I
105TH CONGRESS
2D SESSION
H. R. 4179
To authorize qualified organizations to provide technical assistance and capac-
ity building services to microenterprise development organizations and
programs and to disadvantaged entrepreneurs using funds from the Com-
munity Development Financial Institutions Fund, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JUNE 25, 1998
Mr. RUSH introduced the following bill; which was referred to the Committee
on Banking and Financial Services
A BILL
To authorize qualified organizations to provide technical as-
sistance and capacity building services to microenterprise
development organizations and programs and to dis-
advantaged entrepreneurs using funds from the Commu-
nity Development Financial Institutions Fund, and for
other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. PROVISION OF TECHNICAL ASSISTANCE TO
MICROENTERPRISES.
Title I of the Riegle Community Development and
Regulatory Improvement Act of 1994 (12 U.S.C. 4701 et
seq.) is amended by adding at the end the following new
subtitle:
‘‘Subtitle C—Microenterprise Tech-
nical Assistance and Capacity
Building Program
‘‘SEC. 171. SHORT TITLE.
‘‘This subtitle may be cited as the ‘Program for In-
vestment in Microentrepreneurs Act of 1998’, also re-
ferred to as the ‘PRIME Act’.
‘‘SEC. 172. DEFINITIONS.
‘‘For purposes of this subtitle—
‘‘(1) the term ‘Administrator’ has the same
meaning as in section 103;
‘‘(2) the term ‘capacity building services’ means
services provided to an organization that is, or is in
the process of becoming a microenterprise develop-
ment organization or program, for the purpose of
enhancing its ability to provide training and services
to disadvantaged entrepreneurs;
‘‘(3) the term ‘collaborative’ means 2 or more
nonprofit entities that agree to act jointly as a quali-
fied organization under this subtitle;
‘‘(4) the term ‘disadvantaged entrepreneur’
means a microentrepreneur that is—
‘‘(A) a low-income person;
‘‘(B) a very low-income person; or
‘‘(C) an entrepreneur that lacks adequate
access to capital or other resources essential for
business success, or is economically disadvan-
taged, as determined by the Administrator;
‘‘(5) the term ‘Fund’ has the same meaning as
in section 103;
‘‘(6) the term ‘Indian tribe’ has the same mean-
ing as in section 103;
‘‘(7) the term ‘intermediary’ means a private,
nonprofit entity that seeks to serve microenterprise
development organizations and programs as author-
ized under section 175;
‘‘(8) the term ‘low-income person’ has the same
meaning as in section 103;
‘‘(9) the term ‘microentrepreneur’ means the
owner or developer of a microenterprise;
‘‘(10) 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;
‘‘(11) the term ‘microenterprise development or-
ganization or program’ means a nonprofit entity, or
a program administered by such an entity, including
community development corporations or other non-
profit development organizations and social service
organizations, that provides services to disadvan-
taged entrepreneurs or prospective entrepreneurs;
‘‘(12) the term ‘training and technical assist-
ance’ means services and support provided to dis-
advantaged entrepreneurs or prospective entre-
preneurs, such as assistance for the purpose of en-
hancing business planning, marketing, management,
financial management skills, and assistance for the
purpose of accessing financial services; and
‘‘(13) 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 de-
fined in section 673(2) of the Community Services
Block Grant Act (42 U.S.C. 9902(2), including any
revision required by that section).
‘‘SEC. 173. ESTABLISHMENT OF PROGRAM.
‘‘The Administrator shall establish a microenterprise
technical assistance and capacity building grant program
to provide assistance from the Fund in the form of grants
to qualified organizations in accordance with this subtitle.
‘‘SEC. 174. USES OF ASSISTANCE.
‘‘A qualified organization shall use grants made
under this subtitle—
‘‘(1) to provide training and technical assist-
ance to disadvantaged entrepreneurs;
‘‘(2) to provide training and capacity building
services to microenterprise development organiza-
tions and programs and groups of such organiza-
tions 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 en-
trepreneurs; and
‘‘(4) for such other activities as the Adminis-
trator determines are consistent with the purposes of
this subtitle.
‘‘SEC. 175. QUALIFIED ORGANIZATIONS.
‘‘For purposes of eligibility for assistance under this
subtitle, 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 entre-
preneurs;
‘‘(2) an intermediary;
‘‘(3) a microenterprise development organiza-
tion or program that is accountable to a local com-
munity, 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 with-
in its jurisdiction.
‘‘SEC. 176. ALLOCATION OF ASSISTANCE; SUBGRANTS.
