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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 3705 Introduced in Senate (IS)]

110th CONGRESS
  2d Session
                                S. 3705

 To amend the Small Business Act and the Small Business Investment Act 
    of 1958 to stop the small business credit crunch, and for other 
                               purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           November 19, 2008

   Ms. Snowe introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
 To amend the Small Business Act and the Small Business Investment Act 
    of 1958 to stop the small business credit crunch, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE; DEFINITIONS.

    (a) Short Title.--This Act may be cited as the ``10 Steps for a 
Main Street Economic Recovery Act of 2008''.
    (b) Definitions.--In this Act--
            (1) the term ``Administration'' means the Small Business 
        Administration;
            (2) the term ``Administrator'' means the Administrator of 
        the Small Business Administration; and
            (3) the term ``small business concern'' has the same 
        meaning as in section 3 of the Small Business Act (15 U.S.C. 
        632).

SEC. 2. 7(A) LOANS.

    (a) Maximum Loan Amount.--Section 7(a)(3)(A) of the Small Business 
Act (15 U.S.C. 636(a)(3)(A)) is amended by striking ``$1,500,000 (or if 
the gross loan amount would exceed $2,000,000'' and inserting 
``$2,500,000 (or if the gross loan amount would exceed $3,000,000''.
    (b) Refinancing Existing Loans.--
            (1) In general.--Section 7(a) of the Small Business Act (15 
        U.S.C. 636) is amended by adding at the end the following:
            ``(34) Refinancing existing loans.--A borrower that has 
        received a loan under this subsection may refinance the balance 
        of the loan by applying for a loan from the lender that made 
        the original loan or with another lender.''.
            (2) Technical amendment.--Section 7(a) of the Small 
        Business Act (15 U.S.C. 636(a)) is amended by striking ``(32) 
        Increased'' and inserting ``(33) Increased''.
    (c) Alternative Size Standard.--Section 3(a) of the Small Business 
Act (15 U.S.C. 632(a)) is amended by adding at the end the following:
            ``(5) Optional size standard.--
                    ``(A) In general.--The Administrator shall 
                establish an optional size standard for business loan 
                applicants under section 7(a) and development company 
                loan applicants under title V of the Small Business 
                Investment Act of 1958 (15 U.S.C. 695 et seq.) that 
                uses maximum tangible net worth and average net income 
                as an alternative to the industry size standard.
                    ``(B) Interim rule.--Until the date on which the 
                optional size standards established under subparagraph 
                (A) are in effect, the alternative size standard in 
                section 121.301(b) of title 13, Code of Federal 
                Regulations, or any successor thereto, may be used by 
                business loan applicants under section 7(a).''.
    (d) Flexibility for Pooling of Large Loans.--Section 5(g)(1) of the 
Small Business Act (15 U.S.C. 634(g)(1)) is amended by--
            (1) inserting ``(A)'' after ``(1)'';
            (2) striking the colon and inserting a period;
            (3) striking ``Provided'' and all that follows through 
        ``certificates'' and inserting the following:
    ``(B) A trust certificate issued under this paragraph''; and
            (4) adding at the end the following:
    ``(C) For a loan of more than $500,000 that has been guaranteed by 
the Administrator under this Act, the Administrator shall, on the 
request of a loan pool assembler, divide the amount of such loan into 
individual guarantees, no 1 of which may exceed $500,000. Not more than 
1 portion of a loan that has been divided under this subparagraph shall 
be included in the same pool. Portions of more than 1 loan divided 
under this subparagraph may be included in the same pool.
    ``(D) A lender that makes or services a loan guaranteed under 
section 7(a) may purchase or hold all or any part of a loan pool that 
includes a loan made or serviced by the lender.
    ``(E) A purchase or holding by a lender described in subparagraph 
(D) shall not affect the guarantee under section 7(a) of a loan in a 
pool.''.

SEC. 3. COMMUNITY EXPRESS AND RURAL LENDING.

