I 

116TH CONGRESS 

2D SESSION H. R. 8199 

To amend the Small Business Act to enhance the Office of Credit Risk 

Management, to require the Administrator of the Small Business Administration to issue rules relating to environmental obligations of certified 

development companies, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 11, 2020 

Mr. BISHOP of North Carolina (for himself and Ms. CRAIG) introduced the 

following bill; which was referred to the Committee on Small Business 

A BILL 

To amend the Small Business Act to enhance the Office 

of Credit Risk Management, to require the Administrator 

of the Small Business Administration to issue rules relating to environmental obligations of certified development 

companies, 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 Credit Risk Man5 agement Improvement Act of 2020’’. 


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1 SEC. 2. ENHANCEMENTS TO THE OFFICE OF CREDIT RISK 

2 MANAGEMENT. 

3 Section 47 of the Small Business Act (15 U.S.C. 

4 657t) is amended— 

5 (1) by striking subsection (b) and inserting the 

6 following: 

7 ‘‘(b) DUTIES.—The Office— 

8 ‘‘(1) shall be responsible for— 

9 ‘‘(A) supervising— 

10 ‘‘(i) any lender making loans under 

11 section 7(a) (in this section referred to as 

12 a ‘7(a) lender’); 

13 ‘‘(ii) any Lending Partner or Inter14 mediary participant of the Administration 

15 in a lending program of the Office of Cap16 ital Access of the Administration; 

17 ‘‘(iii) any small business lending com18 pany or a non-Federally regulated lender 

19 without regard to the requirements of sec20 tion 23; and 

21 ‘‘(iv) any certified development com22 pany described under the program estab23 lished under title V of the Small Business 

24 Investment Act of 1958 (referred to in this 

25 section as a ‘certified development com26 pany’), as provided in subsection (k); and 


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1 ‘‘(B) conducting file reviews with respect 

2 to loan closings under the program established 

3 under title V of the Small Business Investment 

4 Act of 1958, as provided in subsection (j); and 

5 ‘‘(2) may— 

6 ‘‘(A) take formal and informal enforcement 

7 actions against a certified development com8 pany, as provided in subsection (l); and 

9 ‘‘(B) charge a certified development com10 pany a fee, as provided in subsection (m).’’; and 

11 (2) by adding at the end the following new sub12 sections: 

13 ‘‘(j) LOAN CLOSING FILE REVIEWS.—With respect 

14 to a loan closing under the program established under title 

15 V of the Small Business Investment Act of 1958, the Of16 fice shall be responsible for the following: 

17 ‘‘(1) Conducting a complete file review of a ran18 dom selection of all loan closings, the number, fre19 quency, and conduct of which shall be at the discre20 tion of the Office, to ensure program integrity, in21 cluding a review of the items listed on the Checklist 

22 for Complete File Review contained in the appro23 priate form of the Administration. 

24 ‘‘(2) Not later than 60 days after the date on 

25 which each complete file review conducted under 


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1 paragraph (1) is completed, preparing a written re2 port documenting the results of that review, which 

3 the Office shall send to— 

4 ‘‘(A) the applicable certified development 

5 company; 

6 ‘‘(B) the designated attorney that closed 

7 the loan for the certified development company; 

8 and 

9 ‘‘(C) the Commercial Loan Service Center. 

10 ‘‘(3) If a complete file review conducted under 

11 paragraph (1) reveals a deficiency that could result 

12 in a loss to the Administration, requiring the appli13 cable certified development company or the des14 ignated attorney to promptly correct the deficiency. 

15 ‘‘(k) SUPERVISION OF CERTIFIED DEVELOPMENT

16 COMPANIES.—With respect to the supervision of certified 

17 development companies— 

18 ‘‘(1) an employee of the Office shall— 

19 ‘‘(A) be present for, and supervise, the re20 view of any such company that is conducted by 

21 a contractor of the Office on the premises of 

22 the company; and 

23 ‘‘(B) supervise the review of any such com24 pany that is conducted by a contractor of the 


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1 Office that is not conducted on the premises of 

2 the company; and 

3 ‘‘(2) the Administrator shall— 

4 ‘‘(A) develop a timeline for the review by 

5 the Office of certified development companies 

6 and the submission of reports regarding those 

7 reviews, under which the Administrator shall— 

8 ‘‘(i) submit to a certified development 

9 company a written report of any review of 

10 the company not later than 90 days after 

11 the date on which the review is concluded; 

12 or 

13 ‘‘(ii) if the Administrator expects to 

14 submit the report after the end of the 90- 

15 day period described in clause (i), notify 

16 the company of the expected date of sub17 mission of the report and the reason for 

18 the delay; and 

19 ‘‘(B) if a response by a certified develop20 ment company is requested in a report sub21 mitted under subparagraph (A)(i), require the 

22 company to submit responses to the Adminis23 trator not later than 45 business days after the 

24 date on which the company receives the report. 


