IV

106TH CONGRESS

2D SESSION H. RES. 533

Providing for the concurrence by the House with an amendment in the

amendment of the Senate to H.R. 2614.

IN THE HOUSE OF REPRESENTATIVES

JUNE 27, 2000

Mr. TALENT submitted the following resolution; which was considered and

agreed to

RESOLUTION

Providing for the concurrence by the House with an

amendment in the amendment of the Senate to H.R. 2614.

1 Resolved, That upon the adoption of this resolution

2 the House shall be considered to have taken from the

3 Speaker’s table the bill H.R. 2614, with the amendment

4 of the Senate thereto, and to have concurred in the

5 amendment of the Senate with an amendment as follows:

6 In lieu of the matter proposed to be inserted by the

7 amendment of the Senate, insert the following:

8 SECTION 1. SHORT TITLE.

9 This Act may be cited as the ‘‘Certified Development

10 Company Program Improvements Act of 2000’’.
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1 SEC. 2. WOMEN-OWNED BUSINESSES.

2 Section 501(d)(3)(C) of the Small Business Invest3 ment Act of 1958 (15 U.S.C. 695(d)(3)(C)) is amended

4 by inserting before the comma ‘‘or women-owned business

5 development’’.

6 SEC. 3. MAXIMUM DEBENTURE SIZE.

7 Section 502(2) of the Small Business Investment Act

8 of 1958 (15 U.S.C. 696(2)) is amended to read as follows:

9 ‘‘(2) LOAN LIMITS.—Loans made by the Ad10 ministration under this section shall be limited to

11 $1,000,000 for each such identifiable small business

12 concern, other than loans meeting the criteria speci13 fied in section 501(d)(3), which shall be limited to

14 $1,300,000 for each such identifiable small business

15 concern.’’.

16 SEC. 4. FEES.

17 Section 503(f) of the Small Business Investment Act

18 of 1958 (15 U.S.C. 697(f)) is amended to read as follows:

19 ‘‘(f) EFFECTIVE DATE.—The fees authorized by sub20 sections (b) and (d) shall apply to any financing approved

21 by the Administration during the period beginning on Oc22 tober 1, 1996 and ending on September 30, 2003.’’.

23 SEC. 5. PREMIER CERTIFIED LENDERS PROGRAM.

24 Section 217(b) of the Small Business Administration

25 Reauthorization and Amendments Act of 1994 (15 U.S.C.

26 697e note) is repealed.
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1 SEC. 6. SALE OF CERTAIN DEFAULTED LOANS.

2 Section 508 of the Small Business Investment Act

3 of 1958 (15 U.S.C. 697e) is amended—

4 (1) in subsection (a), by striking ‘‘On a pilot

5 program basis, the’’ and inserting ‘‘The’’;

6 (2) by redesignating subsections (d) though (i)

7 as subsections (e) though (j), respectively;

8 (3) in subsection (f) (as redesignated by para9 graph (2)), by striking ‘‘subsection (f)’’ and insert10 ing ‘‘subsection (g)’’;

11 (4) in subsection (h) (as redesignated by para12 graph (2)), by striking ‘‘subsection (f)’’ and insert13 ing ‘‘subsection (g)’’; and

14 (5) by inserting after subsection (c) the fol15 lowing:

16 ‘‘(d) SALE OF CERTAIN DEFAULTED LOANS.—

17 ‘‘(1) NOTICE.—

18 ‘‘(A) IN GENERAL.—If, upon default in re19 payment, the Administration acquires a loan

20 guaranteed under this section and identifies

21 such loan for inclusion in a bulk asset sale of

22 defaulted or repurchased loans or other

23 financings, the Administration shall give prior

24 notice thereof to any certified development com25 pany that has a contingent liability under this

26 section.
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1 ‘‘(B) TIMING.—The notice required by

2 subparagraph (A) shall be given to the certified

3 development company as soon as possible after

4 the financing is identified, but not later than 90

5 days before the date on which the Administra6 tion first makes any record on such financing

7 available for examination by prospective pur8 chasers prior to its offering in a package of

9 loans for bulk sale.

10 ‘‘(2) LIMITATIONS.—The Administration may

11 not offer any loan described in paragraph (1)(A) as

12 part of a bulk sale, unless the Administration—

13 ‘‘(A) provides prospective purchasers with

14 the opportunity to examine the records of the

15 Administration with respect to such loan; and

16 ‘‘(B) provides the notice required by para17 graph (1).’’.

