S 2920
Calendar No. 720
110th CONGRESS
2d Session
S. 2920
To reauthorize and improve the financing and entrepreneurial
development programs of the Small Business Administration, and for other
purposes.
IN THE SENATE OF THE UNITED STATES
April 24, 2008
Mr. KERRY (for himself, Ms. SNOWE, and Mr. LEVIN) introduced the following
bill; which was read the first time
April 28, 2008
Read the second time and placed on the calendar
A BILL
To reauthorize and improve the financing and entrepreneurial
development programs of the Small Business Administration, and for other
purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `SBA Reauthorization and Improvement Act
of 2008'.
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 2. Table of contents.
TITLE I--SMALL BUSINESS LENDING
Sec. 101. Authorization of appropriations.
Subtitle A--Microloan Programs
Sec. 121. Conforming technical change in average smaller loan size.
Sec. 122. Inclusion of persons with disabilities.
Sec. 123. Microloan program improvements.
Sec. 124. Prime reauthorization and transfer to the Small Business
Act.
Sec. 125. Report to congress on the microloan program.
Subtitle B--Intermediary Lending Pilot Program
Sec. 142. Small business intermediary lending pilot program.
Subtitle C--7(a) Loan Program
Sec. 161. Preferred lenders program.
Sec. 162. Maximum loan amount.
Sec. 163. Maximum 504 and 7(a) loan eligibility.
Sec. 165. Alternative size standard.
Sec. 166. Alternative variable interest rate.
Sec. 167. Minority small business development.
Sec. 168. Lowering of fees.
Sec. 169. International trade loans.
Sec. 170. Rural lending outreach program.
Subtitle D--Certified Development Companies; 504 Loan Program
Sec. 181. Development company loan programs.
Sec. 182. Loan liquidations.
Sec. 183. Additional equity injections.
Sec. 184. Uniform leasing policy.
Sec. 185. Businesses in low-income communities.
Sec. 186. Combinations of certain goals.
Sec. 187. Refinancing under the local development business loan program.
Sec. 188. Technical correction.
Sec. 189. Definitions for the Small Business Investment Act of 1958.
Sec. 190. Repeal of sunset on reserve requirements for premier certified
lenders.
Sec. 191. Certified development companies.
Sec. 192. Conforming amendments.
Sec. 194. Definition of rural.
Sec. 195. Regulations and effective date.
Sec. 196. Limitation on time for final approval of companies.
Sec. 197. Child care lending pilot program.
Sec. 198. Debenture repayment.
Sec. 199. Real estate appraisals.
TITLE II--SMALL BUSINESS VENTURE CAPITAL
Subtitle A--Small Business Investment Company Program
Sec. 221. Reauthorization.
Sec. 223. Investments in smaller enterprises.
Sec. 224. Maximum investment in a company.
Subtitle B--New Markets Venture Capital Program
Sec. 241. Diversification of New Markets Venture Capital Program.
Sec. 242. Establishment of Office of New Markets Venture Capital.
Sec. 243. Low-income geographic areas.
Sec. 244. Applications for New Markets Venture Capital Program.
Sec. 245. Operational assistance grants.
TITLE III--SMALL BUSINESS ENTREPRENEURIAL DEVELOPMENT
Subtitle A--Reauthorization
Sec. 301. Reauthorization.
Subtitle B--Women's Small Business Ownership Programs
Sec. 311. Office of Women's Business Ownership.
Sec. 312. Women's Business Center Program.
Sec. 313. National Women's Business Council.
Sec. 314. Interagency Committee on Women's Business Enterprise.
Sec. 315. Preserving the independence of the National Women's Business
Council.
Sec. 316. Study and report on women's business centers.
Subtitle C--International Trade
Sec. 321. Small Business Administration Associate Administrator for
International Trade.
Sec. 322. Office of International Trade.
Subtitle D--Native American Small Business Development Program
Sec. 332. Native American Small Business Development Program.
