II

103D CONGRESS

2D SESSION S. 2060

To amend the Small Business Act.

IN THE SENATE OF THE UNITED STATES

MAY 3 (legislative day, MAY 2), 1994

Mr. BUMPERS (by request) introduced the following bill; which was read twice

and referred to the Committee on Small Business

A BILL

To amend the Small Business Act.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 That this Act may be cited as the ‘‘Small Business Admin4 istration Amendments of 1994’’.

5 TITLE I

6 SEC. 101. Section 7(m)(1)(B) of the Small Business

7 Act is amended by adding the words ‘‘, a lender or alliance

8 of lenders’’ after the word ‘‘Administration’’, and by add9 ing after the word ‘‘intermediaries’’ in clause (i) thereof

10 the following phrase ‘‘provided however, that the Adminis11 tration may make in its sole discretion up to 100 percent

12 deferred participation loans to ten intermediaries which
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1 will be located in urban areas and ten intermediaries

2 which will be located in rural areas,’’.

3 SEC. 102. Section 7(m)(7) of the Small Business Act

4 is amended by deleting the number ‘‘50’’ from subpara5 graph (B) thereof, and replacing it with the number

6 ‘‘140’’, and by deleting the period at the end thereof and

7 adding the phrase ‘‘: Provided, That no more than 200

8 total microloan programs may be funded.’’, and by delet9 ing subparagraph (C) thereof and inserting in lieu thereof:

10 ‘‘(C) In no case shall a State receive more

11 than $5 million to fund all microloan programs

12 conducted in that State.’’

13 SEC. 103. Section 7(m)(3)(C) of the Small Business

14 Act is amended by replacing the number ‘‘$1,250,000’’

15 with the number ‘‘$1,750,000’’.

16 SEC. 104. Section 7(m)(3)(F) of the Small Business

17 Act is amended by adding after the phrase ‘‘10 years’’

18 in clause (i) the following: ‘‘with the first five years of

19 any deferred participation loan being a revolving line of

20 credit on which only monthly payments of interest will be

21 required and the balance amortized over the second five

22 year period, with equal monthly payments of principal and

23 interest’’; and by revising clause (ii) to read as follows:

24 ‘‘(ii) APPLICABLE INTEREST RATES.—

25 Exception as provided in clause (iii), loans
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1 made by the Administration under this

2 subsection to an intermediary shall bear an

3 interest rate equal to the rate of interest

4 on comparable five year obligations of the

5 United States Treasury.’’.

6 TITLE II

7 SEC. 201. Section 7(a)(2)(B)(iv) of the Small Busi8 ness Act is amended to read as follows:

9 ‘‘(iv) not more than 90 percent of the

10 financing outstanding at the time of dis11 bursement if such financing is an extension

12 or a revolving line of credit made under

13 paragraph (14) and not less than 90 per14 cent of the financing outstanding at the

15 time of disbursement if such financing is a

16 loan under paragraph (16).’’.

17 SEC. 202. Section 7(a)(14) of the Small Business Act

18 is amended to read as follows:

19 ‘‘(14)(A) The Administration under this sub20 section may provide extensions, specifically including

21 guarantees of standby letters of credit and revolving

22 lines of credit for export purposes, and financings to

23 enable small business concerns, including small busi24 ness export trading companies and small business

25 export management companies, to develop foreign
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1 markets. A bank or participating lending institution

2 may establish such rate of interest on extensions, re3 volving lines of credit and financings made under

4 this paragraph as may be legal and reasonable.’’.

5 SEC. 203. Section 7(a)(3)(B) of the Small Business

6 Act is amended to read as follows: ‘‘If the total amount

7 outstanding and committed (on a deferred basis) solely for

8 the purposes provided in paragraph (16) to the borrower

9 from the Business Guaranteed Loan Financing Account

10 established by this Act would exceed $1,000,000 such

11 amount to be in addition to any financing solely for work12 ing capital, supplies, or revolving lines of credit for export

13 purposes up to a maximum of $750,000: Provided, how14 ever, That in no event may be aggregate amount outstand15 ing and committed by the Administration under this sub16 section exceed $1,250,000.’’.

17 TITLE III

18 SEC. 301. Sections 8(b) (2), (3) and (4) of the Small

19 Business Act are amended by inserting the words ‘‘and

20 other’’ after the word ‘‘small’’ wherever it appears.

21 TITLE IV

22 SEC. 401. Section 28[2](g) of the Small Business Act

23 is deleted and in its place the following is substituted:

24 ‘‘(g) There is established within the Administration

25 an Office of Women’s Business Ownership which shall be
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1 responsible for the administration under the supervision

2 by the Administration of all authority conferred by this

3 section. Such Office shall be headed by a director who

4 shall be appointed by the Administrator.’’

