II

106TH CONGRESS

1ST SESSION S. 409

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.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 10, 1999

Mr. KENNEDY (for himself, Mr. DOMENICI, Mr. REID, Mr. GRASSLEY, Mr.

ABRAHAM, Mr. ROBB, Ms. COLLINS, Mrs. BOXER, Mr. SANTORUM, Mr.

SARBANES, and Ms. SNOWE) introduced the following bill; which was read

twice and referred to the Committee on Banking, Housing, and Urban

Affairs

A BILL

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.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. PROVISION OF TECHNICAL ASSISTANCE TO

2 MICROENTERPRISES.

3 Title I of the Riegle Community Development and

4 Regulatory Improvement Act of 1994 (12 U.S.C. 4701 et

5 seq.) is amended by adding at the end the following new

6 subtitle:

7 ‘‘Subtitle C—Microenterprise Tech8 nical Assistance and Capacity

9 Building Program

10 ‘‘SEC. 171. SHORT TITLE.

11 ‘‘This subtitle may be cited as the ‘Program for In12 vestment in Microentrepreneurs Act of 1999’, also re13 ferred to as the ‘PRIME Act’.

14 ‘‘SEC. 172. DEFINITIONS.

15 ‘‘For purposes of this subtitle—

16 ‘‘(1) the term ‘Administrator’ has the same

17 meaning as in section 103;

18 ‘‘(2) the term ‘capacity building services’ means

19 services provided to an organization that is, or is in

20 the process of becoming a microenterprise develop21 ment organization or program, for the purpose of

22 enhancing its ability to provide training and services

23 to disadvantaged entrepreneurs;

24 ‘‘(3) the term ‘collaborative’ means 2 or more

25 nonprofit entities that agree to act jointly as a quali26 fied organization under this subtitle;
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1 ‘‘(4) the term ‘disadvantaged entrepreneur’

2 means a microentrepreneur that is—

3 ‘‘(A) a low-income person;

4 ‘‘(B) a very low-income person; or

5 ‘‘(C) an entrepreneur that lacks adequate

6 access to capital or other resources essential for

7 business success, or is economically disadvan8 taged, as determined by the Administrator;

9 ‘‘(5) the term ‘Fund’ has the same meaning as

10 in section 103;

11 ‘‘(6) the term ‘Indian tribe’ has the same mean12 ing as in section 103;

13 ‘‘(7) the term ‘intermediary’ means a private,

14 nonprofit entity that seeks to serve microenterprise

15 development organizations and programs as author16 ized under section 175;

17 ‘‘(8) the term ‘low-income person’ has the same

18 meaning as in section 103;

19 ‘‘(9) the term ‘microentrepreneur’ means the

20 owner or developer of a microenterprise;

21 ‘‘(10) the term ‘microenterprise’ means a sole

22 proprietorship, partnership, or corporation that—

23 ‘‘(A) has fewer than 5 employees; and

24 ‘‘(B) generally lacks access to conventional

25 loans, equity, or other banking services;
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1 ‘‘(11) the term ‘microenterprise development or2 ganization or program’ means a nonprofit entity, or

3 a program administered by such an entity, including

4 community development corporations or other non5 profit development organizations and social service

6 organizations, that provides services to disadvan7 taged entrepreneurs or prospective entrepreneurs;

8 ‘‘(12) the term ‘training and technical assist9 ance’ means services and support provided to dis10 advantaged entrepreneurs or prospective entre11 preneurs, such as assistance for the purpose of en12 hancing business planning, marketing, management,

13 financial management skills, and assistance for the

14 purpose of accessing financial services; and

15 ‘‘(13) the term ‘very low-income person’ means

16 having an income, adjusted for family size, of not

17 more than 150 percent of the poverty line (as de18 fined in section 673(2) of the Community Services

19 Block Grant Act (42 U.S.C. 9902(2), including any

20 revision required by that section).

21 ‘‘SEC. 173. ESTABLISHMENT OF PROGRAM.

22 ‘‘The Administrator shall establish a microenterprise

23 technical assistance and capacity building grant program

24 to provide assistance from the Fund in the form of grants

25 to qualified organizations in accordance with this subtitle.
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1 ‘‘SEC. 174. USES OF ASSISTANCE.

2 ‘‘A qualified organization shall use grants made

3 under this subtitle—

4 ‘‘(1) to provide training and technical assist5 ance to disadvantaged entrepreneurs;

6 ‘‘(2) to provide training and capacity building

7 services to microenterprise development organiza8 tions and programs and groups of such organiza9 tions to assist such organizations and programs in

10 developing microenterprise training and services;

11 ‘‘(3) to aid in researching and developing the

12 best practices in the field of microenterprise and

13 technical assistance programs for disadvantaged en14 trepreneurs; and

15 ‘‘(4) for such other activities as the Adminis16 trator determines are consistent with the purposes of

17 this subtitle.

18 ‘‘SEC. 175. QUALIFIED ORGANIZATIONS.

19 ‘‘For purposes of eligibility for assistance under this

20 subtitle, a qualified organization shall be—

21 ‘‘(1) a nonprofit microenterprise development

22 organization or program (or a group or collaborative

23 thereof) that has a demonstrated record of delivering

24 microenterprise services to disadvantaged entre25 preneurs;

26 ‘‘(2) an intermediary;
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1 ‘‘(3) a microenterprise development organiza2 tion or program that is accountable to a local com3 munity, working in conjunction with a State or local

4 government or Indian tribe; or

5 ‘‘(4) an Indian tribe acting on its own, if the

6 Indian tribe can certify that no private organization

7 or program referred to in this paragraph exists with8 in its jurisdiction.

