements be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The bill (S. 3027) was read the third time and passed, as follows:

                                S. 3027

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Microenterprise Results and 
     Accountability Act of 2004''.

     SEC. 2. FINDINGS AND POLICY.

       Congress finds and declares the following:
       (1) Congress has demonstrated its support for 
     microenterprise development assistance programs through the 
     enactment of two comprehensive microenterprise laws:
       (A) The Microenterprise for Self-Reliance Act of 2000 
     (title I of Public Law 106-309; 114 Stat. 1082).
       (B) Public Law 108-31 (an Act entitled ``An Act to amend 
     the Microenterprise for Self-Reliance Act of 2000 and the 
     Foreign Assistance Act of 1961 to increase assistance for the 
     poorest people in developing countries under microenterprise 
     assistance program under those Acts, and for other 
     purposes'', approved June 17, 2003).
       (2) The report on the effectiveness of the United States 
     Agency for International Development's microfinance program, 
     prepared by the Consultative Group to Assist the Poor, rated 
     the Agency in the top tier of the 17 donors in this field.
       (3) The Comptroller General, in a report dated November 
     2003, found that the United States Agency for International 
     Development has met some, but not all, of the key objectives 
     of such microenterprise development assistance programs.
       (4) The Comptroller General's report found, among other 
     things, the following:
       (A) Microenterprise development assistance generally can 
     help alleviate some impacts of poverty, improve income levels 
     and quality of life for borrowers and provide poor 
     individuals, workers, and their families with an important 
     coping mechanism.
       (B) Microenterprise development assistance programs of the 
     United States Agency for International Development have 
     encouraged women's participation in microfinance projects 
     and, according to data of the Agency, women have comprised 
     two-thirds or more of the micro-loan clients in Agency-funded 
     microenterprise projects since 1997.
       (5)(A) The Comptroller General's report recommends that the 
     Administrator of the United States Agency for International 
     Development review the Agency's ``microenterprise results 
     reporting'' system with the goal of ensuring that its annual 
     reporting is complete and accurate.
       (B) Specifically, the Administrator should review and 
     reconsider the methodologies used for the collection, 
     analysis, and reporting of data on annual spending targets, 
     outreach to the very poor, sustainability of microfinance 
     institutions, and the contribution of Agency's funding to the 
     institutions it supports.

     SEC. 3. MICROENTERPRISE DEVELOPMENT ASSISTANCE.

        Chapter 2 of part I of the Foreign Assistance Act of 1961 
     (22 U.S.C. 2166 et seq.) is amended by inserting after title 
     V the following new title:

           ``TITLE VI--MICROENTERPRISE DEVELOPMENT ASSISTANCE

     ``SEC. 251. FINDINGS AND POLICY.

       ``Congress finds and declares the following:
       ``(1) Access to financial services and the development of 
     microenterprise are vital factors in the stable growth of 
     developing countries and in the development of free, open, 
     and equitable international economic systems.
       ``(2) It is therefore in the best interest of the United 
     States to facilitate access to financial services and assist 
     the development of microenterprise in developing countries.
       ``(3) Access to financial services and the development of 
     microenterprises can be supported by programs providing 
     credit, savings, training, technical assistance, business 
     development services, and other financial services.
       ``(4) Given the relatively high percentage of populations 
     living in rural areas of developing countries, and the 
     combined high incidence of poverty in rural areas and growing 
     income inequality between rural and urban markets, 
     microenterprise programs should target both rural and urban 
     poor.
       ``(5) Microenterprise programs have been successful and 
     should continue to empower vulnerable women in the developing 
     world. The Agency should work to ensure that recipients of 
     microenterprise and microfinance development assistance under 
     this title communicate and work with nongovernmental 
     organizations and government organizations to identify and 
     assist victims of trafficking as provided for in section 
     106(a)(1) of the Trafficking Victims Protection Act of 2000 
     (22 U.S.C. 7104(a)(1); Public Law 106-386) and women who are 
     victims of or susceptible to other forms of exploitation and 
     violence.
       ``(6) Given that microenterprise programs have been 
     successful in empowering disenfranchised groups such as 
     women, microenterprise programs should also target 
     populations disenfranchised due to race or ethnicity in 
     countries where a strong relationship between poverty and 
     race or ethnicity has been demonstrated, such as countries in 
     Latin America.

