II 

Calendar No. 168 

118TH CONGRESS 

1ST SESSION S. 1352 

To amend the Small Business Investment Act of 1958 to improve the loan 

guaranty program, enhance the ability of small manufacturers to access 

affordable capital, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 27, 2023 

Ms. KLOBUCHAR (for herself, Mr. YOUNG, Mr. BOOKER, Mr. RUBIO, and Ms. 

CANTWELL) 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 Investment Act of 1958 to 

improve the loan guaranty program, enhance the ability 

of small manufacturers to access affordable capital, 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 Modernization and 

3 Small Manufacturer Enhancement Act of 2023’’. 

4 SEC. 2. ADDITIONS TO POLICY GOALS FOR THE DEVELOP5 MENT COMPANY PROGRAM. 

6 Section 501(d)(3) of the Small Business Investment 

7 Act of 1958 (15 U.S.C. 695(d)(3)) is amended— 

8 (1) by redesignating subparagraphs (A) through 

9 (L) as subparagraphs (B) through (M), respectively; 

10 (2) by inserting before subparagraph (B), as so 

11 redesignated, the following: 

12 ‘‘(A) workforce development through work13 based or work-integrated training, which shall 

14 be satisfied by demonstrating that a small busi15 ness concern that is a subject of the project 

16 has— 

17 ‘‘(i) a documented in-house training 

18 program, the duration of which is not 

19 shorter than 12 weeks; or 

20 ‘‘(ii) entered into a contract with an 

21 entity— 

22 ‘‘(I) to provide trained applicants 

23 for any open position of employment 

24 at the small business concern; and 

25 ‘‘(II) that ensures that any appli26 cant provided to the small business 


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1 concern under subclause (I) has un2 dergone not fewer than 12 weeks of 

3 training that is relevant to the open 

4 position described in that subclause,’’; 

5 (3) by amending subparagraph (D), as so re6 designated, to read as follows: 

7 ‘‘(D) expansion of minority-owned, em8 ployee-owned, or women-owned business devel9 opment,’’; 

10 (4) in subparagraph (L), as so redesignated, by 

11 striking ‘‘producers, or’’ and inserting ‘‘producers,’’; 

12 (5) in subparagraph (M), as so redesignated, by 

13 striking the period at the end and inserting a 

14 comma; 

15 (6) by inserting after subparagraph (M), as so 

16 redesignated, the following: 

17 ‘‘(N) enhanced ability for small business 

18 concerns to reduce costs by using energy effi19 cient products and generating renewable en20 ergy, 

21 ‘‘(O) aid revitalizing of any area for which 

22 a disaster has been declared or determined 

23 under subparagraph (A), (B), (C), or (E) of 

24 section 7(b)(2) of the Small Business Act (15 

25 U.S.C. 636(b)(2)), or 


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1 ‘‘(P) expansion of small business concerns 

2 with 10 or fewer employees.’’; and 

3 (7) in the flush text following subparagraph 

4 (P), as added by paragraph (6), by striking ‘‘sub5 paragraphs (J) and (K)’’ and inserting ‘‘subpara6 graphs (K) and (L)’’. 

7 SEC. 3. INCREASE IN LOAN AMOUNTS FOR MANUFAC8 TURING LOANS. 

9 Section 502 of the Small Business Investment Act 

10 of 1958 (15 U.S.C. 696) is amended— 

11 (1) in the matter preceding paragraph (1), by 

12 striking ‘‘The Administration’’ and inserting the fol13 lowing: 

14 ‘‘(a) IN GENERAL.—The Administration’’; and 

15 (2) in subsection (a), as so designated— 

16 (A) in paragraph (2)(A)— 

17 (i) in the matter preceding clause (i), 

18 by striking ‘‘section’’ and inserting ‘‘sub19 section’’; and 

20 (ii) in clause (iii), by striking 

21 ‘‘$5,500,000’’ and inserting ‘‘$6,500,000’’; 

22 and 

23 (B) in paragraph (3)(A), by striking ‘‘this 

24 section’’ and inserting ‘‘this subsection’’. 


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1 SEC. 4. IMPROVEMENTS TO 504 LOAN CLOSING PROCE2 DURE. 

3 Title V of the Small Business Investment Act of 1958 

4 (15 U.S.C. 695 et seq.) is amended— 

5 (1) in section 502, as amended by section 3, by 

6 adding at the end the following: 

7 ‘‘(b) CLOSING.— 

8 ‘‘(1) AUTHORITY OF CERTAIN DEVELOPMENT

9 COMPANIES.—An accredited lender certified com10 pany may take any of the following actions to facili11 tate the closing of a loan made under subsection (a): 

12 ‘‘(A) Reallocate the cost of the project with 

13 respect to which the loan is made in an amount 

14 that is not more than 10 percent of the overall 

15 cost of the project. 

