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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 1352 Reported in Senate (RS)]

<DOC>

                                                       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.

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

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``504 Modernization and Small 
Manufacturer Enhancement Act of 2023''.</DELETED>

<DELETED>SEC. 2. ADDITIONS TO POLICY GOALS FOR THE DEVELOPMENT COMPANY 
              PROGRAM.</DELETED>

<DELETED>    Section 501(d)(3) of the Small Business Investment Act of 
1958 (15 U.S.C. 695(d)(3)) is amended--</DELETED>
        <DELETED>    (1) by redesignating subparagraphs (A) through (L) 
        as subparagraphs (B) through (M), respectively;</DELETED>
        <DELETED>    (2) by inserting before subparagraph (B), as so 
        redesignated, the following:</DELETED>
                <DELETED>    ``(A) workforce development through work-
                based or work-integrated training, which shall be 
                satisfied by demonstrating that a small business 
                concern that is a subject of the project has--
                </DELETED>
                        <DELETED>    ``(i) a documented in-house 
                        training program, the duration of which is not 
                        shorter than 12 weeks; or</DELETED>
                        <DELETED>    ``(ii) entered into a contract 
                        with an entity--</DELETED>
                                <DELETED>    ``(I) to provide trained 
                                applicants for any open position of 
                                employment at the small business 
                                concern; and</DELETED>
                                <DELETED>    ``(II) that ensures that 
                                any applicant provided to the small 
                                business concern under subclause (I) 
                                has undergone not fewer than 12 weeks 
                                of training that is relevant to the 
                                open position described in that 
                                subclause,'';</DELETED>
        <DELETED>    (3) by amending subparagraph (D), as so 
        redesignated, to read as follows:</DELETED>
                <DELETED>    ``(D) expansion of minority-owned, 
                employee-owned, or women-owned business 
                development,'';</DELETED>
        <DELETED>    (4) in subparagraph (L), as so redesignated, by 
        striking ``producers, or'' and inserting 
        ``producers,'';</DELETED>
        <DELETED>    (5) in subparagraph (M), as so redesignated, by 
        striking the period at the end and inserting a comma;</DELETED>
        <DELETED>    (6) by inserting after subparagraph (M), as so 
        redesignated, the following:</DELETED>
                <DELETED>    ``(N) enhanced ability for small business 
                concerns to reduce costs by using energy efficient 
                products and generating renewable energy,</DELETED>
                <DELETED>    ``(O) aid revitalizing of any area for 
                which a disaster has been declared or determined under 
                subparagraph (A), (B), (C), or (E) of section 7(b)(2) 
                of the Small Business Act (15 U.S.C. 636(b)(2)), 
                or</DELETED>
                <DELETED>    ``(P) expansion of small business concerns 
                with 10 or fewer employees.''; and</DELETED>
        <DELETED>    (7) in the flush text following subparagraph (P), 
        as added by paragraph (6), by striking ``subparagraphs (J) and 
        (K)'' and inserting ``subparagraphs (K) and (L)''.</DELETED>

<DELETED>SEC. 3. INCREASE IN LOAN AMOUNTS FOR MANUFACTURING 
              LOANS.</DELETED>

<DELETED>    Section 502 of the Small Business Investment Act of 1958 
(15 U.S.C. 696) is amended--</DELETED>
        <DELETED>    (1) in the matter preceding paragraph (1), by 
        striking ``The Administration'' and inserting the 
        following:</DELETED>
<DELETED>    ``(a) In General.--The Administration''; and</DELETED>
        <DELETED>    (2) in subsection (a), as so designated--
        </DELETED>
                <DELETED>    (A) in paragraph (2)(A)--</DELETED>
                        <DELETED>    (i) in the matter preceding clause 
                        (i), by striking ``section'' and inserting 
                        ``subsection''; and</DELETED>
                        <DELETED>    (ii) in clause (iii), by striking 
                        ``$5,500,000'' and inserting ``$6,500,000''; 
                        and</DELETED>
                <DELETED>    (B) in paragraph (3)(A), by striking 
                ``this section'' and inserting ``this 
                subsection''.</DELETED>

