110TH CONGRESS 

1ST SESSION H. R. 1332

AN ACT

To improve the access to capital programs of the Small 

Business Administration, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Small Business Lending Improvements Act of 2007’’. 

4 (b) TABLE OF CONTENTS.—The table of contents for 

5 this Act is as follows:

Sec. 1. Short title; table of contents. 

TITLE I—7(a) PROGRAM 

Sec. 101. Authority for fee contributions. 

Sec. 102. Rural Lending Outreach Program. 

Sec. 103. Community Express program made permanent. 

Sec. 104. Medical Professionals in Designated Shortage Areas Program. 

Sec. 105. Increased Veteran Participation Program. 

Sec. 106. Alternative size standard. 

Sec. 107. Support to regional offices. 

TITLE II—CERTIFIED DEVELOPMENT COMPANY ECONOMIC 

DEVELOPMENT LOAN PROGRAM 

Sec. 201. Certified Development Company Economic Development Loan Program. 

Sec. 202. Definitions. 

Sec. 203. Eligibility of development companies to be designated as certified development companies. 

Sec. 204. Definition of rural areas. 

Sec. 205. Businesses in low-income areas. 

Sec. 206. Combinations of certain goals. 

Sec. 207. Refinancing. 

Sec. 208. Additional equity injections. 

Sec. 209. Loan liquidations. 

Sec. 210. Closing costs. 

Sec. 211. Maximum Certified Development Company and 7(a) loan eligibility. 

Sec. 212. Eligibility for energy efficiency projects. 

Sec. 213. Loans for plant projects used for energy-efficient purposes. 

Sec. 214. Extension of period during which loss reserves of premier certified 

lenders determined on the basis of outstanding balance of debentures. 

Sec. 215. Extension of alternative loss reserve pilot program for certain premier 

certified lenders.

6 TITLE I—7(a) PROGRAM 

7 SEC. 101. AUTHORITY FOR FEE CONTRIBUTIONS. 

8 Section 7(a) of the Small Business Act (15 U.S.C. 

9 636(a)) is amended—
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1 (1) in paragraph (18)(A) by striking ‘‘shall col2 lect’’ and inserting ‘‘shall assess and collect’’; 

3 (2) in paragraph (18) by adding at the end the 

4 following: 

5 ‘‘(C) OFFSET.—The Administrator may, 

6 as provided in paragraph (32), offset fees as7 sessed and collected under subparagraph (A).’’; 

8 (3) in paragraph (23) by striking subparagraph 

9 (C) and adding at the end the following: 

10 ‘‘(C) OFFSET.—The Administrator may, 

11 as provided in paragraph (32), offset fees as12 sessed and collected under subparagraph (A).’’; 

13 and 

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

15 ‘‘(32) FEE CONTRIBUTIONS.—

16 ‘‘(A) IN GENERAL.—To the extent that 

17 amounts are made available to the Adminis18 trator for the purpose of fee contributions, the 

19 Administrator shall—

20 ‘‘(i) first consider contributing to fees 

21 paid by small business borrowers under 

22 clauses (i) through (iii) of paragraph 

23 (18)(A), to the maximum extent possible; 

24 and 
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1 ‘‘(ii) then consider contributing to fees 

2 paid by small business lenders under para3 graph (23)(A). 

4 ‘‘(B) QUARTERLY ADJUSTMENT.—Each 

5 fee contribution under subparagraph (A) shall 

6 be effective for one fiscal quarter and shall be 

7 adjusted as necessary for each fiscal quarter 

8 thereafter to ensure that the amounts under 

9 subparagraph (A) are fully used. The fee con10 tribution for a fiscal quarter shall be based on 

11 the loans that the Administrator projects will be 

12 made during that fiscal quarter, given the pro13 gram level authorized by law for that fiscal year 

14 and any other factors that the Administrator 

15 considers appropriate.’’. 

