IB 

Union Calendar No. 64 

110TH CONGRESS 

1ST SESSION H. R. 1332 

[Report No. 110–104] 

To improve the access to capital programs of the Small Business 

Administration, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 6, 2007 

Ms. BEAN (for herself, Mr. CHABOT, and Ms. VELA ́ZQUEZ) introduced the 

following bill; which was referred to the Committee on Small Business 

APRIL 20, 2007 

Additional sponsors: Mr. BISHOP of Utah, Mr. FILNER, Ms. LINDA T. 

SA ́NCHEZ of California, Mrs. MALONEY of New York, and Mr. LIPINSKI

APRIL 20, 2007 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on March 6, 2007] 

A BILL 

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, as 

6 provided in paragraph (32), offset fees assessed 

7 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, as 

11 provided in paragraph (32), offset fees assessed 

12 and collected under subparagraph (A).’’; and 

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

14 ‘‘(32) FEE CONTRIBUTIONS.— 

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

16 amounts are made available to the Adminis17 trator for the purpose of fee contributions, the 

18 Administrator shall— 

19 ‘‘(i) first consider contributing to fees 

20 paid by small business borrowers under 

21 clauses (i) through (iii) of paragraph 

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

23 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 fee 

5 contribution under subparagraph (A) shall be ef6 fective for one fiscal quarter and shall be ad7 justed as necessary for each fiscal quarter there8 after to ensure that the amounts under subpara9 graph (A) are fully used. The fee contribution for 

10 a fiscal quarter shall be based on the loans that 

11 the Administrator projects will be made during 

12 that fiscal quarter, given the program level au13 thorized by law for that fiscal year and any 

14 other factors that the Administrator considers 

15 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). For a 

3 loan made through the program, the following shall 

4 apply: 

5 ‘‘(A) The Administrator shall approve or 

6 disapprove the loan within 36 hours. 

7 ‘‘(B) The program shall use abbreviated ap8 plication and documentation requirements. 

9 ‘‘(C) Minimum credit standards, as the Ad10 ministrator considers necessary to limit the rate 

11 of default on loans made under the program, 

12 shall apply.’’. 

13 SEC. 103. COMMUNITY EXPRESS PROGRAM MADE PERMA14 NENT. 

15 (a) IN GENERAL.—Section 7(a) of the Small Business 

16 Act (15 U.S.C. 636(a)) is amended by adding at the end 

17 the following: 

18 ‘‘(34) COMMUNITY EXPRESS PROGRAM.—The Ad19 ministrator shall carry out a Community Express 

20 Program for loans of $250,000 or less. For a loan 

21 made under this paragraph, the following shall apply: 

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

23 concern— 

24 ‘‘(i) the majority ownership interest of 

25 which is directly held by individuals who 


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1 are women, socially or economically dis2 advantaged individuals (as defined by the 

3 Administrator), or veterans of the Armed 

4 Forces; or 

5 ‘‘(ii) that is located in a low- or mod6 erate-income area, as defined by the Admin7 istrator. 

8 ‘‘(B) The loan shall comply with the collat9 eral policy of the Administration, except that, if 

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

11 $25,000, the Administration shall not require the 

12 lender to take collateral. 

13 ‘‘(C) The loan shall include terms requiring 

14 the lender to ensure that technical assistance is 

15 provided to the borrower, through the lender or 

16 a third-party provider. 

17 ‘‘(D) The Administration shall approve or 

18 disapprove the loan within 36 hours.’’. 

19 (b) NOTICE AND COMMENT.—The program required by 

20 section 7(a)(34) of the Small Business Act, as added by sub21 section (a), shall be established after the opportunity for no22 tice and comment and not later than 180 days after the 

23 date of the enactment of this Act. 


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1 SEC. 104. MEDICAL PROFESSIONALS IN DESIGNATED 

2 SHORTAGE AREAS PROGRAM. 

3 (a) IN GENERAL.—Section 7(a) of the Small Business 

4 Act (15 U.S.C. 636(a)) is amended by adding at the end 

5 the following: 

6 ‘‘(35) MEDICAL PROFESSIONALS IN DESIGNATED

7 SHORTAGE AREAS PROGRAM.—The Administrator 

8 shall carry out a Medical Professionals in Designated 

9 Shortage Areas Program. For a loan made under this 

10 paragraph, the following shall apply: 

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

12 concern that provides properly licensed medical, 

13 dental, or psychiatric services to the public. 

