HR 3020
9-4-07, Bill Passed House 385-5
Referred to Senate Committee
on Small Business & Entrepreneurship
110th CONGRESS
1st Session
H. R. 3020
IN THE SENATE OF THE UNITED STATES
September 5, 2007
Received; read twice and referred to the Committee on Small Business and
Entrepreneurship
AN ACT
To amend the Small Business Act to improve the Microloan program,
and for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title- This Act may be cited as the `Microloan Amendments and Modernization
Act'.
(b) Table of Contents- The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
TITLE I--MICROLOAN
Sec. 101. Transmission of credit reporting information.
Sec. 102. Flexible credit.
Sec. 103. Intermediary eligibility requirements.
Sec. 104. Average loan size.
Sec. 105. Technical assistance.
Sec. 106. Entrepreneurs with disabilities.
TITLE II--PRIME
Sec. 203. Conforming repeal.
TITLE I--MICROLOAN
SEC. 101. TRANSMISSION OF CREDIT REPORTING INFORMATION.
Section 7(m) of the Small Business Act (15 U.S.C. 636(m)) is amended by adding
at the end the following:
`(14) CREDIT REPORTING INFORMATION- The Administrator shall establish a
process, for use by a lender making a loan to a borrower under this subsection,
under which the lender provides to the major credit reporting agencies the
information about the borrower that is relevant to credit reporting, such
as the payment activity of the borrower on the loan.'.
SEC. 102. FLEXIBLE CREDIT.
Section 7(m) of the Small Business Act (15 U.S.C. 636(m)) is amended, in each
of paragraphs (1)(B)(i) and (11)(B), by striking `short-term,'.
SEC. 103. INTERMEDIARY ELIGIBILITY REQUIREMENTS.
Section 7(m)(2) of the Small Business Act (15 U.S.C. 636(m)(2)) is amended--
(1) in subparagraph (A) by striking `paragraph (10)' and inserting `paragraph
(11)'; and
(2) by amending subparagraph (B) to read as follows:
`(I) 1 year of experience making microloans to startup, newly established,
or growing small business concerns; or
`(II) 1 full-time employee who has not less than 3 years experience
making microloans to startup, newly established, or growing small
business concerns; and
`(ii) at least 1 year of experience providing, as an integral part of
its microloan program, intensive marketing, management, and technical
assistance to its borrowers.'.
SEC. 104. AVERAGE LOAN SIZE.
Section 7(m) of the Small Business Act (15 U.S.C. 636(m)) is amended by striking
`$7,500' and inserting `$10,000' in each of the following places: paragraph
(3)(F)(iii), paragraph (6)(C)(i), and paragraph (6)(C)(ii).
SEC. 105. TECHNICAL ASSISTANCE.
Section 7(m)(4)(E) of the Small Business Act (15 U.S.C. 636(m)(4)(E)) is amended
as follows:
(1) PRE-LOAN- Clause (i) is amended by striking `25 percent' and inserting
`35 percent'.
(2) THIRD PARTY CONTRACTS- Clause (ii) is amended by striking `25 percent'
and inserting `35 percent'.
SEC. 106. ENTREPRENEURS WITH DISABILITIES.
Section 7(m)(1)(A)(i) of the Small Business Act (15 U.S.C. 636(m)(1)(A)(i))
is amended by inserting `disabled,' before `and minority entrepreneurs'.
TITLE II--PRIME
SEC. 201. SHORT TITLE.
This title may be cited as the `Program for Investment in Microentrepreneurs
Act' or the `PRIME Act'.
SEC. 202. PRIME.
The Small Business Act is amended--
(1) by redesignating section 37 as 99; and
(2) by inserting after section 36 the following:
`SEC. 37. PRIME PROGRAM.
`(a) Definitions- For purposes of this section, the following definitions
shall apply:
`(1) CAPACITY BUILDING SERVICES- The term `capacity building services' means
services provided to an organization that is, or that 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.
`(2) DISADVANTAGED ENTREPRENEUR- The term `disadvantaged entrepreneur' means
a microentrepreneur that is--
`(A) a very low-income person;
`(B) a low-income person; or
`(C) an entrepreneur that lacks adequate access to capital or other resources
essential for business success, or is economically disadvantaged, as determined
by the Administrator.
`(3) COLLABORATIVE- The term `collaborative' means 2 or more nonprofit entities
that agree to act jointly as a qualified organization under this section.
`(4) INDIAN TRIBE- The term `Indian tribe' means any Indian tribe, band,
pueblo, nation, or other organized group or community, including any Alaska
Native village or regional or village corporation, as defined in or established
pursuant to the Alaska Native Claims Settlement Act, which is recognized
as eligible for the special programs and services provided by the United
States to Indians because of their status as Indians.
`(5) INTERMEDIARY- The term `intermediary' means a private, nonprofit entity
that seeks to serve microenterprise development organizations and programs
as authorized under subsection (d).
`(6) LOW-INCOME PERSON- The term `low-income person' means a person having
an income, adjusted for family size, of not more than--
`(A) for metropolitan areas, 80 percent of the area median income; and
`(B) for nonmetropolitan areas, the greater of--
`(i) 80 percent of the area median income; or
`(ii) 80 percent of the statewide nonmetropolitan area median income.
`(7) MICROENTREPRENEUR- The term `microentrepreneur' means the owner or
developer of a microenterprise.
`(8) MICROENTERPRISE- 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.
`(9) MICROENTERPRISE DEVELOPMENT ORGANIZATION OR PROGRAM- 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.
