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S 1256 ISRSCommentsClose CommentsPermalink

110th CONGRESS 1st Session S. 1256

To amend the Small Business Act to reauthorize loan programs under that Act, and for other purposes.CommentsClose CommentsPermalink

IN THE SENATE OF THE UNITED STATES

May 1, 2007

Mr. KERRY (for himself, Ms. SNOWE, and Mr. LEVIN, Ms. LANDRIEU, Mr. OBAMA, and Mr. TESTER) introduced the following bill; which was read twice and referred to the Committee on Small Business and EntrepreneurshipCommentsClose CommentsPermalink

A BILL

To amend the Small Business Act to reauthorize loan programs under that Act, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the `Small Business Lending Reauthorization and Improvements Act of 2007'. CommentsClose CommentsPermalink

SEC. 2. TABLE OF CONTENTS.

The table of contents of this Act is as follows: CommentsClose CommentsPermalink





Sec. 1. Short title. CommentsClose CommentsPermalink





Sec. 2. Table of contents. CommentsClose CommentsPermalink





Sec. 3. Definitions. CommentsClose CommentsPermalink





Sec. 4. Authorization of appropriations. CommentsClose CommentsPermalink

TITLE I--MICROLOAN PROGRAMS

Sec. 101. Conforming technical change in average smaller loan size. CommentsClose CommentsPermalink





Sec. 102. Inclusion of persons with disabilities. CommentsClose CommentsPermalink





Sec. 103. Microloan pProgram improvements. CommentsClose CommentsPermalink





Sec. 104. PRIME reauthorization and transfer to the Small Business Act. CommentsClose CommentsPermalink





Sec. 105. Report to Congress on the Microloan Program. CommentsClose CommentsPermalink

TITLE II--INTERMEDIARY LENDING PILOT PROGRAM

Sec. 201. Findings. CommentsClose CommentsPermalink





Sec. 202. Small business intermediary lending pilot program. CommentsClose CommentsPermalink

TITLE III--7(a) LOAN PROGRAM

Sec. 301. Preferred lenders pLenders Program. CommentsClose CommentsPermalink





Sec. 302. Maximum loan amount. CommentsClose CommentsPermalink





Sec. 303. Maximum 504 and 7(a) loan eligibility. CommentsClose CommentsPermalink





Sec. 304. Loan pooling. CommentsClose CommentsPermalink





Sec. 305. Alternative size standard. CommentsClose CommentsPermalink





Sec. 306. Alternative variable interest rate. CommentsClose CommentsPermalink





Sec. 307. Minority small business development. CommentsClose CommentsPermalink





Sec. 308. Lowering of fees. CommentsClose CommentsPermalink





Sec. 309. International trade loans. CommentsClose CommentsPermalink





Sec. 310. Rural lending outreach program. CommentsClose CommentsPermalink

TITLE IV--CERTIFIED DEVELOPMENT COMPANIES; 504 LOAN PROGRAM

Sec. 401. Development company loan programs. CommentsClose CommentsPermalink





Sec. 402. Loan liquidations. CommentsClose CommentsPermalink





Sec. 403. Additional equity injections. CommentsClose CommentsPermalink





Sec. 404. Uniform leasing policy. CommentsClose CommentsPermalink





Sec. 405. Businesses in low-income areacommunities. CommentsClose CommentsPermalink





Sec. 4056. Combinations of certain goals. CommentsClose CommentsPermalink





Sec. 4067. Refinancing under the Local Development Business Loan Program. CommentsClose CommentsPermalink





Sec. 4078. Technical correction. CommentsClose CommentsPermalink





Sec. 4089. Definitions for the Small Business Investment Act of 1958. CommentsClose CommentsPermalink





Sec. 40910. Repeal of sunset on reserve requirements for premier certified lenders. CommentsClose CommentsPermalink





Sec. 4101. Certified development companies. CommentsClose CommentsPermalink





Sec. 4112. Conforming amendments. CommentsClose CommentsPermalink





Sec. 4123. Closing costs. CommentsClose CommentsPermalink





Sec. 4134. Definition of rural. CommentsClose CommentsPermalink





Sec. 4145. Regulations and effective date. CommentsClose CommentsPermalink





Sec. 4156. Limitation on time for final approval of companies. CommentsClose CommentsPermalink





Sec. 4167. Child Care Lending Pilot Program. CommentsClose CommentsPermalink





Sec. 418. Debenture repayment. CommentsClose CommentsPermalink





Sec. 419. Real estate appraisals. CommentsClose CommentsPermalink

SEC. 3. DEFINITIONS.

In this Act-- CommentsClose CommentsPermalink





(1) the terms `Administration' and `Administrator' mean the Small Business Administration and the Administrator thereof, respectively; CommentsClose CommentsPermalink





(2) the term `504 Loan Program' means the program to provide financing to small business concerns by guarantees of loans under title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.), which are funded by debentures guaranteed by the Administrator; and CommentsClose CommentsPermalink





(3) the term `small business concern' has the meaning given that term in section 3 of the Small Business Act (15 U.S.C. 632). CommentsClose CommentsPermalink

SEC. 4. AUTHORIZATION OF APPROPRIATIONS.

Section 20 of the Small Business Act (15 U.S.C. 631 note) is amended-- CommentsClose CommentsPermalink





(1) by redesignating subsection (j) as subsection (f); and CommentsClose CommentsPermalink





(2) by adding at the end the following: CommentsClose CommentsPermalink





`(g) Microloan- For each of fiscal years 2007 through 2010, the Administration is authorized to make, as provided in section 7(m)-- CommentsClose CommentsPermalink





`(1) $80,000,000 in technical assistance grants; CommentsClose CommentsPermalink





`(2) $110,000,000 in direct loans; and CommentsClose CommentsPermalink





`(3) $50,000,000 in deferred participation loans. CommentsClose CommentsPermalink





`(h) General Business Loans- The Administration is authorized to make, as provided in section 7(a)-- CommentsClose CommentsPermalink





`(1) $18,000,000,000 in general business loans in fiscal year 2007; CommentsClose CommentsPermalink





`(2) $19,000,000,000 in general business loans in fiscal year 2008; CommentsClose CommentsPermalink





`(3) $20,000,000,000 in general business loans in fiscal year 2009; and CommentsClose CommentsPermalink





`(4) $21,000,000,000 in general business loans in fiscal year 2010. CommentsClose CommentsPermalink





`(i) Certified Development Company Financings- The Administration is authorized to make, as provided in section 7(a)(13) and as provided in section 504 of the Small Business Investment Act of 1958 (15 U.S.C. 697a)-- CommentsClose CommentsPermalink





`(1) $8,000,000,000 in certified development company financings in fiscal year 2007; CommentsClose CommentsPermalink





`(2) $8,500,000,000 in certified development company financings in fiscal year 2008; CommentsClose CommentsPermalink





`(3) $9,000,000,000 in certified development company financings in fiscal year 2009; and CommentsClose CommentsPermalink





`(4) $9,500,000,000 in certified development company financings in fiscal year 2010. CommentsClose CommentsPermalink





`(j) Department of Defense- For each of fiscal years 2007 through 2010, the Administration is authorized to make $500,000,000 in loans as provided in section 7(a)(21). CommentsClose CommentsPermalink





`(k) PRIME Program- CommentsClose CommentsPermalink





`(1) IN GENERAL- There are authorized to be appropriated to the Administrator $15,000,000 for each of fiscal years 2007 through 2010 to carry out section 37, which shall remain available until expended. CommentsClose CommentsPermalink





`(2) CERTAIN PROGRAMS- In addition to the amount authorized under paragraph (1), there are authorized to be appropriated to the Administrator $2,000,000 each of fiscal years 2007 through 2010 to carry out section 37(c)(4), which shall remain available until expended. CommentsClose CommentsPermalink





`(l) Additional Authorizations and Limitations- CommentsClose CommentsPermalink





`(1) IN GENERAL- There are authorized to be appropriated to the Administration for each of fiscal years 2007 through 2010 such sums as may be necessary to carry out the provisions of this Act not elsewhere provided for, including administrative expenses and necessary loan capital for disaster loans pursuant to section 7(b), and to carry out the Small Business Investment Act of 1958, including salaries and expenses of the Administration. CommentsClose CommentsPermalink





`(2) LIMITATIONS- Notwithstanding any other provision of this section, for each of fiscal years 2007 through 2010-- CommentsClose CommentsPermalink





`(A) no funds are authorized to be used as loan capital for the loan program authorized by section 7(a)(21) in any such fiscal year, except by transfer from another Federal department or agency to the Administration, unless the program level authorized for general business loans under subsection (h) is fully funded for that fiscal year; and CommentsClose CommentsPermalink





`(B) the Administration may not approve loans on its own behalf or on behalf of any other Federal department or agency, by contract or otherwise, under terms and conditions other than those specifically authorized under this Act or the Small Business Investment Act of 1958, except that it may approve loans under section 7(a)(21) of this Act in gross amounts of not more than $2,000,000.'. CommentsClose CommentsPermalink

TITLE I--MICROLOAN PROGRAMS

SEC. 101. CONFORMING TECHNICAL CHANGE IN AVERAGE SMALLER LOAN SIZE.

Section 7(m) of the Small Business Act (15 U.S.C. 636(m)) is amended-- CommentsClose CommentsPermalink





(1) in paragraph (3)(F)(iii), by striking `$7,500' and inserting `$10,000'; and CommentsClose CommentsPermalink





(2) in paragraph (6)(C), by striking `$7,500' each place that term appears and inserting `$10,000'. CommentsClose CommentsPermalink

SEC. 102. INCLUSION OF PERSONS 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 `persons with disabilities,' before `and minority'. CommentsClose CommentsPermalink

SEC. 103. MICROLOAN PROGRAM IMPROVEMENTS.