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

15 opening a business concern in a health profes16 sional shortage area (as defined in section 332 of 

17 the Public Health Service Act (42 U.S.C. 254e)). 

18 ‘‘(C) The loan shall include the participa19 tion by the Administration equal to 90 percent 

20 of the balance of the financing outstanding at the 

21 time of disbursement. 

22 ‘‘(D) The fees on the loan under paragraphs 

23 (18) and (23) shall be reduced by half.’’. 

24 (b) NOTICE AND COMMENT.—The program required by 

25 section 7(a)(35) of the Small Business Act, as added by sub26 section (a), shall be established after the opportunity for noVerDate Aug 31 2005 23:38 Apr 20, 2007 Jkt 059200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6203 E:\BILLS\H1332.RH H1332

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1 tice and comment and not later than 180 days after the 

2 date of the enactment of this Act. 

3 SEC. 105. INCREASED VETERAN PARTICIPATION PROGRAM. 

4 (a) IN GENERAL.—Section 7(a) of the Small Business 

5 Act (15 U.S.C. 636(a)) is amended by adding at the end 

6 the following: 

7 ‘‘(36) INCREASED VETERAN PARTICIPATION PRO8 GRAM.—The Administrator shall carry out an In9 creased Veteran Participation Program. For a loan 

10 made under this paragraph, the following shall apply: 

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

12 concern the majority ownership interest of which 

13 is directly held by individuals who are veterans 

14 of the Armed Forces. 

15 ‘‘(B) The loan shall include the participa16 tion by the Administration equal to 90 percent 

17 of the balance of the financing outstanding at the 

18 time of disbursement. 

19 ‘‘(C) The fees on the loan under paragraphs 

20 (18) and (23) shall not apply.’’. 

21 (b) NOTICE AND COMMENT.—The program required by 

22 section 7(a)(36) of the Small Business Act, as added by sub23 section (a), shall be established after the opportunity for no24 tice and comment and not later than 180 days after the 

25 date of the enactment of this Act. 


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1 SEC. 106. ALTERNATIVE SIZE STANDARD. 

2 (a) IN GENERAL.—Section 3(a) of the Small Business 

3 Act (15 U.S.C. 632(a)) is amended by adding at the end 

4 the following: 

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

6 under this subsection, the Administrator shall estab7 lish, and permit a lender making a loan under sec8 tion 7(a) and a lender making a loan under the de9 velopment company loan program to use, an alter10 native size standard. The alternative size standard 

11 shall be based on factors including maximum tangible 

12 net worth and average net income.’’. 

13 (b) APPLICABILITY.—Until the Administrator estab14 lishes, under section 3(a)(5) of the Small Business Act (as 

15 added by subsection (a)), an alternative size standard in 

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

17 that Act, the alternative size standard in section 121.301(b) 

18 of title 13, Code of Federal Regulations, shall apply to such 

19 a case. 

20 SEC. 107. SUPPORT TO REGIONAL OFFICES. 

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

22 636(a)) is amended by adding at the end the following: 

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

24 Administrator shall carry out a program, within an 

25 element of the Administration already in existence as 

26 of the date of the enactment of the Small Business 


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1 Lending Improvements Act of 2007, to provide sup2 port to regional offices of the Administration in as3 sisting small lenders who do not participate in the 

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

5 program.’’. 

6 TITLE II—CERTIFIED DEVELOP7 MENT COMPANY ECONOMIC 

8 DEVELOPMENT LOAN PRO9 GRAM 

10 SEC. 201. CERTIFIED DEVELOPMENT COMPANY ECONOMIC 

11 DEVELOPMENT LOAN PROGRAM. 

12 Section 504 of the Small Business Investment Act of 

13 1958 (15 U.S.C. 697a) is amended— 

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

15 subsections (b) and (c); and 

16 (2) by inserting before subsection (b) (as so re17 designated) the following: 

18 ‘‘(a) The program to provide financing to small busi19 nesses by guarantees of loans under this Act which are fund20 ed by debentures guaranteed by the Administration may be 

21 known as the ‘Certified Development Company Economic 

22 Development Loan Program’.’’. 

23 SEC. 202. DEFINITIONS. 

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

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


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

2 entity incorporated under State law with the author3 ity to promote and assist the growth and development 

4 of small-business concerns in the areas in which it is 

5 authorized to operate by the Administration, and the 

6 term ‘certified development company’ means a devel7 opment company which the Administration has deter8 mined meets the criteria of section 506;’’. 

