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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 1345 Reported in Senate (RS)]

<DOC>

                                                       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.

    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 Credit Risk Management 
Improvement Act of 2023''.</DELETED>

<DELETED>SEC. 2. ENHANCEMENTS TO THE OFFICE OF CREDIT RISK 
              MANAGEMENT.</DELETED>

<DELETED>    Section 47 of the Small Business Act (15 U.S.C. 657t) is 
amended--</DELETED>
        <DELETED>    (1) by striking subsection (b) and inserting the 
        following:</DELETED>
<DELETED>    ``(b) Duties.--The Office--</DELETED>
        <DELETED>    ``(1) shall be responsible for--</DELETED>
                <DELETED>    ``(A) supervising--</DELETED>
                        <DELETED>    ``(i) any lender making loans 
                        under section 7(a) (in this section referred to 
                        as a `7(a) lender');</DELETED>
                        <DELETED>    ``(ii) any Lending Partner or 
                        Intermediary participant of the Administration 
                        in a lending program of the Office of Capital 
                        Access of the Administration;</DELETED>
                        <DELETED>    ``(iii) any small business lending 
                        company or a non-Federally regulated lender 
                        without regard to the requirements of section 
                        23; and</DELETED>
                        <DELETED>    ``(iv) any certified development 
                        company described under the program established 
                        under title V of the Small Business Investment 
                        Act of 1958 (15 U.S.C. 695 et seq.) (referred 
                        to in this section as a `certified development 
                        company'), as provided in subsection (k); 
                        and</DELETED>
                <DELETED>    ``(B) conducting file reviews with respect 
                to loan closings under the program established under 
                title V of the Small Business Investment Act of 1958 
                (15 U.S.C. 695 et seq.), as provided in subsection (j); 
                and</DELETED>
        <DELETED>    ``(2) may--</DELETED>
                <DELETED>    ``(A) take formal and informal enforcement 
                actions against a certified development company, as 
                provided in subsection (l); and</DELETED>
                <DELETED>    ``(B) charge a certified development 
                company a fee, as provided in subsection (m).''; 
                and</DELETED>
        <DELETED>    (2) by adding at the end the following:</DELETED>
<DELETED>    ``(j) Loan Closing File Reviews.--With respect to a loan 
closing under the program established under title V of the Small 
Business Investment Act of 1958 (15 U.S.C. 695 et seq.), the Office 
shall be responsible for the following:</DELETED>
        <DELETED>    ``(1) Conducting a complete file review of a 
        random selection of all loan closings, the number, frequency, 
        and conduct of which shall be at the discretion of the Office, 
        to ensure program integrity, including a review of the items 
        listed on the Checklist for Complete File Review contained in 
        the appropriate form of the Administration.</DELETED>
        <DELETED>    ``(2) Not later than 60 days after the date on 
        which each complete file review conducted under paragraph (1) 
        is completed, preparing a written report documenting the 
        results of that review, which the Office shall send to--
        </DELETED>
                <DELETED>    ``(A) the applicable certified development 
                company;</DELETED>
                <DELETED>    ``(B) the designated attorney that closed 
                the loan for the certified development company; 
                and</DELETED>
                <DELETED>    ``(C) the Commercial Loan Service 
                Center.</DELETED>
        <DELETED>    ``(3) If a complete file review conducted under 
        paragraph (1) reveals a deficiency that could result in a loss 
        to the Administration, requiring the applicable certified 
        development company or the designated attorney to promptly 
        correct the deficiency.</DELETED>
<DELETED>    ``(k) Supervision of Certified Development Companies.--
With respect to the supervision of certified development companies--
</DELETED>
        <DELETED>    ``(1) an employee of the Office shall--</DELETED>
                <DELETED>    ``(A) be present for, and supervise, the 
                review of any such company that is conducted by a 
                contractor of the Office on the premises of the 
                company; and</DELETED>
                <DELETED>    ``(B) supervise the review of any such 
                company that is conducted by a contractor of the Office 
                that is not conducted on the premises of the company; 
                and</DELETED>
        <DELETED>    ``(2) the Administrator shall--</DELETED>
                <DELETED>    ``(A) develop a timeline for the review by 
                the Office of certified development companies and the 
