[House Report 106-184]
[From the U.S. Government Publishing Office]
106th Congress Rept. 106-184
HOUSE OF REPRESENTATIVES
1st Session Part 2
======================================================================
PROGRAM FOR INVESTMENT IN MICROENTREPRENEURS (PRIME)
_______
July 2, 1999.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Talent, from the Committee on Small Business, submitted the
following
R E P O R T
[To accompany H.R. 413]
[Including cost estimate of the Congressional Budget Office]
The Committee on Small Business, to whom was referred the
bill (H.R. 413) 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, having considered the same, report favorably thereon
with an amendment and recommend that the bill as amended do
pass.
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
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 1999', 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, with respect to 2 or
more nonprofit entities, having agreed 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 who 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;
``(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,
except that grant amounts may not be used to make loans of any
kind.
``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, and is 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
certifies 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.
``(e) Consideration of Intermediaries Participating in Microloan
Program.--The Administrator shall establish and use criteria for
selecting applications for grants under this subtitle from among
applications that meet the requirements under this subtitle for
approval for a grant, which--
``(1) may not exclude from consideration any application made
by a qualified organization that is a participant in the
program established under section 7(m) of the Small Business
Act (15 U.S.C. 636(m)); and
``(2) shall provide positive consideration to an application
made by a qualified organization that is a participant in the
program established under section 7(m) of the Small Business
Act (15 U.S.C. 636(m)).
``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. REPORT.
``Not later than 1 year after the date that the first grant is
awarded under this subtitle, the Administrator shall submit to the
Committees on Banking and Financial Services and Small Business of the
House of Representatives and the Committees on Banking, Housing, and
Urban Affairs and Small Business of the Senate a report on the
microenterprise technical assistance and capacity building program
under this subtitle, which shall include the Administrator's evaluation
of the effectiveness of the first year of operation of the program and
the following information:
``(1) The number and locations of the qualified organizations
funded under the grant program.
``(2) The amount of each grant made to a qualified
organization.
``(3) A description of the matching contributions provided in
accordance with section 177 by each qualified organization
receiving a grant.
``(4) The numbers and amounts of subgrants made by qualified
organizations to microenterprise concerns.
``(5) For each grant made under the program, the purpose for
which the grant funds were used.
``SEC. 181. 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 2000;
``(2) $25,000,000 for fiscal year 2001;
``(3) $30,000,000 for fiscal year 2002; and
``(4) $35,000,000 for fiscal year 2003.
``SEC. 182. IMPLEMENTATION.
``(a) Regulations.--The Administrator shall, by regulation, establish
such requirements as may be necessary to carry out this subtitle. The
Administrator of the Fund shall submit a copy of any such proposed,
preliminary, interim, or final regulation to the Administrator of the
Small Business Administrator for review and comment by such
Administrator, and shall review any comments of such Administrator
submitted pursuant to such review. No regulation issued to carry out
this subtitle may take effect before the expiration of the 60-day
period beginning upon the submission of such regulation to the
Administrator of the Small Business Administration.
``(b) Coordination with Small Business Administration.--Not later
than 60 days after the date of the enactment of this section, the
Administrator of the Fund and the Administrator of the Small Business
Administration shall conduct any necessary consultations and enter into
a memorandum of understanding providing that the program under this
subtitle and the microloan program under section 7(m) of the Small
Business Act (15 U.S.C. 636(m)) will be carried out in conjunction and
coordination with each other in a manner that advances the purposes of
both such programs. Notwithstanding any other provision of this
subtitle, the Administrator of the Fund may not make any grant under
this subtitle before such memorandum of understanding is agreed to.''.
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.
(a) In General.--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:
``(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''.
(b) Table of Contents.--The table of contents in section 1(b) is
amended by adding after the item relating to section 158 the following:
``Subtitle C--Microenterprise Technical Assistance and Capacity
Building Program
``Sec. 171. Short title.
``Sec. 172. Definitions.
``Sec. 173. Establishment of program.
``Sec. 174. Uses of assistance.
``Sec. 175. Qualified organizations.
``Sec. 176. Allocation of assistance; subgrants.
``Sec. 177. Matching requirements.
``Sec. 178. Applications for assistance.
``Sec. 179. Recordkeeping.
``Sec. 180. Report.
``Sec. 181. Authorization.
``Sec. 182. Implementation.''.