    (a) Community Express Program Established.--Section 7(a) of the 
Small Business Act (15 U.S.C. 636(a)), as amended by this Act, is 
amended by adding at the end the following:
            ``(35) Community express program.--
                    ``(A) Definitions.--In this paragraph--
                            ``(i) the term `community express program' 
                        means the loan program under this paragraph;
                            ``(ii) the term `eligible small business 
                        concern' means--
                                    ``(I) a small business concern 
                                owned and controlled by women, as 
                                defined in section 29(a)(3);
                                    ``(II) a small business concern 
                                owned by a qualified Indian tribe;
                                    ``(III) a small business concern 
                                owned and controlled by a socially or 
                                economically disadvantaged individual, 
                                as determined by the Administrator;
                                    ``(IV) a small business concern 
                                owned and controlled by veterans;
                                    ``(V) a small business concern 
                                owned and controlled by a member of a 
                                reserve component of the Armed Forces, 
                                as defined in section 101 of title 10, 
                                United States Code;
                                    ``(VI) a small business concern 
                                located in an area that the 
                                Administrator determines to be a low-
                                income or moderate-income area;
                                    ``(VII) a HUBZone small business 
                                concern; and
                                    ``(VIII) a small business concern 
                                located in a special market initiative;
                            ``(iii) the term `qualified private lender' 
                        means a private lender that meets such 
                        requirements as the Administrator shall 
                        establish; and
                            ``(iv) the term `special market initiative' 
                        means a community, market, or industry 
                        designated by the Director of a district office 
                        of the Administration for economic development 
                        purposes.
                    ``(B) Loans of $150,000 or less.--
                            ``(i) Authorization.--The Administrator may 
                        guarantee timely payment of principal and 
                        interest, as scheduled, on a loan of not more 
                        than $150,000 issued by a qualified private 
                        lender to a small business concern.
                            ``(ii) Guarantee percentage.--The 
                        Administrator may guarantee not more than 85 
                        percent of the amount of a loan under this 
                        subparagraph.
                    ``(C) Loans of more than $150,000.--
                            ``(i) Authorization.--The Administrator may 
                        guarantee timely payment of principal and 
                        interest, as scheduled, on a loan of more than 
                        $150,000 and not more than $300,000 issued by a 
                        qualified private lender to an eligible small 
                        business concern under this subparagraph.
                            ``(ii) Guarantee percentage.--The 
                        Administrator may guarantee not more than 75 
                        percent of a loan the amount of a loan under 
                        this subparagraph.
                    ``(D) Qualified private lender requirements.--
                            ``(i) Technical assistance.--A qualified 
                        private lender shall--
                                    ``(I) ensure that appropriate 
                                technical assistance is provided to 
                                each borrower that receives a loan 
                                under the community express program 
                                from the qualified private lender;
                                    ``(II) encourage a borrower that 
                                receives a loan under the community 
                                express program from the qualified 
                                private lender to use the business 
                                development programs of the 
                                Administration for technical 
                                assistance; and
                                    ``(III) to the extent practicable, 
                                use the loan process to work with a 
                                borrower that receives a loan under the 
                                community express program from the 
                                qualified private lender, in order to--
                                            ``(aa) develop a business 
                                        plan, if appropriate;
                                            ``(bb) assess the strengths 
                                        and weaknesses of the borrower 
                                        in management and other 
                                        relevant areas; and
                                            ``(cc) provide technical 
                                        assistance to address any 
                                        assessed weaknesses of the 
                                        borrower.
                            ``(ii) Collateral policy.--
                                    ``(I) In general.--The 
                                Administrator shall establish a policy 
                                relating to collateral for loans under 
                                the community express program, which 
                                shall permit a qualified private lender 
                                to make a loan of not more than $15,000 
                                without collateral.
                                    ``(II) Limitation.--The policy 
                                established by the Administrator may 
                                not limit the ability of a qualified 
                                private lender to follow any internal 
                                procedure of the lender related to 
                                collateral.
                            ``(iii) Equity of borrowers.--Each 
                        qualified private lender shall verify that a 
                        borrower receiving a loan under the community 
                        express program has an equity stake of at least 
                        10 percent in the business concern.
                            ``(iv) Financial statements.--Each 
                        qualified private lender shall obtain a 
                        financial statement from a borrower before 
                        making a loan under the community express 
                        program.
                            ``(v) Sale of loans.--A qualified private 
                        lender may not sell more than 80 percent of the 
                        total dollar value of the loans made by the 
                        qualified private lender under the community 
                        express program to another person or entity.
                    ``(E) Simplification of rules.--The Administrator 
                shall review the regulations and procedures relating to 
                the community express program to ensure that such 
                regulations and procedures are simple and clear and do 
                not create barriers to participation in the program.
                    ``(F) Notice and comment.--The Administrator shall 
                establish policies relating to the community express 
                program--
                            ``(i) after notice and the opportunity for 
                        comment; and
                            ``(ii) not later than 1 year after the date 
                        of enactment of this paragraph.''.
    (b) Rural Lender and New Lender Outreach Program.--Section 7(a) of 
the Small Business Act (15 U.S.C. 636(a)), as amended by this Act, is 
amended by adding at the end the following:
            ``(36) Rural lender and new lender outreach program.--
                    ``(A) Definitions.--In this paragraph--
                            ``(i) the term `new lender' means a lender 
                        that has not made more than 20 loans guaranteed 
                        by the Administrator during the 3-year period 
                        ending on the date on which the applicable loan 
                        is submitted (including a lender that has not 
                        made a loan guaranteed by the Administration);
                            ``(ii) the term `rural area' has the 
                        meaning given that term in subsection (m); and
                            ``(iii) the term `rural lender' means a 
                        lender that--
                                    ``(I) is located in a rural area; 
                                and
                                    ``(II) made not more than 20 loans 
                                guaranteed by the Administration during 
                                the 3-year period ending on the date on 
                                which the applicable loan application 
                                is submitted (including a lender that 
                                has not made a loan guaranteed by the 
                                Administration).
                    ``(B) Program.--The Administrator shall carry out a 
                rural lender and new lender outreach program, under 
                which the Administrator may guarantee timely payment of 
                principal and interest, as scheduled, on a loan to a 
                small business concern of not more than $500,000 made 
                by a rural lender or a new lender.
                    ``(C) Loan processing.--
                            ``(i) In general.--The Administrator shall 
                        establish, for loans guaranteed under this 
                        paragraph--
                                    ``(I) streamlined application and 
                                documentation requirements; and
                                    ``(II) minimum credit standards 
                                necessary to provide for a reasonable 
                                assurance of repayment, in accordance 
                                with paragraph (6).
                            ``(ii) New lender training and 
                        certification.--The Administrator may guarantee 
                        a loan made by a new lender under this 
                        paragraph if the Administrator--
                                    ``(I) provides the new lender with 
                                training described in subparagraph (D); 
                                and
                                    ``(II) determines that the new 
                                lender meets minimum standards for 
                                program knowledge, borrower 
                                eligibility, and underwriting 
                                standards.
                            ``(iii) Approval or disapproval.--For a 
                        loan guaranteed under this paragraph, the 
                        Administrator shall approve or disapprove the 
                        loan in as expedited manner as practicable.
                    ``(D) Training.--At regularly scheduled intervals 
                and upon request by a new lender or rural lender the 
                Administrator shall provide training for new lenders 
                and rural lenders on the loan guarantee program under 
                this subsection.''.
    (c) Electronic Online Loan Underwriting Program Guide.--
            (1) Purpose.--The purpose of this subsection is to assist 
        rural lenders and new lenders in making more loans of good 
        underwriting quality to small business concerns.
            (2) Online underwriting guide.--The Administrator shall 
        establish an online underwriting program guide (in this 
        subsection referred to as the ``guide'') to develop the lending 
        capacity of rural lenders and new lenders (as such terms are 
        defined in paragraph (36) of section 7(a) of the Small Business 
        Act (15 U.S.C. 636(a)), as added by this Act).
            (3) Requirements.--The guide--
                    (A) is not intended to replace the internal credit 
                scoring and loan approval process of a lender;
                    (B) shall demonstrate the steps the Administrator 
                expects a lender to take in making a loan under a 
                program of the Administration;
                    (C) shall assist a lender in using the internal 
                credit evaluation processes of the lender to make a 
                loan under a program of the Administration and build 
                the capacity and ability of the lender to make such 
                loans;
                    (D) shall provide simple steps to assist a lender 
                that has not made a loan guaranteed by the 
                Administration through the loan application process for 
                a loan under section 7(a) of the Small Business Act (15 
                U.S.C. 636(a));
                    (E) shall include information, guidance, sample 
                documentation, questions and answers, and any other 
                information necessary to guide a lender through the 
                process of making a loan guaranteed by the 
                Administration in a systematic and simple fashion; and
                    (F) shall include information relating to--
                            (i) loan application and preapproval;
                            (ii) loan underwriting;
                            (iii) requirements after loan approval;
                            (iv) preparation for loan closing;
                            (v) closing the loan; and
                            (vi) servicing the loan.
            (4) Electronically submitted loans.--The Administrator 
        shall use the guide as a means to increase the number of 
        applications for loan guarantees submitted electronically for 
        approval from rural lenders and new lenders.

