I 

108TH CONGRESS 

2D SESSION H. R. 4062

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. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 30, 2004

Mr. MANZULLO (for himself and Ms. VELA ́ZQUEZ) introduced the following 

bill; which was referred to the Committee on Small Business 

A BILL

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,

3 SECTION 1. ADDITIONAL TEMPORARY EXTENSION OF AU4 THORIZATION OF PROGRAMS UNDER SMALL 

5 BUSINESS ACT AND SMALL BUSINESS INVEST6 MENT ACT OF 1958. 

7 The authorization for any program, authority, or pro8 vision, including any pilot program, that was extended 
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1 through April 2, 2004, by section 1 of Public Law 108–

2 205 is further extended through June 4, 2004, under the 

3 same terms and conditions. 

4 SEC. 2. EXTENSION OF CERTAIN FEE AUTHORIZATIONS. 

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

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

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

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

9 SEC. 3. FISCAL YEAR 2004 PURCHASE AND GUARANTEE AU10 THORITY UNDER TITLE III OF SMALL BUSI11 NESS INVESTMENT ACT OF 1958. 

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

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

14 subsection: 

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

16 AUTHORITY UNDER TITLE III OF SMALL BUSINESS IN17 VESTMENT ACT OF 1958.—For fiscal year 2004, for the 

18 programs authorized by title III of the Small Business In19 vestment Act of 1958 (15 U.S.C. 681 et seq.), the Admin20 istration is authorized to make—

21 ‘‘(1) $4,000,000,000 in purchases of partici22 pating securities; and 

23 ‘‘(2) $3,000,000,000 in guarantees of deben24 tures.’’. 
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1 SEC. 4. COMBINATION FINANCING. 

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

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

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

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

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

7 at the end of that subsection (a). 

8 (b) PARAGRAPH SPECIFIED.—The paragraph re9 ferred to in subsection (a) is as follows: 

10 ‘‘(31) COMBINATION FINANCING.—

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

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

13 means financing comprised of a loan guaran14 teed under this subsection and a commercial 

15 loan; and 

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

17 loan which is part of a combination financing 

18 and no portion of which is guaranteed by the 

19 Federal Government. 

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

21 to a loan guarantee obtained by a small business 

22 concern under this subsection, if the small business 

23 concern also obtains a commercial loan. 

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

25 of any combination financing, the amount of the 

26 commercial loan which is part of such financing 
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1 shall not exceed the gross amount of the loan guar2 anteed under this subsection which is part of such 

3 financing. 

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

5 commercial loan obtained by the small business con6 cern—

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

8 lender that is providing financing under this 

9 subsection or by a different lender; 

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

11 ‘‘(iii) may be made by a lender in the Pre12 ferred Lenders Program, if applicable. 

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

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

15 the commercial loan shall be paid by the lender to 

16 the Administration if the commercial loan has a sen17 ior credit position to that of the loan guaranteed 

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

19 apply to the fee established by this paragraph. 

20 ‘‘(F) DEFERRED PARTICIPATION LOAN SECU21 RITY.—A loan guaranteed under this subsection may 

22 be secured by a subordinated lien. 

23 ‘‘(G) COMPLETION OF APPLICATION PROC24 ESSING.—The Administrator shall complete proc25 essing of an application for combination financing 
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1 under this paragraph pursuant to the program au2 thorized by this subsection as it was operating on 

3 October 1, 2003. 

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

5 standards prescribed by the Administrator relating 

6 to the eligibility of small business concerns to obtain 

7 combination financing under this subsection which 

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

9 paragraph shall apply with respect to combination 

10 financings made under this paragraph. Any modi11 fications to such standards by the Administrator 

12 after such date shall not unreasonably restrict the 

13 availability of combination financing under this 

14 paragraph relative to the availability of such financ15 ing before such modifications.’’. 

16 SEC. 5. LOAN GUARANTEE FEES. 

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

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

19 September 30, 2004, subparagraph (A) of paragraph (23) 

20 of subsection (a) of section 7 of the Small Business Act 

21 (15 U.S.C. 636(a)(23)(A)) shall be applied as if that sub22 paragraph consisted of the language set forth in sub23 section (b). 

24 (b) LANGUAGE SPECIFIED.—The language referred 

25 to in subsection (a) is as follows: 
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1 ‘‘(A) PERCENTAGE.—

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

3 loan guaranteed under this subsection, the Ad4 ministrator shall, in accordance with such terms 

5 and procedures as the Administrator shall es6 tablish by regulation, assess and collect an an7 nual fee in an amount equal to 0.5 percent of 

8 the outstanding balance of the deferred partici9 pation share of the loan. 

10 ‘‘(ii) TEMPORARY PERCENTAGE.—With re11 spect to loans approved during the period be12 ginning on the date of enactment of this clause 

13 and ending on September 30, 2004, the annual 

14 fee assessed and collected under clause (i) shall 

15 be equal to 0.36 percent of the outstanding bal16 ance of the deferred participation share of the 

17 loan.’’. 

18 (c) RETENTION OF CERTAIN FEES.—Subparagraph 

19 (B) of paragraph (18) of subsection (a) of section 7 of 

20 the Small Business Act (15 U.S.C. 636(a)(18)(B)) shall 

21 not be effective during the period beginning on the date 

22 of the enactment of this section and ending on September 

23 30, 2004. 

