I 
111TH CONGRESS 
1ST SESSION H. R. 3723 
To amend the Small Business Act to improve the activities carried out 
under section 7(a) of such Act, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 6, 2009 
Mrs. HALVORSON introduced the following bill; which was referred to the 
Committee on Small Business 
A BILL 
To amend the Small Business Act to improve the activities 
carried out under section 7(a) of such Act, and for 
other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Small Business Credit 
Expansion and Loan Markets Stabilization Act of 2009’’. 
SEC. 2. SMALL LENDER OUTREACH PROGRAM. 
Section 7(a) of the Small Business Act (15 U.S.C. 
636(a)) is amended by adding at the end the following: 
‘‘(34) SMALL LENDER OUTREACH PROGRAM.— 
The Administrator shall establish and carry out a 
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program to provide support to regional, district, and 
branch offices of the Administration to assist small 
lenders, who do not participate in the Preferred 
Lenders Program, to participate in the programs 
under this subsection.’’. 
SEC. 3. RURAL LENDING OUTREACH PROGRAM. 
Section 7(a) of the Small Business Act (15 U.S.C. 
636(a)), as amended by this Act, is further amended by 
adding at the end the following: 
‘‘(35) RURAL LENDING OUTREACH PROGRAM.— 
‘‘(A) IN
GENERAL.—The Administrator 
shall establish and carry out a rural lending 
outreach program (hereinafter referred to in 
this paragraph as the ‘program’) to provide 
loans under this subsection in accordance with 
this paragraph. 
‘‘(B) MAXIMUM
PARTICIPATION.—A loan 
under the program shall include the maximum 
participation levels by the Administrator per-
mitted for loans made under this subsection. 
‘‘(C) MAXIMUM LOAN AMOUNT.—The max-
imum amount of a loan under the program 
shall be $250,000. 
‘‘(D) USE OF RURAL LENDERS.—The pro-
gram shall be carried out through lenders lo-
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cated in a rural area (as such term is defined 
under subsection (m)(11)(C)) or, if a small 
business concern located in a rural area does 
not have a lender located within 30 miles of the 
principal place of business of such concern, 
through any lender chosen by such concern that 
provides loans under this subsection. 
‘‘(E) TIME FOR APPROVAL.—The Adminis-
trator shall approve or disapprove a loan under 
the program within 36 hours. 
‘‘(F) 
DOCUMENTATION.—The 
program 
shall use abbreviated application and docu-
mentation requirements. 
‘‘(G) 
CREDIT
STANDARDS.—Minimum 
credit standards, as the Administrator considers 
necessary to limit the rate of default on loans 
made under the program, shall apply.’’. 
SEC. 4. COMMUNITY EXPRESS PROGRAM MADE PERMA-
NENT. 
Section 7(a) of the Small Business Act (15 U.S.C. 
636(a)), as amended by this Act, is further amended by 
adding at the end the following: 
‘‘(36) COMMUNITY EXPRESS PROGRAM.— 
‘‘(A) IN
GENERAL.—The Administrator 
shall carry out a Community Express Program 
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to provide loans under this subsection in ac-
cordance with this paragraph. 
‘‘(B) REQUIREMENTS.—For a loan made 
under the Community Express Program, the 
following shall apply: 
‘‘(i) The loan shall be in an amount 
not exceeding $250,000. 
‘‘(ii) The loan shall be made to a 
small business concern the majority owner-
ship interest of which is directly held by in-
dividuals the Administrator determines 
are, without regard to the geographic loca-
tion of such individuals, women, members 
of qualified Indian tribes, socially or eco-
nomically disadvantaged individuals, vet-
erans, or members of the reserve compo-
nents of the Armed Forces. 
‘‘(iii) The loan shall comply with the 
collateral policy of the Administration. 
‘‘(iv) The loan shall include terms re-
quiring the lender to provide, at the ex-
pense of the lender, technical assistance to 
the borrower through the lender or a third- 
party provider. 
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‘‘(v) The Administrator shall approve 
or disapprove the loan within 36 hours.’’. 
