I 

118TH CONGRESS 

2D SESSION H. R. 10246 

To amend the Small Business Investment Act of 1958 to improve the loan 

guaranty program, enhance the ability of small manufacturers to access 

affordable capital, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 21, 2024 

Ms. VELA ́ZQUEZ introduced the following bill; which was referred to the 

Committee on Small Business 

A BILL 

To amend the Small Business Investment Act of 1958 to 

improve the loan guaranty program, enhance the ability 

of small manufacturers to access affordable capital, and 

for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘504 Modernization and 

5 Small Manufacturer Enhancement Act of 2024’’. 


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1 SEC. 2. ADDITIONS TO POLICY GOALS FOR THE DEVELOP2 MENT COMPANY PROGRAM. 

3 Section 501(d)(3) of the Small Business Investment 

4 Act of 1958 (15 U.S.C. 695(d)(3)) is amended— 

5 (1) by redesignating subparagraphs (A) through 

6 (L) as subparagraphs (B) through (M), respectively; 

7 (2) by inserting before subparagraph (B), as so 

8 redesignated, the following: 

9 ‘‘(A) workforce development through work10 based or work-integrated training, which shall 

11 be satisfied by demonstrating that a small busi12 ness concern that is a subject of the project 

13 has— 

14 ‘‘(i) a documented in-house training 

15 program, the duration of which is not 

16 shorter than 12 weeks; or 

17 ‘‘(ii) entered into a contract with an 

18 entity— 

19 ‘‘(I) to provide trained applicants 

20 for any open position of employment 

21 at the small business concern; and 

22 ‘‘(II) that ensures that any appli23 cant provided to the small business 

24 concern under subclause (I) has un25 dergone not fewer than 12 weeks of 


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1 training that is relevant to the open 

2 position described in that subclause,’’; 

3 (3) by amending subparagraph (D), as so re4 designated, to read as follows: 

5 ‘‘(D) expansion of minority-owned, em6 ployee-owned, or women-owned business devel7 opment,’’; 

8 (4) in subparagraph (L), as so redesignated, by 

9 striking ‘‘producers, or’’ and inserting ‘‘producers,’’; 

10 (5) in subparagraph (M), as so redesignated, by 

11 striking the period at the end and inserting a 

12 comma; 

13 (6) by inserting after subparagraph (M), as so 

14 redesignated, the following: 

15 ‘‘(N) enhanced ability for small business 

16 concerns to reduce costs by using energy effi17 cient products and generating renewable en18 ergy, 

19 ‘‘(O) aid revitalizing of any area for which 

20 a disaster has been declared or determined 

21 under subparagraph (A), (B), (C), or (E) of 

22 section 7(b)(2) of the Small Business Act (15 

23 U.S.C. 636(b)(2)), or 

24 ‘‘(P) expansion of small business concerns 

25 with 10 or fewer employees.’’; and 


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1 (7) in the flush text following subparagraph 

2 (P), as added by paragraph (6), by striking ‘‘sub3 paragraphs (J) and (K)’’ and inserting ‘‘subpara4 graphs (K) and (L)’’. 

5 SEC. 3. INCREASE IN LOAN AMOUNTS FOR MANUFAC6 TURING LOANS. 

7 Section 502 of the Small Business Investment Act 

8 of 1958 (15 U.S.C. 696) is amended— 

9 (1) in the matter preceding paragraph (1), by 

10 striking ‘‘The Administration’’ and inserting the fol11 lowing: 

12 ‘‘(a) IN GENERAL.—The Administration’’; and 

13 (2) in subsection (a), as so designated— 

14 (A) in paragraph (2)(A)— 

15 (i) in the matter preceding clause (i), 

16 by striking ‘‘section’’ and inserting ‘‘sub17 section’’; and 

18 (ii) in clause (iii), by striking 

19 ‘‘$5,500,000’’ and inserting ‘‘$6,500,000’’; 

20 and 

21 (B) in paragraph (3)(A), by striking ‘‘this 

22 section’’ and inserting ‘‘this subsection’’. 


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1 SEC. 4. IMPROVEMENTS TO 504 LOAN CLOSING PROCE2 DURE. 

