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(4) Section 207(2) of INTCA is amended by in-
serting a comma after ‘‘specified’’.
(5) Section 101(a)(43) (8 U.S.C. 1101(a)(43))
is amended in subparagraph (K)(ii), by striking the
comma after ‘‘1588’’.
(6) Section 273(b) (8 U.S.C. 1323(b)), as
amended by section 209(a) of INTCA, is amended
by striking ‘‘remain’’ and inserting ‘‘remains’’.
(7) Section 209(a)(1) of INTCA is amended by
striking ‘‘$3000’’ and inserting ‘‘$3,000’’.
(8) Section 209(b) of INTCA is amended by
striking ‘‘subsection’’ and inserting ‘‘section’’.
(9) Section 219(cc) of INTCA is amended by
striking ‘‘ ‘year 1993 the first place it appears’ ’’
and inserting ‘‘ ‘year 1993’ the first place it ap-
pears’’.
(10) Section 219(ee) of INTCA is amended by
adding at the end the following:
‘‘(3) The amendments made by this subsection shall
take effect on the date of the enactment of this Act.’’.
(11) Paragraphs (4) and (6) of section 286(r)
(8 U.S.C. 1356(r)) are amended by inserting ‘‘the’’
before ‘‘Fund’’ each place it appears.
(12) Section 221 of INTCA is amended—
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(A) by striking each semicolon and insert-
ing a comma,
(B) by striking ‘‘disasters.’’ and inserting
‘‘disasters,’’; and
(C) by striking ‘‘The official’’ and inserting
‘‘the official’’.
(13) Section 242A (8 U.S.C. 1252a), as added
by section 224(a) of INTCA and before redesigna-
tion as section 238 by section 308(b)(5) of this divi-
sion, is amended by redesignating subsection (d) as
subsection (c).
(14) Except as otherwise provided in this sub-
section, the amendments made by this subsection
shall take effect as if included in the enactment of
INTCA.
(c) AMENDMENTS RELATING TO PUBLIC LAW 104–
132 (ANTITERRORISM AND EFFECTIVE DEATH PENALTY
ACT OF 1996).—
(1) Section 219 (8 U.S.C. 1189), as added by
section 302(a) of Antiterrorism and Effective Death
Penalty Act of 1996 (Public Law 104–132) (in this
subsection referred to as ‘‘AEDPA’’), is amended by
striking the heading and all that follows through
‘‘(a)’’ and inserting the following:
‘‘DESIGNATION OF FOREIGN TERRORIST ORGANIZATIONS
‘‘SEC. 219. (a)’’.
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(2) Section 302(b) of AEDPA is amended by
striking ‘‘, relating to terrorism,’’.
(3) Section 106(a) (8 U.S.C. 1105a(a)), as
amended by sections 401(e) and 440(a) of AEDPA,
is amended—
(A) by striking ‘‘and’’ at the end of para-
graph (8);
(B) by striking the period at the end of
paragraph (9) and inserting ‘‘; and’’; and
(C) in paragraph (10), by striking ‘‘Any’’
and inserting ‘‘any’’.
(4) Section 440(a) of the AEDPA is amended
by striking ‘‘Section 106 of the Immigration and
Nationality Act (8 U.S.C. 1105a(a)(10)) is amended
to read as follows:’’ and inserting ‘‘Section 106(a) of
the Immigration and Nationality Act (8 U.S.C.
1105a(a)) is amended by adding at the end the fol-
lowing:’’.
(5) Section 440(g)(1)(A) of AEDPA is amend-
ed—
(A) by striking ‘‘of this title’’; and
(B) 
by 
striking 
the 
period 
after
‘‘241(a)(2)(A)(i)’’.
(6) Section 440(g) of AEDPA is amended by
striking paragraph (2).
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(7) The amendments made by this subsection
shall take effect as if included in the enactment of
subtitle A of title IV of AEPDA.
(d) STRIKING REFERENCES TO SECTION 210A.—
(1)(A) 
Section 
201(b)(1)(C) 
(8 
U.S.C.
1151(b)(1)(C)) is amended by striking ‘‘, 210A,’’.
(B) 
Section 
274B(a)(3)(B) 
(8 
U.S.C.
1324b(a)(3)(B)) 
is 
amended 
by 
striking 
‘‘,
210A(a),’’.
(C) Section 241(a)(1) (8 U.S.C. 1251(a)(1)),
before redesignation by section 305(a)(2) of this di-
vision, is amended by striking subparagraph (F).
(2) Sections 204(c)(1)(D)(i) and 204(j)(4) of
Immigration Reform and Control Act of 1986 are
each amended by striking ‘‘, 210A,’’.
(e) MISCELLANEOUS CHANGES IN THE IMMIGRATION
AND NATIONALITY ACT.—
(1) Before being amended by section 308(a)(2)
of this division, the item in the table of contents re-
lating to section 242A is amended to read as follows:
‘‘Sec. 242A. Expedited deportation of aliens convicted of committing aggra-
vated felonies.’’.
(2) Section 101(c)(1) (8 U.S.C. 1101(c)(1)) is
amended by striking ‘‘, 321, and 322’’ and inserting
‘‘and 321’’.
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(3) Section 212(d)(11) (8 U.S.C. 1182(d)(11))
is amended by inserting a comma after ‘‘(4) there-
of)’’.
(4) Pursuant to section 6(b) of Public Law
103–272 (108 Stat. 1378)—
(A) 
section 
214(f)(1) 
(8 
U.S.C.
1184(f)(1)) is amended by striking ‘‘section
101(3) of the Federal Aviation Act of 1958’’
and inserting ‘‘section 40102(a)(2) of title 49,
United States Code’’; and
(B) 
section 
258(b)(2) 
(8 
U.S.C.