     ``SEC. 252. AUTHORIZATION; IMPLEMENTATION; TARGETED 
                   ASSISTANCE.

       ``(a) Authorization.--The President is authorized to 
     provide assistance on a non-reimbursable basis for programs 
     in developing countries to increase the availability of 
     credit, savings, and other services to microfinance and 
     microenterprise clients lacking full access to capital, 
     training, technical assistance, and business development 
     services, through--
       ``(1) assistance for the purpose of expanding the 
     availability of credit, savings, and other financial and non-
     financial services to microfinance and microenterprise 
     clients;
       ``(2) assistance for the purpose of training, technical 
     assistance, and business development services for 
     microenterprises to enable them to make better use of credit, 
     to better manage their enterprises, to conduct market 
     analysis and product development for expanding domestic and 
     international sales, particularly to United States markets, 
     and to increase their income and build their assets;
       ``(3) capacity-building for microfinance and 
     microenterprise institutions in order to enable them to 
     better meet the credit, savings, and training needs of 
     microfinance and microenterprise clients; and
       ``(4) policy, regulatory programs, and research at the 
     country level that improve the environment for microfinance 
     and microenterprise clients and institutions that serve the 
     poor and very poor.
       ``(b) Implementation.--
       ``(1) Office of microenterprise development.--There is 
     established within the Agency an office of microenterprise 
     development, which shall be headed by a Director who shall be 
     appointed by the Administrator and who should possess 
     technical expertise and ability to offer leadership in the 
     field of microenterprise development.
       ``(2) Additional provisions.--
       ``(A) Use of implementing partner organizations.--
     Assistance under this section shall emphasize the use of 
     implementing partner organizations that best meet the 
     requirements of subparagraph (C).
       ``(B) Use of central funding mechanisms.--
       ``(i) Program.--In order to ensure that assistance under 
     this title is distributed effectively and efficiently, the 
     office shall also

[[Page 25368]]

     seek to implement a program of central funding under which 
     assistance is administered directly by the office, including 
     through targeted core support for microfinance and 
     microenterprise networks and other practitioners.
       ``(ii) Funding.--Of the amount made available to carry out 
     this subtitle for a fiscal year, not less than $25,000,000 
     should be made available to carry out clause (i).
       ``(C) Efficiency and cost-effectiveness.--Assistance under 
     this section shall meet high standards of efficiency, cost-
     effectiveness, and sustainability and shall especially 
     provide the greatest possible resources to the poor and very 
     poor. When administering assistance under this section, the 
     Administrator shall--
       ``(i) take into consideration the percentage of funds a 
     provider of assistance intends to expend on administrative 
     costs;
       ``(ii) take all appropriate steps to ensure that the 
     provider of assistance keeps administrative costs as low as 
     practicable to ensure the maximum amount of funds are used 
     for directly assisting microfinance and microenterprise 
     clients, for establishing sustainable microfinance and 
     microenterprise institutions, or for advancing the 
     microenterprise development field; and
       ``(iii) give preference to proposals from providers of 
     assistance that are the most technically competitive and have 
     a reasonable allocation to overhead and administrative costs.
       ``(3) Approval of strategic plans.--With respect to 
     assistance provided under this section, the office shall be 
     responsible for concurring in the microenterprise development 
     components of strategic plans of missions, bureaus, and other 
     offices of the Agency and providing technical support to 
     field missions to help the missions prepare such components.
       ``(c) Targeted Assistance.--In carrying out sustainable 
     poverty-focused programs under subsection (a), 50 percent of 
     all microenterprise resources shall be targeted to clients 
     who are very poor. Specifically, until September 30, 2006, 
     such resources shall be used for--
       ``(1) support of programs under this section through 
     practitioner institutions that--
       ``(A) provide credit and other financial services to 
     clients who are very poor, with loans in 1995 United States 
     dollars of--
       ``(i) $1,000 or less in the Europe and Eurasia region;
         ``(ii) $400 or less in the Latin America region; and
       ``(iii) $300 or less in the rest of the world; and
       ``(B) can cover their costs in a reasonable time period; or
       ``(2) demand-driven business development programs that 
     achieve reasonable cost recovery that are provided to clients 
     holding poverty loans (as defined by the regional poverty 
     loan limitations in paragraph (1)(A)), whether they are 
     provided by microfinance institutions or by specialized 
     business development services providers.