3 Title V of the Small Business Investment Act of 1958 

4 (15 U.S.C. 695 et seq.) is amended— 

5 (1) in section 502 (15 U.S.C. 696), as amended 

6 by this Act, by adding at the end the following: 

7 ‘‘(b) CLOSING.—An accredited lender certified com8 pany may take any of the following actions to facilitate 

9 the closing of a loan made under subsection (a): 

10 ‘‘(1) Reallocate the cost of the project with re11 spect to which the loan is made in an amount that 

12 is not more than 10 percent of the overall cost of 

13 the project. 

14 ‘‘(2) Correct any name that is applicable to the 

15 loan, including the name of any borrower, guarantor, 

16 eligible passive company described in paragraph 

17 (3)(A), and operating company described in para18 graph (3)(B). 

19 ‘‘(3) Add any of the following to receive pro20 ceeds of the loan: 

21 ‘‘(A) An eligible passive company that 

22 complies with section 120.111 of title 13, Code 

23 of Federal Regulations, or any successor regula24 tion. 

25 ‘‘(B) If an eligible passive company is 

26 added under subparagraph (A), an operating 


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1 company with respect to that eligible passive 

2 company. 

3 ‘‘(4) Correct the address of any property with 

4 respect to which the loan is made. 

5 ‘‘(5) Correct the name of any interim lender or 

6 third-party lender. 

7 ‘‘(6) Change any third-party lender or interim 

8 lender if that lender is a financial institution that is 

9 regulated by the Federal Government or a State 

10 government. 

11 ‘‘(7) Make a guarantor a co-borrower or a co12 borrower a guarantor. 

13 ‘‘(8) Add a guarantor that does not change 

14 ownership with respect to the loan. 

15 ‘‘(9) Reduce the amount of standby debt before 

16 the closing as a result of regularly scheduled pay17 ments. 

18 ‘‘(10) Reduce the cost of the project with re19 spect to which the loan is made. 

20 ‘‘(c) ACCREDITED LENDER CERTIFIED COMPANY

21 DEFINED.—In this section, the term ‘accredited lender 

22 certified company’ means a certified development company 

23 that meets the requirements under section 507(b), includ24 ing a certified development company that the AdministraVerDate Sep 11 2014 01:11 Dec 28, 2024 Jkt 059200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H10246.IH H10246

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1 tion has designated as an accredited lender under such 

2 section 507(b).’’; and 

3 (2) by adding at the end the following: 

4 ‘‘SEC. 511. CLOSING AND OVERSIGHT. 

5 ‘‘(a) SBA DISTRICT COUNSELS.—Beginning on the 

6 date that is 180 days after the date of enactment of this 

7 section, with respect to the program established under this 

8 title, district counsels of the Administration shall be sub9 ject to the same requirements, and shall have the same 

10 authority and responsibilities, as in effect with respect to 

11 that program on the day before the date of enactment of 

12 this section, except that— 

13 ‘‘(1) the Office of Credit Risk Management of 

14 the Administration shall have the responsibility for 

15 all duties relating to conducting file reviews of loans 

16 made under this title; and 

17 ‘‘(2) district counsels of the Administration 

18 shall not have any responsibility relating to the re19 view of closing packages with respect to a loan made 

20 under this title. 

21 ‘‘(b) DESIGNATED ATTORNEYS.—For the purposes of 

22 this title, the following provisions and requirements shall 

23 apply with respect to a designated attorney of a certified 

24 development company: 


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1 ‘‘(1) A designated attorney that meets the re2 quirements determined under paragraph (2) shall be 

3 responsible for certifying documents relating to the 

4 closing of a loan described in this title. 

5 ‘‘(2) The Administrator may determine any 

6 continuing education requirements that the des7 ignated attorney shall be required to satisfy in order 

8 to be permitted to close a loan made under this title. 

9 ‘‘(3) If, as of the date of enactment of this sec10 tion, a certified development company does not have 

11 a designated attorney, during the 180-day period be12 ginning on that date of enactment, the certified de13 velopment company may identify such an attorney, 

14 subject to the approval of the Administrator.’’. 