16 SEC. 102. RURAL LENDING OUTREACH PROGRAM. 

17 Section 7(a) of the Small Business Act (15 U.S.C. 

18 636(a)) is amended—

19 (1) by striking paragraph (25)(C); and 

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

21 ‘‘(33) RURAL LENDING OUTREACH PROGRAM.—

22 The Administrator shall carry out a rural lending 

23 outreach program to provide up to an 85 percent 

24 guaranty for loans of $250,000 or less. The program 

25 shall be carried out only through lenders located in 
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1 rural areas (as ‘rural’ is defined in section 501(f) of 

2 the Small Business Investment Act of 1958) or, in 

3 the case of a small business concern located in a 

4 rural area that does not have a lender located within 

5 30 miles of the principal place of business, through 

6 any lender that is enrolled in, and administers, the 

7 7(a) loan program that the small business concern 

8 chooses. For a loan made through the program, the 

9 following shall apply: 

10 ‘‘(A) The Administrator shall approve or 

11 disapprove the loan within 36 hours. 

12 ‘‘(B) The program shall use abbreviated 

13 application and documentation requirements. 

14 ‘‘(C) Minimum credit standards, as the 

15 Administrator considers necessary to limit the 

16 rate of default on loans made under the pro17 gram, shall apply.’’. 

18 SEC. 103. COMMUNITY EXPRESS PROGRAM MADE PERMA19 NENT. 

20 (a) IN GENERAL.—Section 7(a) of the Small Busi21 ness Act (15 U.S.C. 636(a)) is amended by adding at the 

22 end the following: 

23 ‘‘(34) COMMUNITY EXPRESS PROGRAM.—The 

24 Administrator shall carry out a Community Express 

25 Program for loans of $250,000 or less. For a loan 
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1 made under this paragraph, the following shall 

2 apply: 

3 ‘‘(A) The loan shall be made to a business 

4 concern—

5 ‘‘(i) the majority ownership interest of 

6 which is directly held by individuals who 

7 are women, members of qualified Indian 

8 tribes, socially or economically disadvan9 taged individuals (as defined by the Ad10 ministrator), or veterans of the Armed 

11 Forces or members of the reserve compo12 nents of the Armed Forces; or 

13 ‘‘(ii) that is located in a low- or mod14 erate-income area, as defined by the Ad15 ministrator. 

16 ‘‘(B) The loan shall comply with the collat17 eral policy of the Administration, except that, if 

18 the amount of the loan is less than or equal to 

19 $25,000, the Administration shall not require 

20 the lender to take collateral. 

21 ‘‘(C) The loan shall include terms requir22 ing the lender to ensure that technical assist23 ance is provided to the borrower, through the 

24 lender or a third-party provider. 
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1 ‘‘(D) The Administration shall approve or 

2 disapprove the loan within 36 hours.’’. 

3 (b) NOTICE AND COMMENT.—The program required 

4 by section 7(a)(34) of the Small Business Act, as added 

5 by subsection (a), shall be established after the oppor6 tunity for notice and comment and not later than 180 days 

7 after the date of the enactment of this Act. 

8 SEC. 104. MEDICAL PROFESSIONALS IN DESIGNATED 

9 SHORTAGE AREAS PROGRAM. 

10 (a) IN GENERAL.—Section 7(a) of the Small Busi11 ness Act (15 U.S.C. 636(a)) is amended by adding at the 

12 end the following: 

13 ‘‘(35) MEDICAL PROFESSIONALS IN DES14 IGNATED SHORTAGE AREAS PROGRAM.—The Admin15 istrator shall carry out a Medical Professionals in 

16 Designated Shortage Areas Program. For a loan 

17 made under this paragraph, the following shall 

18 apply: 

19 ‘‘(A) The loan shall be made to a business 

20 concern that provides properly licensed medical, 

21 dental, or psychiatric services to the public. 

22 ‘‘(B) The loan shall be for the purpose of 

23 opening a business concern in a health profes24 sional shortage area (as defined in section 332 
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1 of the Public Health Service Act (42 U.S.C. 

2 254e)). 

3 ‘‘(C) The loan shall include the participa4 tion by the Administration equal to 90 percent 

5 of the balance of the financing outstanding at 

6 the time of disbursement. 