(a) Intermediary Eligibility Requirements- Section 7(m)(2) of the Small Business Act (15 U.S.C. 636(m)(2)) is amended-- CommentsClose CommentsPermalink





(1) in subparagraph (A), by striking `in paragraph (10); and' and inserting `of the term `intermediary' under paragraph (11);'; and CommentsClose CommentsPermalink





(2) in subparagraph (B)-- CommentsClose CommentsPermalink





(A) by striking `(B) has at least' and inserting the following: CommentsClose CommentsPermalink





`(B) has-- CommentsClose CommentsPermalink





`(i) at least'; and CommentsClose CommentsPermalink





(B) by striking the period at the end and inserting the following: `; or CommentsClose CommentsPermalink





`(ii) a full-time employee who has not less than 3 years experience making microloans to startup, newly established, or growing small business concerns; and CommentsClose CommentsPermalink





`(C) has at least 1 year experience providing, as an integral part of its microloan program, intensive marketing, management, and technical assistance to its borrowers.'. CommentsClose CommentsPermalink





(b) Limitation on Third Party Technical Assistance- Section 7(m)(4)(E)(ii) of the Small Business Act (15 U.S.C. 636(m)(4)(E)(ii)) is amended-- CommentsClose CommentsPermalink





(1) in the clause heading, by striking `TECHNICAL ASSISTANCE' and inserting `THIRD PARTY TECHNICAL ASSISTANCE'; and CommentsClose CommentsPermalink





(2) by striking `25 percent' and inserting `30 percent'. CommentsClose CommentsPermalink





(c) Loan Terms- Section 7(m) of the Small Business Act (15 U.S.C. 636(m)) is amended--(1) in paragraph (1)(B)(i), by striking `short-term,'; and(2) in paragraph (11)(B), by striking `short-term,'.(d) Increased Flexibility for Providing Technical Assistance to Potential Borrowers- Section 7(m)(4)(E)(i) of the Small Business Act (15 U.S.C. 636(m)(4)(E)(i)) is amended by striking `25 percent' and inserting `30 percent'. CommentsClose CommentsPermalink

SEC. 104. PRIME REAUTHORIZATION AND TRANSFER TO THE SMALL BUSINESS ACT.

(a) Program Reauthorization- The Small Business Act (15 U.S.C. 631 et seq.) is amended-- CommentsClose CommentsPermalink





(1) by redesignating section 37 as section 39; and CommentsClose CommentsPermalink





(2) by inserting after section 36 the following: CommentsClose CommentsPermalink

`SEC. 37. PROGRAM FOR INVESTMENT IN MICROENTREPRENEURS.

`(a) Definitions- In this section: CommentsClose CommentsPermalink





`(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. CommentsClose CommentsPermalink





`(2) COLLABORATIVE- The term `collaborative' means 2 or more nonprofit entities that agree to act jointly as a qualified organization under this section. CommentsClose CommentsPermalink





`(3) DISADVANTAGED ENTREPRENEUR- The term `disadvantaged entrepreneur' means a microentrepreneur that-- CommentsClose CommentsPermalink





`(A) is a low-income person; CommentsClose CommentsPermalink





`(B) is a very low-income person; or CommentsClose CommentsPermalink





`(C) lacks adequate access to capital or other resources essential for business success, or is economically disadvantaged, as determined by the Administrator. CommentsClose CommentsPermalink





`(4) DISADVANTAGED NATIVE AMERICAN ENTREPRENEUR- The term `disadvantaged Native American entrepreneur' means a disadvantaged entrepreneur who is also a member of an Indian Tribe. CommentsClose CommentsPermalink





`(5) INDIAN TRIBE- The term `Indian tribe' has the meaning given that term in section 4(a) of the Indian Self-Determination and Education Assistance Act. CommentsClose CommentsPermalink





`(6) INTERMEDIARY- The term `intermediary' means a private, nonprofit entity that seeks to serve microenterprise development organizations and programs, as authorized under subsection (d). CommentsClose CommentsPermalink





`(7) LOW-INCOME PERSON- The term `low-income person' means having an income, adjusted for family size, of not more than-- CommentsClose CommentsPermalink





`(A) for metropolitan areas, 80 percent of the area median income; and CommentsClose CommentsPermalink





`(B) for nonmetropolitan areas, the greater of-- CommentsClose CommentsPermalink





`(i) 80 percent of the area median income; or CommentsClose CommentsPermalink





`(ii) 80 percent of the statewide nonmetropolitan area median income. CommentsClose CommentsPermalink





`(8) MICROENTREPRENEUR- The term `microentrepreneur' means the owner or developer of a microenterprise. CommentsClose CommentsPermalink





`(9) MICROENTERPRISE- The term `microenterprise' means a sole proprietorship, partnership, or corporation that-- CommentsClose CommentsPermalink





`(A) has fewer than 5 employees; and CommentsClose CommentsPermalink





`(B) generally lacks access to conventional loans, equity, or other banking services. CommentsClose CommentsPermalink





`(10) 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. CommentsClose CommentsPermalink





`(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. CommentsClose CommentsPermalink





`(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 (as defined in section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)), including any revision required by that section). CommentsClose CommentsPermalink





`(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. CommentsClose CommentsPermalink





`(c) Uses of Assistance- A qualified organization shall use grants made under this section-- CommentsClose CommentsPermalink





`(1) to provide training and technical assistance to disadvantaged entrepreneurs; CommentsClose CommentsPermalink





`(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; CommentsClose CommentsPermalink





`(3) to aid in researching and developing the best practices in the field of microenterprise and technical assistance programs for disadvantaged entrepreneurs; CommentsClose CommentsPermalink





`(4) to provide training and technical assistance to disadvantaged Native American entrepreneurs and prospective entrepreneurs; and CommentsClose CommentsPermalink





`(5) for such other activities as the Administrator determines are consistent with the purposes of this section. CommentsClose CommentsPermalink





`(d) Qualified Organizations- For purposes of eligibility for assistance under this section, a qualified organization shall be-- CommentsClose CommentsPermalink





`(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; CommentsClose CommentsPermalink





`(2) an intermediary; CommentsClose CommentsPermalink





`(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 CommentsClose CommentsPermalink





`(4) an Indian tribe acting on its own, if the Indian tribe certifies that no private organization or program referred to in this subsection exists within its jurisdiction. CommentsClose CommentsPermalink





`(e) Allocation of Assistance; Subgrants- CommentsClose CommentsPermalink





`(1) ALLOCATION OF ASSISTANCE- CommentsClose CommentsPermalink





`(A) IN GENERAL- The Administrator shall allocate assistance from the Administration under this section to ensure that-- CommentsClose CommentsPermalink





`(i) activities described in subsection (c)(1) are funded using not less than 75 percent of amounts made available for such assistance; and CommentsClose CommentsPermalink





`(ii) activities described in subsection (c)(2) are funded using not less than 15 percent of amounts made available for such assistance. CommentsClose CommentsPermalink





`(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. CommentsClose CommentsPermalink





`(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. CommentsClose CommentsPermalink





`(3) SUBGRANTS AUTHORIZED- CommentsClose CommentsPermalink





`(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. CommentsClose CommentsPermalink





`(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). CommentsClose CommentsPermalink





`(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. CommentsClose CommentsPermalink





`(5) PROHIBITION ON PREFERENTIAL CONSIDERATION OF CERTAIN ADMINISTRATION 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. CommentsClose CommentsPermalink





`(f) Matching Requirements- CommentsClose CommentsPermalink





`(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. CommentsClose CommentsPermalink





`(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). CommentsClose CommentsPermalink





`(3) EXCEPTION- CommentsClose CommentsPermalink





`(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 requirements of paragraph (1). CommentsClose CommentsPermalink





`(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 requirements of paragraph (1), as authorized by subparagraph (A) of this paragraph. CommentsClose CommentsPermalink





`(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. CommentsClose CommentsPermalink





`(h) Recordkeeping and Reporting- CommentsClose CommentsPermalink





`(1) IN GENERAL- Each organization that receives assistance from the Administration under this section shall-- CommentsClose CommentsPermalink





`(A) submit to the Administration not less than once in every 18-month period, financial statements audited by an independent certified public accountant; CommentsClose CommentsPermalink





`(B) submit an annual report to the Administration on its activities; and CommentsClose CommentsPermalink





`(C) keep such records as may be necessary to disclose the manner in which any assistance under this section is used. CommentsClose CommentsPermalink





`(2) ACCESS- The Administration shall have access upon request, for the purposes of determining compliance with this section, to any records of any organization that receives assistance from the Administration under this section. CommentsClose CommentsPermalink





`(3) DATA COLLECTION- Each organization that receives assistance from the Administration under this section shall collect information relating to, as applicable-- CommentsClose CommentsPermalink





`(A) the number of individuals counseled or trained; CommentsClose CommentsPermalink





`(B) the number of hours of counseling provided; CommentsClose CommentsPermalink





`(C) the number of startup small business concerns formed; CommentsClose CommentsPermalink





`(D) the number of small business concerns expanded; CommentsClose CommentsPermalink





`(E) the number of low-income individuals counseled or trained; and CommentsClose CommentsPermalink





`(F) the number of very low-income individuals counseled or trained.'. CommentsClose CommentsPermalink





(b) Conforming Repeal- Subtitle C of title I of the Riegle Community Development and Regulatory Improvement Act of 1994 (15 U.S.C. 6901 note) is repealed. CommentsClose CommentsPermalink





(c) References- All references in Federal law, other than subsection (d) of this section, to the `Program for Investment in Microentrepreneurs Act of 1999' or the `PRIME Act' shall be deemed to be references to section 37 of the Small Business Act, as added by this section. CommentsClose CommentsPermalink





(d) Rule of Construction- Nothing in this section or the amendments made by this section shall affect any grant or assistance provided under the Program for Investment in Microentrepreneurs Act of 1999, before the date of enactment of this Act, and any such grant or assistance shall be subject to the Program for Investment in Microentrepreneurs Act of 1999, as in effect on the day before the date of enactment of this Act. CommentsClose CommentsPermalink

TITLE II--INTERMEDIARY LENDING PILOT PROGRAM

SEC. 201. FINDINGS.

Congress finds the following: CommentsClose CommentsPermalink





(1) Small and emerging businesses, particularly startups and businesses that lack sufficient or conventional collateral, continue to face barriers accessing midsized loans in amounts between $35,000 and $200,000, with affordable terms and conditions. CommentsClose CommentsPermalink





(2) Consolidation in the banking industry has resulted in a decrease in the number of small, locally controlled banks with not more than $100,000,000 in assets and has changed the method by which banks make small business credit decisions with-- CommentsClose CommentsPermalink





(A) credit scoring techniques replacing relationship-based lending, which often works to the disadvantage of small or start-up businesses that do not conform with a bank's standardized credit formulas; and CommentsClose CommentsPermalink





(B) less flexible terms and conditions, which are often necessary for small and emerging businesses. CommentsClose CommentsPermalink





(3) In the environment described in paragraphs (1) and (2), nonprofit intermediary lenders, including community development corporations, provide financial resources that supplement the small business lending and investments of a bank by-- CommentsClose CommentsPermalink





(A) providing riskier, up front, or subordinated capital; CommentsClose CommentsPermalink





(B) offering flexible terms and underwriting procedures; and CommentsClose CommentsPermalink





(C) providing technical assistance to businesses in order to reduce the transaction costs and risk exposure of banks. CommentsClose CommentsPermalink





(4) Several Federal programs, including the Microloan Program under section 7(m) of the Small Business Act (15 U.S.C. 636(m)) and the Intermediary Relending Program of the Department of Agriculture, have demonstrated the effectiveness of working through nonprofit intermediaries to address the needs of small business concerns that are unable to access capital through conventional sources. CommentsClose CommentsPermalink





(5) More than 1,000 nonprofit intermediary lenders in the United States are-- CommentsClose CommentsPermalink





(A) successfully providing financial and technical assistance to small and emerging businesses; CommentsClose CommentsPermalink





(B) working with banks and other lenders to leverage additional capital for their business borrowers; and CommentsClose CommentsPermalink





(C) creating employment opportunities for low-income individuals through their lending and business development activities. CommentsClose CommentsPermalink

SEC. 202. SMALL BUSINESS INTERMEDIARY LENDING PILOT PROGRAM.

