[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3818 Reported in House (RH)]
Union Calendar No. 262
108th CONGRESS
2d Session
H. R. 3818
[Report No. 108-459]
To amend the Foreign Assistance Act of 1961 to improve the results and
accountability of microenterprise development assistance programs, and
for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 24, 2004
Mr. Smith of New Jersey (for himself, Mr. Hyde, Mr. Lantos, Mr.
Rohrabacher, Mr. Bell, Mr. Green of Texas, Ms. Ros-Lehtinen, Mr. Payne,
Mr. Pitts, Ms. Harris, Mr. Dicks, Mr. Sanders, Mr. Smith of Washington,
Mr. Baird, Mr. Faleomavaega, and Mr. Brown of Ohio) introduced the
following bill; which was referred to the Committee on International
Relations
April 2, 2004
Additional sponsors: Mr. Walsh, Mr. Lampson, Mr. Andrews, Mr. Waxman,
Mrs. Jo Ann Davis of Virginia, Mr. Houghton, Mr. Davis of Florida, Mr.
McDermott, Mr. Edwards, Mr. Rothman, Ms. McCollum, Mr. Berman, Mrs.
Tauscher, Mr. Udall of New Mexico, Ms. Lee, Mr. Inslee, Mr. Moran of
Virginia, Mr. Blumenauer, Mr. Hunter, Mr. Filner, Mr. Pence, Mr.
Bereuter, Mr. Gillmor, Mr. Weldon of Florida, Mr. Farr, Mr. George
Miller of California, Mr. Tancredo, Mr. Wexler, Mr. Delahunt, Mr.
Lincoln Diaz-Balart of Florida, Mrs. Napolitano, Mr. Doggett, Mr.
Larsen of Washington, Mr. Greenwood, Mr. Moore, Mr. Meeks of New York,
Mr. Sullivan, Ms. Carson of Indiana, Mr. Smith of Texas, Mr. Holt, Ms.
Dunn, Mr. Shays, Mr. Wilson of South Carolina, Mr. Frost, Mr. Wolf, Mr.
Carson of Oklahoma, Mr. Evans, Mr. Leach, Mr. Saxton, Mr. Meek of
Florida, Mr. Matheson, Mr. Hoeffel, Ms. Majette, Ms. Slaughter, Mrs.
Davis of California, Mr. Pallone, Mr. Spratt, Ms. Corrine Brown of
Florida, Mr. Sabo, Mr. Deutsch, Mr. Menendez, Mr. Ackerman, Ms. Hooley
of Oregon, Mr. Hastings of Florida, Mr. Frank of Massachusetts, and Mr.
Tom Davis of Virginia
April 2, 2004
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed
[Strike out all after the enacting clause and insert the part printed
in italic]
[For text of introduced bill, see copy of bill as introduced on
February 24, 2004]
_______________________________________________________________________
A BILL
To amend the Foreign Assistance Act of 1961 to improve the results and
accountability of microenterprise development assistance programs, and
for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Microenterprise Results and
Accountability Act of 2004''.
SEC. 2. FINDINGS AND POLICY.
Congress finds and declares the following:
(1) Congress has demonstrated its support for
microenterprise development assistance programs through the
enactment of two comprehensive microenterprise laws:
(A) The Microenterprise for Self-Reliance Act of
2000 (title I of Public Law 106-309; 114 Stat. 1082).
(B) Public Law 108-31 (an Act entitled ``An Act to
amend the Microenterprise for Self-Reliance Act of 2000
and the Foreign Assistance Act of 1961 to increase
assistance for the poorest people in developing
countries under microenterprise assistance program
under those Acts, and for other purposes'', approved
June 17, 2003).
(2) The United States Agency for International Development,
the agency responsible for implementing microenterprise
development assistance programs authorized under sections 108
and 131 of the Foreign Assistance Act of 1961 (22 U.S.C. 2151f
and 2152a), is not presently organized to adequately
coordinate, implement, and monitor such programs, as evidenced
by the late submission by the Agency of the report required by
section 108 of the Microenterprise for Self-Reliance Act of
2000.
(3) The Comptroller General, in a report dated November
2003, found that the United States Agency for International
Development has met some, but not all, of the key objectives of
such microenterprise development assistance programs.
(4) The Comptroller General's report found, among other
things, the following:
(A) Microenterprise development assistance
generally can help alleviate some impacts of poverty,
improve income levels and quality of life for borrowers
and provide poor individuals, workers, and their
families with an important coping mechanism.
