I

103D CONGRESS

1ST SESSION S. 1274

IN THE HOUSE OF REPRESENTATIVES

AUGUST 2, 1993

Referred to the Committee on Small Business

AN ACT

To reduce the subsidy cost for the Guaranteed Business

Loan Program of the Small Business Administration,

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; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Small Business Guaranteed Credit Enhancement Act of

6 1993’’.
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1 (b) TABLE OF CONTENTS.—The table of contents for

2 this Act is as follows:

Sec. 1. Short title; table of contents.

Sec. 2. General authorizations for fiscal years 1993 and 1994.

Sec. 3. Extension of State limitation on interest rates.

Sec. 4. Guaranteed business loan program amendments.

Sec. 5. Interest rate for Preferred Lenders Program.

Sec. 6. Microloan program amendments.

Sec. 7. Small Business Development Center Program.

Sec. 8. Regulations.

Sec. 9. White House Conference on Small Business.

Sec. 10. National Women’s Business Council.

3 SEC. 2. GENERAL AUTHORIZATIONS FOR FISCAL YEARS

4 1993 AND 1994.

5 (a) FINANCINGS FOR FISCAL YEAR 1993.—Section

6 20(g)(2) of the Small Business Act (15 U.S.C. 631 note)

7 is amended—

8 (1) by striking ‘‘$7,030,000,000’’ and inserting

9 ‘‘$8,455,000,000’’;

10 (2) in subparagraph (A), by striking

11 ‘‘$6,200,000,000’’ and inserting ‘‘$7,500,000,000’’;

12 and

13 (3) in subparagraph (C), by striking

14 ‘‘$775,000,000’’ and inserting ‘‘$900,000,000’’.

15 (b) FINANCINGS FOR FISCAL YEAR 1994.—Section

16 20(i)(2) of the Small Business Act (15 U.S.C. 631 note)

17 is amended—

18 (1) by striking ‘‘$8,083,000,000’’ and inserting

19 ‘‘$9,258,000,000’’;
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1 (2) in subparagraph (A), by striking

2 ‘‘$7,200,000,000’’ and inserting ‘‘$8,000,000,000’’;

3 and

4 (3) in subparagraph (C), by striking

5 ‘‘$825,000,000’’ and inserting ‘‘$1,200,000,000’’.

6 (c) REDESIGNATIONS.—Section 20 of the Small Busi7 ness Act (15 U.S.C. 631 note) is amended—

8 (1) in subsection (l), as added by section 405(3)

9 of the Small Business Credit and Business Oppor10 tunity Enhancement Act of 1992—

11 (A) by striking ‘‘(l) There’’ and inserting

12 ‘‘(2) There’’, and indenting appropriately; and

13 (B) by striking ‘‘subsection (k)’’ and in14 serting ‘‘paragraph (1)’’;

15 (2) by redesignating subsection (k), as added by

16 section 405(3) of the Small Business Credit and

17 Business Opportunity Enhancement Act of 1992, as

18 subsection (l);

19 (3) in subsection (n)—

20 (A) by striking ‘‘(n) There’’ and inserting

21 ‘‘(2) There’’, and indenting appropriately; and

22 (B) by striking ‘‘subsection (m)’’ and in23 serting ‘‘paragraph (1)’’;

24 (4) by redesignating subsection (o) as sub25 section (n); and
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1 (5) in subsection (p)—

2 (A) by striking ‘‘(p) There’’ and inserting

3 ‘‘(2) There’’, and indenting appropriately; and

4 (B) by striking ‘‘subsection (o)’’ and in5 serting ‘‘paragraph (1)’’.

6 SEC. 3. EXTENSION OF STATE LIMITATION ON INTEREST

7 RATES.

8 Section 112(c) of the Small Business Administration

9 Reauthorization and Amendments Act of 1988 (Public

10 Law 100–590; 102 Stat. 2996) is amended—

11 (1) by striking paragraph (2); and

12 (2) by striking ‘‘(1) IN GENERAL.—’’.

13 SEC. 4. GUARANTEED BUSINESS LOAN PROGRAM AMEND14 MENTS.

15 (a) ADDITIONAL GUARANTEE FEES.—

16 (1) IN GENERAL.—Section 7(a)(18) of the

17 Small Business Act (15 U.S.C. 636(a)(18)) is

18 amended—

19 (A) by inserting ‘‘(A)’’ after ‘‘(18)’’; and

20 (B) by adding at the end the following new

21 subparagraph:

22 ‘‘(B) In addition to fees collected under sub23 paragraph (A), the Administration shall collect an

24 excess premium fee from the participating lending

25 institution in any case in which the sale price of the
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1 guaranteed portion of a loan made under this sec2 tion and sold on the secondary market exceeds 110

3 percent of the face value of the guaranteed portion

4 of the loan. Such fee shall be equal to 50 percent of

5 that portion of the sale price that is in excess of 110

6 percent of the face value of the guaranteed portion

7 of the loan. Such fee may not be charged to the bor8 rower.’’.