7 ‘‘(D) The fees on the loan under para8 graphs (18) and (23) shall be reduced by half.’’. 

9 (b) NOTICE AND COMMENT.—The program required 

10 by section 7(a)(35) of the Small Business Act, as added 

11 by subsection (a), shall be established after the oppor12 tunity for notice and comment and not later than 180 days 

13 after the date of the enactment of this Act. 

14 SEC. 105. INCREASED VETERAN PARTICIPATION PROGRAM. 

15 (a) IN GENERAL.—Section 7(a) of the Small Busi16 ness Act (15 U.S.C. 636(a)) is amended by adding at the 

17 end the following: 

18 ‘‘(36) INCREASED VETERAN PARTICIPATION

19 PROGRAM.—The Administrator shall carry out an 

20 Increased Veteran Participation Program. For a 

21 loan made under this paragraph, the following shall 

22 apply: 

23 ‘‘(A) The loan shall be made to a business 

24 concern the majority ownership interest of 

25 which is directly held by individuals who are 
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1 veterans of the Armed Forces or members of 

2 the reserve components of the Armed Forces. 

3 ‘‘(B) The loan shall include the participa4 tion by the Administration equal to 90 percent 

5 of the balance of the financing outstanding at 

6 the time of disbursement. 

7 ‘‘(C) The fees on the loan under para8 graphs (18) and (23) shall not apply.’’. 

9 (b) NOTICE AND COMMENT.—The program required 

10 by section 7(a)(36) of the Small Business Act, as added 

11 by subsection (a), shall be established after the oppor12 tunity for notice and comment and not later than 180 days 

13 after the date of the enactment of this Act. 

14 SEC. 106. ALTERNATIVE SIZE STANDARD. 

15 (a) IN GENERAL.—Section 3(a) of the Small Busi16 ness Act (15 U.S.C. 632(a)) is amended by adding at the 

17 end the following: 

18 ‘‘(5) In addition to any other size standard 

19 under this subsection, the Administrator shall estab20 lish, and permit a lender making a loan under sec21 tion 7(a) and a lender making a loan under the de22 velopment company loan program to use, an alter23 native size standard. The alternative size standard 

24 shall be based on factors including maximum tan25 gible net worth and average net income.’’. 
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1 (b) APPLICABILITY.—Until the Administrator estab2 lishes, under section 3(a)(5) of the Small Business Act 

3 (as added by subsection (a)), an alternative size standard 

4 in the case of a lender making a loan under section 7(a) 

5 of that Act, the alternative size standard in section 

6 121.301(b) of title 13, Code of Federal Regulations, shall 

7 apply to such a case. 

8 SEC. 107. SUPPORT TO REGIONAL OFFICES. 

9 Section 7(a) of the Small Business Act (15 U.S.C. 

10 636(a)) is amended by adding at the end the following: 

11 ‘‘(37) SUPPORT TO REGIONAL OFFICES.—The 

12 Administrator shall carry out a program, within an 

13 element of the Administration already in existence 

14 as of the date of the enactment of the Small Busi15 ness Lending Improvements Act of 2007, to provide 

16 support to regional offices of the Administration in 

17 assisting small lenders who do not participate in the 

18 preferred lender program to participate in the 7(a) 

19 program.’’. 
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1 TITLE II—CERTIFIED DEVELOP2 MENT COMPANY ECONOMIC 

3 DEVELOPMENT LOAN PRO4 GRAM 

5 SEC. 201. CERTIFIED DEVELOPMENT COMPANY ECONOMIC 

6 DEVELOPMENT LOAN PROGRAM. 

7 Section 504 of the Small Business Investment Act 

8 of 1958 (15 U.S.C. 697a) is amended—

9 (1) by redesignating subsections (a) and (b) as 

10 subsections (b) and (c); and 

11 (2) by inserting before subsection (b) (as so re12 designated) the following: 

13 ‘‘(a) The program to provide financing to small busi14 nesses by guarantees of loans under this Act which are 