(a) In General- Section 7 of the Small Business Act (15 U.S.C. 636) is amended by inserting after subsection (k) the following: CommentsClose CommentsPermalink





`(l) Small Business Intermediary Lending Program- CommentsClose CommentsPermalink





`(1) DEFINITIONS- In this subsection-- CommentsClose CommentsPermalink





`(A) the term `intermediary' means a private, nonprofit entity that seeks to borrow, or has borrowed, funds from the Administration to provide midsize loans to small business concerns under this subsection, including-- CommentsClose CommentsPermalink





`(i) a private, nonprofit community development corporation; CommentsClose CommentsPermalink





`(ii) a consortium of private, nonprofit organizations or nonprofit community development corporations; CommentsClose CommentsPermalink





`(iii) a quasi-governmental economic development entity (such as a planning and development district), other than a State, county, or municipal government; and CommentsClose CommentsPermalink





`(iv) an agency of or nonprofit entity established by a Native American Tribal Government; and CommentsClose CommentsPermalink





`(B) the term `midsize loan' means a fixed rate loan of not less than $35,000 and not more than $200,000, made by an intermediary to a startup, newly established, or growing small business concern. CommentsClose CommentsPermalink





`(2) ESTABLISHMENT- There is established a 3-year pilot program to be know as the `Small Business Intermediary Lending Pilot Program' (referred to in this subsection as the `Program'), under which the Administrator may provide direct loans to eligible intermediaries, for the purpose of making fixed interest rate midsize loans to startup, newly established, and growing small business concerns. CommentsClose CommentsPermalink





`(3) PURPOSES- The purposes of the Program are-- CommentsClose CommentsPermalink





`(A) to assist small business concerns in those areas suffering from a lack of credit due to poor economic conditions; CommentsClose CommentsPermalink





`(B) to create employment opportunities for low-income individuals; CommentsClose CommentsPermalink





`(C) to establish a midsize loan program to be administered by the Administrator to provide loans to eligible intermediaries to enable such intermediaries to provide midsize loans, particularly loans in amounts averaging not more than $150,000, to startup, newly established, or growing small business concerns for working capital or the acquisition of materials, supplies, or equipment; CommentsClose CommentsPermalink





`(D) to test the effectiveness of nonprofit intermediaries-- CommentsClose CommentsPermalink





`(i) as a delivery system for a midsize loan program; and CommentsClose CommentsPermalink





`(ii) in addressing the credit needs of small business concerns and leveraging other sources of credit; and CommentsClose CommentsPermalink





`(E) to determine the advisability and feasibility of implementing a midsize loan program nationwide. CommentsClose CommentsPermalink





`(4) ELIGIBILITY FOR PARTICIPATION- An intermediary shall be eligible to receive loans under the Program if the intermediary has not less than 1 year of experience making loans to startup, newly established, or growing small business concerns. CommentsClose CommentsPermalink





`(5) LOANS TO INTERMEDIARIES- CommentsClose CommentsPermalink





`(A) APPLICATION- Each intermediary desiring a loan under this subsection shall submit an application to the Administrator that describes-- CommentsClose CommentsPermalink





`(i) the type of small business concerns to be assisted; CommentsClose CommentsPermalink





`(ii) the size and range of loans to be made; CommentsClose CommentsPermalink





`(iii) the geographic area to be served and its economic, poverty, and unemployment characteristics; CommentsClose CommentsPermalink





`(iv) the status of small business concerns in the area to be served and an analysis of the availability of credit; and CommentsClose CommentsPermalink





`(v) the qualifications of the applicant to carry out this subsection. CommentsClose CommentsPermalink





`(B) LOAN LIMITS- Notwithstanding subsection (a)(3), no loan may be made to an intermediary under this subsection if the total amount outstanding and committed to the intermediary from the business loan and investment fund established by this Act would, as a result of such loan, exceed $1,000,000 during the participation of the intermediary in the Program. CommentsClose CommentsPermalink





`(C) LOAN DURATION- Loans made by the Administrator under this subsection shall be for a maximum term of 20 years. CommentsClose CommentsPermalink





`(D) APPLICABLE INTEREST RATES- Loans made by the Administrator to an intermediary under the Program shall bear an annual interest rate equal to 1.00 percent. CommentsClose CommentsPermalink





`(E) FEES; COLLATERAL- The Administrator may not charge any fees or require collateral with respect to any loan made to an intermediary under this subsection. CommentsClose CommentsPermalink





`(F) LEVERAGE- Any loan to a small business concern under this subsection shall not exceed 75 percent of the total cost of the project funded by such loan, with the remaining funds being leveraged from other sources, including-- CommentsClose CommentsPermalink





`(i) banks or credit unions; CommentsClose CommentsPermalink





`(ii) community development financial institutions; and CommentsClose CommentsPermalink





`(iii) other sources with funds available to the intermediary lender. CommentsClose CommentsPermalink





`(G) DELAYED PAYMENTS- The Administrator shall not require the repayment of principal or interest on a loan made to an intermediary under the Program during the first 2 years of the loan. CommentsClose CommentsPermalink





`(6) PROGRAM FUNDING FOR MIDSIZE LOANS- CommentsClose CommentsPermalink





`(A) NUMBER OF PARTICIPANTS- Under the Program, the Administrator may provide loans, on a competitive basis, to not more than 20 intermediaries. CommentsClose CommentsPermalink





`(B) EQUITABLE DISTRIBUTION OF INTERMEDIARIES- The Administrator shall select and provide funding under the Program to such intermediaries as will ensure geographic diversity and representation of urban and rural communities. CommentsClose CommentsPermalink





`(7) REPORT TO CONGRESS- CommentsClose CommentsPermalink





`(A) ANNUAL REPORT- Not later than 12 months after the date of enactment of the Small Business Lending Reauthorization and Improvements Act of 2007, and annually thereafter, the Administrator shall submit a report containing an evaluation of the effectiveness of the Program to-- CommentsClose CommentsPermalink





`(i) the Committee on Small Business and Entrepreneurship of the Senate; and CommentsClose CommentsPermalink





`(ii) the Committee on Small Business of the House of Representatives. CommentsClose CommentsPermalink





`(B) CONTENTS- Each report submitted under subparagraph (A) shall include, for the 12-month period before the date of that report-- CommentsClose CommentsPermalink





`(i) the numbers and locations of the intermediaries receiving funds to provide midsize loans; CommentsClose CommentsPermalink





`(ii) the amounts of each loan to an intermediary; CommentsClose CommentsPermalink





`(iii) the numbers and amounts of midsize loans made by intermediaries to small business concerns; CommentsClose CommentsPermalink





`(iv) the repayment history of each intermediary; CommentsClose CommentsPermalink





`(v) a description of the loan portfolio of each intermediary, including the extent to which it provides midsize loans to small business concerns in rural and economically depressed areas; CommentsClose CommentsPermalink





`(vi) an estimate of the number of low-income individuals who have been employed as a direct result of the Program; and CommentsClose CommentsPermalink





`(vii) any recommendations for legislative changes that would improve the operation of the Program. CommentsClose CommentsPermalink





`(8) TERMINATION- The authority to make loans under this subsection shall terminate 3 years after the date of enactment of the Small Business Lending Reauthorization and Improvements Act of 2007.'. CommentsClose CommentsPermalink





(b) Rulemaking Authority- Not later than 180 days after the date of enactment of this Act, the Administrator shall issue regulations to carry out section 7(l) of the Small Business Act, as added by subsection (a). CommentsClose CommentsPermalink





(c) Authorization of Appropriations- CommentsClose CommentsPermalink





(1) IN GENERAL- There are authorized to be appropriated to the Administrator such sums as may be necessary for each of fiscal years 2008 through 2010 to provide $20,000,000 in loans under section 7(l) of the Small Business Act, as added by subsection (a). CommentsClose CommentsPermalink





(2) AVAILABILITY- Any amounts appropriated pursuant to paragraph (1) shall remain available until expended. CommentsClose CommentsPermalink

TITLE III--7(a) LOAN PROGRAM

SEC. 301. PREFERRED LENDERS PROGRAM.

(a) In General- Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is amended by adding at the end the following: CommentsClose CommentsPermalink





`(32) PREFERRED LENDERS PROGRAM- CommentsClose CommentsPermalink





`(A) DEFINITIONS- In this paragraph-- CommentsClose CommentsPermalink





`(i) the term `national preferred lender' means a preferred lender authorized to operate in any area served by an office of the Administration under subparagraph (G); CommentsClose CommentsPermalink





`(ii) the term `preferred lender' means a qualified lender participating in the program; CommentsClose CommentsPermalink





`(iii) the term `program' means the Preferred Lenders Program established under subparagraph (B); and CommentsClose CommentsPermalink





`(iv) the term `qualified lender' means a lender that demonstrates-- CommentsClose CommentsPermalink





`(I) knowledge of and proficiency in the requirements of the program under this subsection; CommentsClose CommentsPermalink





`(II) the ability to process, close, service, and liquidate loans; CommentsClose CommentsPermalink





`(III) the ability to develop and analyze complete loan packages; and CommentsClose CommentsPermalink





`(IV) a satisfactory performance history of participation in the program under this subsection. CommentsClose CommentsPermalink





`(B) ESTABLISHMENT- There is established a Preferred Lenders Program under which the Administrator may authorize qualified lenders to make and service loans. CommentsClose CommentsPermalink





`(C) APPLICATION- A qualified lender desiring to participate in the program shall submit an application at such time, in such manner, and accompanied by such information as the Administrator shall establish. CommentsClose CommentsPermalink





`(D) DELEGATED AUTHORITY- The Administrator shall authorize a preferred lender to take actions relating to loan servicing on behalf of the Administrator, including-- CommentsClose CommentsPermalink





`(i) determining eligibility and creditworthiness and loan monitoring, collection, and liquidation; CommentsClose CommentsPermalink





`(ii) authority to make and close loans with a guarantee from the Administrator without obtaining the prior specific approval of the Administrator; and CommentsClose CommentsPermalink