                submission of reports regarding those reviews, under 
                which the Administrator shall--</DELETED>
                        <DELETED>    ``(i) submit to a certified 
                        development company a written report of any 
                        review of the company not later than 90 days 
                        after the date on which the review is 
                        concluded; or</DELETED>
                        <DELETED>    ``(ii) if the Administrator 
                        expects to submit the report after the end of 
                        the 90-day period described in clause (i), 
                        notify the company of the expected date of 
                        submission of the report and the reason for the 
                        delay; and</DELETED>
                <DELETED>    ``(B) if a response by a certified 
                development company is requested in a report submitted 
                under subparagraph (A)(i), require the company to 
                submit responses to the Administrator not later than 45 
                business days after the date on which the company 
                receives the report.</DELETED>
<DELETED>    ``(l) Enforcement Authority Against Certified Development 
Companies.--</DELETED>
        <DELETED>    ``(1) Informal enforcement authority.--The 
        Director may take an informal enforcement action against a 
        certified development company if the Director finds that the 
        company has violated a statutory or regulatory requirement or 
        any requirement in a Standard Operating Procedures Manual or 
        Policy Notice relating to a program or function of the Office 
        of Capital Access.</DELETED>
        <DELETED>    ``(2) Formal enforcement authority.--</DELETED>
                <DELETED>    ``(A) In general.--With the approval of 
                the Lender Oversight Committee established under 
                section 48, the Director may take a formal enforcement 
                action against any certified development company if the 
                Director finds that the company has violated--
                </DELETED>
                        <DELETED>    ``(i) a statutory or regulatory 
                        requirement, including a requirement relating 
                        to the necessary funds for making loans when 
                        those funds are not made available to the 
                        company from private sources on reasonable 
                        terms; or</DELETED>
                        <DELETED>    ``(ii) any requirement described 
                        in a Standard Operating Procedures Manual or 
                        Policy Notice relating to a program or function 
                        of the Office of Capital Access.</DELETED>
                <DELETED>    ``(B) Enforcement actions.--The decision 
                to take an enforcement action against a certified 
                development company under subparagraph (A) shall be 
                based on the severity or frequency of the violation and 
                may include assessing a civil monetary penalty against 
                the company in an amount that is not greater than 
                $250,000.</DELETED>
        <DELETED>    ``(3) Failure to submit annual report.--With 
        respect to a certified development company that, as of the date 
        that is 30 days after the date on which the company is required 
        to submit any report, fails to submit that report, the Director 
        may--</DELETED>
                <DELETED>    ``(A) suspend the company from 
                participating in the program established under title V 
                of the Small Business Investment Act of 1958 (15 U.S.C. 
                695 et seq.) for a period that is not longer than 30 
                days; or</DELETED>
                <DELETED>    ``(B) impose a penalty on the company in 
                an amount to be determined by the Director, except that 
                the amount of the penalty shall be not more than 
                $10,000.</DELETED>
<DELETED>    ``(m) Fee Authority Regarding Certified Development 
Companies.--</DELETED>
        <DELETED>    ``(1) In general.--On and after the date that is 1 
        year after the date of enactment of this subsection, the Office 
        may collect from each certified development company a fee, the 
        amount of which--</DELETED>
                <DELETED>    ``(A) shall be determined on a graduated 
                scale according to the size of the portfolio of the 
                certified development company with respect to the 
                program carried out under title V of the Small Business 
                Investment Act of 1958 (15 U.S.C. 695 et seq.); 
                and</DELETED>
                <DELETED>    ``(B) shall not exceed the amount that is 
                1 basis point with respect to the value of the 
                portfolio described in subparagraph (A).</DELETED>
        <DELETED>    ``(2) Payment.--A certified development company on 
        which a fee is imposed under paragraph (1) shall pay the fee 
        from the servicing fees collected by the development company 
        pursuant to regulation.''.</DELETED>