15 funded by debentures guaranteed by the Administration 

16 may be known as the ‘Certified Development Company 

17 Economic Development Loan Program’.’’. 

18 SEC. 202. DEFINITIONS. 

19 Section 103(6) of the Small Business Investment Act 

20 of 1958 (15 U.S.C. 662(6)) is amended to read as follows: 

21 ‘‘(6) the term ‘development company’ means an 

22 entity incorporated under State law with the author23 ity to promote and assist the growth and develop24 ment of small-business concerns in the areas in 

25 which it is authorized to operate by the Administra-
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1 tion, and the term ‘certified development company’ 

2 means a development company which the Adminis3 tration has determined meets the criteria of section 

4 506;’’. 

5 SEC. 203. ELIGIBILITY OF DEVELOPMENT COMPANIES TO 

6 BE DESIGNATED AS CERTIFIED DEVELOP7 MENT COMPANIES. 

8 Section 506 of the Small Business Investment Act 

9 of 1958 (15 U.S.C. 697c) is amended to read as follows: 

10 ‘‘SEC. 506. CERTIFIED DEVELOPMENT COMPANIES. 

11 ‘‘(a) AUTHORITY TO ISSUE DEBENTURES.—A devel12 opment company may issue debentures pursuant to this 

13 Act if the Administration certifies that the company meets 

14 the following criteria: 

15 ‘‘(1) SIZE.—The development company is re16 quired to be a small concern with fewer than 500 

17 employees and not under the control of any entity 

18 which does not meet the Administration’s size stand19 ards as a small business, except that any develop20 ment company which was certified by the Adminis21 tration prior to December 31, 2005 may continue to 

22 issue debentures. 

23 ‘‘(2) PURPOSE.—The primary purpose of the 

24 development company is to benefit the community by 
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1 fostering economic development to create and pre2 serve jobs and stimulate private investment. 

3 ‘‘(3) PRIMARY FUNCTION.—The primary func4 tion of the development company is to accomplish its 

5 purpose by providing long term financing to small 

6 businesses by the utilization of the Certified Devel7 opment Company Economic Development Loan Pro8 gram. It may also provide or support such other 

9 local economic development activities to assist the 

10 community. 

11 ‘‘(4) NON-PROFIT STATUS.—The development 

12 company is a non-profit corporation, except that a 

13 development company certified by the Administra14 tion prior to January 1, 1987, may retain its status 

15 as a for-profit corporation. 

16 ‘‘(5) GOOD STANDING.—The development com17 pany is in good standing in its State of incorpora18 tion and in any other State in which it conducts 

19 business, and is in compliance with all laws, includ20 ing taxation requirements, in its State of incorpora21 tion and in any other State in which it conducts 

22 business. 

23 ‘‘(6) MEMBERSHIP.—The development company 

24 has at least 25 members (or stockholders if the cor25 poration is a for-profit entity), none of whom may 
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1 own or control more than 10 percent of the com2 pany’s voting membership, consisting of representa3 tion from each of the following groups (none of 

4 which are in a position to control the development 

5 company): 

6 ‘‘(A) Government organizations that are 

7 responsible for economic development. 

8 ‘‘(B) Financial institutions that provide 

9 commercial long term fixed asset financing. 

10 ‘‘(C) Community organizations that are 

11 dedicated to economic development. 

12 ‘‘(D) Businesses. 

13 ‘‘(7) BOARD OF DIRECTORS.—The development 

14 company has a board of directors that—

15 ‘‘(A) is elected from the membership by 

16 the members; 

17 ‘‘(B) represents at least three of the four 

18 groups enumerated in subsection (a)(6) and no 

19 group is in a position to control the company; 

20 and 

21 ‘‘(C) meets on a regular basis to make pol22 icy decisions for such company. 