Sec. 333. Pilot programs.
Subtitle E--National Small Business Regulatory Assistance
Sec. 343. Small Business Regulatory Assistance Pilot Program.
Subtitle F--Other Provisions
Sec. 351. Minority Entrepreneurship and Innovation Pilot Program.
Sec. 352. Institutions of higher education.
Sec. 353. Health insurance options information for small business
concerns.
Sec. 354. National Small Business Development Center Advisory Board.
Sec. 355. Office of Native American Affairs pilot program.
Sec. 356. Privacy requirements for SCORE chapters.
Sec. 357. National small business summit.
TITLE IV--LENDER OVERSIGHT
Sec. 404. Portfolio quality evaluation standards.
Sec. 406. Computer modeling.
Sec. 407. Economic performance evaluation measurements.
Sec. 409. Executive compensation.
Sec. 410. Study and report on examination and review fees.
SEC. 3. DEFINITIONS.
(1) the terms `Administration' and `Administrator' mean the Small
Business Administration and the Administrator thereof, respectively;
(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;
(3) the term `low-income geographic area' has the meaning given that
term in section 351 of the Small Business Investment Act of 1958 (15
U.S.C. 689), as amended by this Act;
(4) the term `New Markets Venture Capital company' has the meaning
given that term in section 351 of the Small Business Investment Act
of 1958 (15 U.S.C. 689);
(5) the term `New Markets Venture Capital Program' means the program
under part B of title III of the Small Business Investment Act of
1958 (15 U.S.C. 689 et seq.); and
(6) the term `small business concern' has the same meaning as in section
3 of the Small Business Act (15 U.S.C. 632).
TITLE I--SMALL BUSINESS LENDING
SEC. 101. AUTHORIZATION OF APPROPRIATIONS.
Section 20 of the Small Business Act (15 U.S.C. 631 note) is amended--
(1) by redesignating subsection (j) as subsection (f); and
(2) by adding at the end the following:
`(g) Microloan- For each of fiscal years 2008 through 2010, the Administration
is authorized to make, as provided in section 7(m)--
`(1) $80,000,000 in technical assistance grants;
`(2) $110,000,000 in direct loans; and
`(3) $50,000,000 in deferred participation loans.
`(h) General Business Loans- The Administration is authorized to make,
as provided in section 7(a)--
`(1) $19,000,000,000 in general business loans in fiscal year 2008;
`(2) $20,000,000,000 in general business loans in fiscal year 2009;
and
`(3) $21,000,000,000 in general business loans in fiscal year 2010.
`(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)--
`(1) $8,500,000,000 in certified development company financings in
fiscal year 2008;
`(2) $9,000,000,000 in certified development company financings in
fiscal year 2009; and
`(3) $9,500,000,000 in certified development company financings in
fiscal year 2010.
`(j) Department of Defense- For each of fiscal years 2008 through 2010,
the Administration is authorized to make $500,000,000 in loans as provided
in section 7(a)(21).
`(1) IN GENERAL- There are authorized to be appropriated to the Administrator
$15,000,000 for each of fiscal years 2008 through 2010 to carry out
section 37, which shall remain available until expended.
`(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 2008 through 2010 to carry out section
37(c)(4), which shall remain available until expended.
`(l) Additional Authorizations and Limitations-
`(1) IN GENERAL- There are authorized to be appropriated to the Administration
for each of fiscal years 2008 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.
`(2) LIMITATIONS- Notwithstanding any other provision of this section,
for each of fiscal years 2008 through 2010--
`(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
`(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.'.
Subtitle A--Microloan Programs
SEC. 121. CONFORMING TECHNICAL CHANGE IN AVERAGE SMALLER LOAN SIZE.
Section 7(m) of the Small Business Act (15 U.S.C. 636(m)) is amended--
(1) in paragraph (3)(F)(iii), by striking `$7,500' and inserting `$10,000';
and
(2) in paragraph (6)(C), by striking `$7,500' each place that term
appears and inserting `$10,000'.
