108TH CONGRESS

2D SESSION H. R. 4062

AN ACT

To provide for an additional temporary extension of

June 4, 2004, and for other purposes.Small Business Investment Act of 1958 throughprograms under the Small Business Act and the

108TH CONGRESS

2D SESSION H. R. 4062

AN ACT

To provide for an additional temporary extension of programs under the Small Business Act and the Small

Business Investment Act of 1958 through June 4, 2004,

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. ADDITIONAL TEMPORARY EXTENSION OF AU2 THORIZATION OF PROGRAMS UNDER SMALL

3 BUSINESS ACT AND SMALL BUSINESS INVEST4 MENT ACT OF 1958.

5 The authorization for any program, authority, or pro6 vision, including any pilot program, that was extended

7 through April 2, 2004, by section 1 of Public Law 108–

8 205 is further extended through June 4, 2004, under the

9 same terms and conditions.

10 SEC. 2. EXTENSION OF CERTAIN FEE AUTHORIZATIONS.

11 Section 503(f) of the Small Business Investment Act

12 of 1958 (15 U.S.C. 697 (f)), as amended by section 2 of

13 Public Law 108–205, is further amended by striking

14 ‘‘May 21, 2004’’ and inserting ‘‘October 1, 2004’’.

15 SEC. 3. FISCAL YEAR 2004 PURCHASE AND GUARANTEE AU16 THORITY UNDER TITLE III OF SMALL BUSI17 NESS INVESTMENT ACT OF 1958.

18 Section 20 of the Small Business Act (15 U.S.C. 631

19 note) is amended by adding at the end the following new

20 subsection:

21 ‘‘(j) FISCAL YEAR 2004 PURCHASE AND GUARANTEE

22 AUTHORITY UNDER TITLE III OF SMALL BUSINESS IN23 VESTMENT ACT OF 1958.—For fiscal year 2004, for the

24 programs authorized by title III of the Small Business In25 vestment Act of 1958 (15 U.S.C. 681 et seq.), the Admin26 istration is authorized to make—
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1 ‘‘(1) $4,000,000,000 in purchases of partici2 pating securities; and

3 ‘‘(2) $3,000,000,000 in guarantees of deben4 tures.’’.

5 SEC. 4. COMBINATION FINANCING.

6 (a) IN GENERAL.—During the period beginning on

7 the date of the enactment of this section and ending on

8 September 30, 2004, subsection (a) of section 7 of the

9 Small Business Act (15 U.S.C. 636(a)) shall be applied

10 as if the paragraph set forth in subsection (b) were added

11 at the end of that subsection (a).

12 (b) PARAGRAPH SPECIFIED.—The paragraph re13 ferred to in subsection (a) is as follows:

14 ‘‘(31) COMBINATION FINANCING.—

15 ‘‘(A) DEFINITIONS.—In this paragraph—

16 ‘‘(i) the term ‘combination financing’

17 means financing comprised of a loan guaran18 teed under this subsection and a commercial

19 loan; and

20 ‘‘(ii) the term ‘commercial loan’ means a

21 loan which is part of a combination financing

22 and no portion of which is guaranteed by the

23 Federal Government.

24 ‘‘(B) APPLICABILITY.—This paragraph applies

25 to a loan guarantee obtained by a small business
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1 concern under this subsection, if the small business

2 concern also obtains a commercial loan.

3 ‘‘(C) COMMERCIAL LOAN AMOUNT.—In the case

4 of any combination financing, the amount of the

5 commercial loan which is part of such financing

6 shall not exceed the gross amount of the loan guar7 anteed under this subsection which is part of such

8 financing.

9 ‘‘(D) COMMERCIAL LOAN PROVISIONS.—The

10 commercial loan obtained by the small business

11 concern—

12 ‘‘(i) may be made by the participating

13 lender that is providing financing under this

14 subsection or by a different lender;

15 ‘‘(ii) may be secured by a senior lien; and

16 ‘‘(iii) may be made by a lender in the Pre17 ferred Lenders Program, if applicable.

18 ‘‘(E) COMMERCIAL LOAN FEE.—A one-time fee

19 in an amount equal to 0.7 percent of the amount of

20 the commercial loan shall be paid by the lender to

21 the Administration if the commercial loan has a sen22 ior credit position to that of the loan guaranteed

23 under this subsection. Paragraph (23)(B) shall

24 apply to the fee established by this paragraph.
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1 ‘‘(F) DEFERRED PARTICIPATION LOAN SECU2 RITY.—A loan guaranteed under this subsection may

3 be secured by a subordinated lien.