SEC. 4. 504 LOANS.

    (a) Maximum Loan Amounts Under 504 Program.--Section 502(2)(A) of 
the Small Business Investment Act of 1958 (15 U.S.C. 696(2)(A)) is 
amended--
            (1) in clause (i), by striking ``$1,500,000'' and inserting 
        ``$2,250,000'';
            (2) in clause (ii), by striking ``$2,000,000'' and 
        inserting ``$3,000,000''; and
            (3) in clause (iii), by striking ``$4,000,000'' and 
        inserting ``$5,500,000''.
    (b) Businesses in Low-Income Communities.--
            (1) Goals.--Section 501(d)(3)(A) of the Small Business 
        Investment Act of 1958 (15 U.S.C. 695(d)(3)(A)) is amended by 
        inserting after ``business district revitalization,'' the 
        following: ``or expansion of businesses in a low-income 
        community, as defined in section 45D(e) of the Internal Revenue 
        Code of 1986 and implementing regulations,''.
            (2) Additional incentives.--Section 502 of the Small 
        Business Investment Act of 1958 (15 U.S.C. 696) is amended by 
        adding at the end the following:
            ``(7) Low-income communities.--
                    ``(A) Loan amount.--Notwithstanding paragraph 
                (2)(A)(ii), a loan under this section for use in a low-
                income community described in section 501(d)(3)(A) may 
                not exceed $5,500,000.
                    ``(B) Size standards.--For purposes of determining 
                eligibility for a loan under this section for use in a 
                low-income community described in section 501(d)(3)(A), 
                the size standards established by the Administrator 
                under section 3 of the Small Business Act (15 U.S.C. 
                632) shall be increased by 25 percent.
                    ``(C) Personal liquidity.--
                            ``(i) In general.--For any loan under this 
                        section for use in a low-income community 
                        described in section 501(d)(3)(A), the amount 
                        of personal resources of an owner that are 
                        excluded from the amount required to be 
                        provided to reduce the portion of the project 
                        funded by the Administration shall be not less 
                        than 25 percent more than that required for 
                        other loans under this section.
                            ``(ii) Definition.--In this subparagraph, 
                        the term `owner' means any person that owns not 
                        less than 20 percent of the equity of the small 
                        business concern applying for the applicable 
                        loan.''.
    (c) Additional Equity Injections.--Section 502(3)(B)(ii) of the 
Small Business Investment Act of 1958 (15 U.S.C. 696(3)(B)(ii)) is 
amended to read as follows:
                            ``(ii) Funding from institutions.--If a 
                        small business concern--
                                    ``(I) provides the minimum 
                                contribution required under 
                                subparagraph (C), not less than 50 
                                percent of the total cost of any 
                                project financed under clause (i), 
                                (ii), or (iii) of subparagraph (C) 
                                shall come from the institutions 
                                described in subclauses (I), (II), and 
                                (III) of clause (i) of this 
                                subparagraph; and
                                    ``(II) provides more than the 
                                minimum contribution required under 
                                subparagraph (C), any excess 
                                contribution may be used to reduce the 
                                amount required from the institutions 
                                described in subclauses (I), (II), and 
                                (III) of clause (i) of this 
                                subparagraph, except that the amount 
                                from such institutions may not be 
                                reduced to an amount that is less than 
                                the amount of the loan made by the 
                                Administrator.''.
    (d) Refinancing Under the Local Development Business Loan 
Program.--Section 502 of the Small Business Investment Act of 1958 (15 
U.S.C. 696), as amended by this Act, is amended by adding at the end 
the following:
            ``(8) Permissible debt refinancing.--
                    ``(A) In general.--Any financing approved under 
                this title may include a limited amount of debt 
                refinancing.
                    ``(B) Expansions.--If the project involves 
                expansion of a small business concern which has 
                existing indebtedness collateralized by fixed assets, 
                any amount of existing indebtedness that does not 
                exceed \1/2\ of the project cost of the expansion may 
                be refinanced and added to the expansion cost, if--
                            ``(i) the proceeds of the indebtedness were 
                        used to acquire land, including a building 
                        situated thereon, to construct a building 
                        thereon, or to purchase equipment;
                            ``(ii) the borrower has been current on all 
                        payments due on the existing debt for not less 
                        than 1 year preceding the date of refinancing; 
                        and
                            ``(iii) the financing under section 504 
                        will provide better terms or rate of interest 
                        than exists on the debt at the time of 
                        refinancing.''.
    (e) Job Creation Requirements.--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 ``$50,000'' and inserting 
        ``$65,000''; and
            (2) in paragraph (2), by striking ``$50,000'' and inserting 
        ``$65,000''.