<DELETED>SEC. 4. IMPROVEMENTS TO 504 LOAN CLOSING PROCEDURE.</DELETED>

<DELETED>    Title V of the Small Business Investment Act of 1958 (15 
U.S.C. 695 et seq.) is amended--</DELETED>
        <DELETED>    (1) in section 502, as amended by section 3, by 
        adding at the end the following:</DELETED>
<DELETED>    ``(b) Closing.--</DELETED>
        <DELETED>    ``(1) Authority of certain development 
        companies.--An accredited lender certified company may take any 
        of the following actions to facilitate the closing of a loan 
        made under subsection (a):</DELETED>
                <DELETED>    ``(A) Reallocate the cost of the project 
                with respect to which the loan is made in an amount 
                that is not more than 10 percent of the overall cost of 
                the project.</DELETED>
                <DELETED>    ``(B) Correct any name that is applicable 
                to the loan, including the name of any borrower, 
                guarantor, eligible passive company described in 
                subparagraph (C)(i), and operating company described in 
                subparagraph (C)(ii).</DELETED>
                <DELETED>    ``(C) Form any of the following to receive 
                proceeds of the loan:</DELETED>
                        <DELETED>    ``(i) An eligible passive company 
                        that complies with section 120.111 of title 13, 
                        Code of Federal Regulations, or any successor 
                        regulation.</DELETED>
                        <DELETED>    ``(ii) If an eligible passive 
                        company is formed under clause (i), an 
                        operating company with respect to that eligible 
                        passive company.</DELETED>
                <DELETED>    ``(D) Correct the address of any property 
                with respect to which the loan is made.</DELETED>
                <DELETED>    ``(E) Correct the name of any interim 
                lender or third-party lender.</DELETED>
                <DELETED>    ``(F) Change any third-party lender or 
                interim lender if that lender is a financial 
                institution that is regulated by the Federal Government 
                or a State government.</DELETED>
                <DELETED>    ``(G) Make a guarantor a co-borrower or a 
                co-borrower a guarantor.</DELETED>
                <DELETED>    ``(H) Add a guarantor that does not change 
                ownership with respect to the loan.</DELETED>
                <DELETED>    ``(I) Reduce the amount of standby debt 
                before the closing as a result of regularly scheduled 
                payments.</DELETED>
                <DELETED>    ``(J) Reduce the cost of the project with 
                respect to which the loan is made.</DELETED>
        <DELETED>    ``(2) Fees.--The Administrator shall--</DELETED>
                <DELETED>    ``(A) issue a rule regarding the amount of 
                a closing fee that may be financed in a debenture that 
                is issued by a certified development company to make 
                one or more loans to small business concerns, the 
                proceeds of which are used by that concern for the 
                purposes described in subsection (a), except that such 
                amount shall be not less than $3,500; and</DELETED>
                <DELETED>    ``(B) periodically update the rule issued 
                under subparagraph (A).</DELETED>
        <DELETED>    ``(3) No adverse change and financial statement.--
        Before the closing with respect to a loan made under subsection 
        (a), the borrower and any operating company shall--</DELETED>
                <DELETED>    ``(A) make the certification required 
                under section 120.892 of title 13, Code of Federal 
                Regulations, or any successor regulation; and</DELETED>
                <DELETED>    ``(B) submit to the certified development 
                company a financial statement that is not more than 180 
                days old, which the company shall certify not later 
                than 120 days before the date on which the certified 
                development company issues a debenture with respect to 
                the project to which the loan relates.</DELETED>
<DELETED>    ``(c) Accredited Lender Certified Company Defined.--In 
this section, the term `accredited lender certified company' means a 
certified development company that meets the requirements under section 
507(b), including a certified development company that the 
Administration has designated as an accredited lender under such 
section 507(b).''; and</DELETED>
        <DELETED>    (2) by adding at the end the following:</DELETED>

<DELETED>``SEC. 511. CLOSING AND OVERSIGHT.</DELETED>

<DELETED>    ``(a) SBA District Counsels.--Beginning on the date of 
enactment of this section, with respect to the program established 
under this title, district counsels of the Administration shall be 
subject to the same requirements, and shall have the same authority and 
responsibilities, as in effect with respect to that program on the day 
before the date of enactment of this section, except that--</DELETED>
        <DELETED>    ``(1) the Office of Credit Risk Management of the 
        Administration shall have the responsibility for all duties 
        relating to conducting file reviews of loans made under this 
        title; and</DELETED>
        <DELETED>    ``(2) district counsels of the Administration 
        shall not have any responsibility relating to the review of 
        closing packages with respect to a loan made under this 
        title.</DELETED>
<DELETED>    ``(b) Designated Attorneys.--For the purposes of this 
title, the following provisions and requirements shall apply with 
respect to a designated attorney of a certified development 
company:</DELETED>
        <DELETED>    ``(1) A designated attorney that meets the 
        requirements determined under paragraph (2) shall be 
        responsible for certifying documents relating to the closing of 
        a loan described in this title.</DELETED>
        <DELETED>    ``(2) The Administrator may determine any 
        continuing education requirements that the designated attorney 
        shall be required to satisfy in order to be permitted to close 
        a loan made under this title.</DELETED>
        <DELETED>    ``(3) If, as of the date of enactment of this 
        section, a certified development company does not have a 
        designated attorney, during the 270-day period beginning on 
        that date of enactment, the certified development company may 
        identify such an attorney, subject to the approval of the 
        Administrator.''.</DELETED>