4 ‘‘(G) COMPLETION OF APPLICATION PROC5 ESSING.—The Administrator shall complete proc6 essing of an application for combination financing

7 under this paragraph pursuant to the program au8 thorized by this subsection as it was operating on

9 October 1, 2003.

10 ‘‘(H) BUSINESS LOAN ELIGIBILITY.—Any

11 standards prescribed by the Administrator relating

12 to the eligibility of small business concerns to obtain

13 combination financing under this subsection which

14 are in effect on the date of the enactment of this

15 paragraph shall apply with respect to combination

16 financings made under this paragraph. Any modi17 fications to such standards by the Administrator

18 after such date shall not unreasonably restrict the

19 availability of combination financing under this

20 paragraph relative to the availability of such financ21 ing before such modifications.’’.

22 SEC. 5. LOAN GUARANTEE FEES.

23 (a) IN GENERAL.—During the period beginning on

24 the date of the enactment of this section and ending on

25 September 30, 2004, subparagraph (A) of paragraph (23)
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1 of subsection (a) of section 7 of the Small Business Act

2 (15 U.S.C. 636(a)(23)(A)) shall be applied as if that sub3 paragraph consisted of the language set forth in sub4 section (b).

5 (b) LANGUAGE SPECIFIED.—The language referred

6 to in subsection (a) is as follows:

7 ‘‘(A) PERCENTAGE.—

8 ‘‘(i) IN GENERAL.—With respect to each

9 loan guaranteed under this subsection, the Ad10 ministrator shall, in accordance with such terms

11 and procedures as the Administrator shall es12 tablish by regulation, assess and collect an an13 nual fee in an amount equal to 0.5 percent of

14 the outstanding balance of the deferred partici15 pation share of the loan.

16 ‘‘(ii) TEMPORARY PERCENTAGE.—With re17 spect to loans approved during the period be18 ginning on the date of enactment of this clause

19 and ending on September 30, 2004, the annual

20 fee assessed and collected under clause (i) shall

21 be equal to 0.36 percent of the outstanding

22 balance of the deferred participation share of

23 the loan.’’.

24 (c) RETENTION OF CERTAIN FEES.—Subparagraph

25 (B) of paragraph (18) of subsection (a) of section 7 of
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1 the Small Business Act (15 U.S.C. 636(a)(18)(B)) shall

2 not be effective during the period beginning on the date

3 of the enactment of this section and ending on September

4 30, 2004.

5 SEC. 6. EXPRESS LOAN PROVISIONS.

6 (a) DEFINITIONS.—For the purposes of this section:

7 (1) The term ‘‘express lender’’ shall mean any

8 lender authorized by the Administrator to partici9 pate in the Express Loan Pilot Program.

10 (2) The term ‘‘Express Loan’’ shall mean any

11 loan made pursuant to section 7(a) of the Small

12 Business Act (15 U.S.C. 636(a)) in which a lender

13 utilizes to the maximum extent practicable its own

14 loan analyses, procedures, and documentation.

15 (3) The term ‘‘Express Loan Pilot Program’’

16 shall mean the program established by the Adminis17 trator prior to the date of enactment of this section

18 under the authority granted in section 7(a)(25)(B)

19 of the Small Business Act (15 U.S.C. 636(a)(25(B))

20 with a guaranty rate not to exceed 50 percent.

21 (4) The term ‘‘Administrator’’ means the Ad22 ministrator of the Small Business Administration.

23 (5) The term ‘‘small business concern’’ has the

24 same meaning given such term under section 3(a) of

25 the Small Business Act (15 U.S.C. 632(a)).
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1 (b) RESTRICTION TO EXPRESS LENDER.—The au2 thority to make an Express Loan shall be limited to those

3 lenders deemed qualified to make such loans by the Ad4 ministrator. Designation as an express lender for purposes

5 of making an Express Loan shall not prohibit such lender

6 from taking any other action authorized by the Adminis7 trator for that lender pursuant to section 7(a) of the Small

8 Business Act (15 U.S.C. 636(a)).

9 (c) GRANDFATHERING OF EXISTING LENDERS.—Any

10 express lender shall retain such designation unless the Ad11 ministrator determines that the express lender has vio12 lated the law or regulations promulgated by the Adminis13 trator or modifies the requirements to be an express lender

14 and the lender no longer satisfies those requirements.