`(iii) authority to service and liquidate such loans without obtaining the prior specific approval of the Administrator for routine servicing and liquidation activities. CommentsClose CommentsPermalink





`(E) AREA OF OPERATIONS- The Administrator shall designate the area for which a preferred lender may exercise the authority under subparagraph (D). CommentsClose CommentsPermalink





`(F) CONFLICT- A preferred lender shall not take any action creating an actual or apparent conflict of interest. CommentsClose CommentsPermalink





`(G) NATIONAL OPERATION- CommentsClose CommentsPermalink





`(i) IN GENERAL- A preferred lender may request designation as a national preferred lender by the Administrator, and, upon such designation, shall have the authority to operate in any area served by an office of the Administration. CommentsClose CommentsPermalink





`(ii) ELIGIBILITY- The Administration shall designate a preferred lender as a national preferred lender if the Administrator determines that preferred lender has-- CommentsClose CommentsPermalink





`(I) satisfactorily operated as a preferred lender in areas encompassing all or part of the territory in not fewer than 5 district offices of the Administration for a minimum of 3 years in each territory; CommentsClose CommentsPermalink





`(II) centralized loan approval, servicing, and liquidation functions and processes that are satisfactory to the Administration; CommentsClose CommentsPermalink





`(III) uniform written policies and procedures; CommentsClose CommentsPermalink





`(IV) a currency rate that is not less than the Administration's national average currency rate for all loans under this subsection; CommentsClose CommentsPermalink





`(V) a currency rate for loans made under this subsection that is not less than the Administration's national average currency rate for loans made under this subsection; CommentsClose CommentsPermalink





`(VI) a default rate that is not more than the Administration's national average default rate for loans made under this subsection; and CommentsClose CommentsPermalink





`(VII) received, in the most recent audit and review as a preferred lender conducted by the Administrator, a rating that is acceptable or acceptable with corrective actions required. CommentsClose CommentsPermalink





`(H) CORRECTIVE ACTION- If a national preferred lender fails to continue to meet the eligibility criteria under subparagraph (G)(ii), the Administrator shall notify that national preferred lender of the deficiency and allow a reasonable period of time for that national preferred lender to meet such criteria. CommentsClose CommentsPermalink





`(I) SUSPENSION OR REVOCATION- CommentsClose CommentsPermalink





`(i) IN GENERAL- The designation of a lender as a national preferred lender shall be suspended or revoked at any time that the Administration determines that the lender-- CommentsClose CommentsPermalink





`(I) is not adhering to the rules or regulations established by the Administrator for the program; or CommentsClose CommentsPermalink





`(II) has failed to continue to meet the eligibility criteria specified in paragraph (G) or take corrective action under subparagraph (H). CommentsClose CommentsPermalink





`(ii) EFFECT- A suspension or revocation under clause (i) shall not affect any outstanding guarantee of a national preferred lender.'. CommentsClose CommentsPermalink





(b) Clerical Amendment- Section 7(a)(2)(C) of the Small Business Act (15 U.S.C. 636(a)(2)(C)) is amended to read as follows: CommentsClose CommentsPermalink





`(C) INTEREST RATE UNDER PREFERRED LENDERS PROGRAM- The maximum interest rate for a loan guaranteed under the Preferred Lenders Program under paragraph (32) shall not exceed the maximum interest rate as determined by the Administration, applicable to other loans guaranteed under this subsection.'. CommentsClose CommentsPermalink





(c) Conforming Amendment- Section 7(a)(19) of the Small Business Act (15 U.S.C. 636(a)(19)) is amended by striking `the proviso in section 5(b)(7)' and inserting `paragraph (32)'. CommentsClose CommentsPermalink

SEC. 302. MAXIMUM LOAN AMOUNT.

Section 7(a)(3)(A) of the Small Business Act (15 U.S.C. 636(a)(3)(A)) is amended by striking `$1,500,000 (or if the gross loan amount would exceed $2,000,000' and inserting `$2,250,000 (or if the gross loan amount would exceed $3,000,000'. CommentsClose CommentsPermalink

SEC. 303. MAXIMUM 504 AND 7(aA) LOAN ELIGIBILITY.

(a) Combination Financing- CommentsClose CommentsPermalink





(1) IN GENERAL- Section 502(2) of the Small Business Investment Act of 1958 (15 U.S.C. 696(2)) is amended by adding at the end the following: CommentsClose CommentsPermalink





`(C) COMBINATION FINANCING UNDER SMALL BUSINESS ACT- Notwithstanding any other provision of law, financing under this title may be provided to a borrower in the maximum amount provided in this subsection, and a loan guarantee under section 7(a) of the Small Business Act may be provided to the same borrower in the maximum amount provided in section 7(a)(3)(A) of such Act, to the extent that the borrower otherwise qualifies for such assistance.'. CommentsClose CommentsPermalink





(2) CONFORMING AMENDMENT- Section 7(a)(1) of the Small Business Act (15 U.S.C. 636(a)(1) is amended by adding at the end the following: CommentsClose CommentsPermalink





`(C) COMBINATION FINANCING UNDER SMALL BUSINESS INVESTMENT ACT OF 1958- Financing under this subsection may be provided to a borrower in the maximum amount as provided in subsection (b)(2) of section 502 of the Small Business Investment Act of 1958 (15 U.S.C. 696).'. CommentsClose CommentsPermalink





(b) Reporting- Not later than 90 days after the date of enactment of this Act, and annually thereafter, the Administrator shall submit a report to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives that-- CommentsClose CommentsPermalink





(1) includes the number of small business concerns that have financings under both section 7(a) of the Small Business Act (15 U.S.C. 636(a)) and title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.) during the year before the year of that report; and CommentsClose CommentsPermalink





(2) describes the total amount and general performance of the financings described in paragraph (1). CommentsClose CommentsPermalink

SEC. 304. LOAN POOLING.

Section 5(g)(1) of the Small Business Act (15 U.S.C. 634(g)(1)) is amended-- CommentsClose CommentsPermalink





(1) by inserting `(A)' before `The Administration'; CommentsClose CommentsPermalink





(2) by striking the colon and all that follows and inserting a period; and CommentsClose CommentsPermalink





(3) by adding at the end the following: CommentsClose CommentsPermalink





`(B) A trust certificate issued under subparagraph (A) shall be based on, and backed by, a trust or pool approved by the Administrator and composed solely of the guaranteed portion of such loans. CommentsClose CommentsPermalink





`(C) The interest rate on a trust certificate issued under subparagraph (A) shall be either-- CommentsClose CommentsPermalink





`(i) the lowest interest rate on any individual loan in the pool; or CommentsClose CommentsPermalink





`(ii) the weighted average interest rate of all loans in the pool, subject to such limited variations in loan characteristics as the Administrator determines appropriate to enhance marketability of the pool certificates.'. CommentsClose CommentsPermalink

SEC. 305. ALTERNATIVE SIZE STANDARD.

Section 3(a) of the Small Business Act (15 U.S.C. 632(a)) is amended by adding at the end the following: CommentsClose CommentsPermalink





`(5) Optional Size Standard- CommentsClose CommentsPermalink





`(A) IN GENERAL- The Administrator shall establish an optional size standard for business loan applicants under section 7(a) and development company loan applicants under title V of the Small Business Investment Act of 1958, which uses maximum tangible net worth and average net income as an alternative to the use of industry standards. CommentsClose CommentsPermalink





`(B) INTERIM RULE- Until the date on which the optional size standards established under subparagraph (A) are in effect, the alternative size standard in section 121.301(b) of title 13, Code of Federal Regulations, or any successor thereto, may be used by business loan applicants under section 7(a) and development company loan applicants under title V of the Small Business Investment Act of 1958.'. CommentsClose CommentsPermalink

SEC. 306. ALTERNATIVE VARIABLE INTEREST RATE.

(a) In General- Section 7(a)(4)(A) of the Small Business Act (15 U.S.C. 636(a)(4)(A)) is amended by striking `prescribed by the Administration,' and inserting: `prescribed by the Administration, including, on variable rate loans, a nationally recognized prime rate of interest and at least 1 other index as an alternative thereto at the option of the participating lender,'. CommentsClose CommentsPermalink





(b) Applicability- Not later than 180 days after the date of enactment of this Act, the Administrator of the Small Business Administration shall select not less than 1 alternative index under section 7(a)(4)(A) of the Small Business Act, as amended by subsection (a), and make such index available for use by participating lenders. CommentsClose CommentsPermalink

SEC. 307. MINORITY SMALL BUSINESS DEVELOPMENT.

(a) In General- The Small Business Act (15 U.S.C. 631 et seq.) is amended by inserting after section 37, as added by this Act, the following: CommentsClose CommentsPermalink

`SEC. 38. MINORITY SMALL BUSINESS DEVELOPMENT.

`(a) Office of Minority Small Business Development- There is established in the Administration an Office of Minority Small Business Development, which shall be administered by the Associate Administrator for Minority Small Business Development (in this section referred to as the `Associate Administrator') appointed under section 4(b)(1). CommentsClose CommentsPermalink





`(b) Associate Administrator for Minority Small Business Development- The Associate Administrator-- CommentsClose CommentsPermalink





`(1) shall be either-- CommentsClose CommentsPermalink





`(A) an appointee in the Senior Executive Service who is a career appointee; or CommentsClose CommentsPermalink





`(B) an employee in the competitive service; CommentsClose CommentsPermalink





`(2) shall be responsible for the formulation, execution, and promotion of policies and programs of the Administration that provide assistance to small business concerns owned and controlled by minorities; CommentsClose CommentsPermalink





`(3) shall act as an ombudsman for full consideration of minorities in all programs of the Administration (including those under sections 7(j) and 8(a)); CommentsClose CommentsPermalink





`(4) shall work with the Associate Deputy Administrator for Capital Access to increase the proportion of loans and loan dollars, and investments and investment dollars, going to minorities through the finance programs under this Act and the Small Business Investment Act of 1958 (including subsections (a), (b), and (m) of section 7 of this Act and the programs under part A and B of title III and title V of the Small Business Investment Act of 1958); CommentsClose CommentsPermalink





`(5) shall work with the Associate Deputy Administrator for Entrepreneurial Development to increase the proportion of counseling and training that goes to minorities through the entrepreneurial development programs of the Administration; CommentsClose CommentsPermalink





`(6) shall work with the Associate Deputy Administrator for Government Contracting and Minority Enterprise Development to increase the proportion of contracts, including through the Small Business Innovation Research Program and the Small Business Technology Transfer Program, to minorities; CommentsClose CommentsPermalink





`(7) shall work with the partners of the Administration, trade associations, and business groups to identify and carry out policies and procedures to more effectively market the resources of the Administration to minorities; CommentsClose CommentsPermalink





`(8) shall work with the Office of Field Operations to ensure that district offices and regional offices have adequate staff, funding, and other resources to market the programs of the Administration to meet the objectives described in paragraphs (4) through (7); and CommentsClose CommentsPermalink





`(9) shall report to and be responsible directly to the Administrator. CommentsClose CommentsPermalink





`(c) Authorization of Appropriations- There are authorized to be appropriated to carry out this section-- CommentsClose CommentsPermalink





`(1) $5,000,000 for fiscal year 2007; CommentsClose CommentsPermalink





`(2) $5,000,000 for fiscal year 2008; CommentsClose CommentsPermalink





`(3) $5,000,000 for fiscal year 2009; and CommentsClose CommentsPermalink





`(4) $5,000,000 for fiscal year 2010.'. CommentsClose CommentsPermalink





(b) Conforming Amendments- Section 4(b)(1) of the Small Business Act (15 U.S.C. 633(b)(1)) is amended in sixth sentence, by striking `Minority Small Business and Capital Ownership Development' and all that follows through the end of the sentence and inserting `Minority Small Business Development.'. CommentsClose CommentsPermalink

SEC. 308. LOWERING OF FEES.