Purpose
The purpose of H.R. 413, the ``Program for Investment in
Microentrepreneurs Act of 1999'' (the ``Act'', or ``PRIME''),
as reported out of the Committee on Small Business, is to work
in conjunction with the Small Business Administration's (SBA)
Microloan program to encourage entrepreneurship and community
development by providing technical assistance and capacity
building assistance to microenterprise development
organizations, thereby enabling these organizations to more
effectively meet the growing training and technical assistance
needs of low-income entrepreneurs. The Act authorizes the
Community Development Financial Institutions (``CDFI'') Fund to
establish a microenterprise technical assistance and capacity
building program that would award grants on a competitive basis
to eligible microenterprise development organizations and
programs. Eligible organizations shall include Indian Tribes.
Need for Legislation
One of the greatest challenges to small or micro
entrepreneurs is access to capital. Often before they can grow
their businesses several needs must be addressed.
Traditionally, these needs are in the areas of training,
education or general capacity building. The Program for
Investment in Microentrepreneurs was created to assist
entrepreneurs and community development through the
establishment of a grant program.
The passage of the PRIME Act will create an additional
federal microenterprise assistance-related program. Currently,
there are a number of such programs dispersed throughout
various agencies of the federal government. The SBA conducts
the main program, the 7(m) Microloan program, which was
permanently authorized in the Fall of 1997. Through the 7(m)
program, SBA provides loans and grants to nonprofit
microenterprise intermediaries which, in turn, provide small
loans and technical assistance to microentrepreneurs. In
addition to the technical assistance that SBA's 7(m) Microloan
program provides in conjunction with its loans, it provides
technical assistance even without the loan component. Through
its Non-lending Technical Assistance Provider (``NTAP'')
program, SBA can provide up to $125,000 in capacity building
grants--like the PRIME Act--that are not tied to loans for the
explicit purpose of capacity building. In addition to the 7(m)
program, SBA administers other technical assistance and
capacity building programs through the Small Business
Development Center (``SBDC'') Program to provide technical
assistance to current and prospective small business owners;
and the Women's Business Development Program, which provides
technical assistance to women entrepreneurs who are
economically disadvantaged. Additional microenterprise programs
are administered through HHS, HUD, Labor, Agriculture and
Commerce.
With so many programs currently operating to assist
microentrepreneurs, and at a time when government is being
expected to do more with less, it is critical that any new
program is not repetitive or duplicate of currently established
programs. The potential does exist for PRIME to duplicate some
of the services already provided to the microenterprise
community by the 7(m) program.
This possibility for conflict is demonstrated by examining
both the PRIME and the 7(m) programs' statements of purpose. As
approved by the Committee on Small Business, the PRIME
program's purpose is:
To authorize qualified organizations to provide
technical assistance and capacity building services to
micro enterprise and development organizations and
programs to disadvantaged entrepreneurs * * *
According to the statement of purpose for the SBA's
Microloan technical assistance and capacity building program,
as originally authorized in 15 U.S.C. Sec. 636 7(m), the
program's purpose is:
To make grants available to eligible nonprofit
entities that, together with non-Federal matching
funds, will enable such entities to provide intensive
marketing, management, and technical assistance to
assist low-income entrepreneurs and other low-income
individuals * * *
Because of the potential for duplication, the Committee
worked to ensure that the PRIME program will work with existing
federal microenterprise technical assistance and capacity
building grant programs, especially those that already exist at
the Small Business Administration. PRIME has the ability to
make capacity building and technical assistance grants, just as
the SBA Microloan Program. But, in addition to the technical
assistance and capacity building that both SBA and PRIME can
do, the SBA 7(m) Microloan program can make loans in the area
of entrepreneur development and loans that are tied to
technical assistance.
The Committee believes that PRIME can play an important
role in supplementing the current microenterprise technical
assistance programs administered through the SBA. This is
especially true given the fact that PRIME's purpose is to focus
on only technical assistance and capacity building, an area
that has been historically under-funded. The PRIME program
should never extend beyond the level of providing technical
assistance and capacity building. Hearings and Committee action
made clear that CDFI does not possess the infrastructure to
support and administer a Microloan program, and that the PRIME
Act is not structured in a way to create a framework to
administer loans in a safe and sound manner.
Microenterprise programs play a key role in economic
development and job creation in low-income areas. The ultimate
goal of any program of this nature must be to get technical
assistance to the nation's micro-entrepreneurs. The most
effective way to do this is to ensure that the PRIME Act works
in conjunction with existing federal programs to provide our
entrepreneurs with the technical assistance and capacity
building they need to succeed.