     ``SEC. 253. MONITORING SYSTEM.

       ``(a) In General.--In order to maximize the sustainable 
     development impact of assistance authorized under section 
     252(a), the Administrator of the Agency, acting through the 
     Director of the office, shall strengthen its monitoring 
     system to meet the requirements of subsection (b).
       ``(b) Requirements.--The requirements referred to in 
     subsection (a) are the following:
       ``(1) The monitoring system shall include performance goals 
     for the assistance and expresses such goals in an objective 
     and quantifiable form, to the extent feasible.
       ``(2) The monitoring system shall include performance 
     indicators to be used in measuring or assessing the 
     achievement of the performance goals described in paragraph 
     (1) and the objectives of the assistance authorized under 
     section 252.
       ``(3) The monitoring system provides a basis for 
     recommendations for adjustments to the assistance to enhance 
     the sustainability and the impact of the assistance, 
     particularly the impact of such assistance on the very poor, 
     particularly poor women.
       ``(4) The monitoring system adopts the widespread use of 
     proven and effective poverty assessment tools to successfully 
     identify the very poor and ensure that they receive adequate 
     access to microenterprise loans, savings, and assistance.

     ``SEC. 254. DEVELOPMENT AND CERTIFICATION OF POVERTY 
                   MEASUREMENT METHODS; APPLICATION OF METHODS.

       ``(a) Development and Certification.--
       ``(1) In general.--The Administrator of the Agency, in 
     consultation with microenterprise institutions and other 
     appropriate organizations, shall develop no fewer than two 
     low-cost methods for implementing partner organizations to 
     use to assess the poverty levels of their current incoming or 
     prospective clients. The Administrator shall develop poverty 
     indicators that correlate with the circumstances of the very 
     poor.
       ``(2) Field testing.--The Administrator shall field-test 
     the methods developed under paragraph (1). As part of the 
     testing, institutions and programs may use the methods on a 
     voluntary basis to demonstrate their ability to reach the 
     very poor.
       ``(3) Certification.--Not later than April 1, 2005, the 
     Administrator shall, from among the low-cost poverty 
     measurement methods developed under paragraph (1), certify no 
     fewer than two such methods as approved methods for measuring 
     the poverty levels of current, incoming, or prospective 
     clients of microenterprise institutions for purposes of 
     assistance under section 252.
       ``(b) Application.--The Administrator shall require that, 
     with reasonable exceptions, all implementing partner 
     organizations applying for microenterprise assistance under 
     this title use one of the certified methods, beginning not 
     later than October 1, 2006, to determine and report the 
     poverty levels of current, incoming, or prospective clients.

     ``SEC. 255. AVAILABILITY OF FUNDS; ADDITIONAL AUTHORITIES.

       ``(2) Notwithstanding any other provision of law, amounts 
     made available for assistance for microenterprise development 
     assistance under any provision of law other than this title 
     may be provided to further the purposes of this title. To the 
     extent assistance described in the preceding sentence is 
     provided in accordance with such sentence, the Administrator 
     of the Agency shall include, as part of the report required 
     under section 258, a detailed description of such assistance 
     and, to the extent applicable, the information required by 
     paragraphs (1) through (11) of subsection (b) of such section 
     with respect to such assistance.''.

