SECTION 1. SHORT TITLE.

    This Act may be cited as the ``SBA Microenterprise Improvements 
Act''.

SEC. 2. MICROLOAN PROGRAM IMPROVEMENTS.

    (a) 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 ``in paragraph (10); 
        and'' and inserting ``of the term `intermediary' under 
        paragraph (11)(A);''; and
            (2) in subparagraph (B)--
                    (A) by striking ``(B) has at least'' and inserting 
                the following:
                    ``(B) has--
                            ``(i) at least''; and
                    (B) by striking the period at the end and inserting 
                the following:
 ``; or
                            ``(ii) a full-time employee who has not 
                        less than 3 years experience making microloans 
                        to startup, newly established, or growing small 
                        business concerns; and
                    ``(C) has at least 1 year experience providing, as 
                an integral part of its microloan program, intensive 
                marketing, management, and technical assistance to its 
                borrowers.''.
    (b) Conforming Change in Average Smaller Loan Size.--Section 
7(m)(3)(F)(iii) of the Small Business Act (15 U.S.C. 636(m)(3)(F)(iii)) 
is amended by striking ``$7,500'' and inserting ``$10,000''.
    (c) Limitation on Third Party Technical Assistance.--Section 
7(m)(4)(E)(ii) of the Small Business Act (15 U.S.C. 636(m)(4)(E)(ii)) 
is amended--
            (1) by striking ``technical assistance'' in the heading and 
        inserting ``third party technical assistance''; and
            (2) by striking ``25 percent'' and inserting ``30 
        percent''.
    (d) Loan Terms.--Section 7(m)(1)(B)(i) of the Small Business Act 
(15 U.S.C. 636(m)(1)(B)(i)) is amended by striking ``short-term,''.
    (e) Report on Transferred Amounts.--Section 7(m)(9)(B) of the Small 
Business Act (15 U.S.C. 636(m)(9)(B)) is amended--
            (1) by striking ``The Administration'' and inserting the 
        following:
                            ``(i) In general.--The Administration'';
            (2) by striking the period after ``financing''; and
            (3) by adding at the end the following new clause:
                            ``(ii) Report.--The Administration shall 
                        report, in its annual budget request and 
                        performance plan to Congress, on the 
                        performance by the Administration of the 
                        requirements of clause (i).''.
    (f) Accurate Subsidy Model.--Section 7(m) of the Small Business Act 
(15 U.S.C. 636(m)) is amended by adding at the end the following new 
paragraph:
            ``(14) Improved subsidy model.--The Administrator shall 
        develop a subsidy model for the microloan program under this 
        subsection, to be used in the fiscal year 2006 budget, that is 
        more accurate than the subsidy model in effect on the day 
        before the date of enactment of this paragraph.''.
    (g) Increased Flexibility for Providing Technical Assistance to 
Potential Borrowers.--Section 7(m)(4)(E)(i) of the Small Business Act 
(15 U.S.C. 636(m)(4)(E)(i)) is amended by striking ``25 percent'' and 
inserting ``30 percent''.

SEC. 3. PRIME REAUTHORIZATION AND TRANSFER TO THE SMALL BUSINESS ACT.

    (a) Program Reauthorization.--Subtitle C of title I of the Riegle 
Community Development and Regulatory Improvement Act of 1994 (15 U.S.C. 
6901 note) is amended to read as follows:

``SEC. 37. PROGRAM FOR INVESTMENT IN MICROENTREPRENEURS.