24 SEC. 6. EXPRESS LOAN PROVISIONS. 

25 (a) DEFINITIONS.—For the purposes of this section: 
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1 (1) The term ‘‘express lender’’ shall mean any 

2 lender authorized by the Administrator to partici3 pate in the Express Loan Pilot Program. 

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

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

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

7 utilizes to the maximum extent practicable its own 

8 loan analyses, procedures, and documentation. 

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

10 shall mean the program established by the Adminis11 trator prior to the date of enactment of this section 

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

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

14 with a guaranty rate not to exceed 50 percent. 

15 (4) The term ‘‘Administrator’’ means the Ad16 ministrator of the Small Business Administration. 

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

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

19 the Small Business Act (15 U.S.C. 632(a)). 

20 (b) RESTRICTION TO EXPRESS LENDER.—The au21 thority to make an Express Loan shall be limited to those 

22 lenders deemed qualified to make such loans by the Ad23 ministrator. Designation as an express lender for purposes 

24 of making an Express Loan shall not prohibit such lender 

25 from taking any other action authorized by the Adminis-
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1 trator for that lender pursuant to section 7(a) of the Small 

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

3 (c) GRANDFATHERING OF EXISTING LENDERS.—Any 

4 express lender shall retain such designation unless the Ad5 ministrator determines that the express lender has vio6 lated the law or regulations promulgated by the Adminis7 trator or modifies the requirements to be an express lender 

8 and the lender no longer satisfies those requirements. 

9 (d) TEMPORARY EXPANSION OF EXPRESS LOAN

10 PILOT PROGRAM.—

11 (1) AUTHORIZATION.—As of the date of enact12 ment of this section, the maximum loan amount in 

13 the Express Loan Pilot Program shall be increased 

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

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

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

17 (2) TERMINATION DATE.—The authority set 

18 forth in paragraph (1) shall terminate on September 

19 30, 2004. 

20 (3) SAVINGS PROVISION.—Nothing in this sec21 tion shall be interpreted to modify or alter the au22 thority of the Administrator to continue to operate 

23 the Express Loan Pilot Program on or after October 

24 1, 2004. 
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1 (e) OPTION TO PARTICIPATE.—Except as otherwise 

2 provided in this section, the Administrator shall take no 

3 regulatory, policy, or administrative action, without regard 

4 to whether such action requires notification pursuant to 

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

6 636(a)(24)), that has the effect of—

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

8 pursuant to subsection (d); 

9 (2) limiting or modifying any term or condition 

10 of deferred participation loans made under such sec11 tion (other than Express Loans) unless the Adminis12 trator imposes the same limit or modification on Ex13 press Loans; 

14 (3) transferring or re-allocating staff, staff re15 sponsibilities, resources, or funding, if the result of 

16 such transfer or re-allocation would be to increase 

17 the average loan processing, approval, or disburse18 ment time above the averages for those functions as 

19 of October 1, 2003, for loan guarantees approved 

20 under such section by employees of the Administra21 tion or through the Preferred Lenders Program; or 

22 (4) otherwise providing any incentive or dis23 incentive which encourages lenders or borrowers to 

24 make or obtain loans under the Express Loan Pilot 

25 Program instead of under the general loan authority 
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1 of section 7(a) of the Small Business Act (15 U.S.C. 

2 636(a)). 

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

4 loans in excess of $250,000 made pursuant to the author5 ity set forth in subsection (d)(1), the Administrator shall, 

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

7 each such loan. The Administrator shall report monthly 

8 to the Committee on Small Business and Entrepreneur9 ship of the Senate and the Committee on Small Business 

10 of the House of Representatives on the number of such 

11 loans and their purposes. 

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

13 shall not apply after September 30, 2004. 

14 SEC. 7. FISCAL YEAR 2004 DEFERRED PARTICIPATION 

15 STANDARDS. 

16 Deferred participation loans made during the period 

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

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

19 Small Business Act (15 U.S.C. 636(a)) shall have the 

20 same terms and conditions (including maximum gross loan 

21 amounts and collateral requirements) as were applicable 

22 to loans made under such section on October 1, 2003, ex23 cept as otherwise provided in this Act. This section shall 

24 not preclude the Administrator of the Small Business Ad25 ministration from taking such action as necessary to 
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1 maintain the loan program carried out under such section, 

2 subject to appropriations. 

3 SEC. 8. TEMPORARY INCREASE IN LOAN LIMIT UNDER 

4 BUSINESS LOAN AND INVESTMENT FUND AND 

5 IN ASSOCIATED GUARANTEE FEES. 

6 (a) TEMPORARY INCREASE IN AMOUNT PERMITTED

7 TO BE OUTSTANDING AND COMMITTED.—During the pe8 riod beginning on the date of the enactment of this Act 

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

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

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

12 (b) TEMPORARY GUARANTEE FEE ON DEFERRED

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

14 to loans made during the period referred to in subsection 

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

16 (15 U.S.C. 636(a)(18)) applies, the Administrator of the 

17 Small Business Administration shall collect an additional 

18 guarantee fee equal to 0.25 percent of the amount (if any) 

19 by which the deferred participation share of the loan ex20 ceeds $1,000,000.

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