     SEC. 4. MICROENTERPRISE DEVELOPMENT CREDITS.

       (a) Transfer.--Section 108 of the Foreign Assistance Act of 
     1961 (22 U.S.C. 2151f) is hereby--
       (1) transferred from chapter 1 of part I of the Foreign 
     Assistance Act of 1961 to title VI of chapter 2 of part I of 
     such Act (as added by section 3 of this Act); and
       (2) inserted after section 255 of the Foreign Assistance 
     Act of 1961.
       (b) Redesignation.--Title VI of chapter 2 of part I of the 
     Foreign Assistance Act of 1961 is amended by redesignating 
     section 108 (as added by subsection (a)) as section 256.
       (c) Conforming Amendments.--Title VI of chapter 2 of part I 
     of the Foreign Assistance Act of 1961 is amended--
       (1) by inserting after the title heading the following:

                   ``Subtitle A--Grant Assistance'';

       (2) by inserting after section 255 the following:

                 ``Subtitle B--Credit Assistance''; and

       (3) in section 256 (as redesignated by subsection (b))--
       (A) in the matter preceding paragraph (1) of subsection 
     (c), by striking ``Administrator of the agency primarily 
     responsible for administering this part'' and inserting 
     ``Administrator of the Agency''; and
       (B) in subsection (f)(1)--
       (i) by striking ``section 131'' and inserting ``this 
     part''; and
       (ii) by striking ``for each of fiscal years 2001 through 
     2004'' and inserting ``for fiscal year 2005 and such sums as 
     may be necessary for each of the fiscal years 2006 through 
     2009''.

     SEC. 5. UNITED STATES MICROFINANCE LOAN FACILITY.

       (a) Transfer.--Section 132 of the Foreign Assistance Act of 
     1961 (22 U.S.C. 2152b) is hereby--
       (1) transferred from chapter 1 of part I of the Foreign 
     Assistance Act of 1961 to title VI of chapter 2 of part I of 
     such Act (as added by section 3 of this Act); and
       (2) inserted after section 256 of the Foreign Assistance 
     Act of 1961 (as added by section 4 of this Act).
       (b) Redesignation.--Title VI of chapter 2 of part I of the 
     Foreign Assistance Act of 1961 is amended by redesignating 
     section 132 (as added by subsection (a)) as section 257.
       (c) Conforming Amendments.--Title VI of chapter 2 of part I 
     of the Foreign Assistance Act of 1961 is amended--
       (1) by inserting after section 256 the following:

     ``Subtitle C--United States Microfinance Loan Facility''; and

       (2) in section 257 (as redesignated by subsection (b))--
       (A) in subsection (b)(3), by striking ``2001 and 2002'' and 
     inserting ``2005 through 2009'';
       (B) in the matter preceding subparagraph (A) of subsection 
     (d)(1), by striking ``this part for the fiscal year 2001, up 
     to $5,000,000'' and inserting ``this part, up to $5,000,000 
     for fiscal year 2005 and such sums as may be necessary for 
     each of the fiscal years 2006 through 2009,''; and
       (C) by striking subsection (e).

     SEC. 6. MISCELLANEOUS PROVISIONS.

       Title VI of chapter 2 of part I of the Foreign Assistance 
     Act of 1961 (as added by section 3 of this Act and amended by 
     sections 4 and 5 of this Act) is further amended by adding at 
     the end the following new subtitle:

                 ``Subtitle D--Miscellaneous Provisions

     ``SEC. 258. REPORT.

