103D CONGRESS

1ST SESSION H. R. 2766

AN ACT

To amend the 7(a) Loan Program, and for other

purposes.
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103D CONGRESS

1ST SESSION H. R. 2766

AN ACT

To amend the 7(a) Loan Program, 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. AUTHORITY TO IMPOSE SECONDARY MARKET

4 FEES.

5 (a) Section 5(g) of the Small Business Act (15 U.S.C.

6 634) is amended by striking paragraph (4) and by insert7 ing in lieu thereof the following:
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1 ‘‘(4) The Administration may collect the following

2 fees for loan guarantees sold into the secondary market

3 pursuant to the provisions of subsection (f): an amount

4 equal to (A) not more than .4 percent per year on the

5 outstanding balance of such loan guaranteed by the Ad6 ministration, and (B) not more than 50 percent of that

7 portion of the sale price which is in excess of 110 percent

8 of the outstanding principal amount of such loan guaran9 teed by the Administration. Any such fees imposed by the

10 Administration shall be collected by the agent which car11 ries out on behalf of the Administration the central reg12 istration functions required by subsection (h) of this sec13 tion and shall be paid to the Administration and used sole14 ly to reduce the subsidy on loans guaranteed under section

15 7(a) of this Act: Provided, That such fees shall not be

16 charged to the borrower whose loan is guaranteed: and,

17 Provided further, That nothing herein shall preclude any

18 agent of the Administration from collecting a fee approved

19 by the Administration for the functions described in sub20 section (h)(2).’’.

21 (b) Any new fees imposed by the Administration pur22 suant to the authority conferred by subsection (a) shall

23 be applicable only to loans initially sold in the secondary

24 market pursuant to the provisions of section 5(f) of the

25 Small Business Act after August 31, 1993.
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1 SEC. 2. AUTHORITY TO REDUCE LOAN GUARANTEE PER2 CENTAGES.

3 (a) Section 7(a)(2) of the Small Business Act (15

4 U.S.C. 636) is amended—

5 (1) by striking from the end of clause (B)(i) the

6 word ‘‘and’’ and by redesignating clause (B)(ii) as

7 (B)(iv) and by inserting the following after clause

8 (B)(i):

9 ‘‘(ii) not less than 75 percent of the

10 financing outstanding at the time of dis11 bursement, if such financing is more than

12 $155,000 and the period of maturity of

13 such financing is more than 10 years, ex14 cept that the participation by the Adminis15 tration may be reduced below 75 percent

16 upon request of the participating lender;

17 ‘‘(iii) not less than 85 percent of the

18 financing outstanding at the time of dis19 bursement, if such financing is more than

20 $155,000 and the period of maturity of

21 such financing is 10 years or less, except

22 that the participation by the Administra23 tion may be reduced below 85 percent

24 upon request of the participating lender;

25 and’’;
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1 (2) by striking the words ‘‘85 percent under

2 subparagraph (B)’’ and by inserting in lieu thereof

3 the following: ‘‘the above specified percentums’’;

4 (3) by striking from paragraph (B) the words

5 ‘‘not less than 80 percent, except upon’’ and by in6 serting in lieu thereof the following: ‘‘not less than

7 70 percent, unless a lesser percent is required by

8 clause (B)(ii) or upon the’’; and

9 (4) by inserting after the third sentence the fol10 lowing: ‘‘The maximum interest rate for a loan guar11 anteed under the Preferred Lenders Program shall

12 not exceed the maximum interest rate, as deter13 mined by the Administration, which is made applica14 ble to other loan guarantees under section 7(a).’’.

15 (b) The amendments made by subsection (a) shall be

16 effective September 1, 1993, but shall not be applicable

17 to loan guarantee applications received by the Administra18 tion prior to August 21, 1993.

19 SEC. 3. STUDY AND REPORT.

20 The Administration shall study, monitor and evaluate

21 the impact of the amendments made by sections 1 and

22 2 of this Act on the ability of small business concerns and

23 small business concerns owned and controlled by minori24 ties and women, to obtain financing and the impact of

25 such sections on the effectiveness, viability and growth of
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1 the secondary market authorized by section 5(f) of the

2 Small Business Act. Not later than 16 months after the

3 date of enactment, and annually thereafter, the Adminis4 tration shall submit to the Committees on Small Business

5 of the Senate and the House of Representatives a report

6 containing the Administration’s findings and rec7 ommendations on such impact, specifically including

8 changes in the interest rates on financings provided to

9 small business concerns and small business concerns

10 owned and controlled by minorities and women, through

11 the use of the secondary market. The Administration shall

12 segregate such findings and recommendations in the study

13 according to the ethnic and gender components in these

14 categories. Solely for the purposes of the study authorized

15 herein, the term ‘‘small business concerns owned and con16 trolled by minorities’’, includes businesses owned and con17 trolled by individuals belonging to one of the designated

18 groups listed in section 8(d)(3)(C) of the Small Business

19 Act.
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1 SEC. 4. REPEALER.

2 Sections 1 and 2 of this Act are hereby repealed on

3 September 30, 1996.

Passed the House of Representatives August 2,

1993.

Attest:

Clerk.