(B) Although studies and academic analyses funded
by the United States Agency for International
Development have found that microenterprise activities
generally serve the poor clustered around the poverty
line, few loans appear to be reaching the very poor.
(C) Microenterprise development assistance programs
of the United States Agency for International
Development have encouraged women's participation in
microfinance projects and, according to data of the
Agency, women have comprised two-thirds or more of the
micro-loan clients in Agency-funded microenterprise
projects since 1997.
(5)(A) The Comptroller General's report recommends that the
Administrator of the United States Agency for International
Development review the Agency's ``microenterprise results
reporting'' system with the goal of ensuring that its annual
reporting is complete and accurate.
(B) Specifically, the Administrator should review and
reconsider the methodologies used for the collection, analysis,
and reporting of data on annual spending targets, outreach to
the very poor, sustainability of microfinance institutions, and
the contribution of Agency's funding to the institutions it
supports.
SEC. 3. MICROENTERPRISE DEVELOPMENT ASSISTANCE.
Chapter 2 of part I of the Foreign Assistance Act of 1961 (22
U.S.C. 2166 et seq.) is amended by inserting after title V the
following new title:
``TITLE VI--MICROENTERPRISE DEVELOPMENT ASSISTANCE
``SEC. 251. FINDINGS AND POLICY.
``Congress finds and declares the following:
``(1) Access to financial services and the development of
microenterprise are vital factors in the stable growth of
developing countries and in the development of free, open, and
equitable international economic systems.
``(2) It is therefore in the best interest of the United
States to facilitate access to financial services and assist
the development of microenterprise in developing countries.
``(3) Access to financial services and the development of
microenterprises can be supported by programs providing credit,
savings, training, technical assistance, business development
services, and other financial services.
``(4) Given the relatively high percentage of populations
living in rural areas of developing countries, and the combined
high incidence of poverty in rural areas and growing income
inequality between rural and urban markets, microenterprise
programs should target both rural and urban poor.
``(5) Microenteprise programs have been successful and
should continue to empower vulnerable women in the developing
world. Such programs should take into account the risks faced
by women who are potential victims of severe forms of
trafficking and the need for assistance for women who become
victims of severe forms of trafficking, as provided for in
section 106(a)(1) of the Trafficking Victims Protection Act of
2000 (22 U.S.C. 7104(a)(1); Public Law 106-386).
``(6) Given that microenterprise programs have been
successful in empowering disenfranchised groups such as women,
microenterprise programs should also target populations
disenfranchised due to race or ethnicity in countries where a
strong relationship between poverty and race or ethnicity has
been demonstrated, such as countries in Latin America.
``SEC. 252. AUTHORIZATION; IMPLEMENTATION; TARGETED ASSISTANCE.
``(a) Authorization.--The President is authorized to provide
assistance on a grant basis for programs in developing countries to
increase the availability of credit, savings, and other services to
microenterprises lacking full access to capital, training, technical
assistance, and business development services, through--
``(1) grants to microfinance institutions for the purpose
of expanding the availability of credit, savings, and other
financial services to microentreprise clients;
``(2) grants to microenterprise institutions for the
purpose of training, technical assistance, and business
development services for microenterprises to enable them to
make better use of credit, to better manage their enterprises,
to conduct market analysis and product development for
expanding domestic and international sales, particularly to
United States markets, and to increase their income and build
their assets;
``(3) capacity-building for microenterprise institutions in
order to enable them to better meet the credit, savings, and
training needs of microentreprise clients; and
``(4) policy and regulatory programs at the country level
that improve the environment for microentreprise clients and
microenterprise institutions that serve the poor and very poor.
``(b) Implementation.--
``(1) Office of microenterprise development.--
``(A) Establishment.--There is established within
the Agency an Office of Microenterprise Development,
which shall be headed by a Director who shall be
appointed by the Administrator and who should possess
technical expertise and ability to offer leadership in
the field of microenterprise development.
``(B) Duties.--The Office shall coordinate and be
responsible for the provision of assistance under this
title.
``(2) Assistance through grants to eligible
organizations.--Assistance under subsection (a) shall be
provided through grants executed, approved, or reviewed by the
Office to eligible implementing partner organizations that have
a capacity to develop and implement microenterprise programs.
``(3) Review and approval.--With respect to assistance
under subsection (a) that is furnished through field missions
of the Agency, the Office shall be responsible for--
``(A) reviewing or approving each grant agreement
prior to obligation of funds under the agreement in
order to ensure that activities to be carried out using
such funds are efficacious, technically sound, and
suitable for the economic and security climate of the
country or region where the activities will be conducted; and
``(B) approving microenterprise development
components of strategic plans of missions, bureaus, and
offices of the Agency.