23 ‘‘(8) PROFESSIONAL MANAGEMENT AND

24 STAFF.—The development company has full-time 

25 professional management, including a chief executive 
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1 officer to manage daily operations, and a full-time 

2 professional staff qualified to market the Certified 

3 Development Company Economic Development Loan 

4 Program and handle all aspects of loan approval and 

5 servicing, including liquidation, if appropriate. The 

6 development company is required to be independ7 ently managed and operated to pursue its economic 

8 development mission and to employ its chief execu9 tive officer directly, with the following exceptions: 

10 ‘‘(A) A development company may be an 

11 affiliate of another local non-profit service cor12 poration (specifically excluding another develop13 ment company) whose mission is to support 

14 economic development in the area in which the 

15 development company operates. In such a case: 

16 ‘‘(i) The development company may 

17 satisfy the requirement for full-time pro18 fessional staff by contracting with a local 

19 non-profit service corporation (or one of its 

20 non-profit affiliates), or a governmental or 

21 quasi-governmental agency, to provide the 

22 required staffing. 

23 ‘‘(ii) The development company and 

24 the local non-profit service corporation may 

25 have partially common boards of directors. 
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1 ‘‘(B) A development company in a rural 

2 area (as defined in section 501(f)) shall be 

3 deemed to have satisfied the requirements of a 

4 full-time professional staff and professional 

5 management ability if it contracts with another 

6 certified development company which has such 

7 staff and management ability and which is lo8 cated in the same general area to provide such 

9 services. 

10 ‘‘(C) A development company that has 

11 been certified by the Administration as of De12 cember 31, 2005, and that has contracted with 

13 a for-profit company to provide services as of 

14 such date may continue to do so. 

15 ‘‘(b) AREA OF OPERATIONS.—The Administration 

16 shall specify the area in which an applicant is certified 

17 to provide assistance to small businesses under this title, 

18 which may not initially exceed its State of incorporation 

19 unless it proposes to operate in a local economic area 

20 which is required to include part of its State of incorpora21 tion and may include adjacent areas within several States. 

22 After a development company has demonstrated its ability 

23 to provide assistance in its area of operations, it may re24 quest the Administration to be allowed to operate in one 
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1 or more additional States as a multi-state certified devel2 opment company if it satisfies the following criteria: 

3 ‘‘(1) Each additional State is contiguous to the 

4 State of incorporation, except the States of Alaska 

5 and Hawaii shall be deemed to be contiguous to any 

6 State abutting the Pacific ocean. 

7 ‘‘(2) It demonstrates its proficiency in making 

8 and servicing loans under the Certified Development 

9 Company Economic Development Loan Program 

10 by—

11 ‘‘(A) requesting and receiving designation 

12 as an accredited lender under section 507 or a 

13 premier certified lender under section 508; and 

14 ‘‘(B) meeting or exceeding performance 

15 standards established by the Administration. 

16 ‘‘(3) The development company adds to the 

17 membership of its State of incorporation additional 

18 membership from each additional State and the 

19 added membership meets the requirements of sub20 section (a)(6). 

21 ‘‘(4) The development company adds at least 

22 one member to its board of directors in the State of 

23 incorporation, providing that added member was se24 lected by the membership of the development com25 pany. 
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1 ‘‘(5) The company meets such other criteria or 

2 complies with such conditions as the Administration 

3 deems appropriate. 

4 ‘‘(c) PROCESSING OF EXPANSION APPLICATIONS.—

5 The Administration shall respond to the request of a cer6 tified development company for certification as a multi7 state company on an expedited basis within 30 days of 

8 receipt of a completed application if the application dem9 onstrates that the development company meets the re10 quirements of subsection (b)(1) through (b)(4). 

11 ‘‘(d) USE OF FUNDS LIMITED TO STATE WHERE

12 GENERATED.—Any funds generated by a development 

13 company from making loans under the Certified Develop14 ment Company Economic Development Loan Program 

15 which remain after payment of staff, operating and over16 head expenses shall be retained by the development com17 pany as a reserve for future operations, for expanding its 

18 area of operations in a local economic area as authorized 

19 by the Administration, or for investment in other local eco20 nomic development activity in the State from which the 

21 funds were generated. 