1288(b)(2)) is amended by striking ‘‘section
105 or 106 of the Hazardous Materials Trans-
portation Act (49 U.S.C. App. 1804, 1805)’’
and inserting ‘‘section 5103(b), 5104, 5106,
5107, or 5110 of title 49, United States Code’’.
(5) 
Section 
286(h)(1)(A) 
(8 
U.S.C.
1356(h)(1)(A)) is amended by inserting a period
after ‘‘expended’’.
(6) 
Section 
286(h)(2)(A) 
(8 
U.S.C.
1356(h)(2)(A)) is amended—
(A) by striking ‘‘and’’ at the end of clause
(iv);
(B) by moving clauses (v) and (vi) 2 ems
to the left;
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(C) by striking ‘‘; and’’ in clauses (v) and
(vi) and inserting ‘‘and for’’;
(D) by striking the colons in clauses (v)
and (vi); and
(E) by striking the period at the end of
clause (v) and inserting ‘‘; and’’.
(7) Section 412(b) (8 U.S.C. 1522(b)) is
amended by striking the comma after ‘‘is author-
ized’’ in paragraph (3) and after ‘‘The Secretary’’ in
paragraph (4).
(f) MISCELLANEOUS CHANGE IN THE IMMIGRATION
ACT OF 1990.—Section 161(c)(3) of the Immigration Act
of 1990 is amended by striking ‘‘an an’’ and inserting ‘‘of
an’’.
(g) MISCELLANEOUS CHANGES IN OTHER ACTS.—
(1) Section 506(a) of the Intelligence Author-
ization Act, Fiscal Year 1990 (Public Law 101–193)
is amended by striking ‘‘this section’’ and inserting
‘‘such section’’.
(2) Section 140 of the Foreign Relations Au-
thorization Act, Fiscal Years 1994 and 1995, as
amended by section 505(2) of Public Law 103–317,
is amended—
(A) by moving the indentation of sub-
sections (f) and (g) 2 ems to the left; and
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(B) in subsection (g), by striking ‘‘(g)’’
and all that follows through ‘‘shall’’ and insert-
ing ‘‘(g) Subsections (d) and (e) shall’’.
DIVISION D—SMALL BUSINESS
PROGRAMS IMPROVEMENT ACT
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This division may be cited as
the ‘‘Small Business Programs Improvement Act of
1996’’.
(b) TABLE OF CONTENTS.—
Sec. 1. Short title; table of contents.
Sec. 2. Administrator defined.
Sec. 3. Effective date.
TITLE I—AMENDMENTS TO SMALL BUSINESS ACT
Sec. 101. References.
Sec. 102. Risk management database.
Sec. 103. Section 7(a) loan program.
Sec. 104. Disaster loans.
Sec. 105. Microloan demonstration program.
Sec. 106. Small business development center program.
Sec. 107. Miscellaneous authorities to provide loans and other financial assist-
ance.
Sec. 108. Small business competitiveness demonstration program.
Sec. 109. Amendment to Small Business Guaranteed Credit Enhancement Act
of 1993.
Sec. 110. STTR program extension.
Sec. 111. Level of participation for export working capital loans.
TITLE II—AMENDMENTS TO SMALL BUSINESS INVESTMENT ACT
Sec. 201. References.
Sec. 202. Modifications to development company debenture program.
Sec. 203. Required actions upon default.
Sec. 204. Loan liquidation pilot program.
Sec. 205. Registration of certificates.
Sec. 206. Preferred surety bond guarantee program.
Sec. 207. Sense of the Congress.
Sec. 208. Small business investment company improvements.
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SEC. 2. ADMINISTRATOR DEFINED.
For purposes of this Act, the term ‘‘Adminis-
trator’’ means the Administrator of the Small Business
Administration.
SEC. 3. EFFECTIVE DATE.
Except as otherwise expressly provided, this Act
and the amendments made by this Act shall take effect
on October 1, 1996.
TITLE I—AMENDMENTS TO
SMALL BUSINESS ACT
SEC. 101. REFERENCES.
Except as otherwise expressly provided, whenever
in this title an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or
other provision, the reference shall be considered to be
made to a section or other provision of the Small Busi-
ness Act (15 U.S.C. 631 et seq.).
SEC. 102. RISK MANAGEMENT DATABASE.
Section 4(b) (15 U.S.C. 633) is amended by in-
serting after paragraph (2) the following:
‘‘(3) RISK MANAGEMENT DATABASE.—
‘‘(A) ESTABLISHMENT.—The Administra-
tion shall establish, within the management sys-
tem for the loan programs authorized by sub-
sections (a) and (b) of section 7 of this Act and
title V of the Small Business Investment Act of
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1958, a management information system that
will generate a database capable of providing
timely and accurate information in order to
identify loan underwriting, collections, recovery,
and liquidation problems.
‘‘(B) INFORMATION TO BE MAINTAINED.—
In addition to such other information as the
Administration 
considers 
appropriate, 
the
database established under subparagraph (A)
shall, with respect to each loan program de-
scribed in subparagraph (A), include informa-
tion relating to—
‘‘(i) the identity of the institution
making the guaranteed loan or issuing the
debenture;
‘‘(ii) the identity of the borrower;
‘‘(iii) the total dollar amount of the
loan or debenture;
‘‘(iv) the total dollar amount of gov-
ernment exposure in each loan;
‘‘(v) the district of the Administration
in which the borrower has its principal of-
fice;
‘‘(vi) the principal line of business of
the borrower, as identified by Standard In-
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dustrial Classification Code (or any succes-
sor to that system);
‘‘(vii) the delinquency rate for each
program (including number of instances
and days overdue);
‘‘(viii) the number and amount of re-
purchases, losses, and recoveries in each
program;
‘‘(ix) the number of deferrals or
forbearances in each program (including
days and number of instances);
‘‘(x) comparisons on the basis of loan
program, lender, Administration district
and region, for all the data elements main-
tained; and
‘‘(xi) underwriting characteristics of
each loan that has entered into default, in-
cluding term, amount and type of collat-
eral, loan-to-value and other actual and
projected ratios, line of business, credit
history, and type of loan.
