II

105TH CONGRESS

2D SESSION S. 2190

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

JUNE 18, 1998

Mr. KENNEDY (for himself, Mr. DOMENICI, Mr. KERRY, and Mr. BINGAMAN)

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,

3 SECTION 1. PROVISION OF TECHNICAL ASSISTANCE TO

4 MICROENTERPRISES.

5 Title I of the Riegle Community Development and

6 Regulatory Improvement Act of 1994 (12 U.S.C. 4701 et
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1 seq.) is amended by adding at the end the following new

2 subtitle:

3 ‘‘Subtitle C—Microenterprise Tech4 nical Assistance and Capacity

5 Building Program

6 ‘‘SEC. 171. SHORT TITLE.

7 ‘‘This subtitle may be cited as the ‘Program for In8 vestment in Microentrepreneurs Act of 1998’, also re9 ferred to as the ‘PRIME Act’.

10 ‘‘SEC. 172. DEFINITIONS.

11 ‘‘For purposes of this subtitle—

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

13 meaning as in section 103;

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

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

16 the process of becoming a microenterprise develop17 ment organization or program, for the purpose of

18 enhancing its ability to provide training and services

19 to disadvantaged entrepreneurs;

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

21 nonprofit entities that agree to act jointly as a quali22 fied organization under this subtitle;

23 ‘‘(4) the term ‘disadvantaged entrepreneur’

24 means a microentrepreneur that is—

25 ‘‘(A) a low-income person;
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1 ‘‘(B) a very low-income person; or

2 ‘‘(C) an entrepreneur that lacks adequate

3 access to capital or other resources essential for

4 business success, or is economically disadvan5 taged, as determined by the Administrator;

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

7 in section 103;

8 ‘‘(6) the term ‘Indian tribe’ has the same mean9 ing as in section 103;

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

11 nonprofit entity that seeks to serve microenterprise

12 development organizations and programs as author13 ized under section 175;

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

15 meaning as in section 103;

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

17 owner or developer of a microenterprise;

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

19 proprietorship, partnership, or corporation that—

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

21 ‘‘(B) generally lacks access to conventional

22 loans, equity, or other banking services;

23 ‘‘(11) the term ‘microenterprise development or24 ganization or program’ means a nonprofit entity, or

25 a program administered by such an entity, including
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1 community development corporations or other non2 profit development organizations and social service

3 organizations, that provides services to disadvan4 taged entrepreneurs or prospective entrepreneurs;

5 ‘‘(12) the term ‘training and technical assist6 ance’ means services and support provided to dis7 advantaged entrepreneurs or prospective entre8 preneurs, such as assistance for the purpose of en9 hancing business planning, marketing, management,

10 financial management skills, and assistance for the

11 purpose of accessing financial services; and

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

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

14 more than 150 percent of the poverty line (as de15 fined in section 673(2) of the Community Services

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

17 revision required by that section).

18 ‘‘SEC. 173. ESTABLISHMENT OF PROGRAM.

19 ‘‘The Administrator shall establish a microenterprise

20 technical assistance and capacity building grant program

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

22 to qualified organizations in accordance with this subtitle.

23 ‘‘SEC. 174. USES OF ASSISTANCE.

24 ‘‘A qualified organization shall use grants made

25 under this subtitle—
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1 ‘‘(1) to provide training and technical assist2 ance to disadvantaged entrepreneurs;

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

4 services to microenterprise development organiza5 tions and programs and groups of such organiza6 tions to assist such organizations and programs in

7 developing microenterprise training and services;

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

9 best practices in the field of microenterprise and

10 technical assistance programs for disadvantaged en11 trepreneurs; and

12 ‘‘(4) for such other activities as the Adminis13 trator determines are consistent with the purposes of

14 this subtitle.

15 ‘‘SEC. 175. QUALIFIED ORGANIZATIONS.

16 ‘‘For purposes of eligibility for assistance under this

17 subtitle, a qualified organization shall be—

18 ‘‘(1) a nonprofit microenterprise development

19 organization or program (or a group or collaborative

20 thereof) that has a demonstrated record of delivering

21 microenterprise services to disadvantaged entre22 preneurs;

23 ‘‘(2) an intermediary;

24 ‘‘(3) a microenterprise development organiza25 tion or program that is accountable to a local com-
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1 munity, working in conjunction with a State or local

2 government or Indian tribe; or

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

4 Indian tribe can certify that no private organization

5 or program referred to in this paragraph exists with6 in its jurisdiction.

