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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4685 Introduced in House (IH)]

103d CONGRESS
  2d Session
                                H. R. 4685

    To authorize the establishment of a premier lending program for 
  participants in the certified development company program, and for 
                            other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             June 30, 1994

 Mr. LaFalce introduced the following bill; which was referred to the 
                      Committee on Small Business

_______________________________________________________________________

                                 A BILL

 
    To authorize the establishment of a premier lending program for 
  participants in the certified development company program, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, That this Act may be 
cited as the ``Premier Lenders Program Authorization Act of 1994''.
    (a) Title V of the Small Business Investment Act of 1958 (15 U.S.C. 
695 et seq.) is amended by inserting the following new section:

``SEC. 508. PREMIER LENDERS PROGRAM.

    ``(a) The Administration is authorized to establish a Premier 
Lenders Program for certified development companies which meet the 
requirements of subsection (b).
    ``(b) The Administration may designate a participant in accelerated 
lenders program as a premier lender if such company--
            ``(1) has been an active participant in the accelerated 
        lenders program for at least the last 12 months: Provided, That 
        prior to January 1, 1996, the Administration may waive this 
        provision if the applicant is qualified to participate in the 
        accelerated lenders program;
            ``(2) has a history of submitting to the Administration 
        adequately analyzed debenture guaranty application packages; 
        and
            ``(3) agrees to assume and to reimburse the Administration 
        for 5 percent of any loss sustained by the Administration on 
        account of default by the certified development company in the 
        payment of principal and interest on a debenture issued by such 
        company and guaranteed by the Administration under this 
        section.
    ``(c) Upon approval of an applicant as a premier lender, the 
certified development company shall establish a loss reserve in an 
amount equal to the anticipated losses to the certified development 
company pursuant to subsection (b)(3) based upon the historic loss rate 
on debentures issued by such company, or 3 percent of the aggregate 
principal amount of debentures issued by such company and guaranteed by 
the Administration under this section, whichever is greater. The loss 
reserve shall be comprised of segregated assets of the development 
company which shall be securitized in favor of the Administration or of 
such unqualified letters of credit or indemnity agreements from a third 
party as the Administration deems appropriate.
    ``(d) Upon designation and qualification of a company as a premier 
lender, and subject to such terms and conditions as the Administration 
may determine and notwithstanding the provisions of section 503(b)(6), 
the Administration may permit a premier lender to approve loans to be 
funded with the proceeds of and to authorize the guaranty of a 
debenture issued by such company. The approval by the premier lender 
shall be subject to the final approval as to eligibility of any such 
guaranty by the Administration pursuant to subsection 503(a) of this 
Act, but such final approval shall not include decisions by the company 
involving creditworthiness, loan closing, or compliance with legal 
requirements imposed by law or regulation.
    ``(e) The designation of a qualified State or local development 
company as a premier lender may be suspended or revoked if the 
Administration determines that the company--
            ``(1) has not continued to meet the criteria for 
        eligibility under subsection (b);
            ``(2) has not established or maintained the loss reserve 
        required under subsection (c); or
            ``(3) is failing to adhere to the Administration's rules 
        and regulations or is violating any other applicable provision 
        of law.
    ``(f) Suspension or revocation shall not affect any outstanding 
debenture guarantee.''.
    (b) The Administration shall promulgate such regulations to carry 
out this section within one hundred and eighty days of the date of 
enactment.
    (c) The Administration shall report to the Small Business Committee 
of the United States Senate and to the Small Business Committee of the 
United States House of Representatives within one year, and annually 
thereafter, on the implementation of this section, specifically 
including data on the number of development companies designated as 
premier lenders, their debenture guarantee volume, and the loss rate 
under this program, along with such other information as the 
Administration deems appropriate.
    (d) Section 508 of the Small Business Investment Act is repealed on 
October 1, 1999.

                                 <all>
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