    ``(a) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Administration.--The term `Administration' means the 
        Small Business Administration.
            ``(2) Administrator.--The term `Administrator' means the 
        Administrator of the Small Business Administration.
            ``(3) 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.
            ``(4) Collaborative.--The term `collaborative' means 2 or 
        more nonprofit entities that agree to act jointly as a 
        qualified organization under this section.
            ``(5) Disadvantaged entrepreneur.--The term `disadvantaged 
        entrepreneur' means a microentrepreneur that--
                    ``(A) is a low-income person;
                    ``(B) is a very low-income person; or
                    ``(C) lacks adequate access to capital or other 
                resources essential for business success, or is 
                economically disadvantaged, as determined by the 
                Administrator.
            ``(6) Disadvantaged native american entrepreneur.--The term 
        `disadvantaged Native American entrepreneur' means a 
        disadvantaged entrepreneur who is also a member of an Indian 
        Tribe.
            ``(7) Indian tribe.--The term `Indian tribe' has the same 
        meaning as in section 4(a) of the Indian Self-Determination and 
        Education Assistance Act.
            ``(8) Intermediary.--The term `intermediary' means a 
        private, nonprofit entity that seeks to serve microenterprise 
        development organizations and programs, as authorized under 
        subsection (d).
            ``(9) Low-income person.--The term `low-income person' 
        means 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.
            ``(10) Microentrepreneur.--The term `microentrepreneur' 
        means the owner or developer of a microenterprise.
            ``(11) 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.
            ``(12) 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.
            ``(13) 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.
            ``(14) 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 (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).
    ``(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;
            ``(4) to provide training and technical assistance to 
        disadvantaged Native American entrepreneurs and prospective 
        entrepreneurs; and
            ``(5) 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;
            ``(2) an intermediary;
            ``(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 subsection 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) of the Small Business Act 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).
            ``(3) Exception.--
                    ``(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 
                requirements of 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 requirements of paragraph 
                (1), as authorized by subparagraph (A) of this 
                paragraph.
    ``(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.
    ``(h) Recordkeeping and Reporting.--
            ``(1) In general.--Each organization that receives 
        assistance from the Administration in accordance with this 
        section shall--
                    ``(A) submit to the Administration not less than 
                once in every 18-month period, financial statements 
                audited by an independent certified public accountant;
                    ``(B) submit an annual report to the Administration 
                on its activities; and
                    ``(C) keep such records as may be necessary to 
                disclose the manner in which any assistance under this 
                section is used.
            ``(2) Access.--The Administration shall have access upon 
        request, for the purposes of determining compliance with this 
        section, to any records of any organization that receives 
        assistance from the Administration in accordance with this 
        section.
            ``(3) Data collection.--Each organization that receives 
        assistance from the Administration in accordance with this 
        section shall collect information relating to, as applicable--
                    ``(A) the number of individuals counseled or 
                trained;
                    ``(B) the number of hours of counseling provided;
                    ``(C) the number of startup small business concerns 
                formed;
                    ``(D) the number of small business concerns 
                expanded;
                    ``(E) the number of low-income individuals 
                counseled or trained; and
                    ``(F) the number of very low-income individuals 
                counseled or trained.
    ``(i) Authorization of Appropriations.--
            ``(1) In general.--There are authorized to be appropriated 
        to the Administrator $15,000,000 for each of the fiscal years 
        2005 through 2007 to carry out the provisions of this section, 
        which shall remain available until expended.
            ``(2) Training for native american entrepreneurs.--In 
        addition to the amount authorized under subsection (i)(1), 
        there are authorized to be appropriated to the Administrator 
        $2,000,000 for each of the fiscal years 2005 through 2007 to 
        carry out the provisions of subsection (c)(4), which shall 
        remain available until expended.''.
    (b) Transfer Provisions.--
            (1) Small business act amendments.--The Small Business Act 
        (15 U.S.C. 631 et seq.) is amended by redesignating section 37 
        as section 38.
            (2) Transfer.--Section 37 of the Riegle Community 
        Development and Regulatory Improvement Act of 1994 (15 U.S.C. 
        6901 note), as so designated by subsection (a) of this section, 
        is transferred to, and inserted after, section 36 of the Small 
        Business Act.
    (c) References.--All references in Federal law to the ``Program for 
Investment in Microentrepreneurs Act of 1999'' or the ``PRIME Act'' 
shall be deemed to be references to section 37 of the Small Business 
Act, as added by this section.
    (d) Rule of Construction.--Nothing in this section or the 
amendments made by this section shall affect any grant or assistance 
provided under the Program for Investment in Microentrepreneurs Act of 
1999, before the date of enactment of this Act, and any such grant or 
assistance shall be subject to the Program for Investment in 
Microentrepreneurs Act of 1999, as in effect on the day before the date 
of enactment of this Act.
SBA Microenterprise Improvements Act - Amends the Small Business Act to revise the Small Business Administration's (SBA's) microloan program (a program under which SBA loans and grants are made to intermediaries, who then make loans to small businesses and provide to borrowers technical assistance, such as managerial and strategic advice) to: (1) revise eligibility requirements for microloan intermediaries; (2) increase from $7,500 to $10,000 the microloan small loan limit; (3) increase from 25 to 30 the percentage of a microloan grant that an intermediary may use to contract-out the provision of technical assistance by a third party; (4) remove the requirement that intermediaries make only short-term loans to small businesses; (5) require an annual report from the SBA to Congress on microloan amounts transferred to cover administrative expenses of technical assistance grants; (6) require the Administrator to develop a subsidy microloan program model that is more accurate than the current model; and (7) increase from 25 to 30 the percentage of technical assistance that an intermediary may provide to potential (rather than actual) borrowers.

 Amends the Riegle Community Development and Regulatory Improvement Act of 1994 to revise the Program for Investment in Microentrepreneurs (PRIME), a program to provide SBA assistance for the benefit of disadvantaged entrepreneurs through grants to qualified organizations. Authorizes a qualified organization to use grants to provide training and technical assistance to disadvantaged Native American entrepreneurs and prospective entrepreneurs. Requires each organization receiving assistance under PRIME to: (1) submit an annual activities report to the SBA; and (2) collect data on individuals counseled or trained and related information. Extends through FY 2007 the authorization of appropriations for PRIME.
To make improvements to the microenterprise programs administered by the Small Business Administration.