SEC. 5. INCREASED VETERAN PARTICIPATION PROGRAM 
MADE PERMANENT. 
Section 7(a) of the Small Business Act (15 U.S.C. 
636(a)), as amended by this Act, is further amended— 
(1) by redesignating the second paragraph (32), 
as added by section 208 of the Military Reservist 
and Veteran Small Business Reauthorization and 
Opportunity Act of 2008 (Public Law 110–186; 122 
Stat. 631), as paragraph (33); and 
(2) in paragraph (33), as so redesignated by 
paragraph (1) of this section— 
(A) by striking ‘‘pilot program’’ each place 
it appears and inserting ‘‘program’’; 
(B) by striking subparagraphs (C) and 
(F); and 
(C) by redesignating subparagraphs (D) 
and (E) as subparagraphs (C) and (D), respec-
tively. 
SEC. 6. LEASING POLICY. 
Section 7(a) of the Small Business Act (15 U.S.C. 
636(a)), as amended by this Act, is further amended by 
striking paragraph (28) and inserting the following: 
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‘‘(28) LEASING.—If a loan under this sub-
section is used to acquire or construct a facility, the 
assisted small business concern— 
‘‘(A) shall permanently occupy and use not 
less than 50 percent of the space in such facil-
ity; and 
‘‘(B) may, on a temporary or permanent 
basis, lease to others not more than 50 percent 
of the space in such facility.’’. 
SEC. 7. NATIONAL LENDER TRAINING PROGRAM. 
Section 7(a) of the Small Business Act (15 U.S.C. 
636(a)), as amended by this Act, is further amended by 
adding at the end the following: 
‘‘(37) NATIONAL
LENDER
TRAINING
PRO-
GRAM.— 
‘‘(A) IN
GENERAL.—The Administrator 
shall establish and carry out, through the re-
gional offices of the Administration, a lender 
training program for new and existing lenders 
under this subsection with respect to the lend-
ing systems, policies, and procedures of the Ad-
ministration. 
‘‘(B) 
FEES.—The 
Administrator 
shall 
charge a fee for the program established under 
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subparagraph (A) to reduce the cost of such 
program to zero. 
‘‘(C) LIMITATION.—The program estab-
lished under subparagraph (A) may not be car-
ried out by contract with a nongovernmental 
entity.’’. 
SEC. 8. APPLICATIONS FOR REPURCHASE OF LOANS. 
Section 7(a) of the Small Business Act (15 U.S.C. 
636(a)), as amended by this Act, is further amended by 
adding at the end the following: 
‘‘(38) APPLICATIONS
FOR
REPURCHASE
OF 
LOANS.— 
‘‘(A) IN
GENERAL.—Not later than 45 
days after the date of the receipt of a claim 
from a lender for proper payment of the guar-
anteed portion of a loan under this subsection 
due to default, the Administrator shall make a 
final determination with respect to the approval 
or denial of such claim. 
‘‘(B) LATE DETERMINATIONS.—If the Ad-
ministrator does not make a final determination 
under subparagraph (A) in the time period 
specified in such subparagraph, the claim shall 
be approved and paid promptly.’’. 
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SEC. 9. ALTERNATIVE SIZE STANDARD. 
(a) IN GENERAL.—Section 3(a) of the Small Busi-
ness Act (15 U.S.C. 632(a)) is amended by adding at the 
end the following: 
‘‘(5) In addition to any other size standard 
under this subsection, the Administrator shall estab-
lish and permit a lender making a loan under section 
7(a) to use an alternative size standard. The alter-
native size standard shall be based on factors includ-
ing the maximum tangible net worth and average 
net income of a business concern.’’. 
(b) APPLICABILITY.—Until the Administrator estab-
lishes under section 3(a)(5) of the Small Business Act, 
as added by subsection (a) of this section, an alternative 
size standard for use by a lender making a loan under 
section 7(a) of such Act, the alternative size standard in 
section 121.301(b) of title 13, Code of Federal Regula-
tions, shall apply in such a case. 
SEC. 10. PILOT PROGRAM AUTHORITY. 
Section 7(a) of the Small Business Act (15 U.S.C. 
