IIB
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.
Short title; table of contents
Short title
This Act may be cited
as the Microloan Amendments and
Modernization Act
.
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. 201. Short title.
Sec. 202. PRIME.
Sec. 203. Conforming repeal.
Microloan
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:
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.
.
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,
.
Intermediary eligibility requirements
Section 7(m)(2) of the Small Business Act (15 U.S.C. 636(m)(2)) is amended—
in subparagraph
(A) by striking paragraph (10)
and inserting paragraph
(11)
; and
by amending subparagraph (B) to read as follows:
has—
at least—
1 year of experience making microloans to startup, newly established, or growing small business concerns; or
1 full-time employee who has not less than 3 years experience making microloans to startup, newly established, or growing small business concerns; and
at least 1 year of experience providing, as an integral part of its microloan program, intensive marketing, management, and technical assistance to its borrowers.
.
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).
Technical assistance
Section 7(m)(4)(E) of the Small Business Act (15 U.S.C. 636(m)(4)(E)) is amended as follows:
Pre-loan
Clause
(i) is amended by striking 25 percent
and inserting 35
percent
.
Third party contracts
Clause (ii) is amended by striking 25
percent
and inserting 35 percent
.
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
.
PRIME
Short title
This title may be cited
as the Program for Investment in
Microentrepreneurs Act
or the PRIME Act
.
PRIME
The Small Business Act is amended—
by redesignating section 37 as 99; and
by inserting after section 36 the following:
PRIME Program
Definitions
For purposes of this section, the following definitions shall apply:
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.
Disadvantaged entrepreneur
The term disadvantaged entrepreneur means a microentrepreneur that is—
a very low-income person;
a low-income person; or
an entrepreneur that lacks adequate access to capital or other resources essential for business success, or is economically disadvantaged, as determined by the Administrator.
Collaborative
The term collaborative means 2 or more nonprofit entities that agree to act jointly as a qualified organization under this section.
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.
Intermediary
The term intermediary means a private, nonprofit entity that seeks to serve microenterprise development organizations and programs as authorized under subsection (d).
Low-income person
The term low-income person means a person having an income, adjusted for family size, of not more than—
for metropolitan areas, 80 percent of the area median income; and
for nonmetropolitan areas, the greater of—
80 percent of the area median income; or
80 percent of the statewide nonmetropolitan area median income.
Microentrepreneur
The term microentrepreneur means the owner or developer of a microenterprise.
Microenterprise
The term microenterprise means a sole proprietorship, partnership, or corporation that—
has fewer than 5 employees; and
generally lacks access to conventional loans, equity, or other banking services.
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.
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.
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.
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.
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.
Uses of assistance
A qualified organization shall use grants made under this section—
to provide training and technical assistance to disadvantaged entrepreneurs;
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;
to aid in researching and developing the best practices in the field of microenterprise and technical assistance programs for disadvantaged entrepreneurs; and
for such other activities as the Administrator determines are consistent with the purposes of this section.
Qualified organizations
For purposes of eligibility for assistance under this section, a qualified organization shall be—
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;
an intermediary;
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
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.
Allocation of assistance; subgrants
Allocation of assistance
In general
The Administrator shall allocate assistance from the Administration under this section to ensure that—
activities described in subsection (c)(1) are funded using not less than 75 percent of amounts made available for such assistance; and
activities described in subsection (c)(2) are funded using not less than 15 percent of amounts made available for such assistance.
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.
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.
Subgrants authorized
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.
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).
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.
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.
Matching requirements
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.
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).
Exception
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).
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).
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.
Recordkeeping
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.
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.
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.
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.
Reporting
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.
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.
Implementation
The Administrator shall, by regulation, establish such requirements as may be necessary to carry out this section.
.
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.
Lorraine C. Miller,
Clerk.
Jorge E. Sorensen,
Deputy Clerk.