``(c) Targeted Assistance.--In carrying out sustainable poverty-
focused programs under subsection (a), 50 percent of all
microenterprise resources shall be targeted to very poor clients,
defined as those individuals living in the bottom 50 percent below the
poverty line as established by the national government of the country.
Specifically, such resources shall be used for--
``(1) support of programs under this section through
practitioner institutions that--
``(A) provide credit and other financial services
to clients who are very poor, with loans in 1995 United
States dollars of--
``(i) $1,000 or less in the Europe and
Eurasia region;
``(ii) $400 or less in the Latin America
region; and
``(iii) $300 or less in the rest of the
world; and
``(B) can cover their costs in a reasonable time
period; or
``(2) demand-driven business development programs that
achieve reasonable cost recovery that are provided to clients
holding poverty loans (as defined by the regional poverty loan
limitations in paragraph (1)(A)), whether they are provided by
microfinance institutions or by specialized business
development services providers.
``(d) Support for Central Mechanisms.--The Administrator should
increase the use of central mechanisms through microenterprise,
microfinance, and practitioner institutions in the implementation of
this title.
``SEC. 253. MONITORING SYSTEM.
``(a) Establishment.--In order to maximize the sustainable
development impact of assistance authorized under section 252(a), the
Administrator of the Agency, acting through the Director of the Office,
shall establish a monitoring system that meets the requirements of
subsection (b).
``(b) Requirements.--The requirements referred to in subsection (a)
are the following:
``(1) The monitoring system establishes performance goals
for the assistance and expresses such goals in an objective and
quantifiable form, to the extent feasible.
``(2) The monitoring system establishes performance
indicators to be used in measuring or assessing the achievement
of the performance goals described in paragraph (1) and the
objectives of the assistance authorized under section 252.
``(3) The monitoring system provides a basis for
recommendations for adjustments to the assistance to enhance
the sustainability and the impact of the assistance,
particularly the impact of such assistance on the very poor,
particularly poor women.
``(4) The monitoring system adopts the widespread use of
proven and effective poverty assessment tools to successfully
identify the very poor and ensure that they receive adequate
access to microenterprise loans, savings, and assistance.
``SEC. 254. DEVELOPMENT AND CERTIFICATION OF POVERTY MEASUREMENT
METHODS; APPLICATION OF METHODS.
``(a) Development and Certification.--
``(1) In general.--The Administrator of the Agency, in
consultation with microenterprise institutions and other
appropriate organizations, shall develop no fewer than two low-
cost methods for eligible implementing partner organizations to
use to assess the poverty levels of their current or
prospective clients. The Administrator shall develop poverty
indicators that correlate with the circumstances of the very
poor.
``(2) Field testing.--The Administrator shall field-test
the methods developed under paragraph (1). As part of the
testing, institutions and programs may use the methods on a
voluntary basis to demonstrate their ability to reach the very
poor.
``(3) Certification.--Not later than October 1, 2004, the
Administrator shall, from among the low-cost poverty
measurement methods developed under paragraph (1), certify no
fewer than two such methods as approved methods for measuring
the poverty levels of current or prospective clients of
microenterprise institutions for purposes of assistance under
section 252.
``(b) Application.--The Administrator shall require that, with
reasonable exceptions, all eligible implementing partner organizations
applying for microenterprise assistance under this title use one of the
certified methods, beginning not later than October 1, 2005, to
determine and report the poverty levels of current or prospective
clients.
``SEC. 255. AUTHORIZATION OF APPROPRIATIONS; ADDITIONAL AUTHORITIES.
``(a) Authorization of Appropriations.--There are authorized to be
appropriated to the President to carry out this subtitle $200,000,000
for fiscal year 2005 and such sums as may be necessary for fiscal year
2006.
``(b) Additional Authorities.--(1) Amounts appropriated pursuant to
the authorization of appropriations under subsection (a)--
``(A) may be referred to as the `Microenterprise
Development Assistance Account';
``(B) shall be allocated to the Office, and upon approval
by the Director of the Office, may be reallocated to field
missions of the Agency in furtherance of the purposes of this
title;
``(C) are authorized to remain available until expended;
and
``(D) are in addition to amounts otherwise available for
such purposes.
``(2) Notwithstanding any other provision of law, amounts made
available for assistance for microenterprise development assistance
under any provision of law other than this title may be provided to
further the purposes of this title. To the extent assistance described
in the preceding sentence is provided in accordance with such sentence,
the Administrator of the Agency shall include, as part of the report
required under section 258, a detailed description of such assistance
and, to the extent applicable, the information required by paragraphs
(1) through (10) of subsection (b) of such section with respect to such
assistance.''.