16 ‘‘(B) Correct any name that is applicable 

17 to the loan, including the name of any bor18 rower, guarantor, eligible passive company de19 scribed in subparagraph (C)(i), and operating 

20 company described in subparagraph (C)(ii). 

21 ‘‘(C) Form any of the following to receive 

22 proceeds of the loan: 

23 ‘‘(i) An eligible passive company that 

24 complies with section 120.111 of title 13, 

25 Code of Federal Regulations, or any suc26 cessor regulation. 


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1 ‘‘(ii) If an eligible passive company is 

2 formed under clause (i), an operating com3 pany with respect to that eligible passive 

4 company. 

5 ‘‘(D) Correct the address of any property 

6 with respect to which the loan is made. 

7 ‘‘(E) Correct the name of any interim 

8 lender or third-party lender. 

9 ‘‘(F) Change any third-party lender or in10 terim lender if that lender is a financial institu11 tion that is regulated by the Federal Govern12 ment or a State government. 

13 ‘‘(G) Make a guarantor a co-borrower or a 

14 co-borrower a guarantor. 

15 ‘‘(H) Add a guarantor that does not 

16 change ownership with respect to the loan. 

17 ‘‘(I) Reduce the amount of standby debt 

18 before the closing as a result of regularly sched19 uled payments. 

20 ‘‘(J) Reduce the cost of the project with 

21 respect to which the loan is made. 

22 ‘‘(2) FEES.—The Administrator shall— 

23 ‘‘(A) issue a rule regarding the amount of 

24 a closing fee that may be financed in a deben25 ture that is issued by a certified development 


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1 company to make one or more loans to small 

2 business concerns, the proceeds of which are 

3 used by that concern for the purposes described 

4 in subsection (a), except that such amount shall 

5 be not less than $3,500; and 

6 ‘‘(B) periodically update the rule issued 

7 under subparagraph (A). 

8 ‘‘(3) NO ADVERSE CHANGE AND FINANCIAL

9 STATEMENT.—Before the closing with respect to a 

10 loan made under subsection (a), the borrower and 

11 any operating company shall— 

12 ‘‘(A) make the certification required under 

13 section 120.892 of title 13, Code of Federal 

14 Regulations, or any successor regulation; and 

15 ‘‘(B) submit to the certified development 

16 company a financial statement that is not more 

17 than 180 days old, which the company shall 

18 certify not later than 120 days before the date 

19 on which the certified development company 

20 issues a debenture with respect to the project to 

21 which the loan relates. 

22 ‘‘(c) ACCREDITED LENDER CERTIFIED COMPANY

23 DEFINED.—In this section, the term ‘accredited lender 

24 certified company’ means a certified development company 

25 that meets the requirements under section 507(b), includVerDate Sep 11 2014 05:22 Jul 26, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6401 E:\BILLS\S1352.RS S1352

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1 ing a certified development company that the Administra2 tion has designated as an accredited lender under such 

3 section 507(b).’’; and 

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

5 ‘‘SEC. 511. CLOSING AND OVERSIGHT. 

6 ‘‘(a) SBA DISTRICT COUNSELS.—Beginning on the 

7 date of enactment of this section, with respect to the pro8 gram established under this title, district counsels of the 

9 Administration shall be subject to the same requirements, 

10 and shall have the same authority and responsibilities, as 

11 in effect with respect to that program on the day before 

12 the date of enactment of this section, except that— 

13 ‘‘(1) the Office of Credit Risk Management of 

14 the Administration shall have the responsibility for 

15 all duties relating to conducting file reviews of loans 

16 made under this title; and 

17 ‘‘(2) district counsels of the Administration 

18 shall not have any responsibility relating to the re19 view of closing packages with respect to a loan made 

20 under this title. 

21 ‘‘(b) DESIGNATED ATTORNEYS.—For the purposes of 

22 this title, the following provisions and requirements shall 

23 apply with respect to a designated attorney of a certified 

24 development company: 


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1 ‘‘(1) A designated attorney that meets the re2 quirements determined under paragraph (2) shall be 

3 responsible for certifying documents relating to the 

4 closing of a loan described in this title. 

5 ‘‘(2) The Administrator may determine any 

6 continuing education requirements that the des7 ignated attorney shall be required to satisfy in order 

8 to be permitted to close a loan made under this title. 

9 ‘‘(3) If, as of the date of enactment of this sec10 tion, a certified development company does not have 

11 a designated attorney, during the 270-day period be12 ginning on that date of enactment, the certified de13 velopment company may identify such an attorney, 

14 subject to the approval of the Administrator.’’. 