‘‘(C) DEADLINE FOR OPERATIONAL CAPA-
BILITY.—The database established under sub-
paragraph (A) shall—
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‘‘(i) be operational not later than
June 30, 1997; and
‘‘(ii) capture data beginning on the
first day of the second quarter of fiscal
year 1997 beginning after such date and
thereafter.’’.
SEC. 103. SECTION 7(A) LOAN PROGRAM.
(a) SERVICING AND LIQUIDATION OF LOANS BY
PREFERRED LENDERS.—Section 7(a)(2)(C)(ii)(II) (15
U.S.C. 636(a)(2)(C)(ii)(II)) is amended to read as fol-
lows:
‘‘(II) complete authority to serv-
ice and liquidate such loans without
obtaining the prior specific approval
of the Administration for routine serv-
icing and liquidation activities, but
shall not take any actions creating an
actual or apparent conflict of inter-
est.’’.
(b) CERTIFIED
LENDERS
PROGRAM.—Section
7(a)(19) (15 U.S.C. 636(a)(19)) is amended by adding at
the end the following new subparagraph:
‘‘(C) Authority to liquidate loans.—
‘‘(i) IN GENERAL.—The Administrator
may permit lenders participating in the
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Certified Lenders Program to liquidate
loans made with a guarantee from the Ad-
ministration pursuant to a liquidation plan
approved by the Administrator.
‘‘(ii) Automatic approval.—If the Ad-
ministrator does not approve or deny a re-
quest for approval of a liquidation plan
within 10 business days of the date on
which the request is made (or with respect
to any routine liquidation activity under
such a plan, within 5 business days) such
request shall be deemed to be approved.’’.
(c) 
LIMITATION
ON
CONDUCTING
PILOT
PROJECTS.—Section 7(a) (15 U.S.C. 636(a)) is amended
by adding at the end the following new paragraph:
‘‘(25) LIMITATION
ON
CONDUCTING
PILOT
PROJECTS.—
‘‘(A) IN
GENERAL.—Not more than 10
percent of the total number of loans guaranteed
in any fiscal year under this subsection may be
awarded as part of a pilot program which is
commenced by the Administrator on or after
October 1, 1996.
‘‘(B) PILOT PROGRAM DEFINED.—In this
paragraph, the term ‘pilot program’ means any
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lending program initiative, project, innovation,
or other activity not specifically authorized by
law.
‘‘(C) LOW
DOCUMENTATION
LOAN
PRO-
GRAM.—The Administrator may carry out the
low documentation loan program for loans of
$100,000 or less only through lenders with sig-
nificant experience in making small business
loans. Not later than 90 days after the date of
enactment of this subsection, the Administrator
shall promulgate regulations defining the expe-
rience necessary for participation as a lender in
the low documentation loan program.’’.
(d) CALCULATION
OF SUBSIDY RATE.—Section
7(a) (15 U.S.C. 636(a)) is amended by adding at the end
the following new paragraph:
‘‘(26) CALCULATION
OF
SUBSIDY
RATE.—All
fees, interest, and profits received and retained by
the Administration under this subsection shall be in-
cluded in the calculations made by the Director of
the Office of Management and Budget to offset the
cost (as that term is defined in section 502 of the
Federal Credit Reform Act of 1990) to the Adminis-
tration of purchasing and guaranteeing loans under
this Act.’’.
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(e) SALE OF UNGUARANTEED PORTIONS OF SBA
LOANS.—Section 5(f)(3) (15 U.S.C. 634(f)(3)) is amend-
ed by adding at the end the following: ‘‘Beginning on
March 31, 1997, the sale of the unguaranteed portion of
any loan made under section 7(a) shall not be permitted
until a final regulation that applies uniformly to both de-
pository institutions and other lenders is promulgated by
the Administration setting forth the terms and conditions
under which such sales can be permitted, including main-
tenance of appropriate reserve requirements and other
safeguards to protect the safety and soundness of the
program.’’.
(f) CONDITIONS ON PURCHASE OF LOANS.—Sec-
tion 7(a)(4) (15 U.S.C. 636(a)(4)) is amended—
(1) by striking ‘‘(4) Notwithstanding’’ and in-
serting the following:
‘‘(4) INTEREST RATES AND FEES.—
‘‘(A) 
INTEREST
RATES.—Notwithstand-
ing’’; and
(2) by adding at the end the following new sub-
paragraph:
‘‘(B) PAYMENT OF ACCRUED INTEREST.—
‘‘(i) IN GENERAL.—Any bank or other
lending institution making a claim for pay-
ment on the guaranteed portion of a loan
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made under this subsection shall be paid
the accrued interest due on the loan from
the earliest date of default to the date of
payment of the claim at a rate not to ex-
ceed the rate of interest on the loan on the
date of default, minus one percent.
‘‘(ii) LOANS
SOLD
ON
SECONDARY
MARKET.—If a loan described in clause (i)
is sold on the secondary market, the
amount of interest paid to a bank or other
lending institution described in that clause
from the earliest date of default to the
date of payment of the claim shall be no
more than the agreed upon rate, minus one
percent.’’.
(g) PLAN FOR TRANSFER OF LOAN SERVICING
FUNCTIONS TO CENTRALIZED CENTERS.—
(1) IMPLEMENTATION
PLAN
REQUIRED.—The
Administrator shall submit a detailed plan for com-
pleting the consolidation, in one or more centralized
centers, of the performance of the various functions
relating to the servicing of loans directly made or
guaranteed by the Administration pursuant to the
Small Business Act, addressing the matters de-
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scribed in paragraph (2) by the deadline specified in
paragraph (3).