15 SEC. 5. CERTIFIED DEVELOPMENT COMPANY LOANS FOR 

16 SMALL MANUFACTURERS. 

17 (a) CONTRIBUTION REQUIREMENT.—Section 

18 502(a)(3)(C) of the Small Business Investment Act of 

19 1958 (15 U.S.C. 696(a)(3)(C)), as so designated by this 

20 Act, is amended— 

21 (1) by redesignating clauses (i), (ii), (iii), and 

22 (iv) as subclauses (I), (II), (III), and (IV), respec23 tively, and adjusting the margins of such subclauses 

24 accordingly; 


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1 (2) by inserting before subclause (I), as so re2 designated, the following: 

3 ‘‘(i) for a small business concern that 

4 is not a small manufacturer (as defined in 

5 section 501(e)(7))—’’; 

6 (3) in subclause (III), as so redesignated, by 

7 striking ‘‘clauses (i) and (ii)’’ and inserting ‘‘sub8 clauses (I) and (II)’’; 

9 (4) in subclause (IV) as so redesignated, by 

10 striking the period at the end and inserting ‘‘; or’’; 

11 and 

12 (5) by adding at the end the following: 

13 ‘‘(ii) for a small manufacturer (as de14 fined in section 501(e)(7))— 

15 ‘‘(I) at least 5 percent of the 

16 total cost of the project financed, if 

17 the small business concern has been in 

18 operation for a period of 2 years or 

19 less; 

20 ‘‘(II) at least 5 percent of the 

21 total cost of the project financed, if 

22 the project involves a limited or single 

23 purpose building or structure; 

24 ‘‘(III) at least 10 percent of the 

25 total cost of the project financed if the 


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1 project involves both of the conditions 

2 set forth in subclauses (I) and (II); or 

3 ‘‘(IV) at least 5 percent of the 

4 total cost of the project financed, in 

5 all other circumstances, at the discre6 tion of the development company.’’. 

7 (b) COLLATERAL REQUIREMENTS.—Section 

8 502(a)(3)(E)(i) of the Small Business Investment Act of 

9 1958 (15 U.S.C. 696(a)(3)(E)(i)), as so designated by this 

10 Act, is amended by adding at the end the following: ‘‘Addi11 tional collateral shall not be required in the case of a small 

12 manufacturer (as defined in section 501(e)(7)).’’. 

13 (c) DEBT REFINANCING.—Section 502(a)(7)(B) of 

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

15 696(a)(7)(B)), as so designated by this Act, is amended— 

16 (1) in the matter preceding clause (i), by insert17 ing ‘‘(or in the case of a small manufacturer (as de18 fined in section 501(e)(7)), that does not exceed 100 

19 percent of the project cost of the expansion)’’ after 

20 ‘‘cost of the expansion’’; 

21 (2) in clause (v), by adding ‘‘and’’ at the end; 

22 (3) by striking clause (vi); and 

23 (4) by redesignating clause (vii) as clause (vi). 

24 (d) AMOUNT OF GUARANTEED DEBENTURE.—Sec25 tion 503(a) of the Small Business Investment Act of 1958 


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1 (15 U.S.C. 697(a)) is amended by adding at the end the 

2 following: 

3 ‘‘(5) Any debenture issued by a State or local devel4 opment company to a small manufacturer (as defined in 

5 section 501(e)(7)) with respect to which a guarantee is 

6 made under this subsection shall be in an amount equal 

7 to not more than 50 percent of the cost of the project 

8 with respect to which such debenture is issued, without 

9 regard to whether good cause has been shown.’’. 

10 SEC. 6. ASSISTANCE FOR SMALL MANUFACTURERS. 

11 Title V of the Small Business Investment Act of 1958 

12 (15 U.S.C. 695 et seq.), as amended by this Act, is amend13 ed by adding at the end the following: 

14 ‘‘SEC. 512. ASSISTANCE FOR SMALL MANUFACTURERS. 

15 ‘‘(a) IN GENERAL.—The Administrator shall ensure 

16 that each district office of the Administration partners 

17 with not less than 1 resource partner to provide training 

18 to small business concerns assigned a North American In19 dustry Classification System code for manufacturing on 

20 obtaining assistance under the program carried out under 

21 this title, including with respect to the application process 

22 under that program and partnering with development 

23 companies under this title. 