22 ‘‘(e) ETHICAL REQUIREMENTS.—

23 ‘‘(1) IN GENERAL.—Certified development com24 panies, their officers, employees and other staff, 

25 shall at all times act ethically and avoid activities 
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1 which constitute a conflict of interest or appear to 

2 constitute a conflict of interest. No one may serve as 

3 an officer, director or chief executive officer of more 

4 than one certified development company. 

5 ‘‘(2) PROHIBITED CONFLICT IN PROJECT

6 LOANS.—As part of a project under the Certified 

7 Development Company Economic Development Loan 

8 Program, no certified development company may 

9 recommend or approve a guarantee of a debenture 

10 by the Administration that is collateralized by a sec11 ond lien position on the property being constructed 

12 or acquired and also provide, or be affiliated with a 

13 corporation or other entity, for-profit or non-profit, 

14 which provides, financing collateralized by a first 

15 lien on the same property. A business development 

16 company that was participating as a first mortgage 

17 lender, either directly or through an affiliate, for the 

18 Certified Development Company Economic Develop19 ment Loan Program in either fiscal years 2004 or 

20 2005 may continue to do so. 

21 ‘‘(3) OTHER ECONOMIC DEVELOPMENT ACTIVI22 TIES.—Operation of multiple programs to assist 

23 small business concerns in order for a certified de24 velopment company to carry out its economic devel25 opment mission shall not be deemed a conflict of in-
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1 terest, but notwithstanding any other provision of 

2 law, no development company may accept funding 

3 from any source, including but not limited to any de4 partment or agency of the United States Govern5 ment—

6 ‘‘(A) if such funding includes any condi7 tions, priorities or restrictions upon the types of 

8 small businesses to which they may provide fi9 nancial assistance under this title; or 

10 ‘‘(B) if it includes any conditions or im11 poses any requirements, directly or indirectly, 

12 upon any recipient of assistance under this title 

13 unless the department or agency also provides 

14 all of the financial assistance to be delivered by 

15 the development company to the small business 

16 and such conditions, priorities or restrictions 

17 are limited solely to the financial assistance so 

18 provided.’’. 

19 SEC. 204. DEFINITION OF RURAL AREAS. 

20 Section 501 of the Small Business Investment Act 

21 of 1958 (15 U.S.C. 695) is amended by adding at the end 

22 the following new subsection: 

23 ‘‘(f) As used in subsection (d)(3)(D), the term ‘rural’ 

24 shall include any area other than—
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1 ‘‘(1) a city or town that has a population great2 er than 50,000 inhabitants; and 

3 ‘‘(2) the urbanized area contiguous and adja4 cent to such a city or town.’’. 

5 SEC. 205. BUSINESSES IN LOW-INCOME AREAS. 

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

7 Act of 1958 (15 U.S.C. 695(d)(3)) is amended by insert8 ing after ‘‘business district revitalization’’ the following: 

9 ‘‘or expansion of businesses in low-income communities 

10 that would be eligible for new market tax credit invest11 ments under section 45D of the Internal Revenue Code 

12 of 1986 (26 U.S.C. 45D)’’. 

13 SEC. 206. COMBINATIONS OF CERTAIN GOALS. 

14 Section 501(e) of the Small Business Investment Act 

15 of 1958 (15 U.S.C. 695(e)) is amended by adding at the 

16 end the following: 

17 ‘‘(7) A small business concern that is uncondi18 tionally owned by more than one individual, or a cor19 poration whose stock is owned by more than one in20 dividual, is deemed to achieve a public policy goal 

21 under subsection (d)(3) if a combined ownership 

22 share of at least 51 percent is held by individuals 

23 who are in one of the groups listed as public policy 

24 goals specified in subsection (d)(3)(C) or 

25 (d)(3)(E).’’. 
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1 SEC. 207. REFINANCING. 