Committee Consideration and Votes
On June 24, 1999, the Committee on Small Business met in
open session to mark up H.R. 413, the ``Program For Investment
In Microentrepreneurs'' Act of 1999, pursuant to a referral
from the Committee on Banking and Financial Services. The
Committee called up H.R. 413 as reported by the Committee on
Banking and Financial Services as original text for the purpose
of amendment. The Committee on Small Business adopted one en
bloc amendment offered by the Chairman and Ranking Democratic
Member of the Committee. The amendment prohibits CDFI from
making loans, requires the inclusion of participants of SBA's
7(m) program in the PRIME program, adds reporting requirements,
and requires SBA and CDFI to enter into a Memorandum of
Understanding (MOU) over the implementation of the PRIME
legislation, as well as gives SBA the opportunity to comment on
the final regulations. These changes were made to ensure that
there is proper coordination of the program and that the fiscal
safety and soundness of the program is maintained.
Concerns were raised, by Mr. Davis, that should the MOU not
be agreed to in 60 days, implementation of the PRIME program
would be delayed. It is not the intent of the Committee that
the MOU process be used to delay the implementation of the
PRIME program. The Committee will use its full oversight
capabilities to ensure that the SBA and CDFI enter into the MOU
within the allotted 60 day period. The en bloc amendment was
then accepted by voice vote.
Ms. Velazquez then moved that H.R. 413, as amended, be
ordered reported. A quorum being present, H.R. 413 passed the
Committee by a voice vote.
It should also be noted that the Committee held several
hearings on the Small Business Administration's 7(m) Microloan
program since its inception. The Committee has always received
the strongest support testimony for the program from the
Administration and the program participants. This evidence
supports the Committee's concern that efforts to assist
microenterprises may be injured, not by neglect, but rather by
a dissipation of focus caused by a proliferation of overlapping
programs. In addition, the legislative package received by the
Committee from the Small Business Administration included
several amendments to the Section 7(m) microloan program,
particularly the NTAP provisions, which point to this lack of
coordination in Administration efforts. The Committee firmly
believes that the amendments to H.R. 413 will aid the SBA and
CDFI in synchronizing their efforts to assist microenterprises.
Section-by-Section Analysis
section 1. provision of technical assistance to microenterprises
Section 1 amends Title I of the ``Riegle Community
Development and Regulatory Improvement Act of 1994'' by adding
a new subtitle, ``Subtitle C--Microenterprise Technical
Assistance and Capacity Building Program'' which includes the
following sections:
Section 171. Short title
This Section designates new Subtitle C as the ``Program for
Investment in Microentrepreneurs Act of 1999'' (PRIME Act).
Section 172. Definitions
This section defines terms as they apply to the PRIME Act.
Section 173. Establishment of program
This section requires the Treasury Secretary to establish a
microenterprise technical assistance and capacity building
grant program which shall provide assistance from the CDFI Fund
in the form of grants to qualified organizations.
Section 174. Uses of assistance
This section provides that grants can be used for
assistance to provide training, technical assistance, capacity
building and educational assistance targeted to microenterprise
and microenterprise development organizations that serve low
income entrepreneurs. The Committee added language prohibiting
the PRIME act to be used as a loan program. The Committee
further believes that funding for this program should be
focused in manner that provides the maximum assistance directly
to the microentrepreneurs and not in manner that would have
only secondary or limited benefits for the microenterprise
community.
Section 175. Qualified organizations
This section defines a qualified organization as a non-
profit microenterprise development organization as one that has
a demonstrated record of assisting disadvantaged enterpreneurs,
an intermediary nonprofit entity that serves microenterprise
development organizations, or an Indian tribe if it can certify
that a nonprofit microenterprise development program exists in
the area.
Section 176. Allocation of assistance; subgrants
This section provides the manner in which funding is to be
used and defines the parameter under which organizations will
participate in the program. The Committee added language
ensuring that all participants of SBA's 7(m) Microloan program
will be eligible for funding under PRIME. It is critical to
PRIME's success, that those participants in the SBA's 7(m)
program be included in the PRIME program. CDFI should make
every effort to ensure that participants of SBA's 7(m)
Microloan program are included in the PRIME program. The 7(m)
intermediaries have the institutional experience and expertise
to help the PRIME program hit the ground running, and allow the
program to work efficiently and effectively.
Section 177. Matching requirements
This section provides matching requirements from sources
other than the Federal Government equal to fifty percent of
each dollar provided by the CDFI Fund. Sources of matching
funds may include fees, grants, gifts, funds from loan sources,
or in the form of in-kind resources, grants, or loans to the
organization.
In the case of an applicant with severe economic
constraints on sources available for matching funds, the
Administrator may reduce or eliminate the matching requirement.
Not more than 10% of the total funds made available under the
Act may be excepted from the matching requirements.
Section 178. Applications for assistance
This section requires the CDFI Fund to establish procedures
for submission of applications for assistance.