9 ‘‘SEC. 176. ALLOCATION OF ASSISTANCE; SUBGRANTS.

10 ‘‘(a) ALLOCATION OF ASSISTANCE.—

11 ‘‘(1) IN GENERAL.—The Administrator shall al12 locate assistance from the Fund under this subtitle

13 to ensure that—

14 ‘‘(A) activities described in section 174(1)

15 are funded using not less than 75 percent of

16 amounts made available for such assistance;

17 and

18 ‘‘(B) activities described in section 174(2)

19 are funded using not less than 15 percent of

20 amounts made available for such assistance.

21 ‘‘(2) LIMIT ON INDIVIDUAL ASSISTANCE.—No

22 single organization or entity may receive more than

23 10 percent of the total funds appropriated under

24 this subtitle in a single fiscal year.
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1 ‘‘(b) TARGETED ASSISTANCE.—The Administrator

2 shall ensure that not less than 50 percent of the grants

3 made under this subtitle are used to benefit very low-in4 come persons, including those residing on Indian reserva5 tions.

6 ‘‘(c) SUBGRANTS AUTHORIZED.—

7 ‘‘(1) IN GENERAL.—A qualified organization re8 ceiving assistance under this subtitle may provide

9 grants using that assistance to qualified small and

10 emerging microenterprise organizations and pro11 grams, subject to such rules and regulations as the

12 Administrator determines to be appropriate.

13 ‘‘(2) LIMIT ON ADMINISTRATIVE EXPENSES.—

14 Not more than 7.5 percent of assistance received by

15 a qualified organization under this subtitle may be

16 used for administrative expenses in connection with

17 the making of subgrants under paragraph (1).

18 ‘‘(d) DIVERSITY.—In making grants under this sub19 title, the Administrator shall ensure that grant recipients

20 include both large and small microenterprise organiza21 tions, serving urban, rural, and Indian tribal communities

22 and racially and ethnically diverse populations.

23 ‘‘SEC. 177. MATCHING REQUIREMENTS.

24 ‘‘(a) IN GENERAL.—Financial assistance under this

25 subtitle shall be matched with funds from sources other
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1 than the Federal Government on the basis of not less than

2 50 percent of each dollar provided by the Fund.

3 ‘‘(b) SOURCES OF MATCHING FUNDS.—Fees, grants,

4 gifts, funds from loan sources, and in-kind resources of

5 a grant recipient from public or private sources may be

6 used to comply with the matching requirement in sub7 section (a).

8 ‘‘(c) EXCEPTION.—

9 ‘‘(1) IN GENERAL.—In the case of an applicant

10 for assistance under this subtitle with severe con11 straints on available sources of matching funds, the

12 Administrator may reduce or eliminate the matching

13 requirements of subsection (a).

14 ‘‘(2) LIMITATION.—Not more than 10 percent

15 of the total funds made available from the Fund in

16 any fiscal year to carry out this subtitle may be ex17 cepted from the matching requirements of subsection

18 (a), as authorized by paragraph (1) of this sub19 section.

20 ‘‘SEC. 178. APPLICATIONS FOR ASSISTANCE.

21 ‘‘An application for assistance under this subtitle

22 shall be submitted in such form and in accordance with

23 such procedures as the Fund shall establish.
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1 ‘‘SEC. 179. RECORDKEEPING.

2 ‘‘The requirements of section 115 shall apply to a

3 qualified organization receiving assistance from the Fund

4 under this subtitle as if it were a community development

5 financial institution receiving assistance from the Fund

6 under subtitle A.

7 ‘‘SEC. 180. AUTHORIZATION.

8 ‘‘In addition to funds otherwise authorized to be ap9 propriated to the Fund to carry out this title, there are

10 authorized to be appropriated to the Fund to carry out

11 this subtitle—

12 ‘‘(1) $15,000,000 for fiscal year 2000;

13 ‘‘(2) $25,000,000 for fiscal year 2001;

14 ‘‘(3) $30,000,000 for fiscal year 2002; and

15 ‘‘(4) $35,000,000 for fiscal year 2003.

16 ‘‘SEC. 181. IMPLEMENTATION.

17 ‘‘The Administrator shall, by regulation, establish

18 such requirements as may be necessary to carry out this

19 subtitle.’’.

20 SEC. 2. ADMINISTRATIVE EXPENSES.

21 Section 121(a)(2)(A) of the Riegle Community Devel22 opment and Regulatory Improvement Act of 1994 (12

23 U.S.C. 4718(a)(2)(A)) is amended—

24 (1) by striking ‘‘$5,550,000’’ and inserting

25 ‘‘$6,100,000’’; and
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1 (2) in the first sentence, by inserting before the

2 period ‘‘, including costs and expenses associated

3 with carrying out subtitle C’’.

4 SEC. 3. CONFORMING AMENDMENTS.

5 Section 104(d) of the Riegle Community Develop6 ment and Regulatory Improvement Act of 1994 (12

7 U.S.C. 4703(d)) is amended—

8 (1) in paragraph (2)—

9 (A) by striking ‘‘15’’ and inserting ‘‘17’’;

10 (B) in subparagraph (G)—

11 (i) by striking ‘‘9’’ and inserting

12 ‘‘11’’;

13 (ii) by redesignating clauses (iv) and

14 (v) as clauses (v) and (vi), respectively;

15 and

16 (iii) by inserting after clause (iii) the

17 following:

18 ‘‘(iv) 2 individuals who have expertise

19 in microenterprises and microenterprise de20 velopment;’’; and

21 (2) in paragraph (4), in the first sentence, by

22 inserting before the period ‘‘and subtitle C’’.

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