9 SEC. 203. ELIGIBILITY OF DEVELOPMENT COMPANIES TO 

10 BE DESIGNATED AS CERTIFIED DEVELOP11 MENT COMPANIES. 

12 Section 506 of the Small Business Investment Act of 

13 1958 (15 U.S.C. 697c) is amended to read as follows: 

14 ‘‘SEC. 506. CERTIFIED DEVELOPMENT COMPANIES. 

15 ‘‘(a) AUTHORITY TO ISSUE DEBENTURES.—A develop16 ment company may issue debentures pursuant to this Act 

17 if the Administration certifies that the company meets the 

18 following criteria: 

19 ‘‘(1) SIZE.—The development company is re20 quired to be a small concern with fewer than 500 em21 ployees and not under the control of any entity which 

22 does not meet the Administration’s size standards as 

23 a small business, except that any development com24 pany which was certified by the Administration prior 


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1 to December 31, 2005 may continue to issue deben2 tures. 

3 ‘‘(2) PURPOSE.—The primary purpose of the de4 velopment company is to benefit the community by 

5 fostering economic development to create and preserve 

6 jobs and stimulate private investment. 

7 ‘‘(3) PRIMARY FUNCTION.—The primary func8 tion of the development company is to accomplish its 

9 purpose by providing long term financing to small 

10 businesses by the utilization of the Certified Develop11 ment Company Economic Development Loan Pro12 gram. It may also provide or support such other local 

13 economic development activities to assist the commu14 nity. 

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

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

17 development company certified by the Administration 

18 prior to January 1, 1987, may retain its status as 

19 a for-profit corporation. 

20 ‘‘(5) GOOD STANDING.—The development com21 pany is in good standing in its State of incorporation 

22 and in any other State in which it conducts business, 

23 and is in compliance with all laws, including tax24 ation requirements, in its State of incorporation and 

25 in any other State in which it conducts business. 


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

2 has at least 25 members (or stockholders if the cor3 poration is a for-profit entity), none of whom may 

4 own or control more than 10 percent of the company’s 

5 voting membership, consisting of representation from 

6 each of the following groups (none of which are in a 

7 position to control the development company): 

8 ‘‘(A) Government organizations that are re9 sponsible for economic development. 

10 ‘‘(B) Financial institutions that provide 

11 commercial long term fixed asset financing. 

12 ‘‘(C) Community organizations that are 

13 dedicated to economic development. 

14 ‘‘(D) Businesses. 

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

16 company has a board of directors that— 

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

18 members; 

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

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

21 group is in a position to control the company; 

22 and 

23 ‘‘(C) meets on a regular basis to make pol24 icy decisions for such company. 


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1 ‘‘(8) PROFESSIONAL MANAGEMENT AND STAFF.— 

2 The development company has full-time professional 

3 management, including a chief executive officer to 

4 manage daily operations, and a full-time professional 

5 staff qualified to market the Certified Development 

6 Company Economic Development Loan Program and 

7 handle all aspects of loan approval and servicing, in8 cluding liquidation, if appropriate. The development 

9 company is required to be independently managed 

10 and operated to pursue its economic development mis11 sion and to employ its chief executive officer directly, 

12 with the following exceptions: 

13 ‘‘(A) A development company may be an af14 filiate of another local non-profit service corpora15 tion (specifically excluding another development 

16 company) whose mission is to support economic 

17 development in the area in which the develop18 ment company operates. In such a case: 

19 ‘‘(i) The development company may 

20 satisfy the requirement for full-time profes21 sional staff by contracting with a local non22 profit service corporation (or one of its non23 profit affiliates), or a governmental or 

24 quasi-governmental agency, to provide the 

25 required staffing. 