5 TITLE V

6 SEC. 501. Section 8(b)(1)(A) of the Small Business

7 Act is amended by adding at the end thereof the following

8 sentence: ‘‘Notwithstanding any other provision of law, the

9 authority provided by this subparagraph shall remain

10 available until expressly repealed.’’

11 SEC. 502. Section 411(a)(3) of the Small Business

12 Investment Act of 1958 is amended by adding the follow13 ing sentence at the end thereof: ‘‘Notwithstanding any

14 other provision of law, the authority granted by this para15 graph shall remain available until expressly repealed.’’

16 SEC. 503. Section 5(b)(8) of the Small Business Act

17 is amended by deleting the words ‘‘not in excess of six

18 months’’.

19 SEC. 504. The second sentence of Section 732 of

20 Public Law 100–656 is repealed.

21 SEC. 505. Section 4(c) of the Small Business Act is

22 amended to read as follows:

23 ‘‘(c)(1) There is hereby established in the Treasury

24 one Loan Liquidation Fund. All repayment of loans and

25 debentures, payments of interest, and other receipts aris-
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1 ing out of transactions entered into by the Administration

2 pursuant to Sections 5(e), 5(g), 7(a), 7(b), 7(c)(2), 7(e),

3 7(h), 7(l), 7(m), and 8(a) of this Act, and titles III, IV,

4 and V of the Small Business Investment Act of 1958,

5 prior to October 1, 1991, shall be paid into such Loan

6 Fund Liquidating Account. Balances existing in those re7 volving funds, as in effect immediately prior to the effec8 tive date of this paragraph, shall be transferred into such

9 Loan Liquidation Fund. This Loan Liquidation Fund

10 shall have available, without fiscal year limitation, such

11 funds as are necessary to finance its operational needs.

12 ‘‘(2) The Administration shall submit to the Commit13 tees on Small Business and Appropriations of the Senate

14 and the House of Representatives, as soon as possible

15 after the beginning of each fiscal year, a full and complete

16 report on the status of the Loan Liquidation Fund estab17 lished pursuant to paragraph (1).’’.

18 SEC. 506. Section 4(c)(5)(B)(ii) of the Small Busi19 ness Act is amended to read as follows:

20 ‘‘(ii) The Administration shall pay

21 into the miscellaneous receipts of the

22 Treasury following the close of each fiscal

23 year, the actual interest it collects during

24 that fiscal year on all financings made

25 under the authority of this Act.’’.
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1 SEC. 507. Section 3(a)(2) of the Small Business Act

2 is amended to read as follows:

3 ‘‘(2) In addition to the criteria specified in

4 paragraph (1), the Administrator may specify de5 tailed definitions or standards for example, by num6 ber of employees or dollar volume of business, by

7 which a business concern is to be recognized as a

8 small business concern for the purposes of this Act

9 or any other Act. Unless specifically authorized by

10 statute, the Secretary of a department or the head

11 of a Federal agency, other than the Administrator of

12 the Small Business Administration, may not pre13 scribe for the use of such department or agency a

14 size standard for categorizing a business concern as

15 a small business concern, unless such proposed size

16 standard—

17 ‘‘(A) is being proposed after an oppor18 tunity for public notice and comment;

19 ‘‘(B) provides for determining, over a pe20 riod of not less than 3 years—

21 ‘‘(i) the size of a manufacturing con22 cern as measured by its average employ23 ment based upon employment during each

24 of the concern’s pay periods for the preced25 ing completed twelve calendar months; or
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1 ‘‘(ii) the size of a concern providing

2 services on basis of the annual average

3 gross receipts of the concern over a period

4 of not less than three years; and

5 ‘‘(C) is approved by the Administrator.

6 ‘‘(3) When establishing or approving any size

7 standard pursuant to paragraph (2), the Adminis8 trator shall consider variations in economic activity

9 from industry to industry unless the Administrator

10 determines that size standards should not vary in

11 order to meet program needs.’’.

12 SEC. 508. Section 5(b) of the Small Business Act is

13 amended by deleting the word ‘‘and’’ at the end of para14 graph (10) thereof, by removing the ‘‘.’’ at the end of

15 paragraph (11) thereof and replacing it with ‘‘, and’’ and

16 (b) adding a new paragraph (12) which reads as follows:

17 ‘‘(12) to impose reasonable fees to be charged

18 in connection with applications for assistance, and

19 the provision of assistance under this Act and the

20 Small Business Investment Act of 1958 and to re21 tain such fees to offset the costs of administration

22 of such assistance.’’.