Section 7(a)(23) of the Small Business Act (15 U.S.C. 636(a)(23)) is amended by striking subparagraph (C) and inserting the following: CommentsClose CommentsPermalink





`(C) LOWERING OF FEES- CommentsClose CommentsPermalink





`(i) IN GENERAL- FSubject to clause (ii), for loan guarantees made or approved in each full fiscal year after the date of enactment of the Small Business Lending Reauthorization and Improvements Act of 2007, if the fees paid by all small business borrowers and by lenders for guarantees under this subsection, or the sum of such fees plus any funds made available for the purpose of reducing fees for loans under this subsection, as applicable, is more than the amount necessary to equal the cost to the Administration of making such guarantees, the Administrator shall reduce fees paid by small business borrowers and lenders under clauses (i) through (iv) of paragraph (18)(A) and subparagraph (A) of this paragraph. CommentsClose CommentsPermalink





`(ii) MAXIMUM REDUCTION- A reduction in fees under clause (i) in any fiscal year may not exceed the average amount by which fees paid by all small business borrowers and by lenders for guarantees under this subsection exceeded the amount necessary to equal the cost to the Administration of making such guarantees during the 3 most recent fiscal years for which such information is available before that fiscal year. CommentsClose CommentsPermalink





`(iii) MAXIMUM FEES- The fees paid by small business borrowers and lenders for guarantees under this subsection may not be increased above the maximum level authorized under the amendments made by division K of the Consolidated Appropriations Act, 2005 (Public Law 108-447; 118 Stat. 3441).'. CommentsClose CommentsPermalink

SEC. 309. INTERNATIONAL TRADE LOANS.

(a) In General- Section 7(a)(3)(B) of the Small Business Act (15 U.S.C. 636(a)(3)(B)) is amended by striking `$1,750,000, of which not more than $1,250,000' and inserting `$2,750,000 (or if the gross loan amount would exceed $3,670,000), of which not more than $2,000,000'. CommentsClose CommentsPermalink





(b) Working Capital- Section 7(a)(16)(A) of the Small Business Act (15 U.S.C. 636(a)(16)(A)) is amended-- CommentsClose CommentsPermalink





(1) in the matter preceding clause (i), by striking `in--' and inserting `--'; CommentsClose CommentsPermalink





(2) in clause (i)-- CommentsClose CommentsPermalink





(A) by inserting `in' after `(i)'; and CommentsClose CommentsPermalink





(B) by striking `or' at the end; CommentsClose CommentsPermalink





(3) in clause (ii)-- CommentsClose CommentsPermalink





(A) by inserting `in' after `(ii)'; and CommentsClose CommentsPermalink





(B) by striking the period and inserting `; or'; and CommentsClose CommentsPermalink





(4) by adding at the end the following: CommentsClose CommentsPermalink





`(iii) by providing working capital.'. CommentsClose CommentsPermalink





(c) Collateral- Section 7(a)(16)(B) of the Small Business Act (15 U.S.C. 636(a)(16)(B)) is amended-- CommentsClose CommentsPermalink





(1) by striking `Each loan' and inserting the following: CommentsClose CommentsPermalink





`(i) IN GENERAL- Except as provided in clause (ii), each loan'; and CommentsClose CommentsPermalink





(2) by adding at the end the following: CommentsClose CommentsPermalink





`(ii) EXCEPTION- A loan under this paragraph may be secured by a second lien position on the property or equipment financed by the loan or on other assets of the small business concern, if the Administrator determines such lien provides adequate assurance of the payment of such loan.'. CommentsClose CommentsPermalink





(d) Refinancing- Section 7(a)(16)(A)(ii) of the Small Business Act (15 U.S.C. 636(a)(16)(A)(ii)), as amended by this section, is amended by inserting `, including any debt that qualifies for refinancing under any other provision of this subsection' before the semicolon. CommentsClose CommentsPermalink

SEC. 310. RURAL LENDING OUTREACH PROGRAM.

Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as amended by this Act, is amended-- CommentsClose CommentsPermalink





(1) by striking paragraph (25)(C); and CommentsClose CommentsPermalink





(2) by adding at the end the following: CommentsClose CommentsPermalink





`(33) RURAL LENDING OUTREACH PROGRAM- CommentsClose CommentsPermalink





`(A) IN GENERAL- The Administrator shall carry out a rural lending outreach program to provide not more than an 85 percent guaranty for loans of not more than $250,000. The program shall be carried out only through lenders located in rural areas (as the term `rural' is defined in section 501(f) of the Small Business Investment Act of 1958 (15 U.S.C. 695(f)). CommentsClose CommentsPermalink





`(B) LOAN TERMS- For a loan made through the program under this paragraph-- CommentsClose CommentsPermalink





`(i) the Administrator shall approve or disapprove the loan within 36 hours of the time the Administrator receives the application; CommentsClose CommentsPermalink





`(ii) the program shall use abbreviated application and documentation requirements; and CommentsClose CommentsPermalink





`(iii) minimum credit standards, as the Administrator considers necessary to limit the rate of default on loans made under the program, shall apply.'. CommentsClose CommentsPermalink

TITLE IV--CERTIFIED DEVELOPMENT COMPANIES; 504 LOAN PROGRAM

SEC. 401. DEVELOPMENT COMPANY LOAN PROGRAMS.

(a) Title of Program- Title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.) is amended by adding at the end the following: CommentsClose CommentsPermalink

`SEC. 511. PROGRAM TITLE.

`(a) In General- Except as provided in subsection (b), the programs authorized by this title shall be known collectively as the `Local Development Business Loan Program'. The Administrator may refer to such program as the `504 Loan Program', until such usage is no longer necessary. CommentsClose CommentsPermalink





`(b) Existing Name- Participants in the Local Development Business Loan Program may continue to refer to such program as `the 504 Loan Program'.'. CommentsClose CommentsPermalink





(b) Existing Materials- The Administrator may use informational materials created, or that were in the process of being created, before the date of enactment of this Act that do not refer to a program under title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.) as the `Local Development Business Loan Program'. CommentsClose CommentsPermalink





(c) New Materials- Any informational materials created by the Administrator on or after the date of enactment of this Act shall refer to any program under title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.) as the `Local Development Business Loan Program', except that informational materials may refer to such program as the `504 Loan Program', until such usage is no longer necessary. CommentsClose CommentsPermalink

SEC. 402. LOAN LIQUIDATIONS.

Section 510 of the Small Business Investment Act of 1958 (15 U.S.C. 697g) is amended-- CommentsClose CommentsPermalink





(1) by redesignating subsection (e) as subsection (g); and CommentsClose CommentsPermalink





(2) by inserting after subsection (d) the following: CommentsClose CommentsPermalink





`(e) Participation- CommentsClose CommentsPermalink





`(1) IN GENERAL- Any qualified State or local development company which elects not to apply for authority to foreclose and liquidate defaulted loans under this section, or which the Administrator determines to be ineligible for such authority, shall contract with a qualified third-party to perform foreclosure and liquidation of defaulted loans in its portfolio. The contract shall be contingent upon approval by the Administrator with respect to the qualifications of the contractor and the terms and conditions of liquidation activities. CommentsClose CommentsPermalink





`(2) COMMENCEMENT- This subsection does not require any development company to liquidate defaulted loans until the Administrator has adopted and implemented a program to compensate and reimburse development companies, as provided under subsection (f). CommentsClose CommentsPermalink





`(f) Compensation and Reimbursement- CommentsClose CommentsPermalink





`(1) REIMBURSEMENT OF EXPENSES- The Administrator shall reimburse each qualified State or local development company for all expenses paid by such company as part of the foreclosure and liquidation activities, if the expenses-- CommentsClose CommentsPermalink





`(A) were-- CommentsClose CommentsPermalink





`(i) approved in advance by the Administrator, either specifically or generally; or CommentsClose CommentsPermalink





`(ii) incurred by the development company on an emergency basis without prior approval from the Administrator, if the Administrator determines that the expenses were reasonable and appropriate; and CommentsClose CommentsPermalink





`(B) are submitted by the development company to the Administrator not later than 3 years after the date of the purchase of the debenture by the Administrator. CommentsClose CommentsPermalink





`(2) COMPENSATION FOR RESULTS- CommentsClose CommentsPermalink





`(A) DEVELOPMENT- The Administrator shall develop a schedule to compensate and provide an incentive to qualified State or local development companies that foreclose and liquidate defaulted loans. CommentsClose CommentsPermalink





`(B) CRITERIA- The schedule required under this paragraph shall-- CommentsClose CommentsPermalink





`(i) be based on a percentage of the net amount recovered, but shall not exceed a maximum amount; and CommentsClose CommentsPermalink





`(ii) not apply to any foreclosure which is conducted under a contract between a development company and a qualified third party to perform the foreclosure and liquidation.'. CommentsClose CommentsPermalink

SEC. 403. ADDITIONAL EQUITY INJECTIONS.

Section 502(3)(B)(ii) of the Small Business Investment Act of 1958 (15 U.S.C. 696(3)(B)(ii)) is amended to read as follows: CommentsClose CommentsPermalink





`(ii) FUNDING FROM INSTITUTIONS- If a small business concern-- CommentsClose CommentsPermalink





`(I) provides the minimum contribution required under subparagraph (C), not less than 50 percent of the total cost of any project financed under clause (i), (ii), or (iii) of subparagraph (C) shall come from the institutions described in subclauses (I), (II), and (III) of clause (i); and CommentsClose CommentsPermalink





`(II) provides more than the minimum contribution required under subparagraph (C), any excess contribution may be used to reduce the amount required from the institutions described in subclauses (I), (II), and (III) of clause (i), except that the amount from such institutions may not be reduced to an amount that is less than the amount of the loan made by the Administrator.'. CommentsClose CommentsPermalink

SEC. 404. UNIFORM LEASING POLICY.

