II 

108TH CONGRESS 

2D SESSION H. R. 4062 

IN THE SENATE OF THE UNITED STATES 

MARCH 31, 2004 

Received 

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 con11 cern— 

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 bal22 ance of the deferred participation share of the 

23 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: JEFF TRANDAHL, 

Clerk. 

By GERASIMOS C. VANS, 

Deputy Clerk.