15 SEC. 5. CERTIFIED DEVELOPMENT COMPANY LOANS FOR 

16 SMALL MANUFACTURERS. 

17 (a) CONTRIBUTION REQUIREMENT.—Section 

18 502(a)(3)(C) of the Small Business Investment Act of 

19 1958, as designated by section 3, is amended— 

20 (1) by redesignating clauses (i), (ii), (iii), and 

21 (iv) as subclauses (I), (II), (III), and (IV), respec22 tively, and adjusting the margins of such subclauses 

23 accordingly; 

24 (2) by inserting before subclause (I), as so re25 designated, the following: 


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1 ‘‘(i) for a small business concern that 

2 is not a small manufacturer (as defined in 

3 section 501(e)(7))—’’; 

4 (3) in subclause (III), as so redesignated, by 

5 striking ‘‘clauses (i) and (ii)’’ and inserting ‘‘sub6 clauses (I) and (II)’’; 

7 (4) in subclause (IV) as so redesignated, by 

8 striking the period at the end and inserting ‘‘; or’’; 

9 and 

10 (5) by adding at the end the following: 

11 ‘‘(ii) for a small manufacturer (as de12 fined in section 501(e)(7))— 

13 ‘‘(I) at least 5 percent of the 

14 total cost of the project financed, if 

15 the small business concern has been in 

16 operation for a period of 2 years or 

17 less; 

18 ‘‘(II) at least 5 percent of the 

19 total cost of the project financed, if 

20 the project involves a limited or single 

21 purpose building or structure; 

22 ‘‘(III) at least 10 percent of the 

23 total cost of the project financed if the 

24 project involves both of the conditions 

25 set forth in subclauses (I) and (II); or 


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1 ‘‘(IV) at least 5 percent of the 

2 total cost of the project financed, in 

3 all other circumstances, at the discre4 tion of the development company.’’. 

5 (b) CREATION OR RETENTION OF JOBS REQUIRE6 MENT.—Section 501(e) of the Small Business Investment 

7 Act of 1958 (15 U.S.C. 695(e)) is amended— 

8 (1) in paragraph (1), by striking ‘‘creates or re9 tains’’ and all that follows through the period at the 

10 end and inserting ‘‘creates or retains 1 job for every 

11 $75,000 guaranteed by the Administration, except 

12 that the amount is $150,000 in the case of a project 

13 of a small manufacturer.’’; 

14 (2) in paragraph (2), by striking ‘‘creates or re15 tains’’ and all that follows through the period at the 

16 end and inserting ‘‘creates or retains 1 job for every 

17 $75,000 guaranteed by the Administration, except 

18 that the amount is $150,000 in the case of a project 

19 of a small manufacturer.’’; 

20 (3) by redesignating paragraph (6) as para21 graph (7); and 

22 (4) by inserting after paragraph (5) the fol23 lowing: 

24 ‘‘(6) For a loan for a project directed toward the cre25 ation of job opportunities under subsection (d)(1), the AdVerDate Sep 11 2014 05:22 Jul 26, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6401 E:\BILLS\S1352.RS S1352

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1 ministrator shall publish on the website of the Administra2 tion the number of jobs created or retained under the 

3 project as of the date that is 2 years after the completion 

4 (as determined based on information provided by the de5 velopment company) of the project.’’. 

6 (c) COLLATERAL REQUIREMENTS.—Section 

7 502(a)(3)(E)(i) of the Small Business Investment Act of 

8 1958, as designated by section 3, is amended by adding 

9 at the end the following: ‘‘Additional collateral shall not 

10 be required in the case of a small manufacturer (as de11 fined in section 501(e)(7)).’’. 

12 (d) DEBT REFINANCING.—Section 502(a)(7)(B) of 

13 the Small Business Investment Act of 1958, as designated 

14 by section 3, is amended— 

15 (1) in the matter preceding clause (i), by insert16 ing ‘‘(or in the case of a small manufacturer (as de17 fined in section 501(e)(7)), that does not exceed 100 

18 percent of the project cost of the expansion)’’ after 

19 ‘‘cost of the expansion’’; 

20 (2) in clause (v), by adding ‘‘and’’ at the end; 

21 (3) by striking clause (vi); and 

22 (4) by redesignating clause (vii) as clause (vi). 

23 (e) AMOUNT OF GUARANTEED DEBENTURE.—Sec24 tion 503(a) of the Small Business Investment Act of 1958 


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1 (15 U.S.C. 697(a)) is amended by adding at the end the 

2 following: 

3 ‘‘(5) Any debenture issued by a State or local devel4 opment company to a small manufacturer (as defined in 

5 section 501(e)(7)) with respect to which a guarantee is 

6 made under this subsection shall be in an amount equal 

7 to not more than 50 percent of the cost of the project 

8 with respect to which such debenture is issued, without 

9 regard to whether good cause has been shown.’’. 

10 SEC. 6. ASSISTANCE FOR SMALL MANUFACTURERS. 

11 Title V of the Small Business Investment Act of 1958 

12 (15 U.S.C. 695 et seq.), as amended by section 4(2), is 

13 further amended by adding at the end the following: 

14 ‘‘SEC. 512. ASSISTANCE FOR SMALL MANUFACTURERS. 

