II

106TH CONGRESS

1ST SESSION S. 375

To create a rural business lending pilot program within the U.S. Small

Business Administration, and for other purposes.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 4, 1999

Mr. STEVENS (for himself, Mr. INOUYE, Mr. MURKOWSKI, and Mr. AKAKA)

introduced the following bill; which was read twice and referred to the

Committee on Small Business

A BILL

To create a rural business lending pilot program within the

U.S. 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.

4 This Act may be referred to as the ‘‘Rural Business

5 Lending Act’’.

6 SEC. 2. PURPOSES.

7 The purposes of this Act are to—

8 (1) establish a rural business lending pilot pro9 gram to be administered by the U.S. Small Business

10 Administration;
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S 375 IS

1 (2) increase the number of loans in certain

2 rural areas for the purposes authorized by section

3 7(a) of the Small Business Act (15 U.S.C. 636);

4 (3) make loans and capital for investment more

5 readily available in rural areas for economic develop6 ment and employment that might not otherwise be

7 available; and

8 (4) review the effectiveness of the pilot program

9 after two years to determine the advisability of mak10 ing it permanent or implementing it in other areas.

11 SEC. 3. RURAL BUSINESS LENDING PILOT PROJECT.

12 Section 7 of the Small Business Act (15 U.S.C. 636)

13 is amended by adding the following new subsection—

14 ‘‘(n) RURAL BUSINESS LENDING PROGRAM.—

15 ‘‘(1) There is established a Rural Business

16 Lending Program under which the U.S. Small Busi17 ness Administration shall—

18 ‘‘(A) guarantee loans through participating

19 lenders in an amount not greater than

20 $750,000 per loan;

21 ‘‘(B) guarantee up to 90 percent of loans

22 made by participating lenders;

23 ‘‘(C) collect a guarantee fee of not more

24 than one percent of the amount guaranteed;

25 and
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1 ‘‘(D) exempt participating lenders from the

2 basis point fee otherwise required under the

3 7(a) lending program if such an exemption will

4 significantly increase the number of loans made

5 under the Rural Business Lending Program.

6 ‘‘(2) In the event that the Small Business Ad7 ministration is required to honor a guarantee under

8 the Rural Business Lending Program, the Small

9 Business Administration shall take over servicing re10 sponsibility as soon as compliance with the loan au11 thorization and review of the servicing can reason12 ably by accomplished.

13 ‘‘(3) Applications under this program shall be

14 in the same form and follow the same procedures as

15 loans under the regular 7(a) program.

16 ‘‘(4) Applications received under this program

17 shall be processed in the Small Business Administra18 tion Offices in the State of Alaska and State of Ha19 waii.

20 ‘‘(5) Within 24 months after the date of enact21 ment of this Act, the Administration shall submit to

22 the Committees on Small Business of the Senate

23 and the House of Representatives a report on the ef24 fectiveness of the Rural Business Lending Program.
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1 ‘‘(6) A small business concern must meet all

2 the criteria and requirements for loans made under

3 the regular 7(a) loan program but must also be lo4 cated in a community with a population of 9,000 or

5 less as determined by the most recent census, and

6 be located in the State of Alaska or the State of Ha7 waii.’’.

8 SEC. 4. AUTHORITY.

9 There are authorized to be appropriated such funds

10 as are necessary in each of fiscal years 2000, 2001, and

11 2002 to carry out the provisions of this Act.

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