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1 ‘‘(ii) The development company and 

2 the local non-profit service corporation may 

3 have partially common boards of directors. 

4 ‘‘(B) A development company in a rural 

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

6 deemed to have satisfied the requirements of a 

7 full-time professional staff and professional man8 agement ability if it contracts with another cer9 tified development company which has such staff 

10 and management ability and which is located in 

11 the same general area to provide such services. 

12 ‘‘(C) A development company that has been 

13 certified by the Administration as of December 

14 31, 2005, and that has contracted with a for15 profit company to provide services as of such 

16 date may continue to do so. 

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

18 shall specify the area in which an applicant is certified to 

19 provide assistance to small businesses under this title, which 

20 may not initially exceed its State of incorporation unless 

21 it proposes to operate in a local economic area which is 

22 required to include part of its State of incorporation and 

23 may include adjacent areas within several States. After a 

24 development company has demonstrated its ability to pro25 vide assistance in its area of operations, it may request the 


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1 Administration to be allowed to operate in one or more ad2 ditional States as a multi-state certified development com3 pany if it satisfies the following criteria: 

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

5 State of incorporation, except the States of Alaska 

6 and Hawaii shall be deemed to be contiguous to any 

7 State abutting the Pacific ocean. 

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

9 and servicing loans under the Certified Development 

10 Company Economic Development Loan Program 

11 by— 

12 ‘‘(A) requesting and receiving designation 

13 as an accredited lender under section 507 or a 

14 premier certified lender under section 508; and 

15 ‘‘(B) meeting or exceeding performance 

16 standards established by the Administration. 

17 ‘‘(3) The development company adds to the mem18 bership of its State of incorporation additional mem19 bership from each additional State and the added 

20 membership meets the requirements of subsection 

21 (a)(6). 

22 ‘‘(4) The development company adds at least one 

23 member to its board of directors in the State of incor24 poration, providing that added member was selected 

25 by the membership of the development company. 


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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.—The 

5 Administration shall respond to the request of a certified 

6 development company for certification as a multi-state com7 pany on an expedited basis within 30 days of receipt of 

8 a completed application if the application demonstrates 

9 that the development company meets the requirements of 

10 subsection (b)(1) through (b)(4). 

11 ‘‘(d) USE OF FUNDS LIMITED TO STATE WHERE GEN12 ERATED.—Any funds generated by a development company 

13 from making loans under the Certified Development Com14 pany Economic Development Loan Program which remain 

15 after payment of staff, operating and overhead expenses 

16 shall be retained by the development company as a reserve 

17 for future operations, for expanding its area of operations 

18 in a local economic area as authorized by the Administra19 tion, or for investment in other local economic development 

20 activity in the State from which the funds were generated. 

21 ‘‘(e) ETHICAL REQUIREMENTS.— 

22 ‘‘(1) IN GENERAL.—Certified development com23 panies, their officers, employees and other staff, shall 

24 at all times act ethically and avoid activities which 

25 constitute a conflict of interest or appear to constitute 


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1 a conflict of interest. No one may serve as an officer, 

2 director or chief executive officer of more than one cer3 tified development company. 

4 ‘‘(2) PROHIBITED CONFLICT IN PROJECT

5 LOANS.—As part of a project under the Certified De6 velopment Company Economic Development Loan 

7 Program, no certified development company may rec8 ommend or approve a guarantee of a debenture by the 

9 Administration that is collateralized by a second lien 

10 position on the property being constructed or acquired 

11 and also provide, or be affiliated with a corporation 

12 or other entity, for-profit or non-profit, which pro13 vides, financing collateralized by a first lien on the 

14 same property. A business development company that 

15 was participating as a first mortgage lender, either 

16 directly or through an affiliate, for the Certified De17 velopment Company Economic Development Loan 

18 Program in either fiscal years 2004 or 2005 may con19 tinue to do so. 

20 ‘‘(3) OTHER ECONOMIC DEVELOPMENT ACTIVI21 TIES.—Operation of multiple programs to assist 