`(10) POVERTY LINE- The term `poverty line' means the official poverty line
defined by the Office of Management and Budget based on the most recent
data available from the Bureau of the Census. The Administrator shall revise
annually (or at any shorter interval the Administrator determines to be
feasible and desirable) the poverty line. The required revision shall be
accomplished by multiplying the official poverty line by the percentage
change in the Consumer Price Index for All Urban Consumers during the annual
or other interval immediately preceding the time at which the revision is
made.
`(11) TRAINING AND TECHNICAL ASSISTANCE- The term `training and technical
assistance' means services and support provided to disadvantaged 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.
`(12) VERY LOW-INCOME PERSON- The term `very low-income person' means having
an income, adjusted for family size, of not more than 150 percent of the
poverty line.
`(b) Establishment of Program- The Administrator shall establish a microenterprise
technical assistance and capacity building grant program to provide assistance
from the Administration in the form of grants to qualified organizations in
accordance with this section.
`(c) Uses of Assistance- A qualified organization shall use grants made under
this section--
`(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 section.
`(d) Qualified Organizations- For purposes of eligibility for assistance under
this section, 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;
`(3) a microenterprise development organization or program that is accountable
to a local community, 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 can certify
that no private organization or program referred to in this paragraph exists
within its jurisdiction.
`(e) Allocation of Assistance; Subgrants-
`(1) ALLOCATION OF ASSISTANCE-
`(A) IN GENERAL- The Administrator shall allocate assistance from the
Administration under this section to ensure that--
`(i) activities described in subsection (c)(1) are funded using not
less than 75 percent of amounts made available for such assistance;
and
`(ii) activities described in subsection (c)(2) are funded using not
less than 15 percent of amounts made available for such assistance.
`(B) LIMIT ON INDIVIDUAL ASSISTANCE- No single person may receive more
than 10 percent of the total funds appropriated under this section in
a single fiscal year.
`(2) TARGETED ASSISTANCE- The Administrator shall ensure that not less than
50 percent of the grants made under this section are used to benefit very
low-income persons, including those residing on Indian reservations.
`(3) SUBGRANTS AUTHORIZED-
`(A) IN GENERAL- A qualified organization receiving assistance under this
section 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.
`(B) LIMIT ON ADMINISTRATIVE EXPENSES- Not more than 7.5 percent of assistance
received by a qualified organization under this section may be used for
administrative expenses in connection with the making of subgrants under
subparagraph (A).
`(4) DIVERSITY- In making grants under this section, the Administrator shall
ensure that grant recipients include both large and small microenterprise
organizations, serving urban, rural, and Indian tribal communities serving
diverse populations.
`(5) PROHIBITION ON PREFERENTIAL CONSIDERATION OF CERTAIN SBA PROGRAM PARTICIPANTS-
In making grants under this section, the Administrator shall ensure that
any application made by a qualified organization that is a participant in
the program established under section 7(m) does not receive preferential
consideration over applications from other qualified organizations that
are not participants in such program.
`(f) Matching Requirements-
`(1) IN GENERAL- Financial assistance under this section 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 Administration.
`(2) 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 paragraph (1).
`(A) IN GENERAL- In the case of an applicant for assistance under this
section with severe constraints on available sources of matching funds,
the Administrator may reduce or eliminate the matching requirement in
paragraph (1).
`(B) LIMITATION- Not more than 10 percent of the total funds made available
from the Administration in any fiscal year to carry out this section may
be excepted from the matching requirement in paragraph (1), as authorized
by subparagraph (A).
`(g) Applications for Assistance- An application for assistance under this
section shall be submitted in such form and in accordance with such procedures
as the Administrator shall establish.
`(1) IN GENERAL- A qualified organization receiving assistance from the
Administration under this section shall keep such records, for such periods
as may be prescribed by the Administrator and necessary to disclose the
manner in which any assistance under this section is used and to demonstrate
compliance with the requirements of this section.
`(2) USER PROFILE INFORMATION- The Administrator shall require each qualified
organization receiving assistance from the Administration under this section
to compile such data, as is determined to be appropriate by the Administrator,
on the gender, race, ethnicity, national origin, or other pertinent information
concerning individuals that utilize the services of the assisted organization
to ensure that targeted populations and low-income residents of investment
areas are adequately served.
`(3) ACCESS TO RECORDS- The Administrator shall have access on demand, for
the purpose of determining compliance with this section, to any records
of a qualified organization that receives assistance from the Administration
under this section.
`(4) REVIEW- Not less than annually, the Administrator shall review the
progress of each assisted organization in carrying out its strategic plan,
meeting its performance goals, and satisfying the terms and conditions of
its assistance agreement.
`(A) ANNUAL REPORTS- The Administrator shall require each qualified organization
receiving assistance from the Administration under this section to submit
an annual report to the Administrator on its activities, its financial
condition, and its success in meeting performance goals, in satisfying
the terms and conditions of its assistance agreement, and in complying
with other requirements of this section, in such form and manner as the
Administrator shall specify.
`(B) AVAILABILITY OF REPORTS- The Administrator, after deleting or redacting
any material as appropriate to protect privacy or proprietary interests,
shall make such reports submitted under subparagraph (A) available for
public inspection.
`(i) Implementation- The Administrator shall, by regulation, establish such
requirements as may be necessary to carry out this section.'.
SEC. 203. CONFORMING REPEAL.
Subtitle C (15 U.S.C. 6901 et seq.) of title I of the Riegle Community Development
and Regulatory Improvement Act of 1994 is repealed.
Passed the House of Representatives September 4, 2007.
Attest:
LORRAINE C. MILLER,
Clerk.
By Jorge E. Sorensen,
Deputy Clerk.
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