Mr. KERRY . Mr. President, tonight the Senate will vote on H.R. 440, the Microloan Program Technical Corrections Act of 1999. I urge my colleagues to support this Act which, including my amendment, makes important changes to the Small Business Administration's (SBA ) Microloan program. It revises the loan loss reserve requirement for microlenders and makes changes that will more equitably distribute the microloan dollars available to each state. Ultimately, these changes will allow microlenders and intermediaries to make more loans and offer more technical assistance to our nation's small businesses.

Most of my colleagues know that microloans and technical assistance are effective and powerful economic development tools because they voted to make the SBA's microloan program a permanent part of the Agency's lending programs in 1997.

Let's look at the record since the SBA's microloan pilot program was launched in 1991. It has provided more than 7,900 microloans, worth some $80.3 million. For every microloan, 1.7 jobs are created. And, if a borrower was a welfare recipient, it is common for them to hire other welfare recipients. As the program was intended to do, a great percentage of microloans have gone to traditionally underserved groups, including 45 percent to women-owned businesses, 39 percent to minority-owned businesses and 11 percent to veteran-owned businesses. Voting for these measures will be a vote to make a good program better.

Specifically, this legislation revises the loan loss reserve requirement (a cash reserve to guarantee that the government is paid back if a loan defaults) for microlenders by setting a 15-percent ceiling and a 10-percent floor. After a microloan intermediary has participated in the SBA Microloan program for five years and demonstrated its ability to maintain a healthy loan fund, it can request that SBA review and, when appropriate, reduce its loan loss reserve from 15 percent to a percentage based on its average loan loss rate for the five-year period. The proposed change would continue to protect the government's interest in microloans as well as enhance the program by freeing up cash which microlenders could reprogram for more microloans or technical assistance to small business owners.

With my amendment, this legislation establishes a floor for the distribution of microloan funds available to the states, including the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Guam, and American Samoa. Depending on the amount of appropriations, the SBA must provide the lesser of either $800,000 or the even division of the funds among the 55 states. For any monies that exceed $44 million ($800,000 x 55 states), the Administration has the discretion to decide how to distribute the microloan funds. The Administration also has the discretion to distribute any additional money that is left over at the beginning of the third quarter of a fiscal year.

Mr. President, in Massachusetts and across the country, microloans and technical assistance are working; assisting individuals with the tools to successfully start and manage their own business. I thank my colleagues for their past support of small business and urge them to vote for H.R. 440 as amended.