<DELETED>SEC. 5. CERTIFIED DEVELOPMENT COMPANY LOANS FOR SMALL 
              MANUFACTURERS.</DELETED>

<DELETED>    (a) Contribution Requirement.--Section 502(a)(3)(C) of the 
Small Business Investment Act of 1958, as designated by section 3, is 
amended--</DELETED>
        <DELETED>    (1) by redesignating clauses (i), (ii), (iii), and 
        (iv) as subclauses (I), (II), (III), and (IV), respectively, 
        and adjusting the margins of such subclauses 
        accordingly;</DELETED>
        <DELETED>    (2) by inserting before subclause (I), as so 
        redesignated, the following:</DELETED>
                        <DELETED>    ``(i) for a small business concern 
                        that is not a small manufacturer (as defined in 
                        section 501(e)(7))--'';</DELETED>
        <DELETED>    (3) in subclause (III), as so redesignated, by 
        striking ``clauses (i) and (ii)'' and inserting ``subclauses 
        (I) and (II)'';</DELETED>
        <DELETED>    (4) in subclause (IV) as so redesignated, by 
        striking the period at the end and inserting ``; or''; 
        and</DELETED>
        <DELETED>    (5) by adding at the end the following:</DELETED>
                        <DELETED>    ``(ii) for a small manufacturer 
                        (as defined in section 501(e)(7))--</DELETED>
                                <DELETED>    ``(I) at least 5 percent 
                                of the total cost of the project 
                                financed, if the small business concern 
                                has been in operation for a period of 2 
                                years or less;</DELETED>
                                <DELETED>    ``(II) at least 5 percent 
                                of the total cost of the project 
                                financed, if the project involves a 
                                limited or single purpose building or 
                                structure;</DELETED>
                                <DELETED>    ``(III) at least 10 
                                percent of the total cost of the 
                                project financed if the project 
                                involves both of the conditions set 
                                forth in subclauses (I) and (II); 
                                or</DELETED>
                                <DELETED>    ``(IV) at least 5 percent 
                                of the total cost of the project 
                                financed, in all other circumstances, 
                                at the discretion of the development 
                                company.''.</DELETED>
<DELETED>    (b) Creation or Retention of Jobs Requirement.--Section 
501(e) of the Small Business Investment Act of 1958 (15 U.S.C. 695(e)) 
is amended--</DELETED>
        <DELETED>    (1) in paragraph (1), by striking ``creates or 
        retains'' and all that follows through the period at the end 
        and inserting ``creates or retains 1 job for every $75,000 
        guaranteed by the Administration, except that the amount is 
        $150,000 in the case of a project of a small 
        manufacturer.'';</DELETED>
        <DELETED>    (2) in paragraph (2), by striking ``creates or 
        retains'' and all that follows through the period at the end 
        and inserting ``creates or retains 1 job for every $75,000 
        guaranteed by the Administration, except that the amount is 
        $150,000 in the case of a project of a small 
        manufacturer.'';</DELETED>
        <DELETED>    (3) by redesignating paragraph (6) as paragraph 
        (7); and</DELETED>
        <DELETED>    (4) by inserting after paragraph (5) the 
        following:</DELETED>
<DELETED>    ``(6) For a loan for a project directed toward the 
creation of job opportunities under subsection (d)(1), the 
Administrator shall publish on the website of the Administration the 
number of jobs created or retained under the project as of the date 
that is 2 years after the completion (as determined based on 
information provided by the development company) of the 
project.''.</DELETED>
<DELETED>    (c) Collateral Requirements.--Section 502(a)(3)(E)(i) of 
the Small Business Investment Act of 1958, as designated by section 3, 
is amended by adding at the end the following: ``Additional collateral 
shall not be required in the case of a small manufacturer (as defined 
in section 501(e)(7)).''.</DELETED>
<DELETED>    (d) Debt Refinancing.--Section 502(a)(7)(B) of the Small 
Business Investment Act of 1958, as designated by section 3, is 
amended--</DELETED>
        <DELETED>    (1) in the matter preceding clause (i), by 
        inserting ``(or in the case of a small manufacturer (as defined 
        in section 501(e)(7)), that does not exceed 100 percent of the 
        project cost of the expansion)'' after ``cost of the 
        expansion'';</DELETED>
        <DELETED>    (2) in clause (v), by adding ``and'' at the 
        end;</DELETED>
        <DELETED>    (3) by striking clause (vi); and</DELETED>
        <DELETED>    (4) by redesignating clause (vii) as clause 
        (vi).</DELETED>
<DELETED>    (e) Amount of Guaranteed Debenture.--Section 503(a) of the 
Small Business Investment Act of 1958 (15 U.S.C. 697(a)) is amended by 
adding at the end the following:</DELETED>
<DELETED>    ``(5) Any debenture issued by a State or local development 
company to a small manufacturer (as defined in section 501(e)(7)) with 
respect to which a guarantee is made under this subsection shall be in 
an amount equal to not more than 50 percent of the cost of the project 
with respect to which such debenture is issued, without regard to 
whether good cause has been shown.''.</DELETED>