SEC. 405. BUSINESSES IN LOW-INCOME AREACOMMUNITIES.

(a) Goals- Section 501(d)(3)(A) of the Small Business Investment Act of 1958 (15 U.S.C. 695(d)(3)(A)) is amended by inserting after `business district revitalization,' the following: `or expansion of businesses in low-income communities which would be eligible for a new markets tax credit under section 45D(a) of the Internal Revenue Code of 1986, or implementing regulations issued thereunderunder that section,'. CommentsClose CommentsPermalink





(b) Loan AmountAdditional Incentives- Section 502 of the Small Business Investment Act of 1958 (15 U.S.C. 696) is amended by adding at the end the following:`(7) , as amended by this Act, is amended by adding at the end the following: CommentsClose CommentsPermalink





`(6) LOW-INCOME GEOGRAPHIC AREAS- Notwithstanding any other provision of law, aCOMMUNITIES- CommentsClose CommentsPermalink





`(A) LOAN AMOUNT- Notwithstanding paragraph (2)(A)(ii), a loan under this section for use in a low-income community (as that term is used in section 501(d)(3)(A)) may be for not more than $4,000,000. CommentsClose CommentsPermalink





`(B) SIZE STANDARDS- For purposes of determining eligibility for a loan under this section for use in a low-income community (as that term is used in section 501(d)(3)(A)), the size standards established under section 3 of the Small Business Act (15 U.S.C. 632) shall be increased by 25 percent. CommentsClose CommentsPermalink





`(C) PERSONAL LIQUIDITY- CommentsClose CommentsPermalink





`(i) IN GENERAL- For any loan under this section for use in a low-income geographic areacommunity (as that term is defined in section 351) may be for not more than $4,000,000used in section 501(d)(3)(A)), the amount of personal resources of an owner that are excluded from the amount required to be provided to reduce the portion of the project funded by the Administration shall be not less than 25 percent more than that required for other loans under this section. CommentsClose CommentsPermalink





`(ii) DEFINITION- In this subparagraph, the term `owner' means any person that owns not less than 20 percent of the equity of the small business concern applying for the applicable loan.'. CommentsClose CommentsPermalink

SEC. 4056. COMBINATIONS OF CERTAIN GOALS.

Section 501(e) of the Small Business Investment Act of 1958 (15 U.S.C. 695(e)) is amended by adding at the end the following: CommentsClose CommentsPermalink





`(7) A small business concern that is unconditionally owned by more than 1 individual, or a corporation, the stock of which is owned by more than 1 individual, shall be deemed to have achieved a public policy goal required under subsection (d)(3) if a combined ownership share of not less than 51 percent is held by individuals who are in 1 of, or a combination of, the groups described in subparagraph (C) or (E) of subsection (d)(3).'. CommentsClose CommentsPermalink

SEC. 4067. REFINANCING UNDER THE LOCAL DEVELOPMENT BUSINESS LOAN PROGRAM.

Section 502 of the Small Business Investment Act of 1958 (15 U.S.C. 696) is amended by adding at the end the following:`(7) , as amended by this Act, is amended by adding at the end the following: CommentsClose CommentsPermalink





`(7) PERMISSIBLE DEBT REFINANCING- CommentsClose CommentsPermalink





`(A) IN GENERAL- Any financing approved under this title may include a limited amount of debt refinancing. CommentsClose CommentsPermalink





`(B) EXPANSIONS- If the project involves expansion of a small business concern which has existing indebtedness collateralized by fixed assets, any amount of existing indebtedness that does not exceed 1/2 of the project cost of the expansion may be refinanced and added to the expansion cost, if-- CommentsClose CommentsPermalink





`(i) the proceeds of the indebtedness were used to acquire land, including a building situated thereon, to construct a building thereon, or to purchase equipment; CommentsClose CommentsPermalink





`(ii) the borrower has been current on all payments due on the existing debt for not less than 1 year preceding the date of refinancing; and CommentsClose CommentsPermalink





`(iii) the financing under section 504 will provide better terms or rate of interest than exists on the debt at the time of refinancing.'. CommentsClose CommentsPermalink

SEC. 4078. TECHNICAL CORRECTION.

Section 501(e)(2) of the Small Business Investment Act of 1958 (15 U.S.C. 695(e)(2)) is amended by striking `outstanding'. CommentsClose CommentsPermalink

SEC. 4089. DEFINITIONS FOR THE SMALL BUSINESS INVESTMENT ACT OF 1958.

Section 103 of the Small Business Investment Act of 1958 (15 U.S.C. 662) is amended-- CommentsClose CommentsPermalink





(1) by striking paragraph (6) and inserting the following: CommentsClose CommentsPermalink





`(6) the term `development company' means an entity incorporated under State law with the authority to promote and assist the growth and development of small business concerns in the areas in which it is authorized to operate by the Administrator;'; CommentsClose CommentsPermalink





(2) in paragraph (16), by striking `and' at the end; CommentsClose CommentsPermalink





(3) in paragraph (17), by striking the period at the end and inserting `; and'; and CommentsClose CommentsPermalink





(4) by adding at the end the following: CommentsClose CommentsPermalink





`(18) the term `certified development company' means a development company that the Administrator has certified meets the criteria of section 506.'. CommentsClose CommentsPermalink

SEC. 40910. REPEAL OF SUNSET ON RESERVE REQUIREMENTS FOR PREMIER CERTIFIED LENDERS.

Section 508(c)(6)(B) of the Small Business Investment Act of 1958 (15 U.S.C. 697e(c)(6)(B)) is amended-- CommentsClose CommentsPermalink





(1) in the subparagraph heading, by striking `TEMPORARY REDUCTION' and inserting `REDUCTION'; and CommentsClose CommentsPermalink





(2) by striking `Notwithstanding subparagraph (A), during the 2-year period beginning on the date that is 90 days after the date of enactment of this subparagraph, the' and inserting `The'. CommentsClose CommentsPermalink

SEC. 4101. CERTIFIED DEVELOPMENT COMPANIES.

Section 506 of the Small Business Investment Act of 1958 (15 U.S.C. 697c) is amended-- CommentsClose CommentsPermalink





(1) in the section heading, by striking `restrictions on development company assistance' and inserting `certified development companies'; and CommentsClose CommentsPermalink





(2) by inserting before `Notwithstanding any other provision of law' the following: CommentsClose CommentsPermalink





`(a) Authority To Issue Debentures- A development company may issue debentures under this title if the Administrator certifies that the company meets the following criteria: CommentsClose CommentsPermalink





`(1) SIZE- CommentsClose CommentsPermalink





`(A) IN GENERAL- Except as provided in subparagraph (B), the development company shall be a small business concern with fewer than 500 employees, and shall not be under the control of any entity that does not meet the size standards established by the Administrator for a small business concern. CommentsClose CommentsPermalink





`(B) EXCEPTION- Any development company that was certified by the Administrator before December 31, 2005, may continue to issue debentures under this title. CommentsClose CommentsPermalink





`(2) PRIMARY PURPOSE- The primary purpose of the development company shall be to benefit the community by fostering economic development to create and preserve jobs and stimulate private investment. CommentsClose CommentsPermalink





`(3) PRIMARY FUNCTION- A primary function of the development company shall be to accomplish its purpose by providing long-term financing to small business concerns under the Local Development Business Loan Program. The development company shall also provide or support other community and local economic development activities to assist the community. CommentsClose CommentsPermalink





`(4) NONPROFIT STATUS- CommentsClose CommentsPermalink





`(A) IN GENERAL- Except as provided in subparagraph (B), the development company shall be a nonprofit corporation. CommentsClose CommentsPermalink





`(B) EXCEPTION- A development company certified by the Administrator before January 1, 1987, may continue to issue debentures under this title and retain its status as a for-profit enterprise. CommentsClose CommentsPermalink





`(5) GOOD STANDING- The development company-- CommentsClose CommentsPermalink





`(A) shall be in good standing in the State in which such company is incorporated and in any other State in which it conducts business; and CommentsClose CommentsPermalink





`(B) shall be in compliance with all laws, including taxation requirements, in the State in which such company is incorporated and in any other State in which it conducts business. CommentsClose CommentsPermalink





`(6) MEMBERSHIP OF DEVELOPMENT COMPANY- There shall be-- CommentsClose CommentsPermalink





`(A) not fewer than 25 members of the development company (or owners or stockholders, if the corporation is a for-profit entity), none of whom may own or control more than 10 percent of the voting membership of the company; and CommentsClose CommentsPermalink





`(B) at least 1 member of the development company (none of whom is in a position to control the development company) from each of the following: CommentsClose CommentsPermalink





`(i) Government organizations that are responsible for economic development. CommentsClose CommentsPermalink





`(ii) Financial institutions that provide commercial long-term fixed asset financing. CommentsClose CommentsPermalink





`(iii) Community organizations that are dedicated to economic development. CommentsClose CommentsPermalink





`(iv) Businesses. CommentsClose CommentsPermalink





`(7) BOARD OF DIRECTORS- CommentsClose CommentsPermalink





`(A) IN GENERAL- The development company shall have a board of directors. CommentsClose CommentsPermalink





`(B) MEMBERS OF BOARD- Each member of the board of directors shall be-- CommentsClose CommentsPermalink





`(i) a member of the development company; and CommentsClose CommentsPermalink





`(ii) elected by a majority of the members of the development company. CommentsClose CommentsPermalink





`(C) REPRESENTATION OF ORGANIZATIONS AND INSTITUTIONS- CommentsClose CommentsPermalink





`(i) IN GENERAL- There shall be at least 1 member of the board of directors from not fewer than 3 of the 4 organizations and institutions described in paragraph (6)(B), none of whom is in a position to control the development company. CommentsClose CommentsPermalink





`(ii) MAXIMUM PERCENTAGE- Not more than 50 percent of the members of the board of directors shall be from any 1 of the organizations and institutions described in paragraph (6)(B). CommentsClose CommentsPermalink





`(D) MEETINGS- The board of directors of the development company shall meet on a regular basis to make policy decisions for such company. CommentsClose CommentsPermalink





`(8) PROFESSIONAL MANAGEMENT AND STAFF- CommentsClose CommentsPermalink





`(A) IN GENERAL- The development company shall have full-time professional management, including a chief executive officer to manage daily operations and a full-time professional staff qualified to market the Local Development Business Loan Program and handle all aspects of loan approval and servicing, including liquidation, if appropriate. CommentsClose CommentsPermalink