18 SEC. 7. LOAN LIQUIDATION.

19 (a) LIQUIDATION AND FORECLOSURE.—Title V of

20 the Small Business Investment Act of 1958 (15 U.S.C.

21 695 et seq.) is amended by adding at the end the fol22 lowing:

23 ‘‘SEC. 510. FORECLOSURE AND LIQUIDATION OF LOANS.

24 ‘‘(a) DELEGATION OF AUTHORITY.—In accordance

25 with this section, the Administration shall delegate to any
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1 qualified State or local development company (as defined

2 in section 503(e)) that meets the eligibility requirements

3 of subsection (b)(1) of this section the authority to fore4 close and liquidate, or to otherwise treat in accordance

5 with this section, defaulted loans in its portfolio that are

6 funded with the proceeds of debentures guaranteed by the

7 Administration under section 503.

8 ‘‘(b) ELIGIBILITY FOR DELEGATION.—

9 ‘‘(1) REQUIREMENTS.—A qualified State or

10 local development company shall be eligible for a del11 egation of authority under subsection (a) if—

12 ‘‘(A) the company—

13 ‘‘(i) has participated in the loan liq14 uidation pilot program established by the

15 Small Business Programs Improvement

16 Act of 1996 (15 U.S.C. 695 note), as in

17 effect on the day before the date of

18 issuance of final regulations by the Admin19 istration implementing this section;

20 ‘‘(ii) is participating in the Premier

21 Certified Lenders Program under section

22 508; or

23 ‘‘(iii) during the 3 fiscal years imme24 diately prior to seeking such a delegation,

25 has made an average of not fewer than 10
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1 loans per year that are funded with the

2 proceeds of debentures guaranteed under

3 section 503; and

4 ‘‘(B) the company—

5 ‘‘(i) has 1 or more employees—

6 ‘‘(I) with not less than 2 years of

7 substantive, decision-making experi8 ence in administering the liquidation

9 and workout of problem loans secured

10 in a manner substantially similar to

11 loans funded with the proceeds of de12 bentures guaranteed under section

13 503; and

14 ‘‘(II) who have completed a train15 ing program on loan liquidation devel16 oped by the Administration in con17 junction with qualified State and local

18 development companies that meet the

19 requirements of this paragraph; or

20 ‘‘(ii) submits to the Administration

21 documentation demonstrating that the

22 company has contracted with a qualified

23 third-party to perform any liquidation ac24 tivities and secures the approval of the

25 contract by the Administration with re-
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1 spect to the qualifications of the contractor

2 and the terms and conditions of liquidation

3 activities.

4 ‘‘(2) CONFIRMATION.—On request, the Admin5 istration shall examine the qualifications of any com6 pany described in subsection (a) to determine if such

7 company is eligible for the delegation of authority

8 under this section. If the Administration determines

9 that a company is not eligible, the Administration

10 shall provide the company with the reasons for such

11 ineligibility.

12 ‘‘(c) SCOPE OF DELEGATED AUTHORITY.—

13 ‘‘(1) IN GENERAL.—Each qualified State or

14 local development company to which the Administra15 tion delegates authority under subsection (a) may,

16 with respect to any loan described in subsection

17 (a)—

18 ‘‘(A) perform all liquidation and fore19 closure functions, including the purchase in ac20 cordance with this subsection of any other in21 debtedness secured by the property securing the

22 loan, in a reasonable and sound manner, ac23 cording to commercially accepted practices, pur24 suant to a liquidation plan approved in advance

25 by the Administration under paragraph (2)(A);
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1 ‘‘(B) litigate any matter relating to the

2 performance of the functions described in sub3 paragraph (A), except that the Administration

4 may—

5 ‘‘(i) defend or bring any claim if—

6 ‘‘(I) the outcome of the litigation

7 may adversely affect management by

8 the Administration of the loan pro9 gram established under section 502;

10 or

11 ‘‘(II) the Administration is enti12 tled to legal remedies not available to

13 a qualified State or local development

14 company, and such remedies will ben15 efit either the Administration or the

16 qualified State or local development

17 company; or

18 ‘‘(ii) oversee the conduct of any such

19 litigation; and

20 ‘‘(C) take other appropriate actions to

21 mitigate loan losses in lieu of total liquidation

22 or foreclosure, including the restructuring of a

23 loan in accordance with prudent loan servicing

24 practices and pursuant to a workout plan ap-
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1 proved in advance by the Administration under

2 paragraph (2)(C).