SEC. 122. 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'.
SEC. 123. 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--
(1) in subparagraph (A), by striking `in paragraph (10); and' and
inserting `of the term `intermediary' under paragraph (11);'; and
(2) in subparagraph (B)--
(A) by striking `(B) has at least' and inserting the following:
(B) by striking the period at the end and inserting the following:
`; or
`(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
`(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.'.
(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--
(1) in the clause heading, by striking `TECHNICAL ASSISTANCE' and
inserting `THIRD PARTY TECHNICAL ASSISTANCE'; and
(2) by striking `25 percent' and inserting `30 percent'.
(c) 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'.
SEC. 124. 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--
(1) by redesignating section 37 as section 40; and
(2) by inserting after section 36 the following:
`SEC. 37. PROGRAM FOR INVESTMENT IN MICROENTREPRENEURS.
`(a) Definitions- In this section:
`(1) CAPACITY BUILDING SERVICES- The term `capacity building services'
means services provided to an organization that is, or that is in
the process of becoming, a microenterprise development organization
or program, for the purpose of enhancing its ability to provide training
and services to disadvantaged entrepreneurs.
`(2) COLLABORATIVE- The term `collaborative' means 2 or more nonprofit
entities that agree to act jointly as a qualified organization under
this section.
`(3) DISADVANTAGED ENTREPRENEUR- The term `disadvantaged entrepreneur'
means a microentrepreneur that--
`(A) is a low-income person;
`(B) is a very low-income person; or
`(C) lacks adequate access to capital or other resources essential
for business success, or is economically disadvantaged, as determined
by the Administrator.
`(4) DISADVANTAGED NATIVE AMERICAN ENTREPRENEUR- The term `disadvantaged
Native American entrepreneur' means a disadvantaged entrepreneur who
is also a member of an Indian Tribe.
`(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.
`(6) INTERMEDIARY- The term `intermediary' means a private, nonprofit
entity that seeks to serve microenterprise development organizations
and programs, as authorized under subsection (d).
`(7) LOW-INCOME PERSON- The term `low-income person' means having
an income, adjusted for family size, of not more than--
`(A) for metropolitan areas, 80 percent of the area median income;
and
`(B) for nonmetropolitan areas, the greater of--
`(i) 80 percent of the area median income; or
`(ii) 80 percent of the statewide nonmetropolitan area median
income.
`(8) MICROENTREPRENEUR- The term `microentrepreneur' means the owner
or developer of a microenterprise.
`(9) MICROENTERPRISE- The term `microenterprise' means a sole proprietorship,
partnership, or corporation that--
`(A) has fewer than 5 employees; and
`(B) generally lacks access to conventional loans, equity, or other
banking services.
`(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.
`(11) TRAINING AND TECHNICAL ASSISTANCE- The term `training and technical
assistance' means services and support provided to disadvantaged entrepreneurs,
such as assistance for the purpose of enhancing business planning,
marketing, management, financial management skills, and assistance
for the purpose of accessing financial services.
`(12) VERY LOW-INCOME PERSON- The term `very low-income person' means
having an income, adjusted for family size, of not more than 150 percent
of the poverty line (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).
`(b) Establishment of Program- The Administrator shall establish a microenterprise
technical assistance and capacity building grant program to provide
assistance from the Administration in the form of grants to qualified
organizations in accordance with this section.
`(c) Uses of Assistance- A qualified organization shall use grants made
under this section--
`(1) to provide training and technical assistance to disadvantaged
entrepreneurs;
`(2) to provide training and capacity building services to microenterprise
development organizations and programs and groups of such organizations
to assist such organizations and programs in developing microenterprise
training and services;
`(3) to aid in researching and developing the best practices in the
field of microenterprise and technical assistance programs for disadvantaged
entrepreneurs;
`(4) to provide training and technical assistance to disadvantaged
Native American entrepreneurs and prospective entrepreneurs; and
`(5) for such other activities as the Administrator determines are
consistent with the purposes of this section.