(2) CONTENTS OF PLAN.—In addition to such
other matters as the Administrator may deem ap-
propriate, the plan required by paragraph (1) shall
include—
(A) the proposed number and location of
such centralized loan servicing centers;
(B) the proposed workload (identified by
type and numbers of loans and their geographic
origin by the Small Business Administration
district office) and staffing of each such center;
(C) a detailed, time-phased plan for the
transfer of the identified loan servicing func-
tions to each proposed center; and
(D) any identified impediments to the
timely execution of the proposed plan (including
adequacy of available financial resources, avail-
ability of needed personnel, facilities, and relat-
ed equipment) and the recommendations of the
Administrator for addressing such impediments.
(3) DEADLINE
FOR
SUBMISSION.—Not later
than February 28, 1997, the plan required by para-
graph (1) shall be submitted to the Committees on
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Small Business of the House of Representatives and
Senate.
(h) PREFERRED
LENDER
STANDARD
REVIEW
PROGRAM.—Not later than 90 days after the date of en-
actment of this Act, the Administrator shall commence a
standard review program for the Preferred Lender Pro-
gram established by section 5(b)(7) of the Small Busi-
ness Act (15 U.S.C. 634(b)(7)), which shall include an-
nual or more frequent assessments of the participation of
the lender in the program, including defaults, loans, and
recoveries of loans made by that lender under the author-
ity of this section. The Administrator shall require such
standard review for each new entrant to the Preferred
Lender Program.
(i) INDEPENDENT STUDY OF LOAN PROGRAMS.—
(1) STUDY
REQUIRED.—The Administrator
shall contract with one or more private sector parties
to conduct a comprehensive assessment of the per-
formance of the loan programs authorized by section
7(a) of the Small Business Act (15 U.S.C. 636(a))
and title V of the Small Business Investment Act of
1958 (15 U.S.C. 661) addressing the matters de-
scribed in paragraph (2) and resulting in a report to
the Congress pursuant to paragraph (5).
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(2) MATTERS TO BE ASSESSED.—In addition to
such other matters as the Administrator considers
appropriate, the assessment required by paragraph
(1) shall address, with respect to each loan program
described in paragraph (1) for each of the fiscal
years described in paragraph (3)—
(A) the number and frequency of deferrals
and defaults;
(B) default rates;
(C) comparative loss rate, by—
(i) type of lender (separately address-
ing preferred lenders, certified lenders, and
general participation lenders);
(ii) term of the loan;
(iii) dollar value of the loan at dis-
bursement; and
(iv) underwriting characteristics of
each loan that has entered into default, in-
cluding term, amount and type of collat-
eral, loan-to-value and other actual and
projected ratios, line of business, credit
history, and type of loan; and
(D) the economic models used by the Of-
fice of Management and Budget to calculate the
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credit subsidy rate applicable to the loan pro-
grams.
(3) PERIOD OF ASSESSMENT.—The assessments
undertaken pursuant to paragraph (2) shall address
data for the period beginning with fiscal year 1986
of each loan program described in paragraph (1).
(4) ACCESS TO INFORMATION.—The Adminis-
trator shall provide to the contractor access to any
information collected by or available to the Adminis-
tration with regard to the loan programs being as-
sessed. The contactor shall preserve the confidential-
ity of any information for which confidentiality is
protected by law or properly asserted by the person
submitting such information.
(5) CONTRACT
FUNDING.—The Administrator
shall fund the cost of the contract from the amounts
appropriated for the salaries and expenses of the
Administration for fiscal year 1997.
(6) REPORT TO THE CONGRESS.—
(A) CONTENTS.—The contractor shall pre-
pare a report of—
(i) its analyses of the matters to be
assessed pursuant to paragraph (2); and
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(ii) its independent recommendations
for improving program performance with
respect to each loan program, regarding—
(I) improving the timely collec-
tion and subsequent management by
the Administration of data to measure
the performance of each loan program
described in paragraph (1); and
(II) reducing loss rates for and
improving the performance of each
such loan program.
(B) SUBMISSION TO THE CONGRESS.—Not
later than June 30, 1997, the Administrator
shall submit the report prepared under sub-
paragraph (A) to the Committees on Small
Business of the House of Representatives and
the Senate. The Administrator shall append his
comments, and those of the Office of Manage-
ment and Budget, if any, to the report.
SEC. 104. DISASTER LOANS.
(a) PRIVATE SECTOR LOAN SERVICING DEM-
ONSTRATION PROGRAM.—
(1) IN GENERAL.—
(A) 
DEMONSTRATION
PROGRAM
RE-
QUIRED.—Notwithstanding any other provision
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of law, the Administration shall conduct a dem-
onstration program, within the parameters de-
scribed in paragraph (2), to evaluate the com-
parative costs and benefits of having the Ad-
ministration’s portfolio of disaster loans serv-
iced under contract rather than directly by em-
ployees of the Administration. All costs of the
demonstration program shall be paid from
amounts made available for the Salaries and
Expenses Account of the Administration.
(B) INITIATION DATE.—Not later than 90
days after the date of enactment of this Act,
the Administration shall issue a request for pro-
posals for the program parameters described in
paragraph (2).
(2) 
DEMONSTRATION
PROGRAM
PARAM-
ETERS.—
(A) LOAN SAMPLE.—The sample of loans
for the demonstration program shall be ran-
domly drawn from the Administration’s port-
folio of loans made pursuant to section 7(b) of
the Small Business Act and shall include a rep-
resentative group of not less than 30 percent of
all loans for residential properties, including 30
percent of all loans made during the demonstra-
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tion program after the date of enactment of
this Act, which loans shall be selected by the
Administration on the basis of geographic dis-
tribution and such other factors as the Admin-
istration determines to be appropriate.