SEC. 5. GUARANTEE AND SALE OF BANK FINANCINGS WITH 504 LOAN PROGRAM.

    (a) Definitions.--In this section--
            (1) the term ``pool assembler'' means a financial 
        institution that--
                    (A) organizes and packages a loan pool by acquiring 
                the guaranteed portion of third party financings 
                guaranteed by the Administrator under subsection (b);
                    (B) resells fractional interests in the loan pool 
                to registered holders; and
                    (C) directs that the fiscal and transfer agent of 
                the Administrator to issue trust certificates; and
            (2) the term ``third party financing'' means a financing 
        described in section 502(3)(B)(ii) of the Small Business 
        Investment Act of 1958 (15 U.S.C. 696(3)(B)(ii))--
                    (A) made on or before the date of enactment of this 
                Act;
                    (B) that provides for the payment of interest at a 
                fixed rate or under a variable rate index (plus a 
                spread) based upon Prime rate, a London Interbank 
                Offered Rate (or LIBOR), a Federal Home Loan Bank rate, 
                a United States Treasury rate, or a generally accepted 
                market index rate approved by the Administrator;
                    (C) that provides amortized payments with a 
                maturity of not more than 25 years; and
                    (D) for which the borrower--
                            (i) is current on all payments due on the 
                        loan on the date on which the loan is 
                        guaranteed under subsection (b); and
                            (ii) has not been more than 29 days past 
                        due on a payment during the 12-month period 
                        ending on the date on which the loan is 
                        guaranteed under subsection (b).
    (b) Loan Guarantee.--
            (1) In general.--To the extent amounts are provided in 
        advance in appropriations Acts, and in accordance with this 
        subsection, upon application of a pool assembler who has 
        acquired a third party financing, the Administrator shall 
        guarantee the timely repayment of principal and interest on 80 
        percent of the balance of the third party financing outstanding 
        on the date of the guarantee.
            (2) Lenders.--A lender that made a third party financing 
        guaranteed under paragraph (1)--
                    (A) shall--
                            (i) agree to hold and service the note 
                        issued as part of the third party financing;
                            (ii) comply with the reporting and payment 
                        remittance requirements of the Administrator; 
                        and
                            (iii) enter a secondary participation 
                        guaranty agreement with the Administrator and 
                        the fiscal and transfer agent of the 
                        Administrator; and
                    (B) may collect and retain all of any applicable 
                prepayment penalties otherwise provided in the event 
                the third party financing is prepaid.
            (3) Guarantee fee.--To cover the costs of guarantees under 
        this subsection and the cost of issuing trust certificates 
        under subsection (c), a lender that made a third party 
        financing guaranteed under paragraph (1) shall pay to the 
        Administrator--
                    (A) a one-time fee equal to 1 percent of the net 
                amount of the third party financing guaranteed by the 
                Administration, payable on the date on which the third 
                party financing is guaranteed; and
                    (B) a monthly fee on the unpaid balance of the net 
                amount of the third party financing guarantee at the 
                rate of 25 basis points per year.
            (4) Maximum amount.--The Administrator may guarantee a 
        total amount of not more than $6,000,000,000 in third party 
        financings under this subsection.
            (5) Termination of authority.--The authority of the 
        Administrator to guarantee a third party financing under this 
        subsection shall terminate on September 30, 2010.
            (6) Appropriation.--In addition to any other amounts 
        appropriated, there are appropriated for the fiscal year ending 
        September 30, 2009, for the ``Business Loans Program Account'' 
        of the Administration, out of any money in the Treasury not 
        otherwise appropriated, $1 for loan subsidies and for loan 
        modifications for guarantees authorized under this subsection, 
        to remain available until expended.
    (c) Trust Certificates.--
            (1) Issuance.--The Administrator may issue a trust 
        certificate representing ownership of all or a fractional part 
        of the guaranteed portion of 1 or more third party financings 
        that have been guaranteed by the Administrator under subsection 
        (b). A trust certificate issued under this subsection shall be 
        based on and backed by a trust or pool approved by the 
        Administrator and composed solely of the entire guaranteed 
        portion of third party financings guaranteed by the 
        Administrator under subsection (b).
            (2) Pooling requirements.--
                    (A) Interest rate.--The interest rate on a trust 
                certificate issued under this subsection shall be the 
                weighted average interest rate of all third party 
                financings in the pool. There shall be no limit on the 
                difference between the highest and lowest note interest 
                rates on third party financings forming the pool.
                    (B) Maturity.--
                            (i) In general.--Each pool may include 
                        either--
                                    (I) third party financings with 
                                remaining terms to maturity of 15 years 
                                or less; or
                                    (II) third party financings with 
                                remaining terms to maturity of more 
                                than 15 years.
                            (ii) No other limitations.--Except as 
                        provided in clause (i), the Administrator may 
                        not limit the difference between the remaining 
                        terms to maturity of the third party financings 
                        forming a pool.
                    (C) Size.--
                            (i) In general.--If the amount of the 
                        guaranteed portion of any third party financing 
                        exceeds $500,000, the Administrator shall, upon 
                        request of the pool assembler, divide the 
                        amount of the third party financing into 