`(d) Qualified Organizations- For purposes of eligibility for assistance
under this section, a qualified organization shall be--
`(1) a nonprofit microenterprise development organization or program
(or a group or collaborative thereof) that has a demonstrated record
of delivering microenterprise services to disadvantaged entrepreneurs;
`(3) a microenterprise development organization or program that is
accountable to a local community, working in conjunction with a State
or local government or Indian tribe; or
`(4) an Indian tribe acting on its own, if the Indian tribe certifies
that no private organization or program referred to in this subsection
exists within its jurisdiction.
`(e) Allocation of Assistance; Subgrants-
`(1) ALLOCATION OF ASSISTANCE-
`(A) IN GENERAL- The Administrator shall allocate assistance from
the Administration under this section to ensure that--
`(i) activities described in subsection (c)(1) are funded using
not less than 75 percent of amounts made available for such assistance;
and
`(ii) activities described in subsection (c)(2) are funded using
not less than 15 percent of amounts made available for such assistance.
`(B) LIMIT ON INDIVIDUAL ASSISTANCE- No single person may receive
more than 10 percent of the total funds appropriated under this
section in a single fiscal year.
`(2) TARGETED ASSISTANCE- The Administrator shall ensure that not
less than 50 percent of the grants made under this section are used
to benefit very low-income persons, including those residing on Indian
reservations.
`(3) SUBGRANTS AUTHORIZED-
`(A) IN GENERAL- A qualified organization receiving assistance under
this section may provide grants using that assistance to qualified
small and emerging microenterprise organizations and programs, subject
to such rules and regulations as the Administrator determines to
be appropriate.
`(B) LIMIT ON ADMINISTRATIVE EXPENSES- Not more than 7.5 percent
of assistance received by a qualified organization under this section
may be used for administrative expenses in connection with the making
of subgrants under subparagraph (A).
`(4) DIVERSITY- In making grants under this section, the Administrator
shall ensure that grant recipients include both large and small microenterprise
organizations, serving urban, rural, and Indian tribal communities
serving diverse populations.
`(5) PROHIBITION ON PREFERENTIAL CONSIDERATION OF CERTAIN 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.
`(f) Matching Requirements-
`(1) IN GENERAL- Financial assistance under this section shall be
matched with funds from sources other than the Federal Government
on the basis of not less than 50 percent of each dollar provided by
the Administration.
`(2) SOURCES OF MATCHING FUNDS- Fees, grants, gifts, funds from loan
sources, and in-kind resources of a grant recipient from public or
private sources may be used to comply with the matching requirement
in paragraph (1).
`(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).
`(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.
`(g) Applications for Assistance- An application for assistance under
this section shall be submitted in such form and in accordance with
such procedures as the Administrator shall establish.
`(h) Recordkeeping and Reporting-
`(1) IN GENERAL- Each organization that receives assistance from the
Administration under this section shall--
`(A) submit to the Administration not less than once in every 18-month
period, financial statements audited by an independent certified
public accountant;
`(B) submit an annual report to the Administration on its activities;
and
`(C) keep such records as may be necessary to disclose the manner
in which any assistance under this section is used.
`(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.
`(3) DATA COLLECTION- Each organization that receives assistance from
the Administration under this section shall collect information relating
to, as applicable--
`(A) the number of individuals counseled or trained;
`(B) the number of hours of counseling provided;
`(C) the number of startup small business concerns formed;
`(D) the number of small business concerns expanded;
`(E) the number of low-income individuals counseled or trained;
and
`(F) the number of very low-income individuals counseled or trained.'.
(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.
(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.
(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.
SEC. 125. REPORT TO CONGRESS ON THE MICROLOAN PROGRAM.