24 ‘‘(b) RESOURCE PARTNER DEFINED.—In this sec25 tion, the term ‘resource partner’ means— 


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1 ‘‘(1) a small business development center, as 

2 defined in section 3 of the Small Business Act (15 

3 U.S.C. 632); 

4 ‘‘(2) a women’s business center described in 

5 section 29 of such Act (15 U.S.C. 656); 

6 ‘‘(3) a chapter of the Service Corps of Retired 

7 Executives established under section 8(b)(1)(B) of 

8 such Act (15 U.S.C. 637(b)(1)(B)); and 

9 ‘‘(4) a Veteran Business Outreach Center de10 scribed in section 32 of such Act (15 U.S.C. 

11 657b).’’. 

12 SEC. 7. LEASING RULES FOR NEW FACILITIES AND EXIST13 ING BUILDINGS. 

14 (a) IN GENERAL.—Section 502(a) of the Small Busi15 ness Investment Act of 1958 (15 U.S.C. 696(a)), as so 

16 designated by this Act, is amended by striking paragraphs 

17 (4) and (5) and inserting the following: 

18 ‘‘(4) NEW FACILITIES.— 

19 ‘‘(A) IN GENERAL.—With respect to a 

20 project to construct a new facility, an assisted 

21 small business concern may permanently lease 

22 not more than 20 percent of the project to com23 mercial or residential tenants if such concern— 

24 ‘‘(i) permanently occupies and uses 

25 not less than 60 percent of the project; 


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1 ‘‘(ii) plans to occupy and use an addi2 tional portion of the project that is not 

3 permanently leased not later than 3 years 

4 after receipt of assistance under this sec5 tion; and 

6 ‘‘(iii) plans to permanently occupy and 

7 use 80 percent of the project not later than 

8 10 years after receipt of such assistance. 

9 ‘‘(B) SMALL MANUFACTURERS.—With re10 spect to an assisted small business concern that 

11 is a small manufacturer (as defined in section 

12 501(e)(7)), subparagraph (A)(i) shall apply 

13 with ‘50 percent’ substituted for ‘60 percent’. 

14 ‘‘(5) EXISTING BUILDINGS.—With respect to a 

15 project to acquire, renovate, or reconstruct an exist16 ing building, the following shall apply: 

17 ‘‘(A) OCCUPANCY REQUIREMENTS.—The 

18 assisted small business concern may perma19 nently lease not more than 50 percent of the 

20 project if the concern permanently occupies and 

21 uses not less than 50 percent of the project. 

22 ‘‘(B) EXCEPTION.—The assisted small 

23 business concern may permanently lease more 

24 than 50 percent of the project to commercial or 

25 residential tenants if— 


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1 ‘‘(i) such concern— 

2 ‘‘(I) has occupied and used the 

3 existing building for a consecutive 12- 

4 month period before submitting an 

5 application for assistance under this 

6 section; 

7 ‘‘(II) agrees to permanently use 

8 less than 50 percent of the existing 

9 building and permanently lease more 

10 than 50 percent for a consecutive 12- 

11 month period after receiving such as12 sistance; and 

13 ‘‘(III) affirms that the existing 

14 building is appropriate for current 

15 and reasonably anticipated needs; and 

16 ‘‘(ii) the development company assist17 ing such project— 

18 ‘‘(I) provides written notice to 

19 the Administrator on the date on 

20 which the development company closes 

21 the loan for such project; and 

22 ‘‘(II) once each year during the 

23 first 5 years of the loan, and once 

24 every 2 years for the remainder of the 

25 loan— 


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1 ‘‘(aa) conducts an examina2 tion of the assisted small busi3 ness concern to ensure the con4 cern is not a real estate develop5 ment business; and 

6 ‘‘(bb) files with the Adminis7 trator an anti-investor certifi8 cation signed by the development 

9 company and the assisted small 

10 business concern. 

11 ‘‘(C) LEASE TERM.—Any residential lease 

12 made under this paragraph shall be for a term 

13 of not more than 1 year, and any commercial 

14 lease made under this paragraph shall be for a 

15 term of not more than 5 years.’’. 

16 (b) REPORT.—Not later than 5 years after the date 

17 of enactment of this Act, the Administrator of the Small 

18 Business Administration shall submit to Congress a report 

19 analyzing the impact of the amendments made by this sec20 tion on access to capital for small business concerns (as 

21 defined in section 3 of the Small Business Act (15 U.S.C. 

22 632)), and recommending whether similar notice, exam23 ination, and certifications requirements should be made to 


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1 the program established under section 7(a) of the Small 

2 Business Act (15 U.S.C. 636(a)). 

Æ 


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