                        individual guarantees no 1 of which exceeds 
                        $500,000.
                            (ii) Divided financings.--Not more than 1 
                        portion of a third party financing that has 
                        been divided under this subparagraph shall be 
                        included in the same pool. Portions of more 
                        than 1 third party financing divided under this 
                        subparagraph may be included in the same pool.
            (3) Timely payment.--
                    (A) In general.--The Administrator may, upon such 
                terms and conditions as the Administrator determines 
                appropriate, guarantee the timely payment of principal 
                and interest on a trust certificate issued by the 
                Administrator or an agent of the Administrator under 
                this subsection. A guarantee under this paragraph shall 
                be limited to the principal and interest on the 
                guaranteed portions of the third party financings that 
                comprise the trust or pool.
                    (B) Prepayment.--If a third party financing in a 
                trust or pool guaranteed under this paragraph is 
                prepaid, either voluntarily or in the event of default, 
                the guarantee of timely payment of principal and 
                interest on the trust certificates shall be reduced in 
                proportion to the amount of principal and interest the 
                prepaid third party financing represents in the trust 
                or pool. Interest on prepaid or defaulted third party 
                financings shall accrue and be guaranteed by the 
                Administrator only through the date of payment on the 
                guarantee. During the term of a trust certificate 
                issued under this subsection, the trust certificate may 
                be called for redemption due to prepayment or default 
                of all third party financings constituting the pool.
            (4) Full faith and credit.--The full faith and credit of 
        the United States is pledged to the payment of all amounts that 
        may be required to be paid under any guarantee of a trust 
        certificate issued by the Administrator or an agent of the 
        Administrator under this subsection.
            (5) Use of agent.--The Administrator shall negotiate an 
        amendment to the contract in effect on the date of enactment of 
        this Act with the agent for fee collection for trust 
        certificates issued under section 5(g) of the Small Business 
        Act (15 U.S.C. 634(g)) to collect the monthly fee under 
        subsection (b)(3)(B) of this section. The agent may receive, as 
        compensation for services, any interest earned on a fee 
        collected under this section while in the control of the agent 
        before the time at which the agent is contractually required to 
        remit the fee to the Administrator.
            (6) Claims.--In the event the Administrator pays a claim 
        under a guarantee issued under this subsection, it shall be 
        subrogated fully to the rights satisfied by such payment.
            (7) Ownership rights.--No State or local law, and no 
        Federal law, shall preclude or limit the exercise by the 
        Administrator of the ownership rights in the portions of third 
        party financings constituting the trust or pool against which a 
        trust certificate is issued under this subsection.
            (8) Central registration.--The Administrator--
                    (A) shall provide for a central registration of all 
                trust certificates issued under this subsection;
                    (B) shall negotiate an amendment to the contract in 
                effect on the date of enactment of this Act with the 
                agent for central registration of trust certificates 
                issued pursuant to section 5(h) of the Small Business 
                Act (15 U.S.C. 634(h)) to carry out on behalf of the 
                Administrator the central registration functions under 
                this subsection and the issuance of trust certificates 
                to facilitate pooling, under which--
                            (i) the agent may be compensated through 
                        any of the fees collected under this section 
                        and any interest earned on any funds collected 
                        by the agent while such funds are in the 
                        control of the agent and before the time at 
                        which the agent is contractually required to 
                        transfer such funds to the Administrator or to 
                        the holders of the trust certificates, as 
                        appropriate; and
                            (ii) the agent shall provide a fidelity 
                        bond or insurance in such amounts as the 
                        Administrator determines to be necessary to 
                        fully protect the interest of the Government; 
                        and
                    (C) may--
                            (i) use a book-entry or other electronic 
                        form of registration for trust certificates 
                        issued under this subsection; and
                            (ii) with the consent of the Secretary of 
                        the Treasury, use the book-entry system of the 
                        Federal Reserve System.
            (9) Sale.--The Administrator shall, before any sale of a 
        trust certificate issued under this subsection, require the 
        seller to disclose to the purchaser of the trust certificate 
        information on the terms, conditions, and yield of such 
        instrument.
            (10) Brokers and dealers.--The Administrator may issue 
        regulations relating to the brokering of and dealing in trust 
        certificates sold under this subsection.
            (11) Termination of authority.--The authority of the 
        Administrator to issue trust certificates under this subsection 
        shall terminate on September 30, 2010.
    (d) Implementation.--Not later than 30 days after the date of 
enactment of this Act, the Administrator shall issue interim final 
regulations to carry out this section.
    (e) Lender Purchase Eligibility.--
            (1) In general.--A lender that made or services a loan 
        guaranteed under section 7(a) of the Small Business Act (15 
        U.S.C. 636(a)) or a third party financing guaranteed under 
        subsection (b) of this section may purchase and hold all or any 
        part of a loan pool which includes a loan or third party 
        financing made or serviced by the lender.
            (2) No effect on guarantee.--A purchase described in 
        subparagraph (A) shall not affect the guarantee of a loan or 
        third party financing in a pool.