<DELETED>SEC. 6. ASSISTANCE FOR SMALL MANUFACTURERS.</DELETED>

<DELETED>    Title V of the Small Business Investment Act of 1958 (15 
U.S.C. 695 et seq.), as amended by section 4(2), is further amended by 
adding at the end the following:</DELETED>

<DELETED>``SEC. 512. ASSISTANCE FOR SMALL MANUFACTURERS.</DELETED>

<DELETED>    ``(a) In General.--The Administrator shall ensure that 
each district office of the Administration partners with not less than 
1 resource partner to provide training to small business concerns 
assigned a North American Industry Classification System code for 
manufacturing on obtaining assistance under the program carried out 
under this title, including with respect to the application process 
under that program and partnering with development companies under this 
title.</DELETED>
<DELETED>    ``(b) Resource Partner Defined.--In this section, the term 
`resource partner' means--</DELETED>
        <DELETED>    ``(1) a small business development center, as 
        defined in section 3 of the Small Business Act (15 U.S.C. 
        632);</DELETED>
        <DELETED>    ``(2) a women's business center described in 
        section 29 of such Act (15 U.S.C. 656);</DELETED>
        <DELETED>    ``(3) a chapter of the Service Corps of Retired 
        Executives established under section 8(b)(1)(B) of such Act (15 
        U.S.C. 637(b)(1)(B)); and</DELETED>
        <DELETED>    ``(4) a Veteran Business Outreach Center described 
        in section 32 of such Act (15 U.S.C. 657b).''.</DELETED>

<DELETED>SEC. 7. LEASING RULES FOR NEW FACILITIES AND EXISTING 
              BUILDINGS.</DELETED>

<DELETED>    (a) In General.--Section 502(a) of the Small Business 
Investment Act of 1958, as designated by section 3, is amended by 
striking paragraphs (4) and (5) and inserting the following:</DELETED>
        <DELETED>    ``(4) New facilities.--</DELETED>
                <DELETED>    ``(A) In general.--With respect to a 
                project to construct a new facility, an assisted small 
                business concern may permanently lease not more than 20 
                percent of the project if such concern--</DELETED>
                        <DELETED>    ``(i) permanently occupies and 
                        uses not less than 60 percent of the 
                        project;</DELETED>
                        <DELETED>    ``(ii) plans to occupy and use an 
                        additional portion of the project that is not 
                        permanently leased not later than 3 years after 
                        receipt of assistance under this section; 
                        and</DELETED>
                        <DELETED>    ``(iii) plans to permanently 
                        occupy and use 80 percent of the project not 
                        later than 10 years after receipt of such 
                        assistance.</DELETED>
                <DELETED>    ``(B) Small manufacturers.--With respect 
                to an assisted small business concern that is a small 
                manufacturer (as defined in section 501(e)(7)), 
                subparagraph (A)(i) shall apply with `50 percent' 
                substituted for `60 percent'.</DELETED>
        <DELETED>    ``(5) Existing buildings.--With respect to a 
        project to acquire, renovate, or reconstruct an existing 
        building, the following shall apply:</DELETED>
                <DELETED>    ``(A) Occupancy requirements.--The 
                assisted small business concern may permanently lease 
                not more than 50 percent of the project if the concern 
                permanently occupies and uses not less than 50 percent 
                of the project.</DELETED>
                <DELETED>    ``(B) Exception.--The assisted small 
                business concern may permanently lease more than 50 
                percent of the project if--</DELETED>
                        <DELETED>    ``(i) such concern--</DELETED>
                                <DELETED>    ``(I) has occupied and 
                                used the existing building for a 
                                consecutive 12-month period before 
                                submitting an application for 
                                assistance under this 
                                section;</DELETED>
                                <DELETED>    ``(II) agrees to 
                                permanently use less than 50 percent of 
                                the existing building and permanently 
                                lease more than 50 percent for a 
                                consecutive 12-month period after 
                                receiving such assistance; 
                                and</DELETED>
                                <DELETED>    ``(III) affirms that the 
                                existing building is appropriate for 
                                current and reasonably anticipated 
                                needs; and</DELETED>
                        <DELETED>    ``(ii) the development company 
                        assisting such project--</DELETED>
                                <DELETED>    ``(I) provides written 
                                notice to the Administrator on the date 
                                on which the development company closes 
                                the loan for such project; 
                                and</DELETED>
                                <DELETED>    ``(II) once each year 
                                during the first 5 years of the loan, 
                                and once every 2 years for the 
                                remainder of the loan--</DELETED>
                                        <DELETED>    ``(aa) conducts an 
                                        examination of the assisted 
                                        small business concern to 
                                        ensure the concern is not a 
                                        real estate development 
                                        business; and</DELETED>
                                        <DELETED>    ``(bb) files with 
                                        the Administrator an anti-
                                        investor certification signed 
                                        by the development company and 
                                        the assisted small business 
                                        concern.</DELETED>
                <DELETED>    ``(C) Lease term.--Any residential lease 
                made under this paragraph shall be for a term of not 
                more than 1 year, and any commercial lease made under 
                this paragraph shall be for a term of not more than 5 
                years.''.</DELETED>
<DELETED>    (b) Report.--Not later than 5 years after the date of 
enactment of this Act, the Administrator of the Small Business 
Administration shall submit to Congress a report analyzing the impact 
of the amendments made by this section on access to capital for small 
business concerns (as defined in section 3 of the Small Business Act 
(15 U.S.C. 632)), and recommending whether similar notice, examination, 
and certifications requirements should be made to the program 
established under section 7(a) of the Small Business Act (15 U.S.C. 
636(a)).</DELETED>

