IIB 

116TH CONGRESS 

2D SESSION H. R. 8199 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 7, 2020 

Received; read twice and referred to the Committee on Small Business and 

Entrepreneurship 

AN ACT 

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, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘504 Credit Risk Man3 agement Improvement Act of 2020’’. 

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

5 MANAGEMENT. 

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

7 657t) is amended— 

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

9 following: 

10 ‘‘(b) DUTIES.—The Office— 

11 ‘‘(1) shall be responsible for— 

12 ‘‘(A) supervising— 

13 ‘‘(i) any lender making loans under 

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

15 a ‘7(a) lender’); 

16 ‘‘(ii) any Lending Partner or Inter17 mediary participant of the Administration 

18 in a lending program of the Office of Cap19 ital Access of the Administration; 

20 ‘‘(iii) any small business lending com21 pany or a non-Federally regulated lender 

22 without regard to the requirements of sec23 tion 23; and 

24 ‘‘(iv) any certified development com25 pany described under the program estab26 lished under title V of the Small Business 


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1 Investment Act of 1958 (referred to in this 

2 section as a ‘certified development com3 pany’), as provided in subsection (k); and 

4 ‘‘(B) conducting file reviews with respect 

5 to loan closings under the program established 

6 under title V of the Small Business Investment 

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

8 ‘‘(2) may— 

9 ‘‘(A) take formal and informal enforcement 

10 actions against a certified development com11 pany, as provided in subsection (l); and 

12 ‘‘(B) charge a certified development com13 pany a fee, as provided in subsection (m).’’; and 

14 (2) by adding at the end the following new sub15 sections: 

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

17 to a loan closing under the program established under title 

18 V of the Small Business Investment Act of 1958, the Of19 fice shall be responsible for the following: 

20 ‘‘(1) Conducting a complete file review of a ran21 dom selection of all loan closings, the number, fre22 quency, and conduct of which shall be at the discre23 tion of the Office, to ensure program integrity, in24 cluding a review of the items listed on the Checklist 


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1 for Complete File Review contained in the appro2 priate form of the Administration. 

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

4 which each complete file review conducted under 

5 paragraph (1) is completed, preparing a written re6 port documenting the results of that review, which 

7 the Office shall send to— 

8 ‘‘(A) the applicable certified development 

9 company; 

10 ‘‘(B) the designated attorney that closed 

11 the loan for the certified development company; 

12 and 

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

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

15 paragraph (1) reveals a deficiency that could result 

16 in a loss to the Administration, requiring the appli17 cable certified development company or the des18 ignated attorney to promptly correct the deficiency. 

19 ‘‘(k) SUPERVISION OF CERTIFIED DEVELOPMENT

20 COMPANIES.—With respect to the supervision of certified 

21 development companies— 

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

23 ‘‘(A) be present for, and supervise, the re24 view of any such company that is conducted by 


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1 a contractor of the Office on the premises of 

2 the company; and 

3 ‘‘(B) supervise the review of any such com4 pany that is conducted by a contractor of the 

5 Office that is not conducted on the premises of 

6 the company; and 

7 ‘‘(2) the Administrator shall— 

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

9 the Office of certified development companies 

10 and the submission of reports regarding those 

11 reviews, under which the Administrator shall— 

12 ‘‘(i) submit to a certified development 

13 company a written report of any review of 

14 the company not later than 90 days after 

15 the date on which the review is concluded; 

16 or 

17 ‘‘(ii) if the Administrator expects to 

18 submit the report after the end of the 90- 

19 day period described in clause (i), notify 

20 the company of the expected date of sub21 mission of the report and the reason for 

22 the delay; and 

23 ‘‘(B) if a response by a certified develop24 ment company is requested in a report sub25 mitted under subparagraph (A)(i), require the 


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1 company to submit responses to the Adminis2 trator not later than 45 business days after the 

3 date on which the company receives the report. 

