II 

Calendar No. 167 

118TH CONGRESS 

1ST SESSION S. 1345 

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 SENATE OF THE UNITED STATES 

APRIL 27, 2023 

Mr. YOUNG (for himself, Ms. KLOBUCHAR, and Mr. BOOKER) introduced the 

following bill; which was read twice and referred to the Committee on 

Small Business and Entrepreneurship 

JULY 25, 2023 

Reported by Mr. CARDIN, with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

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, 


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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 2023’’. 

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 (15 U.S.C. 695 et 

2 seq.) (referred to in this section as a ‘cer3 tified development company’), as provided 

4 in subsection (k); and 

5 ‘‘(B) conducting file reviews with respect 

6 to loan closings under the program established 

7 under title V of the Small Business Investment 

8 Act of 1958 (15 U.S.C. 695 et seq.), as pro9 vided in subsection (j); and 

10 ‘‘(2) may— 

11 ‘‘(A) take formal and informal enforcement 

12 actions against a certified development com13 pany, as provided in subsection (l); and 

14 ‘‘(B) charge a certified development com15 pany a fee, as provided in subsection (m).’’; and 

16 (2) by adding at the end the following: 

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

18 to a loan closing under the program established under title 

19 V of the Small Business Investment Act of 1958 (15 

20 U.S.C. 695 et seq.), the Office shall be responsible for the 

21 following: 

22 ‘‘(1) Conducting a complete file review of a ran23 dom selection of all loan closings, the number, fre24 quency, and conduct of which shall be at the discre25 tion of the Office, to ensure program integrity, inVerDate Sep 11 2014 05:21 Jul 26, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6401 E:\BILLS\S1345.RS S1345

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1 cluding a review of the items listed on the Checklist 

2 for Complete File Review contained in the appro3 priate form of the Administration. 

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

5 which each complete file review conducted under 

6 paragraph (1) is completed, preparing a written re7 port documenting the results of that review, which 

8 the Office shall send to— 

9 ‘‘(A) the applicable certified development 

10 company; 

11 ‘‘(B) the designated attorney that closed 

12 the loan for the certified development company; 

13 and 

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

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

16 paragraph (1) reveals a deficiency that could result 

17 in a loss to the Administration, requiring the appli18 cable certified development company or the des19 ignated attorney to promptly correct the deficiency. 

20 ‘‘(k) SUPERVISION OF CERTIFIED DEVELOPMENT

21 COMPANIES.—With respect to the supervision of certified 

22 development companies— 

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

24 ‘‘(A) be present for, and supervise, the re25 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 (15 U.S.C. 695 et seq.) for a period that is not 

24 longer than 30 days; or 


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

2 an amount to be determined by the Director, 

3 except that the amount of the penalty shall be 

4 not more than $10,000. 

5 ‘‘(m) FEE AUTHORITY REGARDING CERTIFIED DE6 VELOPMENT COMPANIES.— 

7 ‘‘(1) IN GENERAL.—On and after the date that 

8 is 1 year after the date of enactment of this sub9 section, the Office may collect from each certified 

10 development company a fee, the amount of which— 

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

12 scale according to the size of the portfolio of 

13 the certified development company with respect 

14 to the program carried out under title V of the 

15 Small Business Investment Act of 1958 (15 

16 U.S.C. 695 et seq.); and 

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

18 basis point with respect to the value of the 

19 portfolio described in subparagraph (A). 

20 ‘‘(2) PAYMENT.—A certified development com21 pany on which a fee is imposed under paragraph (1) 

22 shall pay the fee from the servicing fees collected by 

23 the development company pursuant to regulation.’’. 


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1 SEC. 3. RULES RELATING TO OBLIGATIONS OF CERTIFIED 

2 DEVELOPMENT COMPANIES UNDER THE NA3 TIONAL ENVIRONMENTAL POLICY ACT. 

4 (a) ELIGIBLE CERTIFIED DEVELOPMENT COMPANY

5 DEFINED.—In this section, the term ‘‘eligible certified de6 velopment company’’ means a certified development com7 pany defined under title V of the Small Business Invest8 ment Act of 1958 (15 U.S.C. 695 et seq.) that receives 

9 assistance pursuant to that title. 

10 (b) REQUIREMENT TO ISSUE RULES.—Not later 

11 than 180 days after the date of enactment of this Act, 

12 the Administrator of the Small Business Administration 

13 shall issue rules to clarify the procedures necessary for an 

14 eligible certified development company to comply with the 

15 applicable requirements under National Environmental 

16 Policy Act of 1969 (42 U.S.C. 4321 et seq.). 

17 (c) RULE OF CONSTRUCTION.—Nothing in this sec18 tion shall be construed to modify the requirements of the 

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

20 4321 et seq.). 