‘‘(a) ALLOCATION OF ASSISTANCE.—
‘‘(1) IN GENERAL.—The Administrator shall al-
locate assistance from the Fund under this subtitle
to ensure that—
‘‘(A) activities described in section 174(1)
are funded using not less than 75 percent of
amounts made available for such assistance;
and
‘‘(B) activities described in section 174(2)
are funded using not less than 15 percent of
amounts made available for such assistance.
‘‘(2) LIMIT ON INDIVIDUAL ASSISTANCE.—No
single organization or entity may receive more than
10 percent of the total funds appropriated under
this subtitle in a single fiscal year.
‘‘(b) TARGETED ASSISTANCE.—The Administrator
shall ensure that not less than 50 percent of the grants
made under this subtitle are used to benefit very low-in-
come persons, including those residing on Indian reserva-
tions.
‘‘(c) SUBGRANTS AUTHORIZED.—
‘‘(1) IN GENERAL.—A qualified organization re-
ceiving assistance under this subtitle may provide
grants using that assistance to qualified small and
emerging microenterprise organizations and pro-
grams, subject to such rules and regulations as the
Administrator determines to be appropriate.
‘‘(2) LIMIT ON ADMINISTRATIVE EXPENSES.—
Not more than 7.5 percent of assistance received by
a qualified organization under this subtitle may be
used for administrative expenses in connection with
the making of subgrants under paragraph (1).
‘‘(d) DIVERSITY.—In making grants under this sub-
title, the Administrator shall ensure that grant recipients
include both large and small microenterprise organiza-
tions, serving urban, rural, and Indian tribal communities
and racially and ethnically diverse populations.
‘‘SEC. 177. MATCHING REQUIREMENTS.
‘‘(a) IN GENERAL.—Financial assistance under this
subtitle 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 Fund.
‘‘(b) 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 sub-
section (a).
‘‘(c) EXCEPTION.—
‘‘(1) IN GENERAL.—In the case of an applicant
for assistance under this subtitle with severe con-
straints on available sources of matching funds, the
Administrator may reduce or eliminate the matching
requirements of subsection (a).
‘‘(2) LIMITATION.—Not more than 10 percent
of the total funds made available from the Fund in
any fiscal year to carry out this subtitle may be ex-
cepted from the matching requirements of subsection
(a), as authorized by paragraph (1) of this sub-
section.
‘‘SEC. 178. APPLICATIONS FOR ASSISTANCE.
‘‘An application for assistance under this subtitle
shall be submitted in such form and in accordance with
such procedures as the Fund shall establish.
‘‘SEC. 179. RECORDKEEPING.
‘‘The requirements of section 115 shall apply to a
qualified organization receiving assistance from the Fund
under this subtitle as if it were a community development
financial institution receiving assistance from the Fund
under subtitle A.
‘‘SEC. 180. AUTHORIZATION.
‘‘In addition to funds otherwise authorized to be ap-
propriated to the Fund to carry out this title, there are
authorized to be appropriated to the Fund to carry out
this subtitle—
‘‘(1) $15,000,000 for fiscal year 1999;
‘‘(2) $25,000,000 for fiscal year 2000;
‘‘(3) $30,000,000 for fiscal year 2001; and
‘‘(4) $35,000,000 for fiscal year 2002.
‘‘SEC. 181. IMPLEMENTATION.
‘‘The Administrator shall, by regulation, establish
such requirements as may be necessary to carry out this
subtitle.’’.
SEC. 2. ADMINISTRATIVE EXPENSES.
Section 121(a)(2)(A) of the Riegle Community Devel-
opment and Regulatory Improvement Act of 1994 (12
U.S.C. 4718(a)(2)(A)) is amended—
(1) by striking ‘‘$5,550,000’’ and inserting
‘‘$6,100,000’’; and
(2) in the first sentence, by inserting before the
period ‘‘, including costs and expenses associated
with carrying out subtitle C’’.
SEC. 3. CONFORMING AMENDMENTS.
Section 104(d) of the Riegle Community Develop-
ment and Regulatory Improvement Act of 1994 (12
U.S.C. 4703(d)) is amended—
(1) in paragraph (2)—
(A) by striking ‘‘15’’ and inserting ‘‘17’’;
(B) in subparagraph (G)—
(i) by striking ‘‘9’’ and inserting
‘‘11’’;
(ii) by redesignating clauses (iv) and
(v) as clauses (v) and (vi), respectively;
and
(iii) by inserting after clause (iii) the
following:
‘‘(iv) 2 individuals who have expertise
in microenterprises and microenterprise de-
velopment;’’; and
(2) in paragraph (4), in the first sentence, by
inserting before the period ‘‘and subtitle C’’.
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