3 ‘‘(2) ADMINISTRATION APPROVAL.—

4 ‘‘(A) LIQUIDATION PLAN.—

5 ‘‘(i) IN GENERAL.—Before carrying

6 out functions described in paragraph

7 (1)(A), a qualified State or local develop8 ment company shall submit to the Admin9 istration a proposed liquidation plan.

10 ‘‘(ii) ADMINISTRATION ACTION ON

11 PLAN.—

12 ‘‘(I) TIMING.—Not later than 15

13 business days after a liquidation plan

14 is received by the Administration

15 under clause (i), the Administration

16 shall approve or reject the plan.

17 ‘‘(II) NOTICE OF NO DECISION.—

18 With respect to any liquidation plan

19 that cannot be approved or denied

20 within the 15-day period required by

21 subclause (I), the Administration

22 shall, during such period, provide no23 tice in accordance with subparagraph

24 (E) to the company that submitted

25 the plan.
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1 ‘‘(iii) ROUTINE ACTIONS.—In carrying

2 out functions described in paragraph

3 (1)(A), a qualified State or local develop4 ment company may undertake any routine

5 action not addressed in a liquidation plan

6 without obtaining additional approval from

7 the Administration.

8 ‘‘(B) PURCHASE OF INDEBTEDNESS.—

9 ‘‘(i) IN GENERAL.—In carrying out

10 functions described in paragraph (1)(A), a

11 qualified State or local development com12 pany shall submit to the Administration a

13 request for written approval before com14 mitting the Administration to the purchase

15 of any other indebtedness secured by the

16 property securing a defaulted loan.

17 ‘‘(ii) ADMINISTRATION ACTION ON RE18 QUEST.—

19 ‘‘(I) TIMING.—Not later than 15

20 business days after receiving a request

21 under clause (i), the Administration

22 shall approve or deny the request.

23 ‘‘(II) NOTICE OF NO DECISION.—

24 With respect to any request that can25 not be approved or denied within the
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1 15-day period required by subclause

2 (I), the Administration shall, during

3 such period, provide notice in accord4 ance with subparagraph (E) to the

5 company that submitted the request.

6 ‘‘(C) WORKOUT PLAN.—

7 ‘‘(i) IN GENERAL.—In carrying out

8 functions described in paragraph (1)(C), a

9 qualified State or local development com10 pany shall submit to the Administration a

11 proposed workout plan.

12 ‘‘(ii) ADMINISTRATION ACTION ON

13 PLAN.—

14 ‘‘(I) TIMING.—Not later than 15

15 business days after a workout plan is

16 received by the Administration under

17 clause (i), the Administration shall

18 approve or reject the plan.

19 ‘‘(II) NOTICE OF NO DECISION.—

20 With respect to any workout plan that

21 cannot be approved or denied within

22 the 15-day period required by sub23 clause (I), the Administration shall,

24 during such period, provide notice in
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1 accordance with subparagraph (E) to

2 the company that submitted the plan.

3 ‘‘(D) COMPROMISE OF INDEBTEDNESS.—

4 In carrying out functions described in para5 graph (1)(A), a qualified State or local develop6 ment company may—

7 ‘‘(i) consider an offer made by an obli8 gor to compromise the debt for less than

9 the full amount owing; and

10 ‘‘(ii) pursuant to such an offer, re11 lease any obligor or other party contin12 gently liable, if the company secures the

13 written approval of the Administration.

14 ‘‘(E) CONTENTS OF NOTICE OF NO DECI15 SION.—Any notice provided by the Administra16 tion under subparagraph (A)(ii)(II), (B)(ii)(II),

17 or (C)(ii)(II)—

18 ‘‘(i) shall be in writing;

19 ‘‘(ii) shall state the specific reason for

20 the inability of the Administration to act

21 on the subject plan or request;

22 ‘‘(iii) shall include an estimate of the

23 additional time required by the Adminis24 tration to act on the plan or request; and
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1 ‘‘(iv) if the Administration cannot act

2 because insufficient information or docu3 mentation was provided by the company

4 submitting the plan or request, shall speci5 fy the nature of such additional informa6 tion or documentation.

7 ‘‘(3) CONFLICT OF INTEREST.—In carrying out

8 functions described in paragraph (1), a qualified

9 State or local development company shall take no ac10 tion that would result in an actual or apparent con11 flict of interest between the company (or any em12 ployee of the company) and any third party lender

13 (or any associate of a third party lender) or any

14 other person participating in a liquidation, fore15 closure, or loss mitigation action.