22 small business concerns in order for a certified devel23 opment company to carry out its economic develop24 ment mission shall not be deemed a conflict of inter25 est, but notwithstanding any other provision of law, 


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1 no development company may accept funding from 

2 any source, including but not limited to any depart3 ment or agency of the United States Government— 

4 ‘‘(A) if such funding includes any condi5 tions, priorities or restrictions upon the types of 

6 small businesses to which they may provide fi7 nancial assistance under this title; or 

8 ‘‘(B) if it includes any conditions or im9 poses any requirements, directly or indirectly, 

10 upon any recipient of assistance under this title 

11 unless the department or agency also provides all 

12 of the financial assistance to be delivered by the 

13 development company to the small business and 

14 such conditions, priorities or restrictions are 

15 limited solely to the financial assistance so pro16 vided.’’. 

17 SEC. 204. DEFINITION OF RURAL AREAS. 

18 Section 501 of the Small Business Investment Act of 

19 1958 (15 U.S.C. 695) is amended by adding at the end the 

20 following new subsection: 

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

22 shall include any area other than— 

23 ‘‘(1) a city or town that has a population greater 

24 than 50,000 inhabitants; and 


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1 ‘‘(2) the urbanized area contiguous and adjacent 

2 to such a city or town.’’. 

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

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

5 Act of 1958 (15 U.S.C. 695(d)(3)) is amended by inserting 

6 after ‘‘business district revitalization’’ the following: ‘‘or ex7 pansion of businesses in low-income communities that 

8 would be eligible for new market tax credit investments 

9 under section 45D of the Internal Revenue Code of 1986 

10 (26 U.S.C. 45D)’’. 

11 SEC. 206. COMBINATIONS OF CERTAIN GOALS. 

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

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

14 end the following: 

15 ‘‘(7) A small business concern that is uncondi16 tionally owned by more than one individual, or a cor17 poration whose stock is owned by more than one indi18 vidual, is deemed to achieve a public policy goal 

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

20 share of at least 51 percent is held by individuals who 

21 are in one of the groups listed as public policy goals 

22 specified in subsection (d)(3)(C) or (d)(3)(E).’’. 


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1 SEC. 207. REFINANCING. 

2 Section 502 of the Small Business Investment Act of 

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

4 following: 

5 ‘‘(7) PERMISSIBLE DEBT REFINANCING.—Any fi6 nancing approved under this title may also include a 

7 limited amount of debt refinancing for debt that was 

8 not previously guaranteed by the Administration. If 

9 the project involves expansion of a small business 

10 which has existing indebtedness collateralized by fixed 

11 assets, any amount of existing indebtedness that does 

12 not exceed one-half of the project cost of the expansion 

13 may be refinanced and added to the expansion cost, 

14 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 the 

21 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 amended 

4 to read as follows: 

5 ‘‘(ii) FUNDING FROM INSTITUTIONS.— 

6 ‘‘(I) If a small business concern 

7 provides the minimum contribution re8 quired under paragraph (C), not less 

9 than 50 percent of the total cost of any 

10 project financed pursuant to clauses 

11 (i), (ii), or (iii) of subparagraph (C) 

12 shall come from the institutions de13 scribed in subclauses (I), (II), and 

14 (III) of clause (i). 

15 ‘‘(II) If a small business concern 

16 provides more than the minimum con17 tribution required under paragraph 

18 (C), any excess contribution may be 

19 used to reduce the amount required 

20 from the institutions described in sub21 clauses (I), (II), and (III) of clause (i) 

22 except that the amount from such in23 stitutions may not be reduced to an 

24 amount less than the amount of the 

25 loan made by the Administration.’’. 


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1 SEC. 209. LOAN LIQUIDATIONS. 

2 Section 510 of the Small Business Investment Act of 

3 1958 (15 U.S.C. 697g) is amended— 

4 (1) by redesignating subsection (e) as subsection 

5 (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 sec12 tion or which the Administration determines to be in13 eligible for such authority shall contract with a quali14 fied third-party to perform foreclosure and liquida15 tion of defaulted loans in its portfolio. The contract 

16 shall be contingent upon approval by the Administra17 tion with respect to the qualifications of the con18 tractor and the terms and conditions of liquidation 

19 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 as 

25 provided under subsection (f). 