SEC. 6. EMERGENCY SHORT TERM FEE REDUCTIONS.

    (a) Lender Oversight Fees.--
            (1) Temporary reduction in fees.--
                    (A) In general.--To the extent amounts are provided 
                in advance in appropriations Acts, the Administrator 
                shall, in lieu of the fee otherwise applicable under 
                section 5(b)(14) of the Small Business Act (15 U.S.C. 
                634(b)(14)), collect no fee.
                    (B) Authorization of appropriations.--There are 
                authorized to be appropriated for salaries and expenses 
                of the Administration relating to examinations, 
                reviews, and other lender oversight activities relating 
                to loans under section 7 of the Small Business Act (15 
                U.S.C. 636)--
                            (i) $10,000,000 for each of fiscal years 
                        2009 and 2010; and
                            (ii) such sums as may be necessary for each 
                        fiscal year thereafter.
            (2) Report on making fees contingent on performance.--Not 
        later than 6 months after the date of enactment of this Act, 
        the Administrator, in consultation with lenders that have made 
        loans guaranteed under section 7 of the Small Business Act (15 
        U.S.C. 636), shall submit to the Committee on Small Business 
        and Entrepreneurship of the Senate and the Committee on Small 
        Business of the House of Representatives a report regarding the 
        feasibility of assessing annual fees under section 7(a)(23)(A) 
        of the Small Business Act (15 U.S.C. 636(a)(23)(A)) in an 
        amount that is contingent on the performance of the lender, 
        including consideration of the meeting the requirement under 
        section 7(a)(1) of that Act (15 U.S.C. 636(a)(1)) of providing 
        credit to applicants than cannot obtain credit elsewhere. The 
        report under this paragraph may include proposed legislation.
    (b) Fee Reductions.--
            (1) New 7(a) lender defined.--In this subsection the term 
        ``new 7(a) lender'' means a lender that has not made more than 
        20 loans guaranteed by the Administrator under section 7(a) of 
        the Small Business Act (15 U.S.C. 636(a)) during the 3-year 
        period ending on the date on which the Administrator determines 
        the fee under section 7(a)(23)(A) of that Act (15 U.S.C. 
        636(a)(23)(A)) for the lender.
            (2) 7(a) loan fee reductions.--
                    (A) In general.--For fiscal years 2009 and 2010, 
                and to the extent the cost of such reduction in fees is 
                offset by appropriations, with respect to each loan 
                guaranteed under section 7(a) of Small Business Act (15 
                U.S.C. 636(a))--
                            (i) the Administrator shall, in lieu of the 
                        fee otherwise applicable under section 
                        7(a)(23)(A) of the Small Business Act (15 
                        U.S.C. 636(a)(23)(A)), collect an annual fee in 
                        an amount equal to--
                                    (I) 0.25 percent of the outstanding 
                                balance of the deferred participation 
                                share of a loan made under section 7(a) 
                                of the Small Business Act (15 U.S.C. 
                                636(a)) to a small business concern 
                                before the date of enactment of this 
                                Act; and
                                    (II) .20 percent of the outstanding 
                                balance of the deferred participation 
                                share of a loan made by a new 7(a) 
                                lender to a small business concern; and
                            (ii) with respect to each loan guaranteed 
                        under section 7(a) of the Small Business Act 
                        (15 U.S.C. 636(a)), the Administrator shall, in 
                        lieu of the fee otherwise applicable under 
                        section 7(a)(18)(A) of the Small Business Act 
                        (15 U.S.C. 636(a)(18)(A)), (including any 
                        additional fee under clause (iv) of that 
                        section 7(a)(18)(A)) collect a guarantee fee in 
                        an amount equal to--
                                    (I) 0.75 percent of the deferred 
                                participation share of a total loan 
                                amount that is not more than $150,000;
                                    (II) 2 percent of the deferred 
                                participation share of a total loan 
                                amount that is more than $150,000, and 
                                not more than $700,000; and
                                    (III) 2.5 percent of the deferred 
                                participation share of a total loan 
                                amount that is more than $700,000.
                    (B) Implementation.--In carrying out this 
                paragraph, the Administrator shall reduce the fees for 
                a loan guaranteed under section 7(a) of the Small 
                Business Act (15 U.S.C. 636(a)) to the maximum extent 
                possible, subject to the availability of 
                appropriations.
                    (C) Application of fee reductions.--If funds are 
                made available to carry out this paragraph, the 
                Administrator shall reduce the fees under subparagraph 
                (A) for any loan guarantee or project subject to such 
                subparagraph for which the application is pending 
                approval on or after the date of enactment of this Act, 
                until the amount provided for such purpose is expended.
                    (D) Authorization of appropriations.--There are 
                authorized to be appropriated to the Administrator for 
                each of fiscal years 2009 and 2010--
                            (i) $175,000,000 to carry out subparagraph 
                        (A)(i);
                            (ii) $75,000,000 to carry out subparagraph 
                        (A)(ii).
            (3) 504 loan fee and rate reductions.--
                    (A) Fee reductions.--
                            (i) Fee reductions.--To the extent the cost 
                        of such reduction in fees is offset by 
                        appropriations, for any loan guarantee or 
                        project for which an application is closed on 
                        or after the date of enactment of this Act--
                                    (I) with respect to an institution 
                                described in subclause (I), (II), or 
                                (III) of section 502(3)(B)(i) of the 
                                Small Business Investment Act of 1958 
                                (15 U.S.C. 696(3)(B)(i)), the 
                                Administrator shall, in lieu of the 
                                fees otherwise applicable under section 
                                503(d)(2) of the Small Business 
                                Investment Act of 1958 (15 U.S.C. 
                                697(d)(2)), collect no fee;
                                    (II) a development company shall, 
                                in lieu of the mandatory 0.625 
                                servicing fee under section 
                                120.971(a)(3) of title 13, Code of 
                                Federal Regulations, (relating to fees 
                                paid by borrowers), or any successor 
                                thereto, collect no fee; and
                                    (III) the Administrator shall, in 
                                lieu of the fee otherwise applicable 
                                under section 503(d)(3) of the Small 
                                Business Investment Act (15 U.S.C. 
                                697(d)(3)), collect no fee.
                            (ii) Reimbursement for waived fees.--
                                    (I) In general.--To the extent the 
                                cost of such payments is offset by 
                                appropriations, the Administrator shall 
                                reimburse each development company that 
                                does not collect a servicing fee 
                                pursuant to clause (i)(II).
                                    (II) Amount.--The payment to a 
                                development company under subclause (I) 
                                shall be in an amount equal to 0.5 
                                percent of the outstanding principal 
                                balance of any guaranteed debenture for 
                                which the development company does not 
                                collect a servicing fee pursuant to 
                                clause (i)(II).
                            (iii) Authorization of appropriations.--
                        There are authorized to be appropriated to the 
                        Administrator for each of fiscal years 2009 and 
                        2010--
                                    (I) $50,000,000 for the elimination 
                                of fees under clause (i)(I);
                                    (II) $40,000,000 for payments under 
                                clause (ii) to offset the elimination 
                                of fees under clause (i)(II); and
                                    (III) $10,000,000 for the 
                                elimination of fees under clause 
                                (i)(III).
                    (B) Rate reduction.--
                            (i) In general.--To the extent that the 
                        cost of making an interest rate reduction is 
                        offset by appropriations, the Administrator 
                        shall pay, on behalf of a small business 
                        borrower, an amount equal to 100 basis points 
                        of the interest rate required to be paid by the 
                        borrower on the amount of the guarantee 
                        provided under title V of the Small Business 
                        Investment Act of 1958 (15 U.S.C. 695 et seq.), 
                        if the loan is closed on or after the date of 
                        enactment of this Act.
                            (ii) Frequency of payment.--The 
                        Administrator shall make a payment under clause 
                        (i) on a semiannual basis.
                            (iii) Method of payment.--The Administrator 
                        may use a central servicing agent to make a 
                        payment under clause (i).
                            (iv) Notice to development company.--The 
                        Administrator shall notify a development 
                        company that receives a payment under clause 
                        (i) when funds are made available for the rate 
                        reduction under clause (i).
                            (v) Implementation.--A development company 
                        that receives a payment under clause (i) 
                        shall--
                                    (I) use the payments solely for the 
                                purpose provided; and
                                    (II) adjust the amount of the 
                                monthly payment by the borrower 
                                accordingly.
                            (vi) Authorization of appropriations.--
                        There is authorized to be appropriated to the 
                        Administrator for each of fiscal years 2009 and 
                        2010, $150,000,000 for payments made under 
                        clause (i).