21 SECTION 1. SHORT TITLE. 

22 This Act may be cited as the ‘‘504 Credit Risk Manage23 ment Improvement Act of 2023’’. 


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

2 MANAGEMENT. 

3 Title V of the Small Business Investment Act of 1958 

4 (15 U.S.C. 695 et seq.) is amended by adding at the end 

5 the following: 

6 ‘‘SEC. 511. OFFICE OF CREDIT RISK MANAGEMENT OVER7 SIGHT. 

8 ‘‘(a) DEFINITIONS.—In this section— 

9 ‘‘(1) the term ‘Director’ means the Director of the 

10 Office; and 

11 ‘‘(2) the term ‘Office’ means the Office of Credit 

12 Risk Management established under section 47 of the 

13 Small Business Act (15 U.S.C. 657t). 

14 ‘‘(b) DUTIES RELATING TO 504 PROGRAM.—The Of15 fice— 

16 ‘‘(1) shall be responsible for— 

17 ‘‘(A) supervising any certified development 

18 company, as provided in subsection (d); and 

19 ‘‘(B) conducting file reviews with respect to 

20 loan closings under the program established 

21 under this title, as provided in subsection (c); 

22 and 

23 ‘‘(2) may— 

24 ‘‘(A) take formal and informal enforcement 

25 actions against a certified development company, 

26 as provided in subsection (e); and 


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1 ‘‘(B) charge a certified development com2 pany a fee, as provided in subsection (f). 

3 ‘‘(c) LOAN CLOSING FILE REVIEWS.—With respect to 

4 a loan closing under the program established under this 

5 title, the Office shall be responsible for the following: 

6 ‘‘(1) Conducting a complete file review of a ran7 dom selection of all loan closings, the number, fre8 quency, and conduct of which shall be at the discre9 tion of the Office, to ensure program integrity, includ10 ing a review of the items listed on the Checklist for 

11 Complete File Review contained in the appropriate 

12 form of the Administration. 

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

14 which each complete file review conducted under 

15 paragraph (1) is completed, preparing a written re16 port documenting the results of that review, which the 

17 Office shall send to— 

18 ‘‘(A) the applicable certified development 

19 company; 

20 ‘‘(B) the designated attorney that closed the 

21 loan for the certified development company; and 

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

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

24 paragraph (1) reveals a deficiency that could result 

25 in a loss to the Administration, requiring the appliVerDate Sep 11 2014 05:21 Jul 26, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6203 E:\BILLS\S1345.RS S1345

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1 cable certified development company or the designated 

2 attorney to promptly correct the deficiency. 

3 ‘‘(d) SUPERVISION OF CERTIFIED DEVELOPMENT COM4 PANIES.—With respect to the supervision of certified devel5 opment companies— 

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

7 ‘‘(A) be present for, and supervise, the re8 view of any such company that is conducted by 

9 a contractor of the Office on the premises of the 

10 company; and 

11 ‘‘(B) supervise the review of any such com12 pany that is conducted by a contractor of the Of13 fice that is not conducted on the premises of the 

14 company; and 

15 ‘‘(2) the Administrator shall— 

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

17 the Office of certified development companies and 

18 the submission of reports regarding those re19 views, under which the Administrator shall— 

20 ‘‘(i) submit to a certified development 

21 company a written report of any review of 

22 the company not later than 90 days after 

23 the date on which the review is concluded; 

24 or 


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1 ‘‘(ii) if the Administrator expects to 

2 submit the report after the end of the 90- 

3 day period described in clause (i)— 

4 ‘‘(I) notify the company of the ex5 pected date of submission of the report 

6 and the reason for the delay; and 

7 ‘‘(II) submit to the company the 

8 report; and 

9 ‘‘(B) if a response by a certified develop10 ment company is requested in a report submitted 

11 under subparagraph (A), require the company to 

12 submit responses to the Administrator not later 

13 than 45 business days after the date on which 

14 the company receives the report. 

15 ‘‘(e) ENFORCEMENT AUTHORITY AGAINST CERTIFIED

16 DEVELOPMENT COMPANIES.— 

17 ‘‘(1) INFORMAL ENFORCEMENT AUTHORITY.—The 

18 Director may take an informal enforcement action 

19 against a certified development company if the Direc20 tor finds that the company has violated a statutory 

21 or regulatory requirement or any requirement in a 

22 Standard Operating Procedures Manual or Policy 

23 Notice relating to a program or function of the Office 

24 of Capital Access. 