SEC. 4. MICROENTERPRISE DEVELOPMENT CREDITS.
(a) Transfer.--Section 108 of the Foreign Assistance Act of 1961
(22 U.S.C. 2151f) is hereby--
(1) transferred from chapter 1 of part I of the Foreign
Assistance Act of 1961 to title VI of chapter 2 of part I of
such Act (as added by section 3 of this Act); and
(2) inserted after section 255 of the Foreign Assistance
Act of 1961.
(b) Redesignation.--Title VI of chapter 2 of part I of the Foreign
Assistance Act of 1961 is amended by redesignating section 108 (as
added by subsection (a)) as section 256.
(c) Conforming Amendments.--Title VI of chapter 2 of part I of the
Foreign Assistance Act of 1961 is amended--
(1) by inserting after the title heading the following:
``Subtitle A--Grant Assistance'';
(2) by inserting after section 255 the following:
``Subtitle B--Credit Assistance''; and
(3) in section 256 (as redesignated by subsection (b))--
(A) in the matter preceding paragraph (1) of
subsection (c), by striking ``Administrator of the
agency primarily responsible for administering this
part'' and inserting ``Administrator of the Agency'';
and
(B) in subsection (f)(1)--
(i) by striking ``section 131'' and
inserting ``this part''; and
(ii) by striking ``2001 through 2004'' and
inserting ``2005 and 2006''.
SEC. 5. UNITED STATES MICROFINANCE LOAN FACILITY.
(a) Transfer.--Section 132 of the Foreign Assistance Act of 1961
(22 U.S.C. 2152b) is hereby--
(1) transferred from chapter 1 of part I of the Foreign
Assistance Act of 1961 to title VI of chapter 2 of part I of
such Act (as added by section 3 of this Act); and
(2) inserted after section 256 of the Foreign Assistance
Act of 1961 (as added by section 4 of this Act).
(b) Redesignation.--Title VI of chapter 2 of part I of the Foreign
Assistance Act of 1961 is amended by redesignating section 132 (as
added by subsection (a)) as section 257.
(c) Conforming Amendments.--Title VI of chapter 2 of part I of the
Foreign Assistance Act of 1961 is amended--
(1) by inserting after section 256 the following:
``Subtitle C--United States Microfinance Loan Facility'';
and
(2) in section 257 (as redesignated by subsection (b))--
(A) in subsection (b)(3), by striking ``2001 and
2002'' and inserting ``2005 and 2006'';
(B) in the matter preceding subparagraph (A) of
subsection (d)(1), by striking ``the fiscal year 2001''
and inserting ``each of the fiscal years 2005 and
2006''; and
(C) by striking subsection (e).
SEC. 6. MISCELLANEOUS PROVISIONS.
Title VI of chapter 2 of part I of the Foreign Assistance Act of
1961 (as added by section 3 of this Act and amended by sections 4 and 5
of this Act) is further amended by adding at the end the following new
subtitle:
``Subtitle D--Miscellaneous Provisions
``SEC. 258. REPORT.
``(a) In General.--Not later than December 31, 2005, and each
December 31 thereafter, the Administrator of the Agency shall submit to
the appropriate congressional committees a report that contains a
detailed description of the implementation of this title for the
previous fiscal year.
``(b) Contents.--The report shall contain the following:
``(1) The number of grants provided under section 252, with
a listing of--
``(A) the amount of each grant;
``(B) the name of each implementing partner
organization; and
``(C) a listing of the number of countries
receiving assistance authorized by sections 252.
``(2) The results of the monitoring system required under
section 253.
``(3) The process of developing and applying poverty
assessment procedures required under section 254.
``(4) The percentage of assistance furnished under section
252 that was allocated to the very poor based on the data
collected using the certified methods required by section 254.
``(5) The absolute number of the very poor reached with
assistance furnished under section 252.
``(6) The amount of assistance provided under section 252
through central mechanisms.
``(7) The name of each country that receives assistance
under section 256 and the amount of such assistance.
``(8) An estimate of the percentage of beneficiaries of
assistance under this title who are women, including, to the
extent practicable, the percentage of these women who have been
victims of sex trafficking, as well as information on efforts
to provide assistance under this title to women who have been
victims of severe forms of trafficking or who were previously
involved in prostitution.
``(9) Any additional information relating to the provision
of assistance authorized by this title, including the use of
the poverty measurement tools required by section 254, or
additional information on assistance provided by the United
States to support microenterprise development under this title
or any other provision of law.
