To amend the Small Business Act to make improvements to the general business loan program, and for other purposes.

Summary: Amends the Small Business Act to authorize the Small Business Administration (SBA) to guarantee a general business loan made by a bank or other financial institution to a small business in the amount of: (1) 75 percent of the outstanding balance of such loan, if such balance exceeds $150,000 (currently $100,000); and (2) 80 percent of the outstanding balance of less than $150,000 (also currently $100,000).  Prohibits any such loan from being made to a borrower if the total amount outstanding and committed to the borrower from the business loan and SBA investment funds would exceed $1 million (currently $750,000). 
Makes current provisions requiring the payment of accrued interest on defaulted guaranteed loans inapplicable to loans made on or after October 1, 1999. 
Requires a borrower who prepays any loan guaranteed by the SBA to remit to the SBA a subsidy recoupment fee (calculated under this Act) if: (1) the loan is for a period of less than 15 years; (2) the prepayment is voluntary; (3) the amount of prepayment in any calendar year is more than 25 percent of the outstanding loan balance; and (4) the prepayment is made within the first three years after disbursement of the loan proceeds. 
Revises loan guarantee fee amounts.  Authorizes lenders participating in an SBA program to retain no more than 25 percent of such fee with respect to any loan not exceeding $150,000. 
Authorizes a borrower to permanently lease to one or more tenants not more than 20 percent of any property constructed using guaranteed loan proceeds, as long as the borrower permanently occupies and uses not less than 60 percent of the total business space in the property.

SECTION 1. LEVELS OF PARTICIPATION.

    Section 7(a)(2)(A) of the Small Business Act (15 U.S.C. 
636(a)(2)(A)) is amended--
            (1) in paragraph (i) by striking ``$100,000'' and inserting 
        ``$150,000''; and
            (2) in paragraph (ii) by striking ``$100,000'' and 
        inserting ``$150,000''.

SEC. 2. LOAN AMOUNTS.

    Section 7(a)(3)(A) of the Small Business Act (15 U.S.C. 
636(a)(3)(A)) is amended by striking ``$750,000,'' and inserting, 
``$1,000,000 (or if the gross loan amount would exceed $2,000,000),''.

SEC. 3. INTEREST ON DEFAULTED LOANS.

    Subparagraph (B) of section 7(a)(4) of the Small Business Act (15 
U.S.C. 636(a)(4)) is amended by adding at the end the following:
                            ``(iii) Applicability.--Clauses (i) and 
                        (ii) shall not apply to loans made on or after 
                        October 1, 1999.''.

SEC. 4. PREPAYMENT OF LOANS.

    (a) In General.--Section 7(a)(4) of the Small Business Act (15 
U.S.C. 636(a)(4)) is amended--
            (1) by striking ``(4) Interest rates and fees.--'' and 
        inserting ``(4) Interest rates and prepayment charges.--''; and
            (2) by adding at the end the following:
                    ``(C) Prepayment charges.--
                            ``(i) In general.--A borrower who prepays 
                        any loan guaranteed under this subsection shall 
                        remit to the Administration a subsidy 
                        recoupment fee calculated in accordance with 
                        clause (ii) if--
                                    ``(I) the loan is for a term of not 
                                less than 15 years;
                                    ``(II) the prepayment is voluntary;
                                    ``(III) the amount of prepayment in 
                                any calendar year is more than 25 
                                percent of the outstanding balance of 
                                the loan; and
                                    ``(IV) the prepayment is made 
                                within the first 3 years after 
                                disbursement of the loan proceeds.
                            ``(ii) Subsidy recoupment fee.--The subsidy 
                        recoupment fee charged under clause (i) shall 
                        be--
                                    ``(I) 5 percent of the amount of 
                                prepayment, if the borrower prepays 
                                during the first year after 
                                disbursement;
                                    ``(II) 3 percent of the amount of 
                                prepayment, if the borrower prepays 
                                during the second year after 
                                disbursement; and
                                    ``(III) 1 percent of the amount of 
                                prepayment, if the borrower prepays 
                                during the third year after 
                                disbursement.''.

SEC. 5. 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) Exception for certain loans.--
                            ``(i) In general.--Notwithstanding 
                        subparagraph (A), if the total deferred 
                        participation share of a loan guaranteed under 
                        this subsection is less than or equal to 
                        $120,000, the guarantee fee collected under 
                        subparagraph (A) shall be in an amount equal to 
                        2 percent of the total deferred participation 
                        share of the loan.
                            ``(ii) Retention of fees.--Lenders 
                        participating in the programs established under 
                        this subsection may retain not more than 25 
                        percent of the fee collected in accordance with 
                        this subparagraph with respect to any loan not 
                        exceeding $150,000 in gross loan amount.''.

SEC. 6. LEASE TERMS.

    Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is 
further amended by adding at the end the following:
            ``(28) Leasing.--In addition to such other lease 
        arrangements as may be authorized by the Administration, a 
        borrower may permanently lease to one or more tenants not more 
        than 20 percent of any property constructed with the proceeds 
        of a loan guaranteed under this subsection, if the borrower 
        permanently occupies and uses not less than 60 percent of the 
        total business space in the property.''.

            Passed the House of Representatives August 2, 1999.

            Attest:

                                                 JEFF TRANDAHL,

                                                                 Clerk.

                              By Martha C. Morrison,

                                                          Deputy Clerk.