<DELETED>SEC. 3. RULES RELATING TO OBLIGATIONS OF CERTIFIED DEVELOPMENT 
              COMPANIES UNDER THE NATIONAL ENVIRONMENTAL POLICY 
              ACT.</DELETED>

<DELETED>    (a) Eligible Certified Development Company Defined.--In 
this section, the term ``eligible certified development company'' means 
a certified development company defined under title V of the Small 
Business Investment Act of 1958 (15 U.S.C. 695 et seq.) that receives 
assistance pursuant to that title.</DELETED>
<DELETED>    (b) Requirement To Issue Rules.--Not later than 180 days 
after the date of enactment of this Act, the Administrator of the Small 
Business Administration shall issue rules to clarify the procedures 
necessary for an eligible certified development company to comply with 
the applicable requirements under National Environmental Policy Act of 
1969 (42 U.S.C. 4321 et seq.).</DELETED>
<DELETED>    (c) Rule of Construction.--Nothing in this section shall 
be construed to modify the requirements of the National Environmental 
Policy Act of 1969 (42 U.S.C. 4321 et seq.).</DELETED>

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``504 Credit Risk Management 
Improvement Act of 2023''.

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

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

``SEC. 511. OFFICE OF CREDIT RISK MANAGEMENT OVERSIGHT.

    ``(a) Definitions.--In this section--
            ``(1) the term `Director' means the Director of the Office; 
        and
            ``(2) the term `Office' means the Office of Credit Risk 
        Management established under section 47 of the Small Business 
        Act (15 U.S.C. 657t).
    ``(b) Duties Relating to 504 Program.--The Office--
            ``(1) shall be responsible for--
                    ``(A) supervising any certified development 
                company, as provided in subsection (d); and
                    ``(B) conducting file reviews with respect to loan 
                closings under the program established under this 
                title, as provided in subsection (c); and
            ``(2) may--
                    ``(A) take formal and informal enforcement actions 
                against a certified development company, as provided in 
                subsection (e); and
                    ``(B) charge a certified development company a fee, 
                as provided in subsection (f).
    ``(c) Loan Closing File Reviews.--With respect to a loan closing 
under the program established under this title, the Office shall be 
responsible for the following:
            ``(1) Conducting a complete file review of a random 
        selection of all loan closings, the number, frequency, and 
        conduct of which shall be at the discretion of the Office, to 
        ensure program integrity, including a review of the items 
        listed on the Checklist for Complete File Review contained in 
        the appropriate form of the Administration.
            ``(2) Not later than 60 days after the date on which each 
        complete file review conducted under paragraph (1) is 
        completed, preparing a written report documenting the results 
        of that review, which the Office shall send to--
                    ``(A) the applicable certified development company;
                    ``(B) the designated attorney that closed the loan 
                for the certified development company; and
                    ``(C) the Commercial Loan Service Center.
            ``(3) If a complete file review conducted under paragraph 
        (1) reveals a deficiency that could result in a loss to the 
        Administration, requiring the applicable certified development 
        company or the designated attorney to promptly correct the 
        deficiency.
    ``(d) Supervision of Certified Development Companies.--With respect 
to the supervision of certified development companies--
            ``(1) an employee of the Office shall--
                    ``(A) be present for, and supervise, the review of 
                any such company that is conducted by a contractor of 
                the Office on the premises of the company; and
                    ``(B) supervise the review of any such company that 
                is conducted by a contractor of the Office that is not 
                conducted on the premises of the company; and
            ``(2) the Administrator shall--
                    ``(A) develop a timeline for the review by the 
                Office of certified development companies and the 
                submission of reports regarding those reviews, under 
                which the Administrator shall--
                            ``(i) submit to a certified development 
                        company a written report of any review of the 
                        company not later than 90 days after the date 
                        on which the review is concluded; or
                            ``(ii) if the Administrator expects to 
                        submit the report after the end of the 90-day 
                        period described in clause (i)--
                                    ``(I) notify the company of the 
                                expected date of submission of the 
                                report and the reason for the delay; 
                                and
                                    ``(II) submit to the company the 
                                report; and
                    ``(B) if a response by a certified development 
                company is requested in a report submitted under 
                subparagraph (A), require the company to submit 
                responses to the Administrator not later than 45 
                business days after the date on which the company 
                receives the report.
    ``(e) Enforcement Authority Against Certified Development 
Companies.--
            ``(1) Informal enforcement authority.--The Director may 
        take an informal enforcement action against a certified 
        development company if the Director finds that the company has 
        violated a statutory or regulatory requirement or any 
        requirement in a Standard Operating Procedures Manual or Policy 
        Notice relating to a program or function of the Office of 
        Capital Access.
            ``(2) Formal enforcement authority.--
                    ``(A) In general.--With the approval of the Lender 
                Oversight Committee established under section 48 of the 
                Small Business Act (15 U.S.C. 657u), the Director may 
                take a formal enforcement action against any certified 
                development company if the Director finds that the 
                company has violated--
                            ``(i) a statutory or regulatory 
                        requirement, including a requirement relating 
                        to the necessary funds for making loans when 
                        those funds are not made available to the 
                        company from private sources on reasonable 
                        terms; or
                            ``(ii) any requirement described in a 
                        Standard Operating Procedures Manual or Policy 
                        Notice relating to a program or function of the 
                        Office of Capital Access.
                    ``(B) Enforcement actions.--The decision to take an 
                enforcement action against a certified development 
                company under subparagraph (A) shall be based on the 
                severity or frequency of the violation and may include 
                assessing a civil monetary penalty against the company 
                in an amount that is not greater than $250,000.
            ``(3) Failure to submit annual report.--With respect to a 
        certified development company that, as of the date that is 60 
        days after the date on which the company is required to submit 
        any report, fails to submit that report, the Director may--
                    ``(A) suspend the company from participating in the 
                program established under this title for a period that 
                is not longer than 30 days; or
                    ``(B) impose a penalty on the company in an amount 
                to be determined by the Director, except that the 
                amount of the penalty shall be not more than $10,000.
    ``(f) Fee Authority Regarding Certified Development Companies.--
            ``(1) In general.--On and after the date that is 1 year 
        after the date of enactment of this section, the Office may 
        collect from each certified development company a fee, the 
        amount of which--
                    ``(A) shall be determined on a graduated scale 
                according to the size of the portfolio of the certified 
                development company with respect to the program carried 
                out under this title; and
                    ``(B) shall not exceed the amount that is 1 basis 
                point with respect to the value of the portfolio 
                described in subparagraph (A).
            ``(2) Payment.--A certified development company on which a 
        fee is imposed under paragraph (1) shall pay the fee from the 
        servicing fees collected by the development company pursuant to 
        regulation.''.