Section 179. Recordkeeping
This section establishes record keeping requirements for
organizations that receive PRIME Act grants, including an
annual report in which the organization discloses its
activities, financial conditions, and its success in satisfying
the terms and conditions of its assistance agreement.
Section 180. Report
This section requires the Administrator to submit to the
House and Senate Small Business and Banking Committees, within
one year after CDFI has awarded and funded the first grant, and
annually after that, the following information: (1) the number
and locations of the organizations funded under the grant
program; (2) the amount of each grant made to a qualified
organization; (3) a description of the matching contributions
provided by each qualified organization receiving a grant; (4)
the numbers and amounts of sub-grants made by qualified
organizations to small business concerns; (5) each grant made
under the program, the purpose for which the grant funds were
used.
Section 181. Authorization
This section authorizes appropriations of $15 million for
fiscal year 2000, $25 million for fiscal year 2001, $30 million
for fiscal year 2002, and $35 million for fiscal year 2003.
Section 182. Implementation
This section directs the administrator to develop
regulations for the implementation of the program. Prior to the
development of these regulations and before any grants are
awarded, the Administrator is to enter into a Memorandum of
Understanding with the Small Business Administration. This
should include, but not be limited to such items as outreach
and information to organizations. This agreement must be
completed within 60 days of enactment of the legislation. The
Committee encourages both SBA and CDFI to complete this
agreement quickly, and the committee will closely monitor the
progress of this agreement to ensure that this is carried out
in an expeditious manner. Should issues arise that make
completion of the MOU by the 60 day deadline impossible, it is
the Committee's hope that a third party, such as the Office of
Budget and Management, would be available to assist in
resolving any outstanding issues.
Prior to the issuing any proposed preliminary, interim or
final regulations, the Administrator of the fund must provide
the Administrator of SBA 60 days to comment and suggest changes
to these regulation that reflect SBA's experience in the area
of assisting micro-entrepreneurs and to ensure that the two
programs do not duplicate services already provided by SBA.
section 2. administrative expenses
Section 2 increases the CDFI Fund's authorized
administrative expenses from $5,500,000 to $6,100,000 to
accommodate administration of the PRIME Act.
section 3. conforming amendments
This section makes technical and conforming amendments.
Committee Estimate of Costs
Pursuant to the Congressional Budget Act of 1974, the
Committee estimates that the amendments made by the Committee
on Small Business to H.R. 413 will not increase discretionary
spending. The Committee estimate concurs with the Congressional
Budget Office (CBO) estimate on H.R. 413 included with the
original report from the Committee on Banking and Financial
Services.
Furthermore, pursuant to clause 3(d)(2)(A) of rule XIII of
the Rules of the House of Representatives, the Committee
estimates that implementation of H.R. 413, as amended, will not
significantly increase administrative costs.
Oversight Findings
In accordance with clause 4(c)(2) of rule X of the Rules of
the House of Representatives, the Committee states that no
oversight findings or recommendations have been made by the
Committee on Government Reform with respect to the subject
matter contained in H.R. 413.
In accordance with clause (2)(b)(1) of rule X of the Rules
of the House of Representatives, the oversight findings and
recommendations of the Committee on Small Business with respect
to the subject matter contained in H.R. 413 are incorporated
into the descriptive portions of this report.
Statement of Constitutional Authority
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds the authority for
this legislation in Article I, Section 8, clause 18, of the
Constitution of the United States.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
RIEGLE COMMUNITY DEVELOPMENT & REGULATORY IMPROVEMENT
* * * * * * *
SECTION 1. SHORT TITLE; TABLE OF CONTENTS
(a) Short Title.--This Act may be cited as the ``Riegle
Community Development and Regulatory Improvement Act of 1994''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--COMMUNITY DEVELOPMENT AND CONSUMER PROTECTION
Subtitle A--Community Development Banking and Financial Institutions Act
Sec. 101. Short title.
* * * * * * *
Subtitle C--Microenterprise Technical Assistance and Capacity Building
Program
Sec. 171. Short title.
Sec. 172. Definitions.
Sec. 173. Establishment of program.
Sec. 174. Uses of assistance.
Sec. 175. Qualified organizations.
Sec. 176. Allocation of assistance; subgrants.
Sec. 177. Matching requirements.
Sec. 178. Applications for assistance.
Sec. 179. Recordkeeping.
Sec. 180. Report.
Sec. 181. Authorization.
Sec. 182. Implementation.
* * * * * * *
TITLE I--COMMUNITY DEVELOPMENT AND CONSUMER PROTECTION
Subtitle A--Community Development Banking and Financial Institutions
Act
SEC. 104. ESTABLISHMENT OF NATIONAL FUND FOR COMMUNITY DEVELOPMENT
BANKING.