15 ‘‘(a) IN GENERAL.—The Administrator shall ensure 

16 that each district office of the Administration partners 

17 with not less than 1 resource partner to provide training 

18 to small business concerns assigned a North American In19 dustry Classification System code for manufacturing on 

20 obtaining assistance under the program carried out under 

21 this title, including with respect to the application process 

22 under that program and partnering with development 

23 companies under this title. 

24 ‘‘(b) RESOURCE PARTNER DEFINED.—In this sec25 tion, the term ‘resource partner’ means— 


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1 ‘‘(1) a small business development center, as 

2 defined in section 3 of the Small Business Act (15 

3 U.S.C. 632); 

4 ‘‘(2) a women’s business center described in 

5 section 29 of such Act (15 U.S.C. 656); 

6 ‘‘(3) a chapter of the Service Corps of Retired 

7 Executives established under section 8(b)(1)(B) of 

8 such Act (15 U.S.C. 637(b)(1)(B)); and 

9 ‘‘(4) a Veteran Business Outreach Center de10 scribed in section 32 of such Act (15 U.S.C. 

11 657b).’’. 

12 SEC. 7. LEASING RULES FOR NEW FACILITIES AND EXIST13 ING BUILDINGS. 

14 (a) IN GENERAL.—Section 502(a) of the Small Busi15 ness Investment Act of 1958, as designated by section 3, 

16 is amended by striking paragraphs (4) and (5) and insert17 ing the following: 

18 ‘‘(4) NEW FACILITIES.— 

19 ‘‘(A) IN GENERAL.—With respect to a 

20 project to construct a new facility, an assisted 

21 small business concern may permanently lease 

22 not more than 20 percent of the project if such 

23 concern— 

24 ‘‘(i) permanently occupies and uses 

25 not less than 60 percent of the project; 


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1 ‘‘(ii) plans to occupy and use an addi2 tional portion of the project that is not 

3 permanently leased not later than 3 years 

4 after receipt of assistance under this sec5 tion; and 

6 ‘‘(iii) plans to permanently occupy and 

7 use 80 percent of the project not later than 

8 10 years after receipt of such assistance. 

9 ‘‘(B) SMALL MANUFACTURERS.—With re10 spect to an assisted small business concern that 

11 is a small manufacturer (as defined in section 

12 501(e)(7)), subparagraph (A)(i) shall apply 

13 with ‘50 percent’ substituted for ‘60 percent’. 

14 ‘‘(5) EXISTING BUILDINGS.—With respect to a 

15 project to acquire, renovate, or reconstruct an exist16 ing building, the following shall apply: 

17 ‘‘(A) OCCUPANCY REQUIREMENTS.—The 

18 assisted small business concern may perma19 nently lease not more than 50 percent of the 

20 project if the concern permanently occupies and 

21 uses not less than 50 percent of the project. 

22 ‘‘(B) EXCEPTION.—The assisted small 

23 business concern may permanently lease more 

24 than 50 percent of the project if— 

25 ‘‘(i) such concern— 


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1 ‘‘(I) has occupied and used the 

2 existing building for a consecutive 12- 

3 month period before submitting an 

4 application for assistance under this 

5 section; 

6 ‘‘(II) agrees to permanently use 

7 less than 50 percent of the existing 

8 building and permanently lease more 

9 than 50 percent for a consecutive 12- 

10 month period after receiving such as11 sistance; and 

12 ‘‘(III) affirms that the existing 

13 building is appropriate for current 

14 and reasonably anticipated needs; and 

15 ‘‘(ii) the development company assist16 ing such project— 

17 ‘‘(I) provides written notice to 

18 the Administrator on the date on 

19 which the development company closes 

20 the loan for such project; and 

21 ‘‘(II) once each year during the 

22 first 5 years of the loan, and once 

23 every 2 years for the remainder of the 

24 loan— 


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1 ‘‘(aa) conducts an examina2 tion of the assisted small busi3 ness concern to ensure the con4 cern is not a real estate develop5 ment business; and 

6 ‘‘(bb) files with the Adminis7 trator an anti-investor certifi8 cation signed by the development 

9 company and the assisted small 

10 business concern. 

11 ‘‘(C) LEASE TERM.—Any residential lease 

12 made under this paragraph shall be for a term 

13 of not more than 1 year, and any commercial 

14 lease made under this paragraph shall be for a 

15 term of not more than 5 years.’’. 

16 (b) REPORT.—Not later than 5 years after the date 

17 of enactment of this Act, the Administrator of the Small 

18 Business Administration shall submit to Congress a report 

19 analyzing the impact of the amendments made by this sec20 tion on access to capital for small business concerns (as 

21 defined in section 3 of the Small Business Act (15 U.S.C. 