`(B) INDEPENDENT MANAGEMENT AND OPERATION- Except as provided in paragraph (9), the development company shall be independently managed and operated to pursue the economic development purpose of the company and shall employ directly the chief executive officer. CommentsClose CommentsPermalink





`(9) MANAGEMENT AND OPERATION EXCEPTIONS- CommentsClose CommentsPermalink





`(A) AFFILIATION- A development company may be an affiliate of another local nonprofit service corporation (other than a development company), a purpose of which is to support economic development in the area in which the development company operates. CommentsClose CommentsPermalink





`(B) STAFFING- A development company may satisfy the requirement for full-time professional staff under paragraph (8)(A) by contracting for the required staffing with-- CommentsClose CommentsPermalink





`(i) a local nonprofit service corporation; CommentsClose CommentsPermalink





`(ii) a nonprofit affiliate of a local nonprofit service corporation; CommentsClose CommentsPermalink





`(iii) an entity wholly or partially operated by a governmental agency; or CommentsClose CommentsPermalink





`(iv) another entity approved by the Administrator. CommentsClose CommentsPermalink





`(C) DIRECTORS- A development company and a local nonprofit service corporation with which it is affiliated may have in common some, but not all, members of their respective board of directors. CommentsClose CommentsPermalink





`(D) RURAL AREAS- A development company in a rural area may satisfy the requirements of a full-time professional staff and professional management ability under paragraph (8)(A) by contracting for such services with another certified development company that-- CommentsClose CommentsPermalink





`(i) has such staff and management ability; and CommentsClose CommentsPermalink





`(ii) is located in the same State as the development company or in a State that is contiguous to the State in which the development company is located. CommentsClose CommentsPermalink





`(E) PREVIOUSLY CERTIFIED- A development company that, on or before December 31, 2005, was certified by the Administrator and had contracted with a for-profit company to provide staffing and management services, may continue to do so. CommentsClose CommentsPermalink





`(b) Use of Excess Funds- CommentsClose CommentsPermalink





`(1) IN GENERAL- Any funds generated by a certified development company from making loans under section 503 or 504 that remain unexpended after payment of staff, operating, and overhead expenses shall be retained by the certified development company as a reserve for--`(1) future operations;`(2used by the certified development company for-- CommentsClose CommentsPermalink





`(A) operating reserves; CommentsClose CommentsPermalink





`(B) expanding the area in which the certified development company operates through the methods authorized by this Act; or CommentsClose CommentsPermalink





`(3C) investment in other community and local economic development activity or community development in the State from which suchprimarily in the State from which such funds were generated. CommentsClose CommentsPermalink





`(2) REPORTING- Not later than July 1, 2008, and every year thereafter, the Administrator shall compile and submit to Congress a report regarding the economic and community development activities of each certified development company during the fiscal year before the year of that report, other than loans made under this title. CommentsClose CommentsPermalink





`(c) Ethical Requirements- CommentsClose CommentsPermalink





`(1) IN GENERAL- A certified development company and the officers, employees, and other staff of the company shall at all times act ethically and avoid activities which constitute a conflict of interest or appear to constitute a conflict of interest. CommentsClose CommentsPermalink





`(2) PROHIBITED CONFLICT IN PROJECT LOANS- CommentsClose CommentsPermalink





`(A) IN GENERAL- No certified development company may-- CommentsClose CommentsPermalink





`(i) recommend or approve a guarantee of a debenture by the Administrator under the Local Business Development Loan Program that is collateralized by a second lien position on the property being constructed or acquired; and CommentsClose CommentsPermalink





`(ii) provide, or be affiliated with a corporation or other entity which provides, financing collateralized by a first lien on the same property. CommentsClose CommentsPermalink





`(B) EXCEPTION- During the 2-year period beginning on the date of enactment of the Small Business Lending Reauthorization and Improvements Act of 2007, a certified development company that was participating as a first mortgage lender for the Local Business Development Loan Program in either of fiscal years 2004 or 2005 may continue to do so. CommentsClose CommentsPermalink





`(3) OTHER ECONOMIC DEVELOPMENT ACTIVITIES- It shall not be a conflict of interest for a certified development company to operate multiple programs to assist small business concerns as part of carrying out its economic development purpose. CommentsClose CommentsPermalink





`(d) Multistate Operations- CommentsClose CommentsPermalink





`(1) AUTHORIZATION- Notwithstanding any other provision of law, the Administrator shall permit a certified development company to make loans in any State that is contiguous to the State of incorporation of that certified development company, only if such company-- CommentsClose CommentsPermalink





`(A) is-- CommentsClose CommentsPermalink





`(i) an accredited lender under section 507; or CommentsClose CommentsPermalink





`(ii) a premier certified lender under section 508; CommentsClose CommentsPermalink





`(B) has a membership that contains, from each of the States in which it operates, not fewer than 25 members who reside in that State; CommentsClose CommentsPermalink





`(C) has a board of directors that contains not fewer than 2 members from each State in which the company makes loans; CommentsClose CommentsPermalink





`(D) maintains not fewer than 1 loan committee, which shall have not fewer than 1 member from each State in which the company makes loans; and CommentsClose CommentsPermalink





`(E) submits to the Administrator, in writing-- CommentsClose CommentsPermalink





`(i) a notice of the intention of the company to make loans in multiple States; CommentsClose CommentsPermalink





`(ii) the names of the States in which the company intends to make loans; and CommentsClose CommentsPermalink





`(iii) a detailed statement of how the company will comply with this paragraph, including a list of the members described in subparagraph (B). CommentsClose CommentsPermalink





`(2) REVIEW- The Administrator shall verify whether a certified development company satisfies the requirements of paragraph (1) on an expedited basis and, not later than 30 days after the date on which the Administrator receives the statement described in paragraph (1)(E)(iii), the Administrator shall determine whether such company satisfies such criteria and provide notice to such company. CommentsClose CommentsPermalink





`(3) LOAN COMMITTEE PARTICIPATION- For any loan made by a company described in paragraph (1), not fewer than 1 member of the loan committee from the State in which the loan is to be made shall participate in the review of such loan. CommentsClose CommentsPermalink





`(4) AGGREGATE ACCOUNTING- A company described in paragraph (1) may maintain an aggregate accounting of all revenue and expenses of the company for purposes of this title. CommentsClose CommentsPermalink





`(5) SERVICE TO CERTIFIED DEVELOPMENT COMPANIES- CommentsClose CommentsPermalink





`(A) IN GENERAL- Except as provided in subparagraph (B), an associate of a certified development company may not be an officer, director, or manager of more than 1 certified development company. CommentsClose CommentsPermalink





`(B) EXCEPTION- CommentsClose CommentsPermalink





`(i) IN GENERAL- Notwithstanding any other provision of law, a person who is serving on the board of directors of a certified development company may serve on the board of directors, but not as an officer, of not more than 1 additional certified development company, if-- CommentsClose CommentsPermalink





`(I) such companies are not located in the same State; CommentsClose CommentsPermalink





`(II) each board of directors determines that the service by such person on such board does not constitute a conflict of interest; and CommentsClose CommentsPermalink





`(III) there is not a contractual relationship between-- CommentsClose CommentsPermalink

`(aa) the person and such additional certified development company, except for the contract of such person to serve as a member of the board of directors of such company, if any; or CommentsClose CommentsPermalink

`(bb) the certified development companies of which such person is a member of the board of directors. CommentsClose CommentsPermalink

`(ii) MAXIMUM NUMBER OF MEMBERS- A certified development company may not have more than 1 member of the board of directors of such company in common with any other board of directors of a certified development company. CommentsClose CommentsPermalink





`(C) DEFINITION- As used in this paragraph, the term `associate of a certified development company' has the meaning given the term `Associate of a CDC' in section 120.10 of title 13, Code of Federal Regulations (or any corresponding similar regulation or ruling). CommentsClose CommentsPermalink





`(6) LOCAL JOB CREATION REQUIREMENTS- CommentsClose CommentsPermalink





`(A) IN GENERAL- Subject to subparagraph (B), any certified development company making loans in multiple States shall satisfy any applicable job creation or retention requirements separately for each such State. Such a company shall not count jobs created or retained in 1 State towards any applicable job creation or retention requirement in another State. CommentsClose CommentsPermalink





`(B) APPLICABILITY- This paragraph shall apply to a certified development company relating to a State beginning 2 years after the date that certified development company began making loans in that State. CommentsClose CommentsPermalink





`(7) CONTIGUOUS STATES- For purposes of this subsection, the States of Alaska and Hawaii shall be deemed to be contiguous to any State abutting the Pacific Ocean. CommentsClose CommentsPermalink





`(8) LOCAL ECONOMIC AREA REQUIREMENT AND EXEMPTION- CommentsClose CommentsPermalink





`(A) DEFINITION- In this paragraph, the term `local economic area' means an area, as determined by the Administrator, that-- CommentsClose CommentsPermalink





`(i) is in a State other than the State in which a development company is incorporated; CommentsClose CommentsPermalink





`(ii) shares a border with the area of operations of the development company; and CommentsClose CommentsPermalink





`(iii) is a part of a local trade area (including a city that is bisected by a State line and a metropolitan statistical area that is bisected by a State line) that is contiguous to the area of operations of the development company. CommentsClose CommentsPermalink





`(B) EXEMPTION- An applicant operating in a local economic area shall not be considered to be operating in a multistate area, and shall not be required to comply with the requirements for multistate operation. CommentsClose CommentsPermalink





`(e) Restrictions on Development Company Assistance- '. CommentsClose CommentsPermalink

SEC. 4112. CONFORMING AMENDMENTS.

Section 503 of the Small Business Investment Act of 1958 (15 U.S.C. 697) is amended-- CommentsClose CommentsPermalink





(1) in subsection (a)(1), by striking `qualified State or local development company' and inserting `certified development company'; and CommentsClose CommentsPermalink





(2) by striking subsection (e) and inserting the following: CommentsClose CommentsPermalink





`(e) Section 7(a) Loans- Notwithstanding any other provision of law, a certified development company is authorized to prepare applications for deferred participation loans under section 7(a) of the Small Business Act, to service such loans, and to charge a reasonable fee for servicing such loans.'. CommentsClose CommentsPermalink

SEC. 4123. CLOSING COSTS.

Section 503(b) of the Small Business Investment Act of 1958 (15 U.S.C. 697(b)) is amended by striking paragraph (4) and inserting the following: CommentsClose CommentsPermalink





`(4) the aggregate amount of such debenture does not exceed the amount of the loans to be made from the proceeds of such debenture plus, at the election of the borrower, other amounts attributable to the administrative and closing costs of such loans, except for the attorney fees of the borrower;'. CommentsClose CommentsPermalink

SEC. 4134. DEFINITION OF RURAL.