       ``(a) In General.--Not later than June 30, 2006, and each 
     June 30 thereafter, the Administrator of the Agency, acting 
     through the Director of the office, shall submit to the 
     appropriate congressional committees a report that contains a 
     detailed description of the implementation of this title for 
     the previous fiscal year.
       ``(b) Contents.--The report shall contain the following:
       ``(1) The number of grants, cooperative agreements, 
     contracts, contributions, or

[[Page 25369]]

     other form of assistance provided under section 252, with a 
     listing of--
       ``(A) the amount of each grant, cooperative agreement, 
     contract, contribution, or other form of assistance;
       ``(B) the name of each recipient and each developing 
     country with respect to which projects or activities under 
     the grant, cooperative agreement, contract, contribution, or 
     other form of assistance were carried out; and
       ``(C) a listing of the number of countries receiving 
     assistance authorized by section 252.
       ``(2) The results of the monitoring system required under 
     section 253.
       ``(3) The process of developing and applying poverty 
     assessment procedures required under section 254.
       ``(4) The percentage of assistance furnished under section 
     252 that was allocated to the very poor based on the data 
     collected using the certified methods required by section 
     254.
       ``(5) The estimated number of the very poor reached with 
     assistance provided under section 252.
       ``(6) The amount of assistance provided under section 252 
     through central mechanisms.
       ``(7) The name of each country that receives assistance 
     under section 256 and the amount of such assistance.
       ``(8) Information on the efforts of the Agency to ensure 
     that recipients of United States microenterprise and 
     microfinance development assistance work closely with 
     nongovernmental organizations and foreign governments to 
     identify and assist victims or potential victims of severe 
     forms of trafficking in persons and women who are victims of 
     or susceptible to other forms of exploitation and violence.
       ``(9) Any additional information relating to the provision 
     of assistance authorized by this title, including the use of 
     the poverty measurement tools required by section 254, or 
     additional information on assistance provided by the United 
     States to support microenterprise development under this 
     title or any other provision of law.
       ``(10) An estimate of the percentage of beneficiaries of 
     assistance under this title in countries where a strong 
     relationship between poverty and race or ethnicity has been 
     demonstrated.
       ``(11) The level of funding provided through contracts, the 
     level of funding provided through grants, contracts, and 
     cooperative agreements that is estimated to be subgranted or 
     subcontracted, as the case may be, to direct service 
     providers, and an analysis of the comparative cost-
     effectiveness and sustainability of projects carried out 
     under these mechanisms.
       ``(c) Availability to Public.--The report required by this 
     section shall be made available to the public on the Internet 
     website of the Agency.

     ``SEC. 259. DEFINITIONS.

       `` In this title:
       ``(1) Administrator.--The term `Administrator' means the 
     Administrator of the Agency.
       ``(2) Agency.--The term `Agency' means the United States 
     Agency for International Development.
       ``(3) Appropriate congressional committees.--The term 
     `appropriate congressional committees' means the Committee on 
     International Relations of the House of Representatives and 
     the Committee on Foreign Relations of the Senate.
       ``(4) Business development services.--The term `business 
     development services' means support for the growth of 
     microenterprises through training, technical assistance, 
     marketing assistance, improved production technologies, and 
     other related services.
       ``(5) Director.--The term `Director' means the Director of 
     the office.
       ``(6) Implementing partner organization.--The term 
     `implementing partner organization' means an entity eligible 
     to receive assistance under this title which is--
       ``(A) a United States or an indigenous private voluntary 
     organization;
       ``(B) a United States or an indigenous credit union;
       ``(C) a United States or an indigenous cooperative 
     organization;
       ``(D) an indigenous governmental or nongovernmental 
     organization;
       ``(E) a microenterprise institution;
       ``(F) a microfinance institution; or
       ``(G) a practitioner institution.
       ``(7) Microenterprise institution.--The term 
     `microenterprise institution' means a not-for-profit entity 
     that provides services, including microfinance, training, or 
     business development services, for microenterprise clients in 
     foreign countries.
       ``(8) Microfinance institution.--The term `microfinance 
     institution' means a not-for-profit entity or a regulated 
     financial intermediary that directly provides, or works to 
     expand, the availability of credit, savings, and other 
     financial services to microfinance and microenterprise 
     clients in foreign countries.
       ``(9) Microfinance network.--The term `microfinance 
     network' means an affiliated group of practitioner 
     institutions that provides services to its members, including 
     financing, technical assistance, and accreditation, for the 
     purpose of promoting the financial sustainability and 
     societal impact of microenterprise assistance.
       ``(10) Office.--The term `office' means the office of 
     microenterprise development established under section 
     252(b)(1).
       ``(11) Practitioner institution.--The term `practitioner 
     institution' means a not-for-profit entity or a regulated 
     financial intermediary, including a microfinance network, 
     that provides services, including microfinance, training, or 
     business development services, for microfinance and 
     microenterprise clients, or provides assistance to 
     microenterprise institutions in foreign countries.
       ``(12) Private voluntary organization.--The term `private 
     voluntary organization' means a not-for-profit entity that--
       ``(A) engages in and supports activities of an economic or 
     social development or humanitarian nature for citizens in 
     foreign countries; and
       ``(B) is incorporated as such under the laws of the United 
     States, including any of its states, territories or the 
     District of Columbia, or of a foreign country.
       ``(13) United states-supported microfinance institution.--
     The term `United States-supported microfinance institution' 
     means a financial intermediary that has received funds made 
     available under this part for fiscal year 1980 or any 
     subsequent fiscal year.
       ``(14) Very poor.--The term `very poor' means those 
     individuals--
       ``(A) living in the bottom 50 percent below the poverty 
     line established by the national government of the country in 
     which those individuals live; or
       ``(B) living on less than the equivalent of $1 per day (as 
     calculated using the purchasing power parity (PPP) exchange 
     rate method).''.