23 SEC. 509. Section 8(b) of the Small Business Act is

24 amended by deleting the word ‘‘and’’ at the end of para25 graph (15), by striking the period at the end of paragraph
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1 8(b)(16) and replacing it with ‘‘; and’’, and by adding a

2 new paragraph 8(b)(17) which reads as follows:

3 ‘‘(17) to charge and collect such fees as may be

4 necessary to cover all costs associated with the pro5 duction and dissemination of compilations of infor6 mation produced by the Administration under the

7 authority of the Small Business Act and the Small

8 Business Investment Act of 1958, and to retain such

9 fees and utilize such fees to offset the costs of pro10 duction and dissemination of such compilations of

11 information.’’.

12 TITLE VI

13 SEC. 601. Sections 20(k) through 20(p) of the Small

14 Business Act are repealed and the following is substituted

15 in their place:

16 ‘‘(k) The following program levels are authorized for

17 fiscal year 1995:

18 ‘‘(1) For the programs authorized by this Act,

19 the Administration is authorized to make

20 $13,910,000,000 in deferred participation loans and

21 other financings; and of such sum, the Administra22 tion is authorized to make $11,500,000,000 in gen23 eral business loans as provided in section 7(a),

24 $110,000,000 in loans as provided in section 7(m),

25 and $2,300,000,000 in financings as provided in sec-
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1 tion 7(a)(13) and section 504 of the Small Business

2 Investment Act of 1958.

3 ‘‘(2) For the programs authorized by title III of

4 the Small Business Investment Act of 1958, the Ad5 ministration is authorized to make $23,000,000 in

6 purchases of preferred stock, $275,000,000 in guar7 antees of debentures of which $65,000,000 is au8 thorized for guarantees of debentures of companies

9 operating pursuant to section 301(d) of such Act,

10 and $550,000,000 in guarantees of participating

11 securities.

12 ‘‘(3) For the programs authorized by part B of

13 title IV of the Small Business Investment Act of

14 1958, the Administration is authorized to enter into

15 guarantees not to exceed $2,000,000,000.

16 ‘‘(l) There are authorized to be appropriated to the

17 Administration for fiscal year 1995 such sums as may be

18 necessary to carry out subsection (k), including salaries

19 and expenses of the Administration.

20 ‘‘(m) The following program levels are authorized for

21 fiscal year 1996:

22 ‘‘(1) For the programs authorized by this Act,

23 the Administration is authorized to make

24 $17,475,000,000 in deferred participation loans and

25 other financings; and of such sum, the Administra-
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1 tion is authorized to make $13,500,000,000 in gen2 eral business loans as provided in section 7(a),

3 $175,000,000 in loans as provided in section 7(m),

4 and $3,800,000,000 in financings as provided in sec5 tion 7(a)(13) and section 504 of the Small Business

6 Investment Act of 1958.

7 ‘‘(2) For the programs authorized by title III of

8 the Small Business Investment Act of 1958, the Ad9 ministration is authorized to make $24,000,000 in

10 purchases of preferred stock, $320,000,000 in guar11 antees of debentures of which $70,000,000 is au12 thorized for guarantees of debentures of companies

13 operating pursuant to section 301(d) of such Act,

14 and $1,100,000,000 in guarantees of participating

15 securities.

16 ‘‘(3) For the programs authorized by part B of

17 title IV of the Small Business Investment Act of

18 1958, the Administration is authorized to enter into

19 guarantees not to exceed $2,000,000,000.

20 ‘‘(n) There are authorized to be appropriated to the

21 Administration for fiscal year 1996, such sums as may

22 be necessary to carry out subsection (m), including sala23 ries and expenses of the Administration.

24 ‘‘(o) The following program levels are authorized for

25 fiscal year 1997:
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1 ‘‘(1) For the programs authorized by this Act,

2 the Administration is authorized to make

3 $21,450,000,000 in deferred participation loans and

4 other financings; and of such sum, the Administra5 tion is authorized to make $15,500,000,000 in gen6 eral business loans as provided in section 7(a),

7 $250,000,000 in loans as provided in section 7(m),

8 and $5,700,000,000 in financings as provided in sec9 tion 7(a)(13) and section 504 of the Small Business

10 Investment act of 1958.

11 ‘‘(2) For the programs authorized by title III of

12 the Small Business Investment Act of 1958, the Ad13 ministration is authorized to make $25,000,000 in

14 purchases of deferred stock, $385,000,000 in guar15 antees of debentures of which $75,500,000 is au16 thorized for guarantees of debentures of companies

17 operating pursuant to section 301(d) of such Act,

18 and $1,700,000,000 in guarantees of participating

19 securities.

20 ‘‘(3) For the programs authorized by part B of

21 title IV of the Small Business Investment Act of

22 1958, the Administration is authorized to enter into

23 guarantees not to exceed $2,000,000,000.

24 ‘‘(p) There are authorized to be appropriated to the

25 Administration for fiscal year 1997, such sums as may
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1 be necessary to carry out subsection (o), including salaries

2 and expenses of the Administration.’’.

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