22 632)), and recommending whether similar notice, exam23 ination, and certifications requirements should be made to 

24 the program established under section 7(a) of the Small 

25 Business Act (15 U.S.C. 636(a)). 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘504 Modernization and 

3 Small Manufacturer Enhancement Act of 2023’’. 

4 SEC. 2. ADDITIONS TO POLICY GOALS FOR THE DEVELOP5 MENT COMPANY PROGRAM. 

6 Section 501(d)(3) of the Small Business Investment 

7 Act of 1958 (15 U.S.C. 695(d)(3)) is amended— 

8 (1) by redesignating subparagraphs (A) through 

9 (L) as subparagraphs (B) through (M), respectively; 

10 (2) by inserting before subparagraph (B), as so 

11 redesignated, the following: 

12 ‘‘(A) workforce development through work13 based or work-integrated training, which shall be 

14 satisfied by demonstrating that a small business 

15 concern that is a subject of the project has— 

16 ‘‘(i) a documented in-house training 

17 program, the duration of which is not short18 er than 12 weeks; or 

19 ‘‘(ii) entered into a contract with an 

20 entity— 

21 ‘‘(I) to provide trained applicants 

22 for any open position of employment 

23 at the small business concern; and 

24 ‘‘(II) that ensures that any appli25 cant provided to the small business 

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1 gone not fewer than 12 weeks of train2 ing that is relevant to the open posi3 tion described in that subclause,’’; 

4 (3) by amending subparagraph (D), as so redes5 ignated, to read as follows: 

6 ‘‘(D) expansion of minority-owned, em7 ployee-owned, or women-owned business develop8 ment,’’; 

9 (4) in subparagraph (L), as so redesignated, by 

10 striking ‘‘producers, or’’ and inserting ‘‘producers,’’; 

11 (5) in subparagraph (M), as so redesignated, by 

12 striking the period at the end and inserting a comma; 

13 (6) by inserting after subparagraph (M), as so 

14 redesignated, the following: 

15 ‘‘(N) enhanced ability for small business 

16 concerns to reduce costs by using energy efficient 

17 products and generating renewable energy, 

18 ‘‘(O) aid revitalizing of any area for which 

19 a disaster has been declared or determined under 

20 subparagraph (A), (B), (C), or (E) of section 

21 7(b)(2) of the Small Business Act (15 U.S.C. 

22 636(b)(2)), or 

23 ‘‘(P) expansion of small business concerns 

24 with 10 or fewer employees.’’; and 


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1 (7) in the flush text following subparagraph (P), 

2 as added by paragraph (6), by striking ‘‘subpara3 graphs (J) and (K)’’ and inserting ‘‘subparagraphs 

4 (K) and (L)’’. 

5 SEC. 3. INCREASE IN LOAN AMOUNTS FOR MANUFAC6 TURING LOANS. 

7 Section 502 of the Small Business Investment Act of 

8 1958 (15 U.S.C. 696) is amended— 

9 (1) in the matter preceding paragraph (1), by 

10 striking ‘‘The Administration’’ and inserting the fol11 lowing: 

12 ‘‘(a) IN GENERAL.—The Administration’’; and 

13 (2) in subsection (a), as so designated— 

14 (A) in paragraph (2)(A)— 

15 (i) in the matter preceding clause (i), 

16 by striking ‘‘section’’ and inserting ‘‘sub17 section’’; and 

18 (ii) in clause (iii), by striking 

19 ‘‘$5,500,000’’ and inserting ‘‘$6,500,000’’; 

20 and 

21 (B) in paragraph (3)(A), by striking ‘‘this 

22 section’’ and inserting ‘‘this subsection’’. 


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1 SEC. 4. IMPROVEMENTS TO 504 LOAN CLOSING PROCE2 DURE. 

3 Title V of the Small Business Investment Act of 1958 

4 (15 U.S.C. 695 et seq.) is amended— 

5 (1) in section 502 (15 U.S.C. 696), as amended 

6 by this Act, by adding at the end the following: 

7 ‘‘(b) CLOSING.— 

8 ‘‘(1) AUTHORITY OF CERTAIN DEVELOPMENT

9 COMPANIES.—An accredited lender certified company 

10 may take any of the following actions to facilitate the 

11 closing of a loan made under subsection (a): 

12 ‘‘(A) Reallocate the cost of the project with 

13 respect to which the loan is made in an amount 

14 that is not more than 10 percent of the overall 

15 cost of the project. 

16 ‘‘(B) Correct any name that is applicable to 

17 the loan, including the name of any borrower, 

18 guarantor, eligible passive company described in 

19 subparagraph (C)(i), and operating company de20 scribed in subparagraph (C)(ii). 

21 ‘‘(C) Add any of the following to receive 

22 proceeds of the loan: 

23 ‘‘(i) An eligible passive company that 

24 complies with section 120.111 of title 13, 

25 Code of Federal Regulations, or any suc26 cessor regulation. 


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1 ‘‘(ii) If an eligible passive company is 

2 added under clause (i), an operating com3 pany with respect to that eligible passive 

4 company. 