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``504 Modernization and Small 
Manufacturer Enhancement Act of 2023''.

SEC. 2. ADDITIONS TO POLICY GOALS FOR THE DEVELOPMENT COMPANY PROGRAM.

    Section 501(d)(3) of the Small Business Investment Act of 1958 (15 
U.S.C. 695(d)(3)) is amended--
            (1) by redesignating subparagraphs (A) through (L) as 
        subparagraphs (B) through (M), respectively;
            (2) by inserting before subparagraph (B), as so 
        redesignated, the following:
                    ``(A) workforce development through work-based or 
                work-integrated training, which shall be satisfied by 
                demonstrating that a small business concern that is a 
                subject of the project has--
                            ``(i) a documented in-house training 
                        program, the duration of which is not shorter 
                        than 12 weeks; or
                            ``(ii) entered into a contract with an 
                        entity--
                                    ``(I) to provide trained applicants 
                                for any open position of employment at 
                                the small business concern; and
                                    ``(II) that ensures that any 
                                applicant provided to the small 
                                business concern under subclause (I) 
                                has undergone not fewer than 12 weeks 
                                of training that is relevant to the 
                                open position described in that 
                                subclause,'';
            (3) by amending subparagraph (D), as so redesignated, to 
        read as follows:
                    ``(D) expansion of minority-owned, employee-owned, 
                or women-owned business development,'';
            (4) in subparagraph (L), as so redesignated, by striking 
        ``producers, or'' and inserting ``producers,'';
            (5) in subparagraph (M), as so redesignated, by striking 
        the period at the end and inserting a comma;
            (6) by inserting after subparagraph (M), as so 
        redesignated, the following:
                    ``(N) enhanced ability for small business concerns 
                to reduce costs by using energy efficient products and 
                generating renewable energy,
                    ``(O) aid revitalizing of any area for which a 
                disaster has been declared or determined under 
                subparagraph (A), (B), (C), or (E) of section 7(b)(2) 
                of the Small Business Act (15 U.S.C. 636(b)(2)), or
                    ``(P) expansion of small business concerns with 10 
                or fewer employees.''; and
            (7) in the flush text following subparagraph (P), as added 
        by paragraph (6), by striking ``subparagraphs (J) and (K)'' and 
        inserting ``subparagraphs (K) and (L)''.

SEC. 3. INCREASE IN LOAN AMOUNTS FOR MANUFACTURING LOANS.