16 ‘‘(d) SUSPENSION OR REVOCATION OF AUTHOR17 ITY.—The Administration may revoke or suspend a dele18 gation of authority under this section to any qualified

19 State or local development company, if the Administration

20 determines that the company—

21 ‘‘(1) does not meet the requirements of sub22 section (b)(1);

23 ‘‘(2) has violated any applicable rule or regula24 tion of the Administration or any other applicable

25 provision of law; or
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1 ‘‘(3) has failed to comply with any reporting re2 quirement that may be established by the Adminis3 tration relating to carrying out functions described

4 in subsection (c)(1).

5 ‘‘(e) REPORT.—

6 ‘‘(1) IN GENERAL.—Based on information pro7 vided by qualified State and local development com8 panies and the Administration, the Administration

9 shall annually submit to the Committees on Small

10 Business of the House of Representatives and the

11 Senate a report on the results of delegation of au12 thority under this section.

13 ‘‘(2) CONTENTS.—Each report submitted under

14 paragraph (1) shall include—

15 ‘‘(A) with respect to each loan foreclosed

16 or liquidated by a qualified State or local devel17 opment company under this section, or for

18 which losses were otherwise mitigated by the

19 company pursuant to a workout plan under this

20 section—

21 ‘‘(i) the total cost of the project fi22 nanced with the loan;

23 ‘‘(ii) the total original dollar amount

24 guaranteed by the Administration;
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1 ‘‘(iii) the total dollar amount of the

2 loan at the time of liquidation, foreclosure,

3 or mitigation of loss;

4 ‘‘(iv) the total dollar losses resulting

5 from the liquidation, foreclosure, or mitiga6 tion of loss; and

7 ‘‘(v) the total recoveries resulting

8 from the liquidation, foreclosure, or mitiga9 tion of loss, both as a percentage of the

10 amount guaranteed and the total cost of

11 the project financed;

12 ‘‘(B) with respect to each qualified State

13 or local development company to which author14 ity is delegated under this section, the totals of

15 each of the amounts described in clauses (i)

16 through (v) of subparagraph (A);

17 ‘‘(C) with respect to all loans subject to

18 foreclosure, liquidation, or mitigation under this

19 section, the totals of each of the amounts de20 scribed in clauses (i) through (v) of subpara21 graph (A);

22 ‘‘(D) a comparison between—

23 ‘‘(i) the information provided under

24 subparagraph (C) with respect to the 12-
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1 month period preceding the date on which

2 the report is submitted; and

3 ‘‘(ii) the same information with re4 spect to loans foreclosed and liquidated, or

5 otherwise treated, by the Administration

6 during the same period; and

7 ‘‘(E) the number of times that the Admin8 istration has failed to approve or reject a liq9 uidation plan in accordance with subsection

10 (c)(2)(A) or a workout plan in accordance with

11 subsection (c)(2)(C), or to approve or deny a

12 request for purchase of indebtedness under sub13 section (c)(2)(B), including specific information

14 regarding the reasons for the failure of the Ad15 ministration and any delay that resulted.’’.

16 (b) REGULATIONS.—

17 (1) IN GENERAL.—Not later than 150 days

18 after the date of enactment of this Act, the Adminis19 trator shall issue such regulations as may be nec20 essary to carry out section 510 of the Small Busi21 ness Investment Act of 1958, as added by subsection

22 (a) of this section.

23 (2) TERMINATION OF PILOT PROGRAM.—Effec24 tive on the date on which final regulations are issued

25 under paragraph (1), section 204 of the Small Busi-
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1 ness Programs Improvement Act of 1996 (15 U.S.C.

2 695 note) shall cease to have legal effect.

3 SEC. 8. FUNDING LEVELS FOR CERTAIN FINANCINGS

4 UNDER THE SMALL BUSINESS INVESTMENT

5 ACT OF 1958.

6 Section 20 of the Small Business Act (15 U.S.C. 631

7 note) is amended by adding at the end the following:

8 ‘‘(g) PROGRAM LEVELS FOR CERTAIN SMALL BUSI9 NESS INVESTMENT ACT OF 1958 FINANCINGS.—The fol10 lowing program levels are authorized for financings under

11 section 504 of the Small Business Investment Act of 1958:

12 ‘‘(1) $4,000,000,000 for fiscal year 2001.

13 ‘‘(2) $5,000,000,000 for fiscal year 2002.

14 ‘‘(3) $6,000,000,000 for fiscal year 2003.’’.

Æ