5 ‘‘(D) Correct the address of any property 

6 with respect to which the loan is made. 

7 ‘‘(E) Correct the name of any interim lend8 er or third-party lender. 

9 ‘‘(F) Change any third-party lender or in10 terim lender if that lender is a financial institu11 tion that is regulated by the Federal Government 

12 or a State government. 

13 ‘‘(G) Make a guarantor a co-borrower or a 

14 co-borrower a guarantor. 

15 ‘‘(H) Add a guarantor that does not change 

16 ownership with respect to the loan. 

17 ‘‘(I) Reduce the amount of standby debt be18 fore the closing as a result of regularly scheduled 

19 payments. 

20 ‘‘(J) Reduce the cost of the project with re21 spect to which the loan is made. 

22 ‘‘(2) FEES.—The Administrator shall— 

23 ‘‘(A) issue a rule regarding the amount of 

24 a closing fee that may be financed in a debenture 

25 that is issued by a certified development comVerDate Sep 11 2014 05:22 Jul 26, 2023 Jkt 039200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6203 E:\BILLS\S1352.RS S1352

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1 pany to make one or more loans to small busi2 ness concerns, the proceeds of which are used by 

3 that concern for the purposes described in sub4 section (a), except that such amount shall be not 

5 less than $3,500; and 

6 ‘‘(B) periodically update the rule issued 

7 under subparagraph (A). 

8 ‘‘(3) NO ADVERSE CHANGE AND FINANCIAL

9 STATEMENT.—Before the closing with respect to a 

10 loan made under subsection (a), the borrower and any 

11 operating company shall— 

12 ‘‘(A) make the certification required under 

13 section 120.892 of title 13, Code of Federal Regu14 lations, or any successor regulation; and 

15 ‘‘(B) submit to the certified development 

16 company a financial statement that is not more 

17 than 270 days old, which the company shall cer18 tify not later than 120 days before the date on 

19 which the certified development company issues 

20 a debenture with respect to the project to which 

21 the loan relates. 

22 ‘‘(c) ACCREDITED LENDER CERTIFIED COMPANY DE23 FINED.—In this section, the term ‘accredited lender certified 

24 company’ means a certified development company that 

25 meets the requirements under section 507(b), including a 


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1 certified development company that the Administration has 

2 designated as an accredited lender under such section 

3 507(b).’’; and 

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

5 ‘‘SEC. 511. CLOSING AND OVERSIGHT. 

6 ‘‘(a) SBA DISTRICT COUNSELS.—Beginning on the 

7 date that is 180 days after the date of enactment of this 

8 section, with respect to the program established under this 

9 title, district counsels of the Administration shall be subject 

10 to the same requirements, and shall have the same authority 

11 and responsibilities, as in effect with respect to that pro12 gram on the day before the date of enactment of this section, 

13 except that— 

14 ‘‘(1) the Office of Credit Risk Management of the 

15 Administration shall have the responsibility for all 

16 duties relating to conducting file reviews of loans 

17 made under this title; and 

18 ‘‘(2) district counsels of the Administration shall 

19 not have any responsibility relating to the review of 

20 closing packages with respect to a loan made under 

21 this title. 

22 ‘‘(b) DESIGNATED ATTORNEYS.—For the purposes of 

23 this title, the following provisions and requirements shall 

24 apply with respect to a designated attorney of a certified 

25 development company: 


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1 ‘‘(1) A designated attorney that meets the re2 quirements determined under paragraph (2) shall be 

3 responsible for certifying documents relating to the 

4 closing of a loan described in this title. 

5 ‘‘(2) The Administrator may determine any con6 tinuing education requirements that the designated 

7 attorney shall be required to satisfy in order to be 

8 permitted to close a loan made under this title. 

9 ‘‘(3) If, as of the date of enactment of this sec10 tion, a certified development company does not have 

11 a designated attorney, during the 180-day period be12 ginning on that date of enactment, the certified devel13 opment company may identify such an attorney, sub14 ject to the approval of the Administrator.’’. 

15 SEC. 5. CERTIFIED DEVELOPMENT COMPANY LOANS FOR 

16 SMALL MANUFACTURERS. 

17 (a) CONTRIBUTION REQUIREMENT.—Section 

18 502(a)(3)(C) of the Small Business Investment Act of 1958 

19 (15 U.S.C. 696(a)(3)(C)), as so designated by this Act, is 

20 amended— 

21 (1) by redesignating clauses (i), (ii), (iii), and 

22 (iv) as subclauses (I), (II), (III), and (IV), respec23 tively, and adjusting the margins of such subclauses 

24 accordingly; 


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1 (2) by inserting before subclause (I), as so redes2 ignated, the following: 

3 ‘‘(i) for a small business concern that 

4 is not a small manufacturer (as defined in 

5 section 501(e)(7))—’’; 