    Section 502 of the Small Business Investment Act of 1958 (15 U.S.C. 
696) is amended--
            (1) in the matter preceding paragraph (1), by striking 
        ``The Administration'' and inserting the following:
    ``(a) In General.--The Administration''; and
            (2) in subsection (a), as so designated--
                    (A) in paragraph (2)(A)--
                            (i) in the matter preceding clause (i), by 
                        striking ``section'' and inserting 
                        ``subsection''; and
                            (ii) in clause (iii), by striking 
                        ``$5,500,000'' and inserting ``$6,500,000''; 
                        and
                    (B) in paragraph (3)(A), by striking ``this 
                section'' and inserting ``this subsection''.

SEC. 4. IMPROVEMENTS TO 504 LOAN CLOSING PROCEDURE.

    Title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 
et seq.) is amended--
            (1) in section 502 (15 U.S.C. 696), as amended by this Act, 
        by adding at the end the following:
    ``(b) Closing.--
            ``(1) Authority of certain development companies.--An 
        accredited lender certified company may take any of the 
        following actions to facilitate the closing of a loan made 
        under subsection (a):
                    ``(A) Reallocate the cost of the project with 
                respect to which the loan is made in an amount that is 
                not more than 10 percent of the overall cost of the 
                project.
                    ``(B) Correct any name that is applicable to the 
                loan, including the name of any borrower, guarantor, 
                eligible passive company described in subparagraph 
                (C)(i), and operating company described in subparagraph 
                (C)(ii).
                    ``(C) Add any of the following to receive proceeds 
                of the loan:
                            ``(i) An eligible passive company that 
                        complies with section 120.111 of title 13, Code 
                        of Federal Regulations, or any successor 
                        regulation.
                            ``(ii) If an eligible passive company is 
                        added under clause (i), an operating company 
                        with respect to that eligible passive company.
                    ``(D) Correct the address of any property with 
                respect to which the loan is made.
                    ``(E) Correct the name of any interim lender or 
                third-party lender.
                    ``(F) Change any third-party lender or interim 
                lender if that lender is a financial institution that 
                is regulated by the Federal Government or a State 
                government.
                    ``(G) Make a guarantor a co-borrower or a co-
                borrower a guarantor.
                    ``(H) Add a guarantor that does not change 
                ownership with respect to the loan.
                    ``(I) Reduce the amount of standby debt before the 
                closing as a result of regularly scheduled payments.
                    ``(J) Reduce the cost of the project with respect 
                to which the loan is made.
            ``(2) Fees.--The Administrator shall--
                    ``(A) issue a rule regarding the amount of a 
                closing fee that may be financed in a debenture that is 
                issued by a certified development company to make one 
                or more loans to small business concerns, the proceeds 
                of which are used by that concern for the purposes 
                described in subsection (a), except that such amount 
                shall be not less than $3,500; and
                    ``(B) periodically update the rule issued under 
                subparagraph (A).
            ``(3) No adverse change and financial statement.--Before 
        the closing with respect to a loan made under subsection (a), 
        the borrower and any operating company shall--
                    ``(A) make the certification required under section 
                120.892 of title 13, Code of Federal Regulations, or 
                any successor regulation; and
                    ``(B) submit to the certified development company a 
                financial statement that is not more than 270 days old, 
                which the company shall certify not later than 120 days 
                before the date on which the certified development 
                company issues a debenture with respect to the project 
                to which the loan relates.
    ``(c) Accredited Lender Certified Company Defined.--In this 
section, the term `accredited lender certified company' means a 
certified development company that meets the requirements under section 
507(b), including a certified development company that the 
Administration has designated as an accredited lender under such 
section 507(b).''; and
            (2) by adding at the end the following:

``SEC. 511. CLOSING AND OVERSIGHT.

    ``(a) SBA District Counsels.--Beginning on the date that is 180 
days after the date of enactment of this section, with respect to the 
program established under this title, district counsels of the 
Administration shall be subject to the same requirements, and shall 
have the same authority and responsibilities, as in effect with respect 
to that program on the day before the date of enactment of this 
section, except that--
            ``(1) the Office of Credit Risk Management of the 
        Administration shall have the responsibility for all duties 
        relating to conducting file reviews of loans made under this 
        title; and
            ``(2) district counsels of the Administration shall not 
        have any responsibility relating to the review of closing 
        packages with respect to a loan made under this title.
    ``(b) Designated Attorneys.--For the purposes of this title, the 
following provisions and requirements shall apply with respect to a 
designated attorney of a certified development company:
            ``(1) A designated attorney that meets the requirements 
        determined under paragraph (2) shall be responsible for 
        certifying documents relating to the closing of a loan 
        described in this title.
            ``(2) The Administrator may determine any continuing 
        education requirements that the designated attorney shall be 
        required to satisfy in order to be permitted to close a loan 
        made under this title.
            ``(3) If, as of the date of enactment of this section, a 
        certified development company does not have a designated 
        attorney, during the 180-day period beginning on that date of 
        enactment, the certified development company may identify such 
        an attorney, subject to the approval of the Administrator.''.