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

8 ‘‘(a) ALLOCATION OF ASSISTANCE.—

9 ‘‘(1) IN GENERAL.—The Administrator shall al10 locate assistance from the Fund under this subtitle

11 to ensure that—

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

13 are funded using not less than 75 percent of

14 amounts made available for such assistance;

15 and

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

17 are funded using not less than 15 percent of

18 amounts made available for such assistance.

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

20 single organization or entity may receive more than

21 10 percent of the total funds appropriated under

22 this subtitle in a single fiscal year.

23 ‘‘(b) TARGETED ASSISTANCE.—The Administrator

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

25 made under this subtitle are used to benefit very low-in-
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1 come persons, including those residing on Indian reserva2 tions.

3 ‘‘(c) SUBGRANTS AUTHORIZED.—

4 ‘‘(1) IN GENERAL.—A qualified organization re5 ceiving assistance under this subtitle may provide

6 grants using that assistance to qualified small and

7 emerging microenterprise organizations and pro8 grams, subject to such rules and regulations as the

9 Administrator determines to be appropriate.

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

11 Not more than 7.5 percent of assistance received by

12 a qualified organization under this subtitle may be

13 used for administrative expenses in connection with

14 the making of subgrants under paragraph (1).

15 ‘‘(d) DIVERSITY.—In making grants under this sub16 title, the Administrator shall ensure that grant recipients

17 include both large and small microenterprise organiza18 tions, serving urban, rural, and Indian tribal communities

19 and racially and ethnically diverse populations.

20 ‘‘SEC. 177. MATCHING REQUIREMENTS.

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

22 subtitle shall be matched with funds from sources other

23 than the Federal Government on the basis of not less than

24 50 percent of each dollar provided by the Fund.
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1 ‘‘(b) SOURCES OF MATCHING FUNDS.—Fees, grants,

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

3 a grant recipient from public or private sources may be

4 used to comply with the matching requirement in sub5 section (a).

6 ‘‘(c) EXCEPTION.—

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

8 for assistance under this subtitle with severe con9 straints on available sources of matching funds, the

10 Administrator may reduce or eliminate the matching

11 requirements of subsection (a).

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

13 of the total funds made available from the Fund in

14 any fiscal year to carry out this subtitle may be ex15 cepted from the matching requirements of subsection

16 (a), as authorized by paragraph (1) of this sub17 section.

18 ‘‘SEC. 178. APPLICATIONS FOR ASSISTANCE.

19 ‘‘An application for assistance under this subtitle

20 shall be submitted in such form and in accordance with

21 such procedures as the Fund shall establish.

22 ‘‘SEC. 179. RECORDKEEPING.

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

24 qualified organization receiving assistance from the Fund

25 under this subtitle as if it were a community development
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1 financial institution receiving assistance from the Fund

2 under subtitle A.

3 ‘‘SEC. 180. AUTHORIZATION.

4 ‘‘In addition to funds otherwise authorized to be ap5 propriated to the Fund to carry out this title, there are

6 authorized to be appropriated to the Fund to carry out

7 this subtitle—

8 ‘‘(1) $15,000,000 for fiscal year 1999;

9 ‘‘(2) $25,000,000 for fiscal year 2000;

10 ‘‘(3) $30,000,000 for fiscal year 2001; and

11 ‘‘(4) $35,000,000 for fiscal year 2002.

12 ‘‘SEC. 181. IMPLEMENTATION.

13 ‘‘The Administrator shall, by regulation, establish

14 such requirements as may be necessary to carry out this

15 subtitle.’’.

16 SEC. 2. ADMINISTRATIVE EXPENSES.

17 Section 121(a)(2)(A) of the Riegle Community Devel18 opment and Regulatory Improvement Act of 1994 (12

19 U.S.C. 4718(a)(2)(A)) is amended—

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

21 ‘‘$6,100,000’’; and

22 (2) in the first sentence, by inserting before the

23 period ‘‘, including costs and expenses associated

24 with carrying out subtitle C’’.
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1 SEC. 3. CONFORMING AMENDMENTS.

2 Section 104(d) of the Riegle Community Develop3 ment and Regulatory Improvement Act of 1994 (12

4 U.S.C. 4703(d)) is amended—

5 (1) in paragraph (2)—

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

7 (B) in subparagraph (G)—

8 (i) by striking ‘‘9’’ and inserting

9 ‘‘11’’;

10 (ii) by redesignating clauses (iv) and

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

12 and

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

14 following:

15 ‘‘(iv) 2 individuals who have expertise

16 in microenterprises and microenterprise de17 velopment;’’; and

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

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

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