6 (3) in subclause (III), as so redesignated, by 

7 striking ‘‘clauses (i) and (ii)’’ and inserting ‘‘sub8 clauses (I) and (II)’’; 

9 (4) in subclause (IV) as so redesignated, by strik10 ing the period at the end and inserting ‘‘; or’’; and 

11 (5) by adding at the end the following: 

12 ‘‘(ii) for a small manufacturer (as de13 fined in section 501(e)(7))— 

14 ‘‘(I) at least 5 percent of the total 

15 cost of the project financed, if the small 

16 business concern has been in operation 

17 for a period of 2 years or less; 

18 ‘‘(II) at least 5 percent of the total 

19 cost of the project financed, if the 

20 project involves a limited or single 

21 purpose building or structure; 

22 ‘‘(III) at least 10 percent of the 

23 total cost of the project financed if the 

24 project involves both of the conditions 

25 set forth in subclauses (I) and (II); or 


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1 ‘‘(IV) at least 5 percent of the 

2 total cost of the project financed, in all 

3 other circumstances, at the discretion 

4 of the development company.’’. 

5 (b) CREATION OR RETENTION OF JOBS REQUIRE6 MENT.—Section 501(e) of the Small Business Investment 

7 Act of 1958 (15 U.S.C. 695(e)) is amended— 

8 (1) in paragraph (1), by striking ‘‘creates or re9 tains’’ and all that follows through the period at the 

10 end and inserting ‘‘creates or retains 1 job for every 

11 $75,000 guaranteed by the Administration, except 

12 that the amount is $150,000 in the case of a project 

13 of a small manufacturer.’’; 

14 (2) in paragraph (2), by striking ‘‘creates or re15 tains’’ and all that follows through the period at the 

16 end and inserting ‘‘creates or retains 1 job for every 

17 $75,000 guaranteed by the Administration, except 

18 that the amount is $150,000 in the case of a project 

19 of a small manufacturer.’’; 

20 (3) by redesignating paragraph (6) as para21 graph (7); and 

22 (4) by inserting after paragraph (5) the fol23 lowing: 

24 ‘‘(6) For a loan for a project directed toward the cre25 ation of job opportunities under subsection (d)(1), the AdVerDate Sep 11 2014 05:22 Jul 26, 2023 Jkt 039200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6203 E:\BILLS\S1352.RS S1352

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1 ministrator shall publish on the website of the Administra2 tion the number of jobs created or retained under the project 

3 as of the date that is 2 years after the completion (as deter4 mined based on information provided by the development 

5 company) of the project.’’. 

6 (c) COLLATERAL REQUIREMENTS.—Section 

7 502(a)(3)(E)(i) of the Small Business Investment Act of 

8 1958 (15 U.S.C. 696(a)(3)(E)(i)), as so designated by this 

9 Act, is amended by adding at the end the following: ‘‘Addi10 tional collateral shall not be required in the case of a small 

11 manufacturer (as defined in section 501(e)(7)).’’. 

12 (d) DEBT REFINANCING.—Section 502(a)(7)(B) of the 

13 Small Business Investment Act of 1958 (15 U.S.C. 

14 696(a)(7)(B)), as so designated by this Act, is amended— 

15 (1) in the matter preceding clause (i), by insert16 ing ‘‘(or in the case of a small manufacturer (as de17 fined in section 501(e)(7)), that does not exceed 100 

18 percent of the project cost of the expansion)’’ after 

19 ‘‘cost of the expansion’’; 

20 (2) in clause (v), by adding ‘‘and’’ at the end; 

21 (3) by striking clause (vi); and 

22 (4) by redesignating clause (vii) as clause (vi). 

23 (e) AMOUNT OF GUARANTEED DEBENTURE.—Section 

24 503(a) of the Small Business Investment Act of 1958 (15 


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1 U.S.C. 697(a)) is amended by adding at the end the fol2 lowing: 

3 ‘‘(5) Any debenture issued by a State or local develop4 ment company to a small manufacturer (as defined in sec5 tion 501(e)(7)) with respect to which a guarantee is made 

6 under this subsection shall be in an amount equal to not 

7 more than 50 percent of the cost of the project with respect 

8 to which such debenture is issued, without regard to whether 

9 good cause has been shown.’’. 

10 SEC. 6. ASSISTANCE FOR SMALL MANUFACTURERS. 

11 Title V of the Small Business Investment Act of 1958 

12 (15 U.S.C. 695 et seq.), as amended by this Act, is amended 

13 by adding at the end the following: 

14 ‘‘SEC. 512. ASSISTANCE FOR SMALL MANUFACTURERS. 

15 ‘‘(a) IN GENERAL.—The Administrator shall ensure 

16 that each district office of the Administration partners with 

17 not less than 1 resource partner to provide training to small 

18 business concerns assigned a North American Industry 

19 Classification System code for manufacturing on obtaining 

20 assistance under the program carried out under this title, 

21 including with respect to the application process under that 

22 program and partnering with development companies 

23 under this title. 