SEC. 5. CERTIFIED DEVELOPMENT COMPANY LOANS FOR SMALL MANUFACTURERS.

    (a) Contribution Requirement.--Section 502(a)(3)(C) of the Small 
Business Investment Act of 1958 (15 U.S.C. 696(a)(3)(C)), as so 
designated by this Act, is amended--
            (1) by redesignating clauses (i), (ii), (iii), and (iv) as 
        subclauses (I), (II), (III), and (IV), respectively, and 
        adjusting the margins of such subclauses accordingly;
            (2) by inserting before subclause (I), as so redesignated, 
        the following:
                            ``(i) for a small business concern that is 
                        not a small manufacturer (as defined in section 
                        501(e)(7))--'';
            (3) in subclause (III), as so redesignated, by striking 
        ``clauses (i) and (ii)'' and inserting ``subclauses (I) and 
        (II)'';
            (4) in subclause (IV) as so redesignated, by striking the 
        period at the end and inserting ``; or''; and
            (5) by adding at the end the following:
                            ``(ii) for a small manufacturer (as defined 
                        in section 501(e)(7))--
                                    ``(I) at least 5 percent of the 
                                total cost of the project financed, if 
                                the small business concern has been in 
                                operation for a period of 2 years or 
                                less;
                                    ``(II) at least 5 percent of the 
                                total cost of the project financed, if 
                                the project involves a limited or 
                                single purpose building or structure;
                                    ``(III) at least 10 percent of the 
                                total cost of the project financed if 
                                the project involves both of the 
                                conditions set forth in subclauses (I) 
                                and (II); or
                                    ``(IV) at least 5 percent of the 
                                total cost of the project financed, in 
                                all other circumstances, at the 
                                discretion of the development 
                                company.''.
    (b) Creation or Retention of Jobs Requirement.--Section 501(e) of 
the Small Business Investment Act of 1958 (15 U.S.C. 695(e)) is 
amended--
            (1) in paragraph (1), by striking ``creates or retains'' 
        and all that follows through the period at the end and 
        inserting ``creates or retains 1 job for every $75,000 
        guaranteed by the Administration, except that the amount is 
        $150,000 in the case of a project of a small manufacturer.'';
            (2) in paragraph (2), by striking ``creates or retains'' 
        and all that follows through the period at the end and 
        inserting ``creates or retains 1 job for every $75,000 
        guaranteed by the Administration, except that the amount is 
        $150,000 in the case of a project of a small manufacturer.'';
            (3) by redesignating paragraph (6) as paragraph (7); and
            (4) by inserting after paragraph (5) the following:
    ``(6) For a loan for a project directed toward the creation of job 
opportunities under subsection (d)(1), the Administrator shall publish 
on the website of the Administration the number of jobs created or 
retained under the project as of the date that is 2 years after the 
completion (as determined based on information provided by the 
development company) of the project.''.
    (c) Collateral Requirements.--Section 502(a)(3)(E)(i) of the Small 
Business Investment Act of 1958 (15 U.S.C. 696(a)(3)(E)(i)), as so 
designated by this Act, is amended by adding at the end the following: 
``Additional collateral shall not be required in the case of a small 
manufacturer (as defined in section 501(e)(7)).''.
    (d) Debt Refinancing.--Section 502(a)(7)(B) of the Small Business 
Investment Act of 1958 (15 U.S.C. 696(a)(7)(B)), as so designated by 
this Act, is amended--
            (1) in the matter preceding clause (i), by inserting ``(or 
        in the case of a small manufacturer (as defined in section 
        501(e)(7)), that does not exceed 100 percent of the project 
        cost of the expansion)'' after ``cost of the expansion'';
            (2) in clause (v), by adding ``and'' at the end;
            (3) by striking clause (vi); and
            (4) by redesignating clause (vii) as clause (vi).
    (e) Amount of Guaranteed Debenture.--Section 503(a) of the Small 
Business Investment Act of 1958 (15 U.S.C. 697(a)) is amended by adding 
at the end the following:
    ``(5) Any debenture issued by a State or local development company 
to a small manufacturer (as defined in section 501(e)(7)) with respect 
to which a guarantee is made under this subsection shall be in an 
amount equal to not more than 50 percent of the cost of the project 
with respect to which such debenture is issued, without regard to 
whether good cause has been shown.''.

SEC. 6. ASSISTANCE FOR SMALL MANUFACTURERS.