9 (2) SUNSET.—The amendments made by para10 graph (1) shall remain in effect until September 30,

11 1996.

12 (b) GUARANTEE PERCENTAGES.—

13 (1) IN GENERAL.—Subparagraph (B) of section

14 7(a)(2) of the Small Business Act (15 U.S.C.

15 636(a)(2)) is amended to read as follows:

16 ‘‘(B) subject to the limitation in paragraph

17 (3)—

18 ‘‘(i) not less than 70 percent nor more

19 than 85 percent of the financing outstanding at

20 the time of disbursement, if such financing is

21 more than $155,000 and the period of maturity

22 of such financing is less than 10 years, except

23 that the participation by the Administration

24 may be reduced below 70 percent upon request

25 of the participating lender;
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1 ‘‘(ii) not less than 70 percent nor more

2 than 75 percent of the financing outstanding at

3 the time of disbursement, if such financing is

4 more than $155,000 and the period of maturity

5 of such financing is not less than 10 years, ex6 cept that the participation by the Administra7 tion may be reduced below 70 percent upon re8 quest of the participating lender; and

9 ‘‘(iii) not less than 85 percent of the fi10 nancing outstanding at the time of disburse11 ment, if such financing is a loan under para12 graph (16).’’.

13 (2) ADDITIONAL AMENDMENTS.—Section

14 7(a)(2) of the Small Business Act (15 U.S.C.

15 636(a)(2)) is amended—

16 (A) in the second sentence, by striking

17 ‘‘guaranteed to less than 85 percent’’ and in18 serting ‘‘guaranteed to less than the specified

19 percentages’’; and

20 (B) in the third sentence, by striking ‘‘80

21 percent’’ and inserting ‘‘75 percent’’.

22 (c) ANNUAL GUARANTEE FEE; PENALTY.—Section

23 7(a) of the Small Business Act (15 U.S.C. 636(a)) is

24 amended by adding at the end the following new para25 graph:
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1 ‘‘(22)(A) For loans guaranteed under this sub2 section, the Administrator is authorized to collect,

3 either directly or through a fiscal and transfer

4 agent, an annual fee on each loan that is equal to

1 5 ⁄4 of 1 percent of the declining principal balance of

6 the loan.

7 ‘‘(B) The Administrator is authorized to impose

8 and collect, either directly or through a fiscal and

9 transfer agent, a reasonable penalty fee on late pay10 ments of the fee authorized under subparagraph

11 (A).’’.

12 SEC. 5. INTEREST RATE FOR PREFERRED LENDERS PRO13 GRAM.

14 Section 7(a)(2) of the Small Business Act (15 U.S.C.

15 7(a)(2)) is amended by inserting after the third sentence,

16 the following: ‘‘The maximum interest rate for a loan

17 under the Preferred Lenders Program shall not exceed the

18 maximum interest rate applicable to other loan guarantee

19 programs under section 7(a), as established by the Admin20 istrator.’’.

21 SEC. 6. MICROLOAN PROGRAM AMENDMENTS.

22 Section 7(m) of the Small Business Act (15 U.S.C.

23 636(m)) is amended—

24 (1) in paragraph (1)(B)(iii), by striking

25 ‘‘$15,000’’ and inserting ‘‘$25,000’’;
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1 (2) in paragraph (4)(C)(ii), by inserting ‘‘to de2 fray costs associated with loan fund administration

3 and’’ before ‘‘to provide’’;

4 (3) in paragraph (5)(A), by striking ‘‘6 grants’’

5 and inserting ‘‘12 grants’’;

6 (4) by amending paragraph (9)(A) to read as

7 follows:

8 ‘‘(A) IN GENERAL.—The Administration

9 may provide, directly or through an organiza10 tion described in subparagraph (B), technical

11 assistance for participants and potential partici12 pants in the Microloan Demonstration Program

13 to give such participants and potential partici14 pants such knowledge, skills, and understanding

15 of microlending practices necessary to operate

16 successful microloan programs.’’; and

17 (5) in paragraph (9)(B)—

18 (A) by striking ‘‘3 percent’’ and inserting

19 ‘‘7 percent’’; and

20 (B) by inserting ‘‘and nonprofit organiza21 tions that have demonstrated experience in pro22 viding training support for microenterprise de23 velopment and financing’’ after ‘‘microlending

24 organizations’’.
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1 SEC. 7. SMALL BUSINESS DEVELOPMENT CENTER PRO2 GRAM.

3 Section 223(b) of the Small Business Credit and

4 Business Opportunity Enhancement Act of 1992 (15

5 U.S.C. 631 note) is amended by striking ‘‘Such proposed

6 regulations shall not be published in the Federal Reg7 ister.’’.