25 ‘‘(2) FORMAL ENFORCEMENT AUTHORITY.— 


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

2 the Lender Oversight Committee established 

3 under section 48 of the Small Business Act (15 

4 U.S.C. 657u), the Director may take a formal 

5 enforcement action against any certified develop6 ment company if the Director finds that the com7 pany has violated— 

8 ‘‘(i) a statutory or regulatory require9 ment, including a requirement relating to 

10 the necessary funds for making loans when 

11 those funds are not made available to the 

12 company from private sources on reasonable 

13 terms; or 

14 ‘‘(ii) any requirement described in a 

15 Standard Operating Procedures Manual or 

16 Policy Notice relating to a program or func17 tion of the Office of Capital Access. 

18 ‘‘(B) ENFORCEMENT ACTIONS.—The deci19 sion to take an enforcement action against a cer20 tified development company under subparagraph 

21 (A) shall be based on the severity or frequency of 

22 the violation and may include assessing a civil 

23 monetary penalty against the company in an 

24 amount that is not greater than $250,000. 


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

2 With respect to a certified development company that, 

3 as of the date that is 60 days after the date on which 

4 the company is required to submit any report, fails 

5 to submit that report, the Director may— 

6 ‘‘(A) suspend the company from partici7 pating in the program established under this 

8 title for a period that is not longer than 30 days; 

9 or 

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

11 an amount to be determined by the Director, ex12 cept that the amount of the penalty shall be not 

13 more than $10,000. 

14 ‘‘(f) FEE AUTHORITY REGARDING CERTIFIED DEVEL15 OPMENT COMPANIES.— 

16 ‘‘(1) IN GENERAL.—On and after the date that 

17 is 1 year after the date of enactment of this section, 

18 the Office may collect from each certified development 

19 company a fee, the amount of which— 

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

21 scale according to the size of the portfolio of the 

22 certified development company with respect to 

23 the program carried out under this title; and 


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

2 basis point with respect to the value of the port3 folio described in subparagraph (A). 

4 ‘‘(2) PAYMENT.—A certified development com5 pany on which a fee is imposed under paragraph (1) 

6 shall pay the fee from the servicing fees collected by 

7 the development company pursuant to regulation.’’. 

8 SEC. 3. RULES RELATING TO OBLIGATIONS OF CERTIFIED 

9 DEVELOPMENT COMPANIES UNDER THE NA10 TIONAL ENVIRONMENTAL POLICY ACT. 

11 (a) ELIGIBLE CERTIFIED DEVELOPMENT COMPANY

12 DEFINED.—In this section, the term ‘‘eligible certified de13 velopment company’’ means a certified development com14 pany, within the meaning under title V of the Small Busi15 ness Investment Act of 1958 (15 U.S.C. 695 et seq.), that 

16 receives assistance pursuant to that title. 

17 (b) REQUIREMENT TO ISSUE RULES.—Not later than 

18 180 days after the date of enactment of this Act, the Admin19 istrator of the Small Business Administration shall issue 

20 rules to clarify the procedures necessary for an eligible cer21 tified development company to comply with the applicable 

22 requirements under National Environmental Policy Act of 

23 1969 (42 U.S.C. 4321 et seq.). 

24 (c) RULE OF CONSTRUCTION.—Nothing in this section 

25 shall be construed to modify the requirements of the NaVerDate Sep 11 2014 05:21 Jul 26, 2023 Jkt 039200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6203 E:\BILLS\S1345.RS S1345

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1 tional Environmental Policy Act of 1969 (42 U.S.C. 4321 

2 et seq.). 

3 SEC. 4. EXTENSION OF SUNSET FOR DELEGATED AUTHOR4 ITY FOR ACCREDITED LENDERS. 

5 Section 328(b)(2) of division N of the Consolidated Ap6 propriations Act, 2021 (15 U.S.C. 697d note) is amended 

7 by striking ‘‘2023’’ and inserting ‘‘2025’’. 


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Calendar No. 167 

118TH CONGRESS 

1ST SESSION S. 1345 

A BILL 

To amend the Small Business Act to enhance the 

for other purposes. gations of certified development companies, and tion to issue rules relating to environmental obliAdministrator of the Small Business AdministraOffice of Credit Risk Management, to require the 

JULY 25, 2023 

Reported with an amendment 


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