Section 7(m)(10) of the Small Business Act (15 U.S.C. 638(m)(10)) is
amended to read as follows:
`(10) REPORT TO CONGRESS ON THE MICROLOAN PROGRAM-
`(A) IN GENERAL- Not later than 6 months after the date of enactment
of the SBA Reauthorization and Improvement Act of 2008, the Comptroller
General of the United States shall submit to the Committee on Small
Business and Entrepreneurship of the Senate and the Committee on
Small Business of the House of Representatives, a report which includes--
`(i) an analysis of the effectiveness of the Microloan Program
and the microloan technical assistance program;
`(ii) a description of the loan portfolio of each intermediary,
including the extent to which it provides microloans to small
business concerns in rural areas;
`(iii) the numbers and amounts of microloans made by the intermediaries
to small business concern borrowers;
`(iv) an accurate measure of the cost of the microloan and microloan
technical assistance programs; and
`(v) any recommendations for legislative changes that would improve
the program operations.
`(B) CONSIDERATIONS AND CONSULTATIONS- In developing the report
required by subparagraph (A), the Comptroller General shall consult
with the microloan intermediaries, the Committee on Small Business
and Entrepreneurship of the Senate and the Committee on Small Business
of the House of Representatives, and other appropriate industry
members, and shall allow for industry comment.'.
Subtitle B--Intermediary Lending Pilot Program
SEC. 141. FINDINGS.
Congress finds the following:
(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.
(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--
(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
(B) less flexible terms and conditions, which are often necessary
for small and emerging businesses.
(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--
(A) providing riskier, up front, or subordinated capital;
(B) offering flexible terms and underwriting procedures; and
(C) providing technical assistance to businesses in order to reduce
the transaction costs and risk exposure of banks.
(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.
(5) More than 1,000 nonprofit intermediary lenders in the United States
are--
(A) successfully providing financial and technical assistance to
small and emerging businesses;
(B) working with banks and other lenders to leverage additional
capital for their business borrowers; and
(C) creating employment opportunities for low-income individuals
through their lending and business development activities.
SEC. 142. 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:
`(l) Small Business Intermediary Lending Program-
`(1) DEFINITIONS- In this subsection--
`(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--
`(i) a private, nonprofit community development corporation;
`(ii) a consortium of private, nonprofit organizations or nonprofit
community development corporations;
`(iii) a quasi-governmental economic development entity (such
as a planning and development district), other than a State, county,
or municipal government; and
`(iv) an agency of or nonprofit entity established by a Native
American Tribal Government; and
`(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.
`(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.
`(3) PURPOSES- The purposes of the Program are--
`(A) to assist small business concerns in those areas suffering
from a lack of credit due to poor economic conditions;
`(B) to create employment opportunities for low-income individuals;
`(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;
`(D) to test the effectiveness of nonprofit intermediaries--
`(i) as a delivery system for a midsize loan program; and
`(ii) in addressing the credit needs of small business concerns
and leveraging other sources of credit; and
`(E) to determine the advisability and feasibility of implementing
a midsize loan program nationwide.
`(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.
`(5) LOANS TO INTERMEDIARIES-
`(A) APPLICATION- Each intermediary desiring a loan under this subsection
shall submit an application to the Administrator that describes--
`(i) the type of small business concerns to be assisted;
`(ii) the size and range of loans to be made;
`(iii) the geographic area to be served and its economic, poverty,
and unemployment characteristics;
`(iv) the status of small business concerns in the area to be
served and an analysis of the availability of credit; and
`(v) the qualifications of the applicant to carry out this subsection.
`(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.
`(C) LOAN DURATION- Loans made by the Administrator under this subsection
shall be for a maximum term of 20 years.
`(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.
`(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.
`(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--
`(i) banks or credit unions;
`(ii) community development financial institutions; and
`(iii) other sources with funds available to the intermediary
lender.
`(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.
`(6) PROGRAM FUNDING FOR MIDSIZE LOANS-
`(A) NUMBER OF PARTICIPANTS- Under the Program, the Administrator
may provide loans, on a competitive basis, to not more than 20 intermediaries.