2 Section 502 of the Small Business Investment Act 

3 of 1958 (15 U.S.C. 696) is amended by adding at the end 

4 the following: 

5 ‘‘(7) PERMISSIBLE DEBT REFINANCING.—Any 

6 financing approved under this title may also include 

7 a limited amount of debt refinancing for debt that 

8 was not previously guaranteed by the Administra9 tion. If the project involves expansion of a small 

10 business which has existing indebtedness 

11 collateralized by fixed assets, any amount of existing 

12 indebtedness that does not exceed one-half of the 

13 project cost of the expansion may be refinanced and 

14 added to the expansion cost, providing—

15 ‘‘(A) the proceeds of the indebtedness were 

16 used to acquire land, including a building situ17 ated thereon, to construct a building thereon or 

18 to purchase equipment; 

19 ‘‘(B) the borrower has been current on all 

20 payments due on the existing debt for at least 

21 the past year; and 

22 ‘‘(C) the financing under the Certified De23 velopment Company Economic Development 

24 Loan Program will provide better terms or rate 

25 of interest than now exists on the debt.’’. 
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1 SEC. 208. ADDITIONAL EQUITY INJECTIONS. 

2 Clause (ii) of section 502(3)(B) of the Small Business 

3 Investment Act of 1958 (15 U.S.C. 696(3)(B)) is amend4 ed to read as follows: 

5 ‘‘(ii) FUNDING FROM INSTITU6 TIONS.—

7 ‘‘(I) If a small business concern 

8 provides the minimum contribution re9 quired under paragraph (C), not less 

10 than 50 percent of the total cost of 

11 any project financed pursuant to 

12 clauses (i), (ii), or (iii) of subpara13 graph (C) shall come from the institu14 tions described in subclauses (I), (II), 

15 and (III) of clause (i). 

16 ‘‘(II) If a small business concern 

17 provides more than the minimum con18 tribution required under paragraph 

19 (C), any excess contribution may be 

20 used to reduce the amount required 

21 from the institutions described in sub22 clauses (I), (II), and (III) of clause (i) 

23 except that the amount from such in24 stitutions may not be reduced to an 

25 amount less than the amount of the 

26 loan made by the Administration.’’. 
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1 SEC. 209. LOAN LIQUIDATIONS. 

2 Section 510 of the Small Business Investment Act 

3 of 1958 (15 U.S.C. 697g) is amended—

4 (1) by redesignating subsection (e) as sub5 section (g); and 

6 (2) by inserting after subsection (d) the fol7 lowing: 

8 ‘‘(e) PARTICIPATION.—

9 ‘‘(1) MANDATORY.—Any certified development 

10 company which elects not to apply for authority to 

11 foreclose and liquidate defaulted loans under this 

12 section or which the Administration determines to be 

13 ineligible for such authority shall contract with a 

14 qualified third-party to perform foreclosure and liq15 uidation of defaulted loans in its portfolio. The con16 tract shall be contingent upon approval by the Ad17 ministration with respect to the qualifications of the 

18 contractor and the terms and conditions of liquida19 tion activities. 

20 ‘‘(2) COMMENCEMENT.—The provisions of this 

21 subsection shall not require any development com22 pany to liquidate defaulted loans until the Adminis23 tration has adopted and implemented a program to 

24 compensate and reimburse development companies 

25 as provided under subsection (f). 

26 ‘‘(f) COMPENSATION AND REIMBURSEMENT.—
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1 ‘‘(1) REIMBURSEMENT OF EXPENSES.—The 

2 Administration shall reimburse each certified devel3 opment company for all expenses paid by such com4 pany as part of the foreclosure and liquidation ac5 tivities if the expenses—

6 ‘‘(A) were approved in advance by the Ad7 ministration either specifically or generally; or 

8 ‘‘(B) were incurred by the company on an 

9 emergency basis without Administration prior 

10 approval but which were reasonable and appro11 priate. 

12 ‘‘(2) COMPENSATION FOR RESULTS.—The Ad13 ministration shall develop a schedule to compensate 

14 and provide an incentive to qualified State or local 

15 development companies which foreclose and liquidate 

16 defaulted loans. The schedule shall be based on a 

17 percentage of the net amount recovered but shall not 

18 exceed a maximum amount. The schedule shall not 

19 apply to any foreclosure which is conducted pursu20 ant to a contract between a development company 

21 and a qualified third-party to perform the fore22 closure and liquidation.’’. 
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1 SEC. 210. CLOSING COSTS. 