4 ‘‘(l) ENFORCEMENT AUTHORITY AGAINST CER5 TIFIED DEVELOPMENT COMPANIES.— 

6 ‘‘(1) INFORMAL ENFORCEMENT AUTHORITY.— 

7 The Director may take an informal enforcement ac8 tion against a certified development company if the 

9 Director finds that the company has violated a stat10 utory or regulatory requirement or any requirement 

11 in a Standard Operating Procedures Manual or Pol12 icy Notice relating to a program or function of the 

13 Office of Capital Access. 

14 ‘‘(2) FORMAL ENFORCEMENT AUTHORITY.— 

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

16 the Lender Oversight Committee established 

17 under section 48, the Director may take a for18 mal enforcement action against any certified de19 velopment company if the Director finds that 

20 the company has violated— 

21 ‘‘(i) a statutory or regulatory require22 ment, including a requirement relating to 

23 the necessary funds for making loans when 

24 those funds are not made available to the 


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1 company from private sources on reason2 able terms; or 

3 ‘‘(ii) any requirement described in a 

4 Standard Operating Procedures Manual or 

5 Policy Notice relating to a program or 

6 function of the Office of Capital Access. 

7 ‘‘(B) ENFORCEMENT ACTIONS.—The deci8 sion to take an enforcement action against a 

9 certified development company under subpara10 graph (A) shall be based on the severity or fre11 quency of the violation and may include assess12 ing a civil monetary penalty against the com13 pany in an amount that is not greater than 

14 $250,000. 

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

16 With respect to a certified development company 

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

18 on which the company is required to submit any re19 port, fails to submit that report, the Director may— 

20 ‘‘(A) suspend the company from partici21 pating in the program established under title V 

22 of the Small Business Investment Act of 1958 

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

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

25 an amount to be determined by the Director, 


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1 except that the amount of the penalty shall be 

2 not more than $10,000. 

3 ‘‘(m) FEE AUTHORITY REGARDING CERTIFIED DE4 VELOPMENT COMPANIES.— 

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

6 date of the enactment of this subsection, the Office 

7 may collect from each certified development com8 pany a fee, the amount of which— 

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

10 scale according to the size of the portfolio of 

11 the certified development company with respect 

12 to the program carried out under title V of the 

13 Small Business Investment Act of 1958; and 

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

15 basis point with respect to the value of the 

16 portfolio described in subparagraph (A). 

17 ‘‘(2) PAYMENT.—A certified development com18 pany on which a fee is imposed under paragraph (1) 

19 shall pay the fee from the servicing fees collected by 

20 the development company pursuant to regulation.’’. 

21 SEC. 3. RULES RELATING TO OBLIGATIONS OF CERTIFIED 

22 DEVELOPMENT COMPANIES UNDER THE NA23 TIONAL ENVIRONMENTAL POLICY ACT. 

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

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


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1 the Small Business Administration shall issue rules to 

2 clarify the procedures necessary for an eligible certified 

3 development company to comply with the applicable re4 quirements under National Environmental Policy Act of 

5 1969 (42 U.S.C. 4321 et seq.). 

6 (b) RULE OF CONSTRUCTION.—Nothing in this sec7 tion shall be construed to modify the requirements of the 

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

9 4321 et seq.). 

10 (c) ELIGIBLE CERTIFIED DEVELOPMENT COMPANY

11 DEFINED.—In this section, the term ‘‘eligible certified de12 velopment company’’ means a certified development com13 pany defined under title V of the Small Business Invest14 ment Act of 1958 (15 U.S.C. 695 et seq.) that receives 

15 assistance pursuant to such title. 

16 SEC. 4. DETERMINATION OF BUDGETARY EFFECTS. 

17 The budgetary effects of this Act, for the purpose of 

18 complying with the Statutory Pay-As-You-Go Act of 2010, 

19 shall be determined by reference to the latest statement 

20 titled ‘‘Budgetary Effects of PAYGO Legislation’’ for this 

21 Act, submitted for printing in the Congressional Record 

22 by the Chairman of the House Budget Committee, proVerDate Sep 11 2014 03:35 Dec 08, 2020 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H8199.RFS H8199

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1 vided that such statement has been submitted prior to the 

2 vote on passage. 

Passed the House of Representatives December 3, 

2020. 

Attest: CHERYL L. JOHNSON, 

Clerk. 


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