`(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.
`(A) ANNUAL REPORT- Not later than 12 months after the date of enactment
of the SBA Reauthorization and Improvement Act of 2008, and annually
thereafter, the Administrator shall submit a report containing an
evaluation of the effectiveness of the Program to--
`(i) the Committee on Small Business and Entrepreneurship of the
Senate; and
`(ii) the Committee on Small Business of the House of Representatives.
`(B) CONTENTS- Each report submitted under subparagraph (A) shall
include, for the 12-month period before the date of that report--
`(i) the numbers and locations of the intermediaries receiving
funds to provide midsize loans;
`(ii) the amounts of each loan to an intermediary;
`(iii) the numbers and amounts of midsize loans made by intermediaries
to small business concerns;
`(iv) the repayment history of each intermediary;
`(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;
`(vi) an estimate of the number of low-income individuals who
have been employed as a direct result of the Program; and
`(vii) any recommendations for legislative changes that would
improve the operation of the Program.
`(8) TERMINATION- The authority to make loans under this subsection
shall terminate 3 years after the date of enactment of the SBA Reauthorization
and Improvement Act of 2008.'.
(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).
(c) Authorization of Appropriations-
(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).
(2) AVAILABILITY- Any amounts appropriated pursuant to paragraph (1)
shall remain available until expended.
Subtitle C--7(a) Loan Program
SEC. 161. PREFERRED LENDERS PROGRAM.
(a) In General- Section 7(a) of the Small Business Act (15 U.S.C. 636(a))
is amended--
(1) by redesignating paragraph (32) relating to increased veteran
participation, as added by section 208 of the Military Reservist and
Veteran Small Business Reauthorization and Opportunity Act of 2008
(Public Law 110-186; 122 Stat. 631), as paragraph (33); and
(2) by adding at the end the following:
`(34) PREFERRED LENDERS PROGRAM-
`(A) DEFINITIONS- In this paragraph--
`(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);
`(ii) the term `preferred lender' means a qualified lender participating
in the program;
`(iii) the term `program' means the Preferred Lenders Program
established under subparagraph (B); and
`(iv) the term `qualified lender' means a lender that demonstrates--
`(I) knowledge of and proficiency in the requirements of the
program under this subsection;
`(II) the ability to process, close, service, and liquidate
loans;
`(III) the ability to develop and analyze complete loan packages;
and
`(IV) a satisfactory performance history of participation in
the program under this subsection.
`(B) ESTABLISHMENT- There is established a Preferred Lenders Program
under which the Administrator may authorize qualified lenders to
make and service loans.
`(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.
`(D) DELEGATED AUTHORITY- The Administrator shall authorize a preferred
lender to take actions relating to loan servicing on behalf of the
Administrator, including--
`(i) determining eligibility and creditworthiness and loan monitoring,
collection, and liquidation;
`(ii) authority to make and close loans with a guarantee from
the Administrator without obtaining the prior specific approval
of the Administrator; and
`(iii) authority to service and liquidate such loans without obtaining
the prior specific approval of the Administrator for routine servicing
and liquidation activities.
`(E) AREA OF OPERATIONS- The Administrator shall designate the area
for which a preferred lender may exercise the authority under subparagraph
(D).
`(F) CONFLICT- A preferred lender shall not take any action creating
an actual or apparent conflict of interest.
`(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.
`(ii) ELIGIBILITY- The Administration shall designate a preferred
lender as a national preferred lender if the Administrator determines
that preferred lender has--
`(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;
`(II) centralized loan approval, servicing, and liquidation
functions and processes that are satisfactory to the Administration;
`(III) uniform written policies and procedures;
`(IV) a currency rate that is not less than the Administration's
national average currency rate for all loans under this subsection;
`(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;
`(VI) a default rate that is not more than the Administration's
national average default rate for loans made under this subsection;
and
`(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.