636(a)), as amended by this Act, is further amended by 
striking paragraph (25) and inserting the following: 
‘‘(25) LIMITATION
ON
CONDUCTING
PILOT 
PROJECTS.— 
‘‘(A) LIMITATION ON NUMBER.—Not more 
than 10 percent of the total number of loans 
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guaranteed in any fiscal year under this sub-
section may be awarded as part of a pilot pro-
gram. 
‘‘(B) DOLLAR LIMITATIONS.— 
‘‘(i) IN
GENERAL.—With respect to 
any pilot program under this subsection es-
tablished on or after the date of the enact-
ment of the Small Business Credit Expan-
sion and Loan Markets Stabilization Act of 
2009, no loan shall be made under such 
program if such loan would result in the 
total amount of loans made during a fiscal 
year under all such programs to be in ex-
cess of 5 percent of the total amount of 
loans guaranteed in such fiscal year under 
this subsection. 
‘‘(ii) CERTAIN
PRE-EXISTING
PRO-
GRAMS.—With respect to any pilot pro-
gram under this subsection established be-
fore the date of the enactment of the Small 
Business Credit Expansion and Loan Mar-
kets Stabilization Act of 2009, no loan 
shall be made under such program if such 
loan would result in the total amount of 
loans made during a fiscal year under all 
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such programs to be in excess of 10 per-
cent of the total amount of loans guaran-
teed in such fiscal year under this sub-
section. 
‘‘(C) EXPIRATION.— 
‘‘(i) IN
GENERAL.—Except as pro-
vided in clause (iii), the duration of any 
pilot program under this subsection may 
not exceed 3 years. 
‘‘(ii) DESIGNATION
AS
NEW
PRO-
GRAM.—For purposes of this subpara-
graph, a pilot program shall not be treated 
as a new pilot program solely on the basis 
of a modification or change in the pilot 
program, including the change of its name. 
‘‘(iii) EXISTING PROGRAMS.—With re-
spect to any pilot program in existence on 
the date of the enactment of the Small 
Business Credit Expansion and Loan Mar-
kets Stabilization Act of 2009, such pro-
gram may continue in effect for a period 
not exceeding 3 years after such date with-
out regard to the duration of such program 
before such date. 
‘‘(D) REGULATIONS.— 
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‘‘(i) IN
GENERAL.—With respect to 
each pilot program under this subsection, 
including each pilot program in existence 
on the date of the enactment of the Small 
Business Credit Expansion and Loan Mar-
kets Stabilization Act of 2009, the Admin-
istrator shall— 
‘‘(I) issue regulations for such 
program after providing notice in the 
Federal Register and an opportunity 
for comment; and 
‘‘(II) ensure that such regula-
tions are published in the Code of 
Federal Regulations. 
‘‘(ii) PILOT PROGRAMS ESTABLISHED 
AFTER
DATE
OF
ENACTMENT.—With re-
spect to any pilot program established 
after the date of the enactment of the 
Small Business Credit Expansion and 
Loan Markets Stabilization Act of 2009, 
such program shall not take effect until 
the requirements under this subparagraph 
are satisfied. 
‘‘(E) REPEAL
OF
AUTHORITY
TO
WAIVE 
CERTAIN RULES.— 
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‘‘(i) IN
GENERAL.—Notwithstanding 
section 120.3 of title 13, Code of Federal 
Regulations, the Administrator may not 
from time to time suspend, modify, or 
waive rules for a limited period of time to 
test new programs or ideas with respect to 
this subsection, unless such suspension, 
modification, or waiver is explicitly author-
ized by Act of Congress. 
‘‘(ii) EXISTING
PILOT
PROGRAMS.— 
Nothing under clause (i) may be construed 
to affect a pilot program in existence on 
the date of the enactment of the Small 
Business Credit Expansion and Loan Mar-
kets Stabilization Act of 2009. 
‘‘(F) PILOT PROGRAM.—For purposes of 
this paragraph, the term ‘pilot program’ means 
any lending program initiative, project, innova-
tion, or other activity not specifically authorized 
by Act of Congress.’’. 