    Title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 
et seq.), as amended by this Act, is amended by adding at the end the 
following:

``SEC. 512. ASSISTANCE FOR SMALL MANUFACTURERS.

    ``(a) In General.--The Administrator shall ensure that each 
district office of the Administration partners with not less than 1 
resource partner to provide training to small business concerns 
assigned a North American Industry Classification System code for 
manufacturing on obtaining assistance under the program carried out 
under this title, including with respect to the application process 
under that program and partnering with development companies under this 
title.
    ``(b) Resource Partner Defined.--In this section, the term 
`resource partner' means--
            ``(1) a small business development center, as defined in 
        section 3 of the Small Business Act (15 U.S.C. 632);
            ``(2) a women's business center described in section 29 of 
        such Act (15 U.S.C. 656);
            ``(3) a chapter of the Service Corps of Retired Executives 
        established under section 8(b)(1)(B) of such Act (15 U.S.C. 
        637(b)(1)(B)); and
            ``(4) a Veteran Business Outreach Center described in 
        section 32 of such Act (15 U.S.C. 657b).''.

SEC. 7. LEASING RULES FOR NEW FACILITIES AND EXISTING BUILDINGS.

    (a) In General.--Section 502(a) of the Small Business Investment 
Act of 1958 (15 U.S.C. 696(a)), as so designated by this Act, is 
amended by striking paragraphs (4) and (5) and inserting the following:
            ``(4) New facilities.--
                    ``(A) In general.--With respect to a project to 
                construct a new facility, an assisted small business 
                concern may permanently lease not more than 20 percent 
                of the project if such concern--
                            ``(i) permanently occupies and uses not 
                        less than 60 percent of the project;
                            ``(ii) plans to occupy and use an 
                        additional portion of the project that is not 
                        permanently leased not later than 3 years after 
                        receipt of assistance under this section; and
                            ``(iii) plans to permanently occupy and use 
                        80 percent of the project not later than 10 
                        years after receipt of such assistance.
                    ``(B) Small manufacturers.--With respect to an 
                assisted small business concern that is a small 
                manufacturer (as defined in section 501(e)(7)), 
                subparagraph (A)(i) shall apply with `50 percent' 
                substituted for `60 percent'.
            ``(5) Existing buildings.--With respect to a project to 
        acquire, renovate, or reconstruct an existing building, the 
        following shall apply:
                    ``(A) Occupancy requirements.--The assisted small 
                business concern may permanently lease not more than 50 
                percent of the project if the concern permanently 
                occupies and uses not less than 50 percent of the 
                project.
                    ``(B) Exception.--The assisted small business 
                concern may permanently lease more than 50 percent of 
                the project if--
                            ``(i) such concern--
                                    ``(I) has occupied and used the 
                                existing building for a consecutive 12-
                                month period before submitting an 
                                application for assistance under this 
                                section;
                                    ``(II) agrees to permanently use 
                                less than 50 percent of the existing 
                                building and permanently lease more 
                                than 50 percent for a consecutive 12-
                                month period after receiving such 
                                assistance; and
                                    ``(III) affirms that the existing 
                                building is appropriate for current and 
                                reasonably anticipated needs; and
                            ``(ii) the development company assisting 
                        such project--
                                    ``(I) provides written notice to 
                                the Administrator on the date on which 
                                the development company closes the loan 
                                for such project; and
                                    ``(II) once each year during the 
                                first 5 years of the loan, and once 
                                every 2 years for the remainder of the 
                                loan--
                                            ``(aa) conducts an 
                                        examination of the assisted 
                                        small business concern to 
                                        ensure the concern is not a 
                                        real estate development 
                                        business; and
                                            ``(bb) files with the 
                                        Administrator an anti-investor 
                                        certification signed by the 
                                        development company and the 
                                        assisted small business 
                                        concern.
                    ``(C) Lease term.--Any residential lease made under 
                this paragraph shall be for a term of not more than 1 
                year, and any commercial lease made under this 
                paragraph shall be for a term of not more than 5 
                years.''.
    (b) Report.--Not later than 5 years after the date of enactment of 
this Act, the Administrator of the Small Business Administration shall 
submit to Congress a report analyzing the impact of the amendments made 
by this section on access to capital for small business concerns (as 
defined in section 3 of the Small Business Act (15 U.S.C. 632)), and 
recommending whether similar notice, examination, and certifications 
requirements should be made to the program established under section 
7(a) of the Small Business Act (15 U.S.C. 636(a)).
                                                       Calendar No. 168

118th CONGRESS

  1st Session

                                S. 1352

_______________________________________________________________________

                                 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.

_______________________________________________________________________

                             July 25, 2023

                       Reported with an amendment
```