(B)
CONTRACT AND OPTIONS.—The Ad-
ministration shall solicit and competitively
award one or more contracts to service the
loans included in the sample of loans described
in subparagraph (A) for a term of not less than
one year, with 3 one-year contract renewal op-
tions, each of which shall be exercised by the
Administration unless the Administration termi-
nates the contractor or contractors for good
cause.
(3) TERM OF DEMONSTRATION PROGRAM.—The
demonstration program shall commence not later
than October 1, 1997.
(4) REPORTS.—
(A) INTERIM
REPORTS.—Not later than
120 days before the expiration of the initial 4-
year contract performance period, the Adminis-
trator shall submit to the Committees on Small
Business of the House of Representatives and
the Senate an interim report on the conduct of
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the demonstration program. The contractor
shall be afforded a reasonable opportunity to
attach comments to each such report.
(B) FINAL REPORT.—Not later than 120
days after the termination of the demonstration
program, the Administrator shall submit to the
Committees on Small Business of the House of
Representatives and the Senate a final report
on the performance of the demonstration pro-
gram, together with the recommendations of the
Administrator for continuation, termination, or
modification of the demonstration program.
(b) DEFINITION OF DISASTER.—
(1) IN
GENERAL.—Section 3(k) (15 U.S.C.
632(k)) is amended by inserting ‘‘commercial fishery
failures or fishery resource disasters (as determined
by the Secretary of Commerce under section 308(b)
of the Interjurisdictional Fisheries Act of 1986),’’
after ‘‘tidal waves,’’.
(2) EFFECTIVE DATE.—The amendment made
by paragraph (1) shall be effective with respect to
any disaster occurring on or after March 1, 1994.
SEC. 105. MICROLOAN DEMONSTRATION PROGRAM.
Section 7(m)(7)(B) (15 U.S.C. 636(m)(4)) is
amended by adding at the end the following: ‘‘If, how-
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ever, at the beginning of the fourth quarter of a fiscal
year the Administration determines that a portion of ap-
propriated microloan funds are unlikely to be awarded
during that year, the Administration may make addi-
tional funds available to a State in excess of 125 percent
of the pro rata share of that State.’’.
SEC. 106. SMALL BUSINESS DEVELOPMENT CENTER PRO-
GRAM.
(a) ASSOCIATE
ADMINISTRATOR
FOR
SMALL
BUSINESS DEVELOPMENT CENTERS.—
(1) DUTIES.—Section 21(h) (15 U.S.C. 648(h))
is amended to read as follows:
‘‘(h) ASSOCIATE
ADMINISTRATOR
FOR
SMALL
BUSINESS DEVELOPMENT CENTERS.—
‘‘(1) APPOINTMENT AND COMPENSATION.—The
Administrator shall appoint an Associate Adminis-
trator for Small Business Development Centers who
shall report to an official who is not more than one
level below the Office of the Administrator and who
shall serve without regard to the provisions of title
5, governing appointments in the competitive service,
and without regard to chapter 51, and subchapter
III of chapter 53 of such title relating to classifica-
tion and General Schedule pay rates, but at a rate
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not less than the rate of GS–17 of the General
Schedule.
‘‘(2) DUTIES.—
‘‘(A) IN GENERAL.—The sole responsibility
of the Associate Administrator for Small Busi-
ness Development Centers shall be to admin-
ister the small business development center pro-
gram. Duties of the position shall include rec-
ommending the annual program budget, review-
ing the annual budgets submitted by each appli-
cant, establishing appropriate funding levels
therefore, selecting applicants to participate in
this program, implementing the provisions of
this section, maintaining a clearinghouse to pro-
vide for the dissemination and exchange of in-
formation between small business development
centers and conducting audits of recipients of
grants under this section.
‘‘(B) CONSULTATION REQUIREMENTS.—In
carrying out the duties described in this sub-
section, the Associate Administrator shall con-
fer with and seek the advice of the Board estab-
lished by subsection (i) and Administration offi-
cials in areas served by the small business de-
velopment centers; however, the Associate Ad-
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ministrator shall be responsible for the manage-
ment and administration of the program and
shall not be subject to the approval or concur-
rence of such Administration officials.’’.
(2) REFERENCES
TO
ASSOCIATE
ADMINIS-
TRATOR.—Section 21 (15 U.S.C. 648) is amended—
(A) in subsection (c)(7), by striking ‘‘Dep-
uty Associate Administrator of the Small Busi-
ness Development Center program’’ and insert-
ing ‘‘Associate Administrator for Small Busi-
ness Development Centers’’; and
(B) in subsection (i)(2), by striking ‘‘Dep-
uty Associate Administrator for Management
Assistance’’ and inserting ‘‘Associate Adminis-
trator for Small Business Development Cen-
ters’’.
(b) EXTENSION OR RENEWAL OF COOPERATIVE
AGREEMENTS.—Section 21(k)(3) (15 U.S.C. 648(k)(3))
is amended to read as follows:
‘‘(3) EXTENSION OR RENEWAL OF COOPERA-
TIVE AGREEMENTS.—
‘‘(A) IN
GENERAL.—In extending or re-
newing a cooperative agreement of a small busi-
ness development center, the Administration
shall consider the results of the examination
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and certification program conducted pursuant
to paragraphs (1) and (2).
‘‘(B) 
CERTIFICATION
REQUIREMENT.—
After September 30, 2000, the Administration
may not renew or extend any cooperative agree-
ment with a small business development center
unless the center has been approved under the
certification program conducted pursuant to
this subsection, except that the Associate Ad-
ministrator for Small Business Development
Centers may waive such certification require-
ment, in the discretion of the Associate Admin-
istrator, upon a showing that the center is mak-
ing a good faith effort to obtain certification.’’.
