To temporarily extend the programs under the Small Business Act and the Small Business Investment Act of 1958, through May 15, 2004, and for other purposes.

March 9, 2004

Mr. DASCHLE for Mr. KERRY (for himself) introduced the following bill; which was read twice and referred to the Committee on Small Business and Entrepreneurship

To temporarily extend the programs under the Small Business Act and the Small Business Investment Act of 1958, through May 15, 2004, 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 Emergency Authorization Extension Act of 2004'.

SEC. 2. SBA PROGRAM AUTHORIZATIONS.

(a) IN GENERAL- Section 1 of Public Law 108-172 (117 Stat. 2065) is amended--

(1) in subsection (a), by striking `March 15' each place that term appears and inserting `May 15'; and

(2) by adding at the end the following:

`(c) EXCEPTION FOR OTHER PROGRAMS- Notwithstanding subsection (a), title V of the Small Business Investment Act of 1958 (15 U.S.C. 661 et seq.) and section 29 of the Small Business Act (15 U.S.C. 656), including any pilot program, shall remain authorized through September 30, 2004.'.

(b) CONFORMING AMENDMENT- Section 503(f) of the Small Business Investment Act of 1958 (15 U.S.C. 697(f)) is amended by striking `October 1, 2003' and inserting `October 1, 2004'.

SEC. 3. WOMEN'S BUSINESS CENTERS.

(a) IN GENERAL- Section 29(k) of the Small Business Act (15 U.S.C. 656(k)) is amended--

(1) in paragraph (2), by adding at the end the following:

`(C) FUNDING PRIORITY- Subject to available funds, and reservation of funds, the Administration shall, for each fiscal year, allocate--

`(i) $150,000 for each women's business center established under subsection (b), except for any center that requests a lesser amount;

`(ii) from the remaining funds, not more than $125,000, in equal amounts, to each women's business center established under subsection (l), to the extent such funds are reserved under subsection (k)(4)(A), except for any center that requests a lesser amount; and

`(iii) any funds remaining after allocations are made under clauses (i) and (ii) to new eligible women's business centers and eligible women's business centers that did not receive funding in the prior fiscal year under subsection (b).'; and

(2) in paragraph (4)(A), by adding at the end the following:

`(v) For fiscal year 2004, 48 percent.'.

(b) SUNSET DATE- The amendments made by this section are repealed on October 1, 2004.

SEC. 4. 7(a) LOAN GUARANTEE PROGRAM.

(a) COMBINATION LOANS-

(1) 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:

`(31) COMBINATION LOANS-

`(A) DEFINED TERM- As used in this paragraph, the term `combination loan' means a financing comprised of a loan guaranteed under this subsection and a loan not guaranteed by Federal, State, or local government.

`(B) AUTHORITY-

`(i) IN GENERAL- A small business concern may combine a loan guaranteed under this subsection with a loan that is not guaranteed by Federal, State, or local government.

`(ii) LENDER- The nonguaranteed loan under clause (i) may be made by--

`(I) the lender that provided the financing under this subsection or a different lender; or

`(II) a lender in the Preferred Lenders Program.

`(iii) SECURITY- The nonguaranteed loan under clause (i) may be secured by a senior lien and the guaranteed loan under

this subsection may be secured by a subordinated lien.

`(iv) APPLICATION- A loan guarantee under this subsection on behalf of a small business concern, which is approved within 120 days of the date on which a nonguaranteed loan is obtained by the same small business concern, shall be subject to the provisions of this paragraph.

`(C) FEE ON COMBINATION LOAN- The lender shall pay a one-time fee of 0.5 percent of the amount of the nonguaranteed loan if the nonguaranteed portion of the loan has a senior credit position to the guaranteed portion of the loan. This fee shall be in addition to any other lender fees and shall not be charged to the borrower.

`(D) LOAN SIZE-

`(i) PREFERRED LENDERS PROGRAM- If the loan guaranteed under this subsection is processed under delegated authority under the Preferred Lenders Program, the maximum amount of the nonguaranteed loan may not exceed--

`(I) $1,000,000; or

`(II) a combination of $2,000,000 gross loan amount of a loan guaranteed by the Administration and an additional nonguaranteed loan of $1,000,000.

`(ii) SMALL BUSINESS ADMINISTRATION- If the loan guaranteed under this subsection is processed and approved by Administration staff, the amount of the nonguaranteed loan may not exceed--

`(I) $2,000,000; or

`(II) a combination of $2,000,000 gross loan amount of a loan guaranteed by the Administration and an additional nonguaranteed loan of $2,000,000.

`(E) USE OF PROCEEDS- All proceeds from the fee collected under this subparagraph shall be used to offset the cost (as defined in section 502 of the Credit Reform Act of 1990) to the Administration of guaranteeing loans under this subsection.'.

(b) TERMINATION OF LENDER AUTHORITY TO RETAIN GUARANTEE FEES- Section 7(a)(18)(B) of the Small Business Act (15 U.S.C. 636(a)(18)(B)) is amended to read as follows:

`(B) RETENTION OF CERTAIN FEES-

`(i) IN GENERAL- Except as provided under clause (ii), lenders participating in the programs established under this subsection may retain not more than 25 percent of a fee collected under subparagraph (A)(i).