26 ‘‘(f) COMPENSATION AND REIMBURSEMENT.— 


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1 ‘‘(1) REIMBURSEMENT OF EXPENSES.—The Ad2 ministration shall reimburse each certified develop3 ment company for all expenses paid by such company 

4 as part of the foreclosure and liquidation activities if 

5 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 per17 centage of the net amount recovered but shall not ex18 ceed a maximum amount. The schedule shall not 

19 apply to any foreclosure which is conducted pursuant 

20 to a contract between a development company and a 

21 qualified third-party to perform the foreclosure and 

22 liquidation.’’. 


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•HR 1332 RH

1 SEC. 210. CLOSING COSTS. 

2 Paragraph (4) of section 503(b) of the Small Business 

3 Investment Act of 1958 (15 U.S.C. 697(b)) is amended to 

4 read as follows: 

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

6 not exceed the amount of loans to be made from the 

7 proceeds of such debenture plus, at the election of the 

8 borrower under the Certified Development Company 

9 Economic Development Loan Program, other amounts 

10 attributable to the administrative and closing costs of 

11 such loans, except for the borrower’s attorney fees;’’. 

12 SEC. 211. MAXIMUM CERTIFIED DEVELOPMENT COMPANY 

13 AND 7(A) LOAN ELIGIBILITY. 

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

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

16 end the following: 

17 ‘‘(C) COMBINATION FINANCING.—Financing 

18 under this title may be provided to a borrower 

19 in the maximum amount provided in this sub20 section, plus a loan guarantee under section 7(a) 

21 of the Small Business Act may also be provided 

22 to the same borrower in the maximum provided 

23 in section 7(a)(3)(A) of such Act.’’. 

24 SEC. 212. ELIGIBILITY FOR ENERGY EFFICIENCY PROJECTS. 

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

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


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26 

•HR 1332 RH

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

2 end; 

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

4 at the end and inserting ‘‘, or’’; and 

5 (3) by inserting after subparagraph (H) the fol6 lowing: 

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

8 least 10 percent.’’. 

9 SEC. 213. LOANS FOR PLANT PROJECTS USED FOR ENERGY10 EFFICIENT PURPOSES. 

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

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

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

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

15 end and inserting ‘‘; and’’; and 

16 (3) by adding at the end the following: 

17 ‘‘(iv) $4,000,000 for each project that 

18 reduces the borrower’s energy consumption 

19 by at least 10 percent.’’. 

20 SEC. 214. EXTENSION OF PERIOD DURING WHICH LOSS RE21 SERVES OF PREMIER CERTIFIED LENDERS 

22 DETERMINED ON THE BASIS OF OUT23 STANDING BALANCE OF DEBENTURES. 

24 Section 508(c)(6)(B) of the Small Business Investment 

25 Act of 1958 (15 U.S.C. 697e(c)(6)(B)) is amended by strikVerDate Aug 31 2005 23:38 Apr 20, 2007 Jkt 059200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6203 E:\BILLS\H1332.RH H1332

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27 

•HR 1332 RH

1 ing ‘‘during the 2-year period beginning on the date that 

2 is 90 days after the date of the enactment of this subpara3 graph,’’ and inserting ‘‘through the end of fiscal year 

4 2008,’’. 

5 SEC. 215. EXTENSION OF ALTERNATIVE LOSS RESERVE 

6 PILOT PROGRAM FOR CERTAIN PREMIER CER7 TIFIED LENDERS. 

8 Section 508(c)(7)(J) of the Small Business Investment 

9 Act of 1958 (15 U.S.C. 697e(c)(7)(J)) is amended by strik10 ing ‘‘means’’ and all that follows through the period at the 

11 end and inserting ‘‘means each calendar quarter through 

12 the end of fiscal year 2008.’’ 


pwalker on PROD1PC71 with BILLS
Union Calendar No. 64 

110TH CONGRESS 

1ST SESSION H. R. 1332 

[Report No. 110

–104] 

A BILL 

To improve the access to capital programs of the 

purposes. Small Business Administration, and for other 

APRIL 20, 2007 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


pwalker on PROD1PC71 with BILLS