15 (d) TEMPORARY EXPANSION OF EXPRESS LOAN

16 PILOT PROGRAM.—

17 (1) AUTHORIZATION.—As of the date of enact18 ment of this section, the maximum loan amount in

19 the Express Loan Pilot Program shall be increased

20 to a maximum loan amount of $2,000,000 as set

21 forth in section 7(a)(3)(A) of the Small Business

22 Act (15 U.S.C. 636(a)(3)(A)).

23 (2) TERMINATION DATE.—The authority set

24 forth in paragraph (1) shall terminate on September

25 30, 2004.
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1 (3) SAVINGS PROVISION.—Nothing in this sec2 tion shall be interpreted to modify or alter the au3 thority of the Administrator to continue to operate

4 the Express Loan Pilot Program on or after October

5 1, 2004.

6 (e) OPTION TO PARTICIPATE.—Except as otherwise

7 provided in this section, the Administrator shall take no

8 regulatory, policy, or administrative action, without regard

9 to whether such action requires notification pursuant to

10 section 7(a)(24) of the Small Business Act (15 U.S.C.

11 636(a)(24)), that has the effect of—

12 (1) requiring a lender to make an Express Loan

13 pursuant to subsection (d);

14 (2) limiting or modifying any term or condition

15 of deferred participation loans made under such sec16 tion (other than Express Loans) unless the Adminis17 trator imposes the same limit or modification on Ex18 press Loans;

19 (3) transferring or re-allocating staff, staff re20 sponsibilities, resources, or funding, if the result of

21 such transfer or re-allocation would be to increase

22 the average loan processing, approval, or disburse23 ment time above the averages for those functions as

24 of October 1, 2003, for loan guarantees approved
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1 under such section by employees of the Administra2 tion or through the Preferred Lenders Program; or

3 (4) otherwise providing any incentive or dis4 incentive which encourages lenders or borrowers to

5 make or obtain loans under the Express Loan Pilot

6 Program instead of under the general loan authority

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

8 636(a)).

9 (f) COLLECTION AND REPORTING OF DATA.—For all

10 loans in excess of $250,000 made pursuant to the author11 ity set forth in subsection (d)(1), the Administrator shall,

12 to the extent practicable, collect data on the purpose for

13 each such loan. The Administrator shall report monthly

14 to the Committee on Small Business and Entrepreneur15 ship of the Senate and the Committee on Small Business

16 of the House of Representatives on the number of such

17 loans and their purposes.

18 (g) TERMINATION.—Subsections (b), (c), (e), and (f)

19 shall not apply after September 30, 2004.

20 SEC. 7. FISCAL YEAR 2004 DEFERRED PARTICIPATION

21 STANDARDS.

22 Deferred participation loans made during the period

23 beginning on the date of the enactment of this Act and

24 ending on September 30, 2004, under section 7(a) of the

25 Small Business Act (15 U.S.C. 636(a)) shall have the
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1 same terms and conditions (including maximum gross loan

2 amounts and collateral requirements) as were applicable

3 to loans made under such section on October 1, 2003, ex4 cept as otherwise provided in this Act. This section shall

5 not preclude the Administrator of the Small Business Ad6 ministration from taking such action as necessary to

7 maintain the loan program carried out under such section,

8 subject to appropriations.

9 SEC. 8. TEMPORARY INCREASE IN LOAN LIMIT UNDER

10 BUSINESS LOAN AND INVESTMENT FUND AND

11 IN ASSOCIATED GUARANTEE FEES.

12 (a) TEMPORARY INCREASE IN AMOUNT PERMITTED

13 TO BE OUTSTANDING AND COMMITTED.—During the pe14 riod beginning on the date of the enactment of this Act

15 and ending on September 30, 2004, section 7(a)(3)(A) of

16 the Small Business Act (15 U.S.C. 636(a)(3)(A)) shall be

17 applied as if the first dollar figure were $1,500,000.

18 (b) TEMPORARY GUARANTEE FEE ON DEFERRED

19 PARTICIPATION SHARE OVER $1,000,000.—With respect

20 to loans made during the period referred to in subsection

21 (a) to which section 7(a)(18) of the Small Business Act

22 (15 U.S.C. 636(a)(18)) applies, the Administrator of the

23 Small Business Administration shall collect an additional

24 guarantee fee equal to 0.25 percent of the amount (if any)
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1 by which the deferred participation share of the loan ex2 ceeds $1,000,000.

Passed the House of Representatives March 31,

2004.

Attest:

Clerk.