SEC. 11. LOANS TO COOPERATIVES. 
Section 7(a) of the Small Business Act (15 U.S.C. 
636(a)), as amended by this Act, is further amended by 
adding at the end the following: 
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‘‘(39) 
COOPERATIVES.—The 
Administration 
may provide loans under this subsection to any coop-
erative that— 
‘‘(A) is not organized as a tax exempt enti-
ty; 
‘‘(B) is engaged in a legal business activ-
ity; 
‘‘(C) obtains financial benefits for the co-
operative and for the members of such coopera-
tive; and 
‘‘(D) is eligible under applicable size stand-
ards of the Administration, including that any 
business entity that is a member of such coop-
erative is eligible under applicable size stand-
ards of the Administration.’’. 
SEC. 12. CAPITAL BACKSTOP PROGRAM. 
Section 7(a) of the Small Business Act (15 U.S.C. 
636(a)), as amended by this Act, is further amended by 
adding at the end the following: 
‘‘(40) CAPITAL BACKSTOP PROGRAM.— 
‘‘(A) IN
GENERAL.—The Administrator 
shall establish a process under which a small 
business concern may submit an application to 
the Administrator for the purpose of securing a 
loan under this subsection. With respect to such 
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application, the Administrator shall collect all 
information necessary to determine the credit-
worthiness and repayment ability of an appli-
cant and shall determine if such application 
meets basic eligibility and credit standards for 
a loan under this subsection. 
‘‘(B) PARTICIPATION OF LENDERS.— 
‘‘(i) IN GENERAL.—The Administrator 
shall establish a process under which the 
Administrator makes available to lenders 
each loan application submitted and deter-
mined to meet basic eligibility and credit 
standards under subparagraph (A) for the 
purpose of such lenders originating, under-
writing, closing, and servicing the loan for 
which the applicant applied. 
‘‘(ii) ELIGIBILITY.—Lenders are eligi-
ble to receive a loan application described 
in clause (i) if they participate in the pro-
grams established under this subsection. 
‘‘(iii) LOCAL LENDERS.—The Admin-
istrator shall first make available a loan 
application described in clause (i) to lend-
ers within 100 miles of the principal office 
of the loan applicant. 
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‘‘(iv) PREFERRED
LENDERS.—If a 
lender described in clause (iii) does not 
agree to originate, underwrite, close, and 
service the loan applied for within 5 busi-
ness days of receiving a loan application 
described in clause (i), the Administrator 
shall subsequently make available such 
loan application to lenders in the Preferred 
Lenders 
Program 
under 
paragraph 
(2)(C)(ii) of this subsection. 
‘‘(v) AUTHORITY OF ADMINISTRATION 
TO LEND.—If a lender described in clauses 
(iii) or (iv) does not agree to originate, un-
derwrite, close, and service the loan applied 
for within 10 business days of receiving a 
loan application described in clause (i), the 
Administrator shall originate, underwrite, 
close, and service such loan. 
‘‘(C) ASSET
SALES.—The Administrator 
shall offer to sell loans made by the Adminis-
trator under this paragraph. Such sales shall be 
made through the semi-annual public solicita-
tion (in the Federal Register and in other 
media) of offers to purchase. The Administrator 
may contract with vendors for due diligence, 
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asset valuation, and other services related to 
such sales. The Administrator may not sell any 
loan under this subparagraph for less than 90 
percent of the net present value of the loan, as 
determined and certified by a qualified third 
party. 
‘‘(D) LOANS
NOT
SOLD.—The Adminis-
trator shall maintain and service loans made by 
the Administrator under this paragraph that 
are not sold through the asset sales under this 
paragraph. 
‘‘(E) EFFECTIVE DATES.—This paragraph 
shall have effect on a date if— 
‘‘(i) such date occurs during a period 
that— 
‘‘(I) begins on the date the Bu-
reau of Economic Analysis, or any 
successor organization, makes a deter-
mination that the gross domestic 
product of the United States has de-
creased for three consecutive quarters; 
and 
‘‘(II) ends on the date the Bu-
reau of Economic Analysis, or any 
successor organization, makes a deter-
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