(a) * * *
* * * * * * *
(d) Advisory Board.--
(1) * * *
(2) Membership.--The Board shall consist of [15] 17
members, including--
(A) * * *
* * * * * * *
(G) [9] 11 private citizens, appointed by the
President, who shall be selected, to the
maximum extent practicable, to provide for
national geographic representation and racial,
ethnic, and gender diversity, including--
(i) * * *
* * * * * * *
(iv) 2 individuals who have expertise
in microenterprises and microenterprise
development;
[(iv)] (v) 2 individuals who have
expertise in community development; and
[(v)] (vi) 1 individual who has
personal experience and specialized
expertise in the unique lending and
community development issues confronted
by Indian tribes on Indian
reservations.
* * * * * * *
(4) Board function.--It shall be the function of the
Board to advise the Administrator on the policies of
the Fund regarding activities under this subtitle and
subtitle C. The Board shall not advise the
Administrator on the granting or denial of any
particular application.
* * * * * * *
SEC. 121. AUTHORIZATION OF APPROPRIATIONS.
(a) Fund Authorization.--
(1) * * *
(2) Administrative expenses.--
(A) In general.--Of amounts authorized to be
appropriated to the Fund pursuant to this
section, not more than [$5,550,000] $6,100,000
may be used by the Fund in each fiscal year to
pay the administrative costs and expenses of
the Fund, including costs and expenses
associated with carrying out subtitle C. Costs
associated with the training program
established under section 109 and the technical
assistance program established under section
108 shall not be considered to be
administrative expenses for purposes of this
paragraph.
* * * * * * *
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 1999'', 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, with respect to
2 or more nonprofit entities, having agreed 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 who 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;
(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, except that grant amounts may not be used to
make loans of any kind.
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, and
is 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 certifies 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.
(e) Consideration of Intermediaries Participating in
Microloan Program.--The Administrator shall establish and use
criteria for selecting applications for grants under this
subtitle from among applications that meet the requirements
under this subtitle for approval for a grant, which--
(1) may not exclude from consideration any
application made by a qualified organization that is a
participant in the program established under section
7(m) of the Small Business Act (15 U.S.C. 636(m)); and
(2) shall provide positive consideration to an
application made by a qualified organization that is a
participant in the program established under section
7(m) of the Small Business Act (15 U.S.C. 636(m)).
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. REPORT.
Not later than 1 year after the date that the first grant is
awarded under this subtitle, the Administrator shall submit to
the Committees on Banking and Financial Services and Small
Business of the House of Representatives and the Committees on
Banking, Housing, and Urban Affairs and Small Business of the
Senate a report on the microenterprise technical assistance and
capacity building program under this subtitle, which shall
include the Administrator's evaluation of the effectiveness of
the first year of operation of the program and the following
information:
(1) The number and locations of the qualified
organizations funded under the grant program.
(2) The amount of each grant made to a qualified
organization.
(3) A description of the matching contributions
provided in accordance with section 177 by each
qualified organization receiving a grant.
(4) The numbers and amounts of subgrants made by
qualified organizations to microenterprise concerns.
(5) For each grant made under the program, the
purpose for which the grant funds were used.
SEC. 181. 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 2000;
(2) $25,000,000 for fiscal year 2001;
(3) $30,000,000 for fiscal year 2002; and
(4) $35,000,000 for fiscal year 2003.
SEC. 182. IMPLEMENTATION.
(a) Regulations.--The Administrator shall, by regulation,
establish such requirements as may be necessary to carry out
this subtitle. The Administrator of the Fund shall submit a
copy of any such proposed, preliminary, interim, or final
regulation to the Administrator of the Small Business
Administration for review and comment by such Administrator,
and shall review any comments of such Administrator submitted
pursuant to such review. No regulation issued to carry out this
subtitle may take effect before the expiration of the 60-day
period beginning upon the submission of such regulation to the
Administrator of the Small Business Administration.
(b) Coordination With Small Business Administration.--Not
later than 60 days after the date of the enactment of this
section, the Administrator of the Fund and the Administrator of
the Small Business Administration shall conduct any necessary
consultations and enter into a memorandum of understanding
providing that the program under this subtitle and the
microloan program under section 7(m) of the Small Business Act
(15 U.S.C. 636(m)) will be carried out in conjunction and
coordination with each other in a manner that advances the
purposes of both such programs. Notwithstanding any other
provision of this subtitle, the Administrator of the Fund may
not make any grant under this subtitle before such memorandum
of understanding is agreed to.