2 Paragraph (4) of section 503(b) of the Small Busi3 ness Investment Act of 1958 (15 U.S.C. 697(b)) is amend4 ed to read as follows: 

5 ‘‘(4) the aggregate amount of such debenture 

6 does not exceed the amount of loans to be made 

7 from the proceeds of such debenture plus, at the 

8 election of the borrower under the Certified Develop9 ment Company Economic Development Loan Pro10 gram, other amounts attributable to the administra11 tive and closing costs of such loans, except for the 

12 borrower’s attorney fees;’’. 

13 SEC. 211. MAXIMUM CERTIFIED DEVELOPMENT COMPANY 

14 AND 7(a) LOAN ELIGIBILITY. 

15 Section 502(2) of the Small Business Investment Act 

16 of 1958 (15 U.S.C. 696(2)) is amended by adding at the 

17 end the following: 

18 ‘‘(C) COMBINATION FINANCING.—Financ19 ing under this title may be provided to a bor20 rower in the maximum amount provided in this 

21 subsection, plus a loan guarantee under section 

22 7(a) of the Small Business Act may also be pro23 vided to the same borrower in the maximum 

24 provided in section 7(a)(3)(A) of such Act.’’. 
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1 SEC. 212. ELIGIBILITY FOR ENERGY EFFICIENCY 

2 PROJECTS. 

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

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

5 (1) in subparagraph (G) by striking ‘‘or’’ at the 

6 end; 

7 (2) in subparagraph (H) by striking the period 

8 at the end and inserting a comma; and 

9 (3) by inserting after subparagraph (H) the fol10 lowing: 

11 ‘‘(I) reduction of energy consumption by at 

12 least 10 percent, or 

13 ‘‘(J) increased use of sustainable design or 

14 low-impact design to produce buildings that re15 duce the use of non-renewable resources, mini16 mize environmental impact, and relate people 

17 with the natural environment.’’. 

18 SEC. 213. LOANS FOR PLANT PROJECTS USED FOR ENERGY19 EFFICIENT PURPOSES. 

20 Section 502(2)(A) of the Small Business Investment 

21 Act of 1958 (15 U.S.C. 696(2)(A)) is amended—

22 (1) in clause (ii) by striking ‘‘and’’ at the end; 

23 (2) in clause (iii) by striking the period at the 

24 end and inserting ‘‘; and’’; and 

25 (3) by adding at the end the following: 
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1 ‘‘(iv) $4,000,000 for each project that 

2 reduces the borrower’s energy consumption 

3 by at least 10 percent.’’. 

4 SEC. 214. EXTENSION OF PERIOD DURING WHICH LOSS RE5 SERVES OF PREMIER CERTIFIED LENDERS 

6 DETERMINED ON THE BASIS OF OUT7 STANDING BALANCE OF DEBENTURES. 

8 Section 508(c)(6)(B) of the Small Business Invest9 ment Act of 1958 (15 U.S.C. 697e(c)(6)(B)) is amended 

10 by striking ‘‘during the 2-year period beginning on the 

11 date that is 90 days after the date of the enactment of 

12 this subparagraph,’’ and inserting ‘‘through the end of fis13 cal year 2008,’’. 

14 SEC. 215. EXTENSION OF ALTERNATIVE LOSS RESERVE 

15 PILOT PROGRAM FOR CERTAIN PREMIER 

16 CERTIFIED LENDERS. 

17 Section 508(c)(7)(J) of the Small Business Invest18 ment Act of 1958 (15 U.S.C. 697e(c)(7)(J)) is amended 

19 by striking ‘‘means’’ and all that follows through the pe-
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1 riod at the end and inserting ‘‘means each calendar quar2 ter through the end of fiscal year 2008.’’. 

Passed the House of Representatives April 25, 2007. 

Attest:

Clerk. 
110TH CONGRESS 

1ST SESSION H. R. 1332

AN ACT

To improve the access to capital programs of the 

purposes. Small Business Administration, and for other