SEC. 3. RULES RELATING TO OBLIGATIONS OF CERTIFIED DEVELOPMENT 
              COMPANIES UNDER THE NATIONAL ENVIRONMENTAL POLICY ACT.

    (a) Eligible Certified Development Company Defined.--In this 
section, the term ``eligible certified development company'' means a 
certified development company, within the meaning under title V of the 
Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.), that 
receives assistance pursuant to that title.
    (b) Requirement To Issue Rules.--Not later than 180 days after the 
date of enactment of this Act, the Administrator of the Small Business 
Administration shall issue rules to clarify the procedures necessary 
for an eligible certified development company to comply with the 
applicable requirements under National Environmental Policy Act of 1969 
(42 U.S.C. 4321 et seq.).
    (c) Rule of Construction.--Nothing in this section shall be 
construed to modify the requirements of the National Environmental 
Policy Act of 1969 (42 U.S.C. 4321 et seq.).

SEC. 4. EXTENSION OF SUNSET FOR DELEGATED AUTHORITY FOR ACCREDITED 
              LENDERS.

    Section 328(b)(2) of division N of the Consolidated Appropriations 
Act, 2021 (15 U.S.C. 697d note) is amended by striking ``2023'' and 
inserting ``2025''.
                                                       Calendar No. 167

118th CONGRESS

  1st Session

                                S. 1345

_______________________________________________________________________

                                 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.

_______________________________________________________________________

                             July 25, 2023

                       Reported with an amendment
```