8 SEC. 8. REGULATIONS.

9 Not later than 60 days after the date of enactment

10 of this Act, the Administrator of the Small Business Ad11 ministration shall promulgate interim final regulations to

12 implement the amendments made by this Act.

13 SEC. 9. WHITE HOUSE CONFERENCE ON SMALL BUSINESS.

14 (a) DATES OF CONFERENCES.—Section 2 of the

15 White House Conference on Small Business Authorization

16 Act (15 U.S.C. 631 note) is amended—

17 (1) by striking ‘‘January 1, 1994’’ and insert18 ing ‘‘May 1, 1995’’;

19 (2) by striking ‘‘April 1, 1994’’ and inserting

20 ‘‘December 31, 1995’’; and

21 (3) by striking ‘‘December 1, 1992’’ and insert22 ing ‘‘March 1, 1994’’.

23 (b) APPOINTMENT OF COMMISSIONERS.—Section

24 5(a) of the White House Conference on Small Business

25 Authorization Act (15 U.S.C. 631 note) is amended by

26 striking ‘‘The President’’ and inserting ‘‘Not later than
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1 30 days after the date of enactment of the Small Business

2 Guaranteed Credit Enhancement Act of 1993, the Presi3 dent’’.

4 SEC. 10. NATIONAL WOMEN’S BUSINESS COUNCIL.

5 (a) MEMBERSHIP.—

6 (1) NEW MEMBERS.—Section 403 of the Wom7 en’s Business Ownership Act of 1988 (15 U.S.C.

8 631 note) is amended in subsection (a)—

9 (A) by striking ‘‘nine’’ and inserting

10 ‘‘eleven’’;

11 (B) in paragraph (1), by inserting ‘‘, the

12 Secretary of Labor (or such Secretary’s dep13 uty),’’ after ‘‘(or such Secretary’s deputy)’’;

14 (C) in paragraph (2), by striking ‘‘and’’ at

15 the end;

16 (D) in paragraph (3), by striking the pe17 riod at the end and inserting ‘‘; and’’; and

18 (E) by adding at the end the following new

19 paragraph:

20 ‘‘(4) one member shall be appointed by the

21 President.’’.

22 (2) APPOINTMENT DATE.—The first appoint23 ment required under section 403(a)(4) of the Wom24 en’s Business Ownership Act of 1988 (as added by
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1 paragraph (1)(E)) shall be made not later than 90

2 days after the date of enactment of this Act.

3 (3) TERMS OF CURRENT MEMBERS.—Any mem4 ber appointed under paragraph (2) or (3) of section

5 403(a) of the Women’s Business Ownership Act of

6 1988 (15 U.S.C. 631 note) and serving prior to the

7 date of enactment of this Act shall continue to serve

8 until the expiration of the term for which the mem9 ber was appointed.

10 (4) CONFORMING AMENDMENTS.—Section

11 403(b) of the Women’s Business Ownership Act of

12 1988 (15 U.S.C. 631 note) is amended—

13 (A) in paragraph (1), by striking ‘‘section

14 (a)(2) and (3)’’ and inserting ‘‘paragraphs (2),

15 (3), and (4) of subsection (a)’’;

16 (B) in paragraph (2)(C), by striking ‘‘sub17 section (a)(2) and (3)’’ and inserting ‘‘para18 graphs (2), (3), and (4) of subsection (a)’’; and

19 (C) in paragraph (2)(F)—

20 (i) by striking ‘‘(1) Two’’ and insert21 ing ‘‘(i) Three’’; and

22 (ii) by striking ‘‘(2) A majority’’ and

23 inserting ‘‘(ii) A majority’’.

24 (5) DELETION OF OBSOLETE REFERENCES.—

25 Section 404 of the Women’s Business Ownership
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1 Act of 1988 (15 U.S.C. 631 note) is amended by

2 striking ‘‘rate of basic pay payable for GS–18 of the

3 General Schedule’’ each place it appears and insert4 ing ‘‘rate of pay payable for a position at level IV

5 of the Executive Schedule under section 5315 of title

6 5, United States Code’’.

7 (b) AUTHORIZATION.—Section 407 of the Women’s

8 Business Ownership Act of 1988 (15 U.S.C. 631 note) is

9 amended to read as follows:

10 ‘‘SEC. 407. AUTHORIZATION.

11 ‘‘(a) IN GENERAL.—There are authorized to be ap12 propriated to carry out this title—

13 ‘‘(1) $500,000 for fiscal year 1994; and

14 ‘‘(2) $500,000 for fiscal year 1995.

15 ‘‘(b) LIMITATION ON AUTHORITY.—New spending

16 authority or authority to enter into contracts as author17 ized in this Act shall be effective only to such extent and

18 in such amounts as are provided in advance in appropria19 tion Acts.

20 ‘‘(c) SUNSET.—This section shall cease to be effective

21 on November 30, 1995.’’.

Passed the Senate July 30 (legislative day, June

30), 1993.

Attest: WALTER J. STEWART

Secretary.