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1 ‘‘(l) ENFORCEMENT AUTHORITY AGAINST CER2 TIFIED DEVELOPMENT COMPANIES.— 

3 ‘‘(1) INFORMAL ENFORCEMENT AUTHORITY.— 

4 The Director may take an informal enforcement ac5 tion against a certified development company if the 

6 Director finds that the company has violated a stat7 utory or regulatory requirement or any requirement 

8 in a Standard Operating Procedures Manual or Pol9 icy Notice relating to a program or function of the 

10 Office of Capital Access. 

11 ‘‘(2) FORMAL ENFORCEMENT AUTHORITY.— 

12 ‘‘(A) IN GENERAL.—With the approval of 

13 the Lender Oversight Committee established 

14 under section 48, the Director may take a for15 mal enforcement action against any certified de16 velopment company if the Director finds that 

17 the company has violated— 

18 ‘‘(i) a statutory or regulatory require19 ment, including a requirement relating to 

20 the necessary funds for making loans when 

21 those funds are not made available to the 

22 company from private sources on reason23 able terms; or 

24 ‘‘(ii) any requirement described in a 

25 Standard Operating Procedures Manual or 


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1 Policy Notice relating to a program or 

2 function of the Office of Capital Access. 

3 ‘‘(B) ENFORCEMENT ACTIONS.—The deci4 sion to take an enforcement action against a 

5 certified development company under subpara6 graph (A) shall be based on the severity or fre7 quency of the violation and may include assess8 ing a civil monetary penalty against the com9 pany in an amount that is not greater than 

10 $250,000. 

11 ‘‘(3) FAILURE TO SUBMIT ANNUAL REPORT.— 

12 With respect to a certified development company 

13 that, as of the date that is 30 days after the date 

14 on which the company is required to submit any re15 port, fails to submit that report, the Director may— 

16 ‘‘(A) suspend the company from partici17 pating in the program established under title V 

18 of the Small Business Investment Act of 1958 

19 for a period that is not longer than 30 days; or 

20 ‘‘(B) impose a penalty on the company in 

21 an amount to be determined by the Director, 

22 except that the amount of the penalty shall be 

23 not more than $10,000. 

24 ‘‘(m) FEE AUTHORITY REGARDING CERTIFIED DE25 VELOPMENT COMPANIES.— 


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1 ‘‘(1) IN GENERAL.—Effective one year after the 

2 date of the enactment of this subsection, the Office 

3 may collect from each certified development com4 pany a fee, the amount of which— 

5 ‘‘(A) shall be determined on a graduated 

6 scale according to the size of the portfolio of 

7 the certified development company with respect 

8 to the program carried out under title V of the 

9 Small Business Investment Act of 1958; and 

10 ‘‘(B) shall not exceed the amount that is 1 

11 basis point with respect to the value of the 

12 portfolio described in subparagraph (A). 

13 ‘‘(2) PAYMENT.—A certified development com14 pany on which a fee is imposed under paragraph (1) 

15 shall pay the fee from the servicing fees collected by 

16 the development company pursuant to regulation.’’. 

17 SEC. 3. RULES RELATING TO OBLIGATIONS OF CERTIFIED 

18 DEVELOPMENT COMPANIES UNDER THE NA19 TIONAL ENVIRONMENTAL POLICY ACT. 

20 (a) IN GENERAL.—Not later than 180 days after the 

21 date of the enactment of this Act, the Administrator of 

22 the Small Business Administration shall issue rules to 

23 clarify the procedures necessary for an eligible certified 

24 development company to comply with the applicable reVerDate Sep 11 2014 01:46 Sep 12, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H8199.IH H8199

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1 quirements under National Environmental Policy Act of 

2 1969 (42 U.S.C. 4321 et seq.). 

3 (b) RULE OF CONSTRUCTION.—Nothing in this sec4 tion shall be construed to modify the requirements of the 

5 National Environmental Policy Act of 1969 (42 U.S.C. 

6 4321 et seq.). 

7 (c) ELIGIBLE CERTIFIED DEVELOPMENT COMPANY

8 DEFINED.—In this section, the term ‘‘eligible certified de9 velopment company’’ means a certified development com10 pany defined under title V of the Small Business Invest11 ment Act of 1958 (15 U.S.C. 695 et seq.) that receives 

12 assistance pursuant to such title. 

Æ 


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