`(ii) FISCAL YEAR 2004- Beginning on the date of enactment of this clause and ending on September 30, 2004, the Administration or its agent shall collect all fees under subparagraph (A)(i). All proceeds from fees collected under this paragraph shall be used to offset the cost (as defined in section 502 of the Credit Reform Act of 1990) to the Small Business Administration of guaranteeing loans under this subsection.'.

(c) TEMPORARY MODIFICATION OF ANNUAL LENDER FEE- Section 7(a)(23) of the Small Business Act (15 U.S.C. 636(a)) is amended--

(1) by striking `0.25 percent' and inserting `0.35 percent'; and

(2) by adding at the end the following: `All proceeds from the fee collected under this paragraph shall be used to offset the cost (as defined in section 502 of the Credit Reform Act of 1990) to the Administration of guaranteeing loans under this subsection.'.

(d) LIFTING LOAN RESTRICTIONS AND PRIORITY PROCESSING OF REJECTED APPLICATIONS-

(1) IN GENERAL- The Small Business Administration shall--

(A) eliminate the program restrictions imposed by policy notices 5000-902 and 0000-1709 to allow for the processing and approval of loan applications cancelled or returned because of the program shutdown or restrictions imposed by policy notices 5000-902, 0000-1707, or 0000-1709;

(B) permit a small business or lender to resubmit any loan application that was not considered or approved because of the program shutdown or restrictions imposed by policy notices 5000-902, 0000-1707, or 0000-1709;

(C) give priority to processing any application submitted before January 8, 2004, that was not considered because of the program

shutdown or loan restrictions imposed by policy notices 5000-902, 0000-1707, or 0000-1709;

(D) give priority, to the extent possible, to approving all eligible loans that were cancelled or returned because of the program shutdown or restrictions imposed by policy notices 5000-902, 0000-1707, or 0000-1709, in the order in which the applications were originally submitted; and

(E) give priority to processing all eligible loans to any small business that has received financing under section 7(a)(14) of the Small Business Act (15 U.S.C. 636(a)(14) and requests a renewal of such financing, regardless of temporary restrictions imposed by the Small Business Administration through the policy notices referred to in this paragraph, and approve such loans, if the small business is otherwise eligible for such financing under that section.

(2) PROOF OF APPLICATION- An application shall not be denied consideration or approval because the Small Business Administration failed to retain a record of receiving an application if the lender or borrower supplies proof that the application was submitted by mail, fax, or electronic means before January 8, 2004.

(3) RESERVATION AND APPLICATION OF FEE PROCEEDS- All proceeds from fees authorized under section 7(a) of the Small Business Act (15 U.S.C. 636(a)) shall be combined with any amounts appropriated to carry out such section and used--

(A) first, to process and fund loan guarantees approved pursuant to paragraph (d)(1); and

(B) second, to process and fund other loan guarantees under section 7(a) of the Small Business Act.

(4) NOTIFICATION REQUIREMENT- The Small Business Administration shall not make any significant policy or administrative changes affecting the operation of the loan program authorized under section 7(a) of the Small Business Act (15 U.S.C. 636(a)) unless, not later than 15 business days before such change, the Administrator of the Small Business Administration submits, under the Administrator's signature, a report that specifically describes the proposed changes and the duration of those changes to--

(A) the chairman and ranking member of the Committee on Small Business and Entrepreneurship of the Senate; and

(B) the chairman and ranking member of the Committee on Small Business of the House of Representatives.

(e) SUNSET DATE- This section and the amendments made by this section are repealed on October 1, 2004.

SEC. 5. RESUBMISSION OF DISASTER LOAN APPLICATIONS FOR CERTAIN BUSINESSES.

(a) RESUBMISSION OF APPLICATIONS- During the 30-day period beginning on the date of enactment of this Act, a small business concern may resubmit an application for a loan that was not approved under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) if the following conditions are met:

(1) ORIGINAL APPLICATION- The small business concern originally submitted an application before January 1, 2003, in response to the events associated with Small Business Administration Disaster Declaration 3364.

(2) LOCATION- On the date of the original submission of the application and on the date of the resubmission, the applicant operates a facility in Bronx, Kings, Nassau, New York, Queens, Richmond, or Westchester county in the State of New York.

(3) INABILITY TO OPERATE- Without regard to physical damage to a facility, the applicant was unable to operate at a facility because of a prohibition on the use of the facility, in whole or in part, by an order or other action of a Federal, State, or local government (or any instrumentality of any of the foregoing) for 20 or more consecutive days, occurring as a result of the events associated with Small Business Administration Disaster Declaration 3364.

(b) STANDARD FOR APPROVAL- The Administrator shall approve (without regard to any requirements applicable under section 7(b) of the Small Business Act (15 U.S.C. 636(b))), a loan with respect to any application resubmitted under subsection (a) if the applicant has a debt coverage ratio, as attested to by a qualified, independent, third-party auditor, of not less than 1.15 for the applicant's last taxable year ending before the date of the submission of the original application. For purposes of determining the debt coverage ratio under this subsection, the Administrator shall not take into account any Federal or State tax lien or obligation other than a judgment lien.

(c) MINIMUM LOAN AMOUNT- The Administrator shall not approve a loan under this section for an amount that is less than 80 percent of the documented losses shown on the application submitted under subsection (a).

(d) COORDINATION WITH OTHER LOAN LIMITS- No loan made under this section shall be taken into account under section 7(b)(3)(E) of the Small Business Act (15 U.S.C. 636(b)(3)(E)).

END