(c) TECHNICAL CORRECTION.—Section 21(l) (15
U.S.C. 648(l)) is amended to read as follows:
‘‘(l) CONTRACT AUTHORITY.—The authority to
enter into contracts shall be in effect for each fiscal year
only to the extent and in the amounts as are provided in
advance in appropriations Acts. After the administration
has entered a contract, either as a grant or a cooperative
agreement, with any applicant under this section, it shall
not suspend, terminate, or fail to renew or extend any
such contract unless the Administration provides the ap-
plicant with written notification setting forth the reasons
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therefore and affording the applicant an opportunity for
a hearing, appeal, or other administrative proceeding
under the provisions of chapter 5 of title 5, United States
Code.’’.
SEC. 107. MISCELLANEOUS AUTHORITIES TO PROVIDE
LOANS AND OTHER FINANCIAL ASSISTANCE.
(a) FUNDING LIMITATION; SEMINARS.—Section
7(d) (15 U.S.C. 636(d)) is amended—
(1) by striking ‘‘(d)(1)’’ and inserting ‘‘(d)’’;
and
(2) by striking paragraph (2).
(b) TRADE ADJUSTMENT LOANS.—Section 7(e)
(15 U.S.C. 636(e)) is amended to read as follows:
‘‘(e) [RESERVED].’’.
(c) WAIVER OF CREDIT ELSEWHERE TEST FOR
COLLEGES AND UNIVERSITIES.—Section 7(f) (15 U.S.C.
636(f)) is amended to read as follows:
‘‘(f) [RESERVED].’’.
(d) LOANS TO SMALL BUSINESS CONCERNS FOR
SOLAR ENERGY
AND ENERGY CONSERVATION MEAS-
URES.—Section 7(l) (15 U.S.C. 636(l)) is amended to
read as follows:
‘‘(l) [RESERVED].’’.
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SEC. 
108. 
SMALL 
BUSINESS 
COMPETITIVENESS 
DEM-
ONSTRATION PROGRAM.
(a) EXTENSION OF DEMONSTRATION PROGRAM.—
(1) IN GENERAL.—Section 711(c) of the Small
Business Competitiveness Demonstration Program
Act of 1988 (15 U.S.C. 644 note; 102 Stat. 3890)
is amended by striking ‘‘September 30, 1996’’ and
inserting ‘‘September 30, 1997’’.
(2) REPEAL.—Section 717(f) of the Small
Business Competitiveness Demonstration Program
Act of 1988 (15 U.S.C. 644 note) is repealed.
(b) REPORTING OF SUBCONTRACT PARTICIPATION
IN CONTRACTS FOR ARCHITECTURAL AND ENGINEERING
SERVICES.—Section 714(b)(5) of the Small Business
Competitiveness Demonstration Program Act of 1988 (15
U.S.C. 644 note; 102 Stat. 3892) is amended to read as
follows:
‘‘(5) DURATION.—The system described in sub-
section (a) shall be established not later than Octo-
ber 1, 1996 (or as soon as practicable thereafter on
the first day of a subsequent quarter of fiscal year
1997), and shall terminate on September 30,
1997.’’.
(c) REPORTS TO THE CONGRESS.—
(1) IN GENERAL.—Section 716 of the Small
Business Competitiveness Demonstration Program
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Act of 1988 (15 U.S.C. 644 note; 102 Stat. 3893)
is amended—
(A) in subsection (a), by striking ‘‘fiscal
year 1991 and 1995’’ and inserting ‘‘each of
fiscal years 1991 through 1996’’;
(B) in subsection (b), by striking ‘‘results’’
and inserting ‘‘cumulative results’’; and
(C) in subsection (c), by striking ‘‘1996’’
and inserting ‘‘1997’’.
(2) CUMULATIVE
REPORT
THROUGH
FISCAL
YEAR 1995.—A cumulative report of the results of
the Small Business Competitiveness Demonstration
Program for fiscal years 1991 through 1995 shall be
submitted not later than February 28, 1997 pursu-
ant to section 716(a) of the Small Business Com-
petitiveness Demonstration Program Act of 1988
(15 U.S.C. 644 note; 102 Stat. 3893), as amended
by paragraph (1) of this subsection.
SEC. 109. AMENDMENT TO SMALL BUSINESS GUARANTEED
CREDIT ENHANCEMENT ACT OF 1993.
(a) IN GENERAL.—Section 7 of the Small Busi-
ness Guaranteed Credit Enhancement Act of 1993 (Pub-
lic Law 103–81; 15 U.S.C. 634 note) is repealed effective
September 29, 1996.
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(b) CLERICAL AMENDMENT.—The table of con-
tents for the Small Business Guaranteed Credit Enhance-
ment Act of 1993 (Public Law 103–81; 15 U.S.C. 631
note) is amended by striking the item relating to section
7.
SEC. 110. STTR PROGRAM EXTENSION.
Section 9(n)(1)(C) (15 U.S.C. 638(n)(1)(C)) is
amended by striking ‘‘fiscal year 1996’’ and inserting
‘‘fiscal years 1996 and 1997’’.
SEC. 111. LEVEL OF PARTICIPATION FOR EXPORT WORK-
ING CAPITAL LOANS.
Section 7(A)(2) (15 U.S.C. 636(A)(2)) is amend-
ed by adding at the end the following:
‘‘(D) 
PARTICIPATION
UNDER
EXPORT
WORKING CAPITAL PROGRAM.—Notwithstanding
subparagraph (A), in an agreement to partici-
pate in a loan on a deferred basis under the
Export Working Capital Program established
pursuant to paragraph (14)(A), such participa-
tion by the Administration shall not exceed 90
percent.’’.