Section 501 of the Small Business Investment Act of 1958 (15 U.S.C. 695) is amended by adding at the end the following: CommentsClose CommentsPermalink





`(f) As used in this title, the term `rural' includes any area that is not-- CommentsClose CommentsPermalink





`(1) a city or town that has a population greater than 50,000 inhabitants; or CommentsClose CommentsPermalink





`(2) the urbanized area contiguous and adjacent to a city or town described in paragraph (1).'. CommentsClose CommentsPermalink

SEC. 4145. REGULATIONS AND EFFECTIVE DATE.

(a) In General- Except as provided in subsection (b), the Administrator shall-- CommentsClose CommentsPermalink





(1) publish proposed rules to implement this title and the amendments made by this title, not later than 120 days after the date of enactment of this Act; and CommentsClose CommentsPermalink





(2) publish such rules in final form not later than 120 days after the date of publication under paragraph (1). CommentsClose CommentsPermalink





(b) Multistate Operations- As soon as is practicable after the date of enactment of this Act, the Administrator shall promulgate regulations to implement section 506(d) of the Small Business Investment Act of 1958, as added by this title. Such regulations shall become effective not later than 120 days after the date of enactment of this Act. CommentsClose CommentsPermalink





(c) Effective Date- CommentsClose CommentsPermalink





(1) IN GENERAL- Except as otherwise specifically provided this title, this title and the amendments made by this title shall become effective 240 days after the date of enactment of this Act, regardless of whether the Administrator has promulgated the regulations required under subsection (a). CommentsClose CommentsPermalink





(2) MULTISTATE OPERATIONS- Section 506(d) of the Small Business Investment Act of 1958, as added by this title, shall become effective 120 days after the date of enactment of this Act, regardless of whether the Administrator has promulgated the regulations required under subsection (b). CommentsClose CommentsPermalink

SEC. 4156. LIMITATION ON TIME FOR FINAL APPROVAL OF COMPANIES.

Section 354(d) of the Small Business Investment Act of 1958 (15 U.S.C. 689c(d)) is amended by striking `a period of time, not to exceed 2 years,' and inserting `2 years'. CommentsClose CommentsPermalink

SEC. 4167. CHILD CARE LENDING PILOT PROGRAM.

(a) Child Care Lending Pilot Program- Section 502 of the Small Business Investment Act of 1958 (15 U.S.C. 696), as amended by this Act, is amended-- CommentsClose CommentsPermalink





(1) in the matter preceding paragraph (1)-- CommentsClose CommentsPermalink





(A) by striking `The Administration' and inserting the following: CommentsClose CommentsPermalink





`(a) Authorization- The Administration'; CommentsClose CommentsPermalink





(B) by striking `and such loans' and inserting `. Such loans'; CommentsClose CommentsPermalink





(C) by striking `:Provided, however, That the foregoing powers shall be subject to the following restrictions and limitations:' and inserting a period; and CommentsClose CommentsPermalink





(D) by adding at the end the following: CommentsClose CommentsPermalink





`(b) Restrictions and Limitations- The authority under subsection (a) shall be subject to the following restrictions and limitations:'; and CommentsClose CommentsPermalink





(2) in subsection (b)(1), as so redesignated-- CommentsClose CommentsPermalink





(A) by inserting after `USE OF PROCEEDS- ' the following: CommentsClose CommentsPermalink





`(A) IN GENERAL- '; and CommentsClose CommentsPermalink





(B) by adding at the end the following: CommentsClose CommentsPermalink





`(B) LOANS TO SMALL, NONPROFIT CHILD CARE BUSINESSES- CommentsClose CommentsPermalink





`(i) IN GENERAL- Notwithstanding subsection (a), the proceeds of any loan described in subsection (a) may be used by the certified development company to assist a small, nonprofit child care business, if-- CommentsClose CommentsPermalink





`(I) the loan is used for a sound business purpose that has been approved by the Administrator; CommentsClose CommentsPermalink





`(II) each such business meets all of the same eligibility requirements applicable to for-profit businesses under this title, except for status as a for-profit business; CommentsClose CommentsPermalink





`(III) 1 or more individuals has personally guaranteed the loan; CommentsClose CommentsPermalink





`(IV) each such business has clear and singular title to the collateral for the loan; CommentsClose CommentsPermalink





and`(V) each such business has sufficient cash flow from its operations to meet its obligations on the loan and its normal and reasonable operating expenses; and CommentsClose CommentsPermalink





`(VI) each such business is located in Arkansas, Connecticut, Georgia, Indiana, Iowa, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, North Carolina, South Dakota, Tennessee, Washington, or Wyoming. CommentsClose CommentsPermalink





`(ii) LIMITATION ON VOLUME- Not more than 7 percent of the total number of loans guaranteed in any fiscal year under this title may be awarded under this subparagraph. CommentsClose CommentsPermalink





`(iii) DEFINED TERM- For purposes of this subparagraph, the term `small, nonprofit child care business' means an establishment that-- CommentsClose CommentsPermalink





`(I) is organized in accordance with section 501(c)(3) of the Internal Revenue Code of 1986; CommentsClose CommentsPermalink





`(II) is primarily engaged in providing child care for infants, toddlers, pre-school, or pre-kindergarten children (or any combination thereof), and may provide care for older children when they are not in school, and may offer pre-kindergarten educational programs; CommentsClose CommentsPermalink





`(III) including its affiliates, has tangible net worth that does not exceed $7,000,000, and has average net income (excluding any carryover losses) for the 2 completed fiscal years preceding the date of the application for assistance under this subparagraph that does not exceed $2,500,000; and CommentsClose CommentsPermalink





`(IV) is licensed as a child care provider by the State, insular area, or the District of Columbia, in which it is located. CommentsClose CommentsPermalink





`(iv) SUNSET PROVISION- This subparagraph shall cease to have effect on September 30, 2010, and shall apply to all loans authorized under this subparagraph that are applied for, approved, or disbursed during the period beginning on the date of enactment of this subparagraph and ending on September 30, 2010.'. CommentsClose CommentsPermalink





(b) Reports- CommentsClose CommentsPermalink





(1) SMALL BUSINESS ADMINISTRATION- CommentsClose CommentsPermalink





(A) IN GENERAL- Not later than 6 months after the date of enactment of this Act, and every 6 months thereafter until September 30, 2010, the Administrator shall submit a report on the implementation of the program under section 502(b)(1)(B) of the Small Business Investment Act of 1958, as added by this Act, to-- CommentsClose CommentsPermalink





(i) the Committee on Small Business and Entrepreneurship of the Senate; and CommentsClose CommentsPermalink





(ii) the Committee on Small Business of the House of Representatives. CommentsClose CommentsPermalink





(B) CONTENTS- Each report under subparagraph (A) shall contain-- CommentsClose CommentsPermalink





(i) the date on which the program is implemented; CommentsClose CommentsPermalink





(ii) the date on which the rules are issued under subsection (c); and CommentsClose CommentsPermalink





(iii) the number and dollar amount of loans under the program applied for, approved, and disbursed during the 6-month period ending on the date of that report-- CommentsClose CommentsPermalink





(I) with respect to nonprofit child care businesses; and CommentsClose CommentsPermalink





(II) with respect to for-profit child care businesses. CommentsClose CommentsPermalink





(2) GOVERNMENT ACCOUNTABILITY OFFICE- CommentsClose CommentsPermalink





(A) IN GENERAL- Not later than March 31, 2010, the Comptroller General of the United States shall submit a report on the child care small business loans authorized by section 502(b)(1)(B) of the Small Business Investment Act of 1958, as added by this Act, to-- CommentsClose CommentsPermalink





(i) the Committee on Small Business and Entrepreneurship of the Senate; and CommentsClose CommentsPermalink





(ii) the Committee on Small Business of the House of Representatives. CommentsClose CommentsPermalink





(B) CONTENTS- The report under subparagraph (A) shall-- CommentsClose CommentsPermalink





(i) contain information gathered during the first 2 years of the loan program, including-- CommentsClose CommentsPermalink





(iI) an evaluation of the timeliness of the implementation of the loan program; CommentsClose CommentsPermalink





(iiII) a description of the effectiveness and ease with which certified development companies, lenders, and small business concerns have participated in the loan program; CommentsClose CommentsPermalink





(iiiIII) a description and assessment of how the loan program was marketed; CommentsClose CommentsPermalink





(ivIV) by location (State, insular area, and the District of Columbia) and in total, the number of child care small businesses, categorized by status as a for-profit or nonprofit business, that-- CommentsClose CommentsPermalink

(Iaa) applied for a loan under the program (and whether it was a new or expanding child care provider); CommentsClose CommentsPermalink

(IIbb) were approved for a loan under the program; and CommentsClose CommentsPermalink

(IIIcc) received a loan disbursement under the program (and whether they are a new or expanding child care provider); and CommentsClose CommentsPermalink

(vV) with respect to businesses described under clause (iv)(III)--(Isubclause (IV)(cc)-- CommentsClose CommentsPermalink

(aa) the number of such businesses in each State, insular area, and the District of Columbia, as of the year of enactment of this Act; CommentsClose CommentsPermalink

(IIbb) the total amount loaned to such businesses under the program; CommentsClose CommentsPermalink

(IIIcc) the total number of loans to such businesses under the program; CommentsClose CommentsPermalink

(IVdd) the average loan amount and term; CommentsClose CommentsPermalink

(Vee) the currency rate, delinquencies, defaults, and losses of the loans; CommentsClose CommentsPermalink

(VIff) the number and percent of children served who receive subsidized assistance; and CommentsClose CommentsPermalink

(VIIgg) the number and percent of children served who are low income; and CommentsClose CommentsPermalink

(ii) assess whether there are government programs in place making loans or providing grant funding to nonprofit child care centers to address child care shortages. CommentsClose CommentsPermalink





(C) ACCESS TO INFORMATION- CommentsClose CommentsPermalink





(i) IN GENERAL- The Administration shall collect and maintain such information as may be necessary to carry out this paragraph from certified development centerompanies and child care providers, and such centerompanies and providers shall comply with a request for information from the Administration for that purpose. CommentsClose CommentsPermalink





(ii) PROVISION OF INFORMATION TO GOVERNMENT ACCOUNTABILITY OFFICE- The Administration shall provide information collected under this subparagraph to the Comptroller General of the United States for purposes of the report required by this paragraph. CommentsClose CommentsPermalink





(c) Rulemaking Authority- Not later than 120 days after the date of enactment of this Act, the Administrator shall issue final rules to carry out the loan program authorized by section 502(b)(1)(B) of the Small Business Investment Act of 1958, as added by this Act. CommentsClose CommentsPermalink