SEC. 7. MICROLENDING.

    In addition to any amounts otherwise authorized to be appropriated 
for such purposes, there are authorized to be appropriated to the 
Administrator for each of fiscal years 2009 and 2010--
            (1) $5,000,000 for direct loans under section 7(m) of the 
        Small Business Act (15 U.S.C. 636(m)); and
            (2) $20,000,000 for grants to intermediaries for marketing, 
        management, and technical assistance under section 7(m)(4) of 
        the Small Business Act (15 U.S.C. 636(m)(4)).

SEC. 8. SMALL BUSINESS INVESTMENT COMPANIES.

    Section 303(b) of the Small Business Investment Act of 1958 (15 
U.S.C. 683(b)) is amended--
            (1) by striking paragraph (2) and inserting the following:
            ``(2) Maximum leverage.--
                    ``(A) In general.--The maximum amount of 
                outstanding leverage made available to any 1 company 
                licensed under section 301(c) may not exceed the lesser 
                of--
                            ``(i) 300 percent of the private capital of 
                        the company; or
                            ``(ii) $150,000,000.
                    ``(B) Multiple licenses under common control.--The 
                maximum amount of outstanding leverage made available 
                to 2 or more companies licensed under section 301(c) 
                that are commonly controlled (as determined by the 
                Administrator) and the private capital of which the 
                Administrator determines meets the requirements of 
                subsection (e) may not exceed $225,000,000.''; and
            (2) by striking paragraph (4).

SEC. 9. EMERGENCY SMALL BUSINESS LENDING ADVERTISING STRATEGY.