`(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.
`(I) SUSPENSION OR REVOCATION-
`(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--
`(I) is not adhering to the rules or regulations established
by the Administrator for the program; or
`(II) has failed to continue to meet the eligibility criteria
specified in paragraph (G) or take corrective action under subparagraph
(H).
`(ii) EFFECT- A suspension or revocation under clause (i) shall
not affect any outstanding guarantee of a national preferred lender.'.
(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:
`(C) INTEREST RATE UNDER PREFERRED LENDERS PROGRAM- The maximum
interest rate for a loan guaranteed under the Preferred Lenders
Program under paragraph (34) shall not exceed the maximum interest
rate as determined by the Administration, applicable to other loans
guaranteed under this subsection.'.
(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 (34)'.
SEC. 162. 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'.
SEC. 163. MAXIMUM 504 AND 7(a) LOAN ELIGIBILITY.
(a) Combination Financing-
(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:
`(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.'.
(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:
`(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).'.
(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--
(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
(2) describes the total amount and general performance of the financings
described in paragraph (1).
SEC. 164. LOAN POOLING.
Section 5(g)(1) of the Small Business Act (15 U.S.C. 634(g)(1)) is amended--
(1) by inserting `(A)' before `The Administration';
(2) by striking the colon and all that follows and inserting a period;
and
(3) by adding at the end the following:
`(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.
`(C) The interest rate on a trust certificate issued under subparagraph
(A) shall be either--
`(i) the lowest interest rate on any individual loan in the pool;
or
`(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.'.
SEC. 165. 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:
`(5) Optional Size Standard-
`(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.
`(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.'.
SEC. 166. 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,'.
(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.
SEC. 167. 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:
`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).
`(b) Associate Administrator for Minority Small Business Development-
The Associate Administrator--
`(A) an appointee in the Senior Executive Service who is a career
appointee; or
`(B) an employee in the competitive service;
`(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;
`(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));
`(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);
`(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;
`(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;
`(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;
`(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
`(9) shall report to and be responsible directly to the Administrator.
`(c) Authorization of Appropriations- There are authorized to be appropriated
to carry out this section--
`(1) $5,000,000 for fiscal year 2008;
`(2) $5,000,000 for fiscal year 2009; and
`(3) $5,000,000 for fiscal year 2010.'.
(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.'.
SEC. 168. 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:
`(i) IN GENERAL- Subject to clause (ii), for loan guarantees made
or approved in each full fiscal year after the date of enactment
of the SBA Reauthorization and Improvement Act of 2008, 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.
`(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.
`(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).'.
SEC. 169. 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'.
(b) Working Capital- Section 7(a)(16)(A) of the Small Business Act (15
U.S.C. 636(a)(16)(A)) is amended--
(1) in the matter preceding clause (i), by striking `in--' and inserting
`--';
(A) by inserting `in' after `(i)'; and
(B) by striking `or' at the end;
(A) by inserting `in' after `(ii)'; and
(B) by striking the period and inserting `; or'; and
(4) by adding at the end the following:
`(iii) by providing working capital.'.
(c) Collateral- Section 7(a)(16)(B) of the Small Business Act (15 U.S.C.
636(a)(16)(B)) is amended--
(1) by striking `Each loan' and inserting the following:
`(i) IN GENERAL- Except as provided in clause (ii), each loan';
and
(2) by adding at the end the following:
`(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.'.
(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.
SEC. 170. 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--
(1) by striking paragraph (25)(C); and
(2) by adding at the end the following:
`(35) RURAL LENDING OUTREACH PROGRAM-
`(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))).
`(B) LOAN TERMS- For a loan made through the program under this
paragraph--
`(i) the Administrator shall approve or disapprove the loan within
36 hours of the time the Administrator receives the application;
`(ii) the program shall use abbreviated application and documentation
requirements; and
`(iii) minimum credit standards, as the Administrator considers
necessary to limit the rate of default on loans made under the
program, shall apply.'.