``(10) An estimate of the percentage of beneficiaries of
assistance under this title in countries where a strong
relationship between poverty and race or ethnicity has been
demonstrated.
``(c) Limitation.--The content of the report required by this
section shall be produced by the Office established under section
252(b)(1), and shall be made available for free electronic distribution
through such Office.
``SEC. 259. DEFINITIONS.
`` In this title:
``(1) Administrator.--The term `Administrator' means the
Administrator of the Agency.
``(2) Agency.--The term `Agency' means the United States
Agency for International Development.
``(3) Appropriate congressional committees.--The term
`appropriate congressional committees' means the Committee on
International Relations of the House of Representatives and the
Committee on Foreign Relations of the Senate.
``(4) Business development services.--The term `business
development services' means support for the growth of
microenterprises through training, technical assistance,
marketing assistance, improved production technologies, and
other related services.
``(5) Director.--The term `Director' means the Director of
the Office.
``(6) Eligible implementing partner organization.--The term
`eligible implementing partner organization' means an entity
eligible to receive assistance under this title which is--
``(A) a United States or an indigenous private
voluntary organization;
``(B) a United States or an indigenous credit
union;
``(C) a United States or an indigenous cooperative
organization;
``(D) an indigenous governmental or nongovernmental
organization;
``(E) a microenterprise institution;
``(F) a microfinance institution; or
``(G) a practitioner institution.
``(7) Microenterprise institution.--The term
`microenterprise institution' means a not-for-profit entity
that provides services, including microfinance, training, or
business development services, for microentreprise clients in
foreign countries.
``(8) Microfinance institution.--The term `microfinance
institution' means a not-for-profit entity or a regulated
financial intermediary that directly provides, or works to
expand, the availability of credit, savings, and other
financial services to microentreprise clients in foreign
countries.
``(9) Microfinance network.--The term `microfinance
network' means an affiliated group of practitioner institutions
that provides services to its members, including financing,
technical assistance, and accreditation, for the purpose of
promoting the financial sustainability and societal impact of
microenterprise assistance.
``(10) Office.--The term `Office' means the Office of
Microenterprise Development established under section
252(b)(1).
``(11) Practitioner institution.--The term `practitioner
institution' means a not-for-profit entity or a regulated
financial intermediary, including a microfinance network, that
provides services, including microfinance, training, or
business development services, for microentreprise clients, or
provides assistance to microenterprise institutions in foreign
countries.
``(12) Private voluntary organization.--The term `private
voluntary organization' means a not-for-profit entity that--
``(A) engages in and supports activities of an
economic or social development or humanitarian nature
for citizens in foreign countries; and
``(B) is incorporated as such under the laws of the
United States, including any of its states, territories
or the District of Columbia, or of a foreign country.
``(13) United states-supported microfinance institution.--
The term `United States-supported microfinance institution'
means a financial intermediary that has received funds made
available under this part for fiscal year 1980 or any
subsequent fiscal year.
``(14) Very poor.--The term `very poor' means those
individuals--
``(A) living in the bottom 50 percent below the
poverty line established by the national government of
the country in which those individuals live; or
``(B) living on less than the equivalent of $1 per
day.''.
SEC. 7. REPEALS.
(a) Foreign Assistance Act of 1961.--Section 131 of the Foreign
Assistance Act of 1961 (22 U.S.C. 2152a) is hereby repealed.
(b) Public Law 108-31.--
(1) In general.--Section 4 of Public Law 108-31 (22 U.S.C.
2151f note) is amended by striking subsection (b).
(2) Conforming amendment.--Section 4 of Public Law 108-31
is amended by striking ``(a)'' and all that follows through
``Not later'' and inserting ``Not later''.
SEC. 8. REFERENCES.
Any reference in a law, regulation, agreement, or other document of
the United States to section 108, 131, or 132 of the Foreign Assistance
Act of 1961 shall be deemed to be a reference to subtitle B of title VI
of chapter 2 of part I of the Foreign Assistance Act of 1961, subtitle
A of title VI of chapter 2 of part I of such Act, or subtitle C of
title VI of chapter 2 of part I of such Act, respectively.
Union Calendar No. 262
108th CONGRESS
2d Session
H. R. 3818
[Report No. 108-459]
_______________________________________________________________________
A BILL
To amend the Foreign Assistance Act of 1961 to improve the results and
accountability of microenterprise development assistance programs, and
for other purposes.
_______________________________________________________________________
April 2, 2004
Reported with an amendment, committed to the Committee of the Whole
House on the State of the Union, and ordered to be printed