    Section 4 of the Small Business Act (15 U.S.C. 633) is amended by 
adding at the end the following:
    ``(i) Emergency Small Business Lending Advertising Strategy.--
            ``(1) Purpose.--The purpose of this subsection is to ensure 
        that the Administrator provides information to the owners of 
        small business concerns regarding lenders in their areas that 
        participate in programs of the Administration and that will 
        allow small business concerns to access business capital during 
        a liquidity and capital lending shortage.
            ``(2) Lending advertising strategy.--The Administrator 
        shall develop an emergency small business lending advertising 
        strategy to inform small business concerns located throughout 
        the United States that loans under this Act are available 
        through lenders that participate in programs of the 
        Administration.
            ``(3) Media.--The Administrator shall use print, radio, 
        television, and Internet advertisement, where appropriate, to 
        carry out this subsection.
            ``(4) Effective date.--Not later than 30 days after the 
        date of enactment of this Act, the Administrator shall 
        implement the emergency small business lending advertising 
        strategy.
            ``(5) Authorization of appropriations.--There are 
        authorized to be appropriated to carry out this subsection--
                    ``(A) $5,000,000 for each of fiscal years 2009 and 
                2010; and
                    ``(B) such sums as may be necessary for each fiscal 
                year thereafter.''.

SEC. 10. TAX PROVISIONS.

    (a) Extension of Temporary Increase in Limitations on Expensing of 
Certain Depreciable Business Assets.--
            (1) In general.--Paragraph (7) of section 179(b) of the 
        Internal Revenue Code of 1986 is amended--
                    (A) by inserting ``and 2009'' after ``2008'' in the 
                heading, and
                    (B) by inserting ``or 2009'' after ``In the case of 
                any taxable year beginning in 2008''.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after December 31, 2008.
    (b) Carryback of Certain Net Operating Losses Allowed for 5 Years; 
Temporary Suspension of 90 Percent AMT Limit.--
            (1) In general.--Subparagraph (H) of section 172(b)(1) of 
        the Internal Revenue Code of 1986 is amended to read as 
        follows:
                    ``(H) 5-year carryback of certain losses.--
                            ``(i) Taxable years ending during 2001 and 
                        2002.--In the case of a net operating loss for 
                        any taxable year ending during 2001 or 2002, 
                        subparagraph (A)(i) shall be applied by 
                        substituting `5' for `2' and subparagraph (F) 
                        shall not apply.
                            ``(ii) Taxable years ending during 2008 and 
                        2009.--In the case of a net operating loss with 
                        respect to any eligible taxpayer for any 
                        taxable year ending during 2008 or 2009--
                                    ``(I) subparagraph (A)(i) shall be 
                                applied by substituting `5' for `2',
                                    ``(II) subparagraph (E)(ii) shall 
                                be applied by substituting `4' for `2', 
                                and
                                    ``(III) subparagraph (F) shall not 
                                apply.
                            ``(iii) Eligible taxpayer.--For purposes of 
                        clause (ii), the term `eligible taxpayer' means 
                        a corporation or partnership which meets the 
                        gross receipts test of section 448(c) 
                        (determined by substituting `$10,000,000' for 
                        `$5,000,000' and `5-taxable-year period' for 
                        `3-taxable-year period') for the taxable year 
                        in which the loss arose (or, in the case of a 
                        sole proprietorship, which would meet such test 
                        if such proprietorship were a corporation.''.
            (2) Temporary suspension of 90 percent limit on certain nol 
        carrybacks and carryovers.--
                    (A) In general.--Section 56(d) of the of the 
                Internal Revenue Code of 1986 is amended by adding at 
                the end the following new paragraph:
            ``(3) Additional adjustments.--For purposes of paragraph 
        (1)(A), in the case of an eligible taxpayer (as defined in 
        section 172(b)(1)(H)(iii)), the amount described in clause (I) 
        of paragraph (1)(A)(ii) shall be increased by the amount of the 
        net operating loss deduction allowable for the taxable year 
        under section 172 attributable to the sum of--
                    ``(A) carrybacks of net operating losses from 
                taxable years ending during 2008 and 2009, and
                    ``(B) carryovers of net operating losses to taxable 
                years ending during 2008 or 2009.''.
                    (B) Conforming amendment.--Subclause (I) of section 
                56(d)(1)(A)(i) of such Code is amended by inserting 
                ``amount of such'' before ``deduction described in 
                clause (ii)(I)''.
            (3) Anti-abuse rules.--The Secretary of Treasury or the 
        Secretary's designee shall prescribe such rules as are 
        necessary to prevent the abuse of the purposes of the 
        amendments made by this subsection, including anti-stuffing 
        rules, anti-churning rules (including rules relating to sale-
        leasebacks), and rules similar to the rules under section 1091 
        of the Internal Revenue Code of 1986 relating to losses from 
        wash sales.
            (4) Effective dates.--
                    (A) Subsection (a).--The amendments made by 
                paragraph (1) shall apply to net operating losses 
                arising in taxable years ending in 2008 or 2009.
                    (B) Subsection (b).--The amendments made by 
                paragraph (2) shall apply to taxable years ending after 
                December 31, 2007.

SEC. 11. TROUBLED ASSETS.

    Section 3(9) of the Emergency Economic Stabilization Act of 2008 
(division A of Public Law 110-343) is amended--
            (1) in subparagraph (A), by striking ``and'' at the end;
            (2) by redesignating subparagraph (B) as subparagraph (C); 
        and
            (3) by inserting after subparagraph (A) the following:
                    ``(B) a trust certificate issued by the 
                Administrator of the Small Business Administration 
                under section 5(g) of the Small Business Act (15 U.S.C. 
                634(g)), a loan guaranteed by the Small Business 
                Administration under section 7(a) of the Small Business 
                Act (15 U.S.C. 636(a)), and a trust certificate issued 
                under section 505 of the Small Business Investment Act 
                of 1958 (15 U.S.C. 697), including an underlying 
                debenture, the purchase of which the Secretary 
                determines promotes financial market stability; and''.
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