Subtitle D--Certified Development Companies; 504 Loan Program
SEC. 181. 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:
`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.
`(b) Existing Name- Participants in the Local Development Business Loan
Program may continue to refer to such program as `the 504 Loan Program'.'.
(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'.
(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.
SEC. 182. LOAN LIQUIDATIONS.
Section 510 of the Small Business Investment Act of 1958 (15 U.S.C.
697g) is amended--
(1) by redesignating subsection (e) as subsection (g); and
(2) by inserting after subsection (d) the following:
`(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.
`(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).
`(f) Compensation and Reimbursement-
`(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--
`(i) approved in advance by the Administrator, either specifically
or generally; or
`(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
`(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.
`(2) COMPENSATION FOR RESULTS-
`(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.
`(B) CRITERIA- The schedule required under this paragraph shall--
`(i) be based on a percentage of the net amount recovered, but
shall not exceed a maximum amount; and
`(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.'.
SEC. 183. 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:
`(ii) FUNDING FROM INSTITUTIONS- If a small business concern--
`(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
`(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.'.
SEC. 184. UNIFORM LEASING POLICY.
(a) In General- Section 502 of the Small Business Investment Act of
1958 (15 U.S.C. 696) is amended--
(1) by striking paragraphs (4) and (5) and inserting the following:
`(4) LIMITATION ON LEASING- If the use of a loan under this section
includes the acquisition of a facility or the construction of a new
facility, the small business concern assisted--
`(A) shall permanently occupy and use not less than a total of 50
percent of the space in the facility; and
`(B) may, on a temporary or permanent basis, lease to others not
more than 50 percent of the space in the facility.'; and
(2) by redesignating paragraph (6) as paragraph (5).
(b) Policy for 7(a) Loans- Section 7(a)(28) of the Small Business Act
(15 U.S.C. 636(a)(28)) is amended to read as follows:
`(28) LIMITATION ON LEASING- If the use of a loan under this subsection
includes the acquisition of a facility or the construction of a new
facility, the small business concern assisted--
`(A) shall permanently occupy and use not less than a total of 50
percent of the space in the facility; and
`(B) may, on a temporary or permanent basis, lease to others not
more than 50 percent of the space in the facility.'.
SEC. 185. BUSINESSES IN LOW-INCOME COMMUNITIES.
(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 under that section,'.
(b) Additional Incentives- Section 502 of the Small Business Investment
Act of 1958 (15 U.S.C. 696), as amended by this Act, is amended by adding
at the end the following:
`(6) LOW-INCOME COMMUNITIES-
`(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.
`(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.
`(i) IN GENERAL- For any loan under this section for use in a
low-income community (as that term is used 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.
`(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.'.
SEC. 186. 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:
`(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).'.
SEC. 187. REFINANCING UNDER THE LOCAL DEVELOPMENT BUSINESS LOAN PROGRAM.
Section 502 of the Small Business Investment Act of 1958 (15 U.S.C.
696), as amended by this Act, is amended by adding at the end the following:
`(7) PERMISSIBLE DEBT REFINANCING-
`(A) IN GENERAL- Any financing approved under this title may include
a limited amount of debt refinancing.
`(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--
`(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;
`(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
`(iii) the financing under section 504 will provide better terms
or rate of interest than exists on the debt at the time of refinancing.'.
SEC. 188. 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'.
SEC. 189. 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--
(1) by striking paragraph (6) and inserting the following:
`(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;';
(2) in paragraph (18), by striking `and' at the end;
(3) in paragraph (19), by striking the period at the end and inserting
`; and'; and
(4) by adding at the end the following:
`(20) the term `certified development company' means a development
company that the Administrator has certified meets the criteria of
section 506.'.
SEC. 190. 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--
(1) in the subparagraph heading, by striking `TEMPORARY REDUCTION'
and inserting `REDUCTION'; and