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TITLE 
II—AMENDMENTS 
TO
SMALL 
BUSINESS 
INVEST-
MENT ACT
SEC. 201. REFERENCES.
Except as otherwise expressly provided, whenever
in this title an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or
other provision, the reference shall be considered to be
made to a section or other provision of the Small Busi-
ness Investment Act of 1958 (15 U.S.C. 661 et seq.).
SEC. 202. MODIFICATIONS TO DEVELOPMENT COMPANY
DEBENTURE PROGRAM.
(a) DECREASED LOAN TO VALUE RATIOS.—Sec-
tion 502(3) (15 U.S.C. 696(3)) is amended to read as
follows:
‘‘(3) CRITERIA FOR ASSISTANCE.—
‘‘(A) IN GENERAL.—Any development com-
pany assisted under this section or section 503
of this title must meet the criteria established
by the Administration, including the extent of
participation to be required or amount of paid-
in capital to be used in each instance as is de-
termined to be reasonable by the Administra-
tion.
‘‘(B) COMMUNITY INJECTION FUNDS.—
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‘‘(i) SOURCES
OF
FUNDS.—Commu-
nity injection funds may be derived, in
whole or in part, from—
‘‘(I) State or local governments;
‘‘(II) banks or other financial in-
stitutions;
‘‘(III) foundations or other not-
for-profit institutions; or
‘‘(IV) the small business concern
(or its owners, stockholders, or affili-
ates) receiving assistance through a
body authorized by this title.
‘‘(ii) 
FUNDING
FROM
INSTITU-
TIONS.—Not less than 50 percent of the
total cost of any project financed pursuant
to clauses (i), (ii), or (iii) of subparagraph
(C) shall come from the institutions de-
scribed in subclauses (I), (II), and (III) of
clause (i).
‘‘(C) FUNDING FROM A SMALL BUSINESS
CONCERN.—The small business concern (or its
owners, stockholders, or affiliates) receiving as-
sistance through a body authorized by this title
shall provide—
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‘‘(i) at least 15 percent of the total
cost of the project financed, if the small
business concern has been in operation for
a period of 2 years or less;
‘‘(ii) at least 15 percent of the total
cost of the project financed if the project
involves the construction of a limited or
single purpose building or structure;
‘‘(iii) at least 20 percent of the total
cost of the project financed if the project
involves both of the conditions set forth in
clauses (i) and (ii); or
‘‘(iv) at least 10 percent of the total
cost of the project financed, in all other
circumstances, at the discretion of the de-
velopment company.’’.
(b) GUARANTEE FEE FOR DEVELOPMENT COM-
PANY DEBENTURES.—Section 503(b)(7)(A) (15 U.S.C.
697(b)(7)(A)) is amended by striking ‘‘equal to 0.125
percent’’ and all that follows before the semicolon and in-
serting the following: ‘‘equal to the lesser of—
‘‘(i) 0.9375 percent per year of the
outstanding balance of the loan; or
‘‘(ii) such percentage per year of the
outstanding balance of the loan as the Ad-
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ministrator may determine to be necessary
to reduce the cost (as that term is defined
in section 502 of the Federal Credit Re-
form Act of 1990) to the Administration of
purchasing and guaranteeing debentures
under this Act to an amount that, taking
into consideration any available appro-
priated funds, would permit the Adminis-
tration 
to 
purchase 
or 
guarantee
$2,000,000,000 of debentures in fiscal
year 1997’’.
(c) FEES TO OFFSET SUBSIDY COST.—Section
503(d) (15 U.S.C. 697(d)) is amended to read as follows:
‘‘(d) 
CHARGES
FOR
ADMINISTRATION
EX-
PENSES.—
‘‘(1) LEVEL OF CHARGES.—The Administration
may impose an additional charge for administrative
expenses with respect to each debenture for which
payment of principal and interest is guaranteed
under subsection (a).
‘‘(2) PARTICIPATION FEE.—The Administration
shall collect a one-time fee in an amount equal to 50
basis points on the total participation in any project
of any institution described in subclause (I), (II), or
(III) of section 502(3)(B)(i). Such fee shall be im-
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posed only when the participation of the institution
will occupy a senior credit position to that of the de-
velopment company. All proceeds of the fee shall be
used to offset the cost (as that term is defined in
section 502 of the Credit Reform Act of 1990) to
the Administration of making guarantees under sub-
section (a).
‘‘(3) DEVELOPMENT COMPANY FEE.—The Ad-
ministration shall collect annually from each devel-
opment company a fee of 0.125 percent of the out-
standing principal balance of any guaranteed deben-
ture authorized by the Administration after Septem-
ber 30, 1996. Such fee shall be derived from the
servicing fees collected by the development company
pursuant to regulation, and shall not be derived
from any additional fees imposed on small business
concerns. All proceeds of the fee shall be used to off-
set the cost (as that term is defined in section 502
of the Credit Reform Act of 1990) to the Adminis-
tration of making guarantees under subsection (a).’’.
(d) EFFECTIVE DATE.—Section 503 (15 U.S.C.
697) is amended by adding at the end the following new
subsection:
‘‘(f) EFFECTIVE DATE.—The fees authorized by
subsections (b) and (c) shall apply to financings approved
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‘‘(B) implement a formal written deferral
agreement.
‘‘(2) PURCHASE OR ACCELERATION OF DEBEN-
TURE.—Not later than the 65th day after the date
on which a payment on a loan described in para-
graph (1) is due and not received, and absent a for-
mal written deferral agreement, the administration
shall take all necessary steps to purchase or acceler-
ate the debenture.