24 ‘‘(b) RESOURCE PARTNER DEFINED.—In this section, 

25 the term ‘resource partner’ means— 


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1 ‘‘(1) a small business development center, as de2 fined in section 3 of the Small Business Act (15 

3 U.S.C. 632); 

4 ‘‘(2) a women’s business center described in sec5 tion 29 of such Act (15 U.S.C. 656); 

6 ‘‘(3) a chapter of the Service Corps of Retired 

7 Executives established under section 8(b)(1)(B) of 

8 such Act (15 U.S.C. 637(b)(1)(B)); and 

9 ‘‘(4) a Veteran Business Outreach Center de10 scribed in section 32 of such Act (15 U.S.C. 657b).’’. 

11 SEC. 7. LEASING RULES FOR NEW FACILITIES AND EXIST12 ING BUILDINGS. 

13 (a) IN GENERAL.—Section 502(a) of the Small Busi14 ness Investment Act of 1958 (15 U.S.C. 696(a)), as so des15 ignated by this Act, is amended by striking paragraphs (4) 

16 and (5) and inserting the following: 

17 ‘‘(4) NEW FACILITIES.— 

18 ‘‘(A) IN GENERAL.—With respect to a 

19 project to construct a new facility, an assisted 

20 small business concern may permanently lease 

21 not more than 20 percent of the project if such 

22 concern— 

23 ‘‘(i) permanently occupies and uses not 

24 less than 60 percent of the project; 


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1 ‘‘(ii) plans to occupy and use an addi2 tional portion of the project that is not per3 manently leased not later than 3 years after 

4 receipt of assistance under this section; and 

5 ‘‘(iii) plans to permanently occupy 

6 and use 80 percent of the project not later 

7 than 10 years after receipt of such assist8 ance. 

9 ‘‘(B) SMALL MANUFACTURERS.—With re10 spect to an assisted small business concern that 

11 is a small manufacturer (as defined in section 

12 501(e)(7)), subparagraph (A)(i) shall apply with 

13 ‘50 percent’ substituted for ‘60 percent’. 

14 ‘‘(5) EXISTING BUILDINGS.—With respect to a 

15 project to acquire, renovate, or reconstruct an existing 

16 building, the following shall apply: 

17 ‘‘(A) OCCUPANCY REQUIREMENTS.—The as18 sisted small business concern may permanently 

19 lease not more than 50 percent of the project if 

20 the concern permanently occupies and uses not 

21 less than 50 percent of the project. 

22 ‘‘(B) EXCEPTION.—The assisted small busi23 ness concern may permanently lease more than 

24 50 percent of the project if— 

25 ‘‘(i) such concern— 


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1 ‘‘(I) has occupied and used the ex2 isting building for a consecutive 12- 

3 month period before submitting an ap4 plication for assistance under this sec5 tion; 

6 ‘‘(II) agrees to permanently use 

7 less than 50 percent of the existing 

8 building and permanently lease more 

9 than 50 percent for a consecutive 12- 

10 month period after receiving such as11 sistance; and 

12 ‘‘(III) affirms that the existing 

13 building is appropriate for current 

14 and reasonably anticipated needs; and 

15 ‘‘(ii) the development company assist16 ing such project— 

17 ‘‘(I) provides written notice to the 

18 Administrator on the date on which 

19 the development company closes the 

20 loan for such project; and 

21 ‘‘(II) once each year during the 

22 first 5 years of the loan, and once 

23 every 2 years for the remainder of the 

24 loan— 


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1 ‘‘(aa) conducts an examina2 tion of the assisted small business 

3 concern to ensure the concern is 

4 not a real estate development 

5 business; and 

6 ‘‘(bb) files with the Adminis7 trator an anti-investor certifi8 cation signed by the development 

9 company and the assisted small 

10 business concern. 

11 ‘‘(C) LEASE TERM.—Any residential lease 

12 made under this paragraph shall be for a term 

13 of not more than 1 year, and any commercial 

14 lease made under this paragraph shall be for a 

15 term of not more than 5 years.’’. 

16 (b) REPORT.—Not later than 5 years after the date 

17 of enactment of this Act, the Administrator of the Small 

18 Business Administration shall submit to Congress a report 

19 analyzing the impact of the amendments made by this sec20 tion on access to capital for small business concerns (as de21 fined in section 3 of the Small Business Act (15 U.S.C. 

22 632)), and recommending whether similar notice, examina23 tion, and certifications requirements should be made to the 

24 program established under section 7(a) of the Small Busi25 ness Act (15 U.S.C. 636(a)). 


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Calendar No. 168 

118TH CONGRESS 

1ST SESSION S. 1352 

A BILL 

To amend the Small Business Investment Act of 

cess affordable capital, and for other purposes. hance the ability of small manufacturers to ac1958 to improve the loan guaranty program, enJULY 25, 2023 

Reported with an amendment 


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