     SEC. 7. SENSE OF CONGRESS.

       It is the sense of Congress that, in carrying out title VI 
     of chapter 2 of part I of the Foreign Assistance Act of 1961 
     (as added by section 3 of this Act and amended by sections 4 
     through 6 of this Act), the Administrator of the United 
     States Agency for International Development--
       (1) where applicable, should ensure that microenterprise 
     development assistance provided under such title is matched 
     by recipients with an equal amount of assistance from non-
     United States Government sources, including private 
     donations, multilateral funding, commercial and concessional 
     borrowing, savings, and program income;
       (2) should include in the report required by section 258 of 
     the Foreign Assistance Act of 1961 (as added by section 6 of 
     this Act) a description of all matching assistance (as 
     described in paragraph (1)) provided for the prior year by 
     recipients of microenterprise development assistance under 
     such title;
       (3) should ensure that recipients of microenterprise 
     development assistance under such title do not expend an 
     unreasonably large percentage of such assistance on 
     administrative costs;
       (4) should not use recipients of microenterprise 
     development assistance under such title to carry out critical 
     management functions of the Agency, including functions such 
     as strategy development or overall management of programs in 
     a country; and
       (5) should consult with the appropriate congressional 
     committees with respect to the implementation of title VI of 
     chapter 2 of part I of the Foreign Assistance Act of 1961 not 
     later than 90 days after the date of the enactment of this 
     Act.

     SEC. 8. REPEALS.

       (a) Foreign Assistance Act of 1961.--Section 131 of the 
     Foreign Assistance Act of 1961 (22 U.S.C. 2152a) is hereby 
     repealed.
       (b) Public Law 108-31.--
       (1) In general.--Section 4 of Public Law 108-31 (22 U.S.C. 
     2151f note) is amended by striking subsection (b).
       (2) Conforming amendment.--Section 4 of Public Law 108-31 
     is amended by striking ``(a)'' and all that follows through 
     ``Not later'' and inserting ``Not later''.

     SEC. 9. REFERENCES.

       Any reference in a law, regulation, agreement, or other 
     document of the United States to section 108, 131, or 132 of 
     the Foreign Assistance Act of 1961 shall be deemed to be a 
     reference to subtitle B of title VI of chapter 2 of part I of 
     the Foreign Assistance Act of 1961, subtitle A of title VI of 
     chapter 2 of part I of such Act, or subtitle C of title VI of 
     chapter 2 of part I of such Act, respectively.

                          ____________________