‘‘(3) PREPAYMENT PENALTIES.—With respect
to the portion of any project derived from funds set
forth in section 502(3), the Administration—
‘‘(A) shall negotiate the elimination of any
prepayment penalties or late fees on defaulted
loans made prior to September 30, 1996;
‘‘(B) shall not pay any prepayment penalty
or late fee on the default based purchase of
loans issued after September 30, 1996; and
‘‘(C) for any project financed after Sep-
tember 30, 1996, shall not pay any default in-
terest rate higher than the interest rate on the
note prior to the date of default.’’.
SEC. 204. LOAN LIQUIDATION PILOT PROGRAM.
(a) IN GENERAL.—The Administrator shall carry
out a loan liquidation pilot program (in this section re-
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ferred to as the ‘‘pilot program’’) in accordance with the
requirements of this section.
(b) SELECTION OF DEVELOPMENT COMPANIES.—
(1) IN GENERAL.—Not later than 90 days after
the date of the enactment of this Act, the Adminis-
trator shall establish a pilot program under which
certain development companies authorized to make
loans and issue debentures under title V of the
Small Business Investment Act of 1958 are selected
by the Administrator in accordance with this sub-
section to carry out loan liquidations.
(2) CONFLICTS
OF
INTEREST.—The develop-
ment companies selected under paragraph (1) shall
agree not to take any action that would create a po-
tential conflict of interest involving the development
company, the third party lender, or an associate of
the third party lender.
(3) QUALIFICATIONS.—In order to qualify to
participate in the pilot program under this section,
each development company shall—
(A) have not less than 6 years of experi-
ence in the program established by title V of
the Small Business Investment Act of 1958;
(B) have made, during the 6 most recent
fiscal years, an average of not less than 10
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loans per year through the program established
by such title V of the Small Business Invest-
ment Act of 1958;
(C) have not less than 2 years of experi-
ence in liquidating loans under the authority of
a Federal, State, or other lending program; and
(D) meet such other requirements as the
Administration may establish.
(c) AUTHORITY OF DEVELOPMENT COMPANIES.—
The development companies selected under subsection (b)
shall, for loans in their portfolio of loans made through
debentures guaranteed under title V of the Small Busi-
ness Investment Act of 1958 that are in default after the
date of enactment of this Act, be authorized to—
(1) perform all liquidation and foreclosure func-
tions, including the acceleration or purchase of com-
munity injection funds, subject to such company ob-
taining prior written approval from the Adminis-
trator before committing the agency to purchase any
other indebtedness secured by the property: Pro-
vided, That the Administrator shall approve or deny
a request for such purchase within a period of 10
business days; and
(2) liquidate such loans in a reasonable and
sound manner and according to commercially accept-
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ed practices pursuant to a liquidation plan approved
by the Administrator in advance of its implementa-
tion. If the Administrator does not approve or deny
a request for approval of a liquidation plan within
10 business days of the date on which the request
is made (or with respect to any routine liquidation
activity under such a plan, within 5 business days)
such request shall be deemed to be approved.
(d) AUTHORITY
OF
THE ADMINISTRATOR.—In
carrying out the pilot program, the Administrator shall—
(1) have full authority to rescind the authority
granted any development company under this section
upon a 10-day written notice stating the reasons for
the rescission; and
(2) not later than 90 days after the admission
of the development companies specified in subsection
(b), implement the pilot program.
(e) REPORT.—
(1) IN
GENERAL.—The Administrator shall
issue a report on the results of the pilot program to
the Committees on Small Business of the House of
Representatives and the Senate. The report shall in-
clude information relating to—
(A) the total dollar amount of each loan
and project liquidated;
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(B) the total dollar amount guaranteed by
the Administration;
(C) total dollar losses;
(D) total recoveries both as percentage of
the amount guaranteed and the total cost of the
project; and
(E) a comparison of the pilot program in-
formation with the same information for liq-
uidation conducted outside the pilot program
over the period of time.
(2) REPORTING PERIOD.—The report shall be
based on data from, and issued not later than 90
days after the close of, the first eight fiscal quarters
of the pilot program’s operation after the date of im-
plementation.
SEC. 205. REGISTRATION OF CERTIFICATES.
(a) CERTIFICATES SOLD PURSUANT
TO SMALL
BUSINESS ACT.—Section 5(h) of the Small Business Act
(15 U.S.C. 634(h)) is amended—
(1) by redesignating paragraphs (1) through
(4) as subparagraphs (A) through (D);
(2) by striking ‘‘(h)’’ and inserting ‘‘(h)(1)’’;
(3) by striking subparagraph (A), as redesig-
nated by paragraph (1) of this subsection, and in-
serting the following:
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‘‘(A) provide for a central registration of
all loans and trust certificates sold pursuant to
subsections (f) and (g) of this section;’’; and
(4) by adding at the end the following:
‘‘(2) Nothing in this subsection shall prohibit
the utilization of a book-entry or other electronic
form of registration for trust certificates. The Ad-
ministration may, with the consent of the Secretary
of the Treasury, use the book-entry system of the
Federal Reserve System.’’.
(b) CERTIFICATES SOLD PURSUANT
TO SMALL
BUSINESS INVESTMENT COMPANY PROGRAM.—Section
321(f) (15 U.S.C. 687l(f)) is amended—
(1) in paragraph (1), by striking ‘‘Such central
registration shall include’’ and all that follows
through the period at the end of the paragraph; and
(2) by adding at the end the following:
‘‘(5) Nothing in this subsection shall prohibit
the use of a book-entry or other electronic form of
registration for trust certificates.’’.
(c) CERTIFICATES SOLD PURSUANT TO DEVELOP-
MENT COMPANY PROGRAM.—Section 505(f) (15 U.S.C.
697b(f)) is amended—
(1) by redesignating paragraphs (1) through
(4) as subparagraphs (A) through (D);