To amend the Small Business Act to improve the Microloan program, and for other purposes.

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Microloan 
Amendments and Modernization Act''.
    (b) 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.

                           TITLE I--MICROLOAN

SEC. 101. 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:
            ``(14) 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.''.

SEC. 102. 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,''.

SEC. 103. 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 ``paragraph (10)'' and 
        inserting ``paragraph (11)''; and
            (2) by amending subparagraph (B) to read as follows:
                    ``(B) has--
                            ``(i) at least--
                                    ``(I) 1 year of experience making 
                                microloans to startup, newly 
                                established, or growing small business 
                                concerns; or
                                    ``(II) 1 full-time employee who has 
                                not less than 3 years experience making 
                                microloans to startup, newly 
                                established, or growing small business 
                                concerns; and
                            ``(ii) at least 1 year of experience 
                        providing, as an integral part of its microloan 
                        program, intensive marketing, management, and 
                        technical assistance to its borrowers.''.

SEC. 104. 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).

SEC. 105. TECHNICAL ASSISTANCE.

    Section 7(m)(4)(E) of the Small Business Act (15 U.S.C. 
636(m)(4)(E)) is amended as follows:
            (1) Pre-loan.--Clause (i) is amended by striking ``25 
        percent'' and inserting ``35 percent''.
            (2) Third party contracts.--Clause (ii) is amended by 
        striking ``25 percent'' and inserting ``35 percent''.

SEC. 106. 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''.

                            TITLE II--PRIME

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Program for Investment in 
Microentrepreneurs Act'' or the ``PRIME Act''.

SEC. 202. PRIME.

    The Small Business Act is amended--
            (1) by redesignating section 37 as 99; and
            (2) by inserting after section 36 the following:

``SEC. 37. PRIME PROGRAM.

    ``(a) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) 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.
            ``(2) Disadvantaged entrepreneur.--The term `disadvantaged 
        entrepreneur' means a microentrepreneur that is--
                    ``(A) a very low-income person;
                    ``(B) a low-income person; or
                    ``(C) an entrepreneur that lacks adequate access to 
                capital or other resources essential for business 
                success, or is economically disadvantaged, as 
                determined by the Administrator.
            ``(3) Collaborative.--The term `collaborative' means 2 or 
        more nonprofit entities that agree to act jointly as a 
        qualified organization under this section.
            ``(4) 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.
            ``(5) Intermediary.--The term `intermediary' means a 
        private, nonprofit entity that seeks to serve microenterprise 
        development organizations and programs as authorized under 
        subsection (d).
            ``(6) Low-income person.--The term `low-income person' 
        means a person 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.
            ``(7) Microentrepreneur.--The term `microentrepreneur' 
        means the owner or developer of a microenterprise.
            ``(8) 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.
            ``(9) 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.
            ``(10) 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.
            ``(11) 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.
            ``(12) 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.
    ``(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; and
            ``(4) 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 paragraph 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) 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 
                requirement in 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 requirement in paragraph 
                (1), as authorized by subparagraph (A).
    ``(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.--
            ``(1) 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.
            ``(2) 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.
            ``(3) 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.
            ``(4) 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.
            ``(5) Reporting.--
                    ``(A) 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.
                    ``(B) 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.
    ``(i) Implementation.--The Administrator shall, by regulation, 
establish such requirements as may be necessary to carry out this 
section.''.

SEC. 203. 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.

            Attest:

                                            LORRAINE C. MILLER,

                                                                 Clerk.

                               By Jorge E. Sorensen,

                                                          Deputy Clerk.

Summary: Microloan Amendments and Modernization Act - Title I: Microloan - (Sec. 101) Amends the Small Business Act with regard to the Microloan program (a program administered by the Small Business Administration [SBA] to provide small-scale loans to startup, newly established, or growing small businesses for working capital or the acquisition of materials, supplies, or equipment) to require the SBA Administrator to establish a process under which a lender provides to the major credit reporting agencies information about the borrower that is relevant to credit reporting (such as loan payment activity).

(Sec. 102) Removes the requirement that Microloan loans be short-term only.

(Sec. 103) Requires Microloan loan intermediaries to have one full-time employee who has at least three years experience making microloans.

(Sec. 104) Increases from $7,500 to $10,000 the limit for loans made to intermediaries that will receive a reduced interest rate.

(Sec. 105) Increases from 25% to 35% of grant funds received by Microloan intermediaries the amount that may be used to provide information and technical assistance to small businesses that are prospective borrowers.

(Sec. 106) Includes disabled entrepreneurs and small business owners under the Microloan program.

Title II: PRIME - Program for Investment in Microentrepreneurs Act or PRIME Act - (Sec. 202) Directs the Administrator to establish a technical assistance and capacity building grant program to provide assistance to microenterprises (small businesses with fewer than five employees and generally lacking access to conventional loans, equity, or other banking services) through grants to qualified microenterprise development organizations. Requires the Administrator to ensure that at least 50% of the grants made are used to benefit very low-income persons, including those residing on Indian reservations. Provides a 50% matching funds requirement, with an exception for applicants with severe constraints on available sources of matching funds. Outlines recordkeeping requirements for organizations receiving grants. Requires such organizations to report annually to the Administrator on its activities, financial condition, and success in meeting performance goals.

(Sec. 203) Repeals provisions of the Riegle Community Development and Regulatory Improvement Act of 1994 which established a Program for Investment in Microentrepreneurs (PRIME).