SEC. 102. RISK MANAGEMENT DATA BASE.
Section 4(b) (15 U.S.C. 633) is amended by inserting
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
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 borrower’s principal line of
business, as identified by Standard Indus-
trial Classification Code (or any successor
to that system);
‘‘(vii) the delinquency rate for each
program (including number of instances
and days overdue);
‘‘(viii) the number of defaults in each
program (including losses and recoveries);
‘‘(ix) the number of deferrals or
forbearances in each program (including
days and number of instances); and
‘‘(x) comparisons on the basis of loan
program, lender, Administration district
and region, for all the data elements main-
tained.
‘‘(C) DEADLINE FOR OPERATIONAL CAPA-
BILITY.—The database established under sub-
paragraph (A) shall be operational not later
than March 31, 1997, and shall capture data
beginning on the first day of the first 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 PRE-
FERRED LENDERS.—Section 7(a)(2)(C)(ii)(II) (15 U.S.C.
636(a)(2)(C)(ii)(II)) is amended to read as follows:
‘‘(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.’’.
(b) 
CERTIFIED
LENDERS
PROGRAM.—Section
7(a)(19) (15 U.S.C. 636(a)(19)) is amended to read as
follows:
‘‘(19) CERTIFIED LENDERS PROGRAM.—
‘‘(A) ESTABLISHMENT.—In addition to the
Preferred Lenders Program authorized by the
proviso in section 5(b)(7), the Administration is
authorized to establish a Certified Lenders Pro-
gram for lenders who establish their knowledge
of Administration laws and regulations concern-
ing the guaranteed loan program and their pro-
ficiency in program requirements.
‘‘(B) DESIGNATION OF CERTIFIED LEND-
ERS.—
‘‘(i) REQUIREMENT.—The Adminis-
tration may designate a lender as a cer-
tified lender only if the lender has made in
each of the preceding 2 fiscal years—
‘‘(I) 8 or more loans guaranteed
under this subsection to small busi-
ness concerns located in areas other
than a rural area; or
‘‘(II) 4 or more loans guaranteed
under this subsection to small busi-
ness concerns located in a rural area.
‘‘(ii) 
SUSPENSION
AND
REVOCA-
TION.—The designation of a lender as a
certified lender shall be suspended or re-
voked at any time that the Administration
determines that the lender is not adhering
to its rules and regulations or that the loss
experience of the lender is excessive as
compared to other lenders, but such sus-
pension or revocation shall not affect any
outstanding guarantee.
‘‘(iii) RURAL AREA DEFINED.—In this
subparagraph, the term ‘rural area’ has
the meaning given such term by subsection
(m)(11)(C).
‘‘(C) UNIFORM
AND
SIMPLIFIED
LOAN
FORMS.—In order to encourage all lending in-
stitutions and other entities making loans au-
thorized under this subsection to provide loans
of $50,000 or less in guarantees to eligible
small business loan applicants, the Administra-
tion shall develop and allow participating lend-
ers to solely utilize a uniform and simplified
loan form for such loans.
‘‘(D) LOW
DOCUMENTATION
LOAN
PRO-
GRAM.—The Administration may carry out the
low documentation loan program for loans of
$100,000 or less only through preferred lenders
and certified lenders.’’.
(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 established
by the Administration.
‘‘(B) PILOT PROGRAM DEFINED.—In this
paragraph, the term ‘pilot program’ means any
lending program initiative, project, innovation,
or other activity not specifically authorized by
law.’’.
(d) SECURITIZATION OF UNGUARANTEED PORTIONS
OF SBA LOANS.—Section 5(f)(3) (15 U.S.C. 634(f)(3))
is amended by adding at the end the following: ‘‘The Ad-
ministration may not prohibit a lender from securitizing
the non-guaranteed portion of any loan made under sec-
tion 7(a) pursuant to the regulations contained in section
120.420 of title 13, Code of Federal Regulations, solely
due to the status of the lender as a depository institu-
tion.’’.
(e) CONDITIONS ON PURCHASE OF LOANS.—
(1) SERVICING
FEE.—Section 5(g)(5) (15
U.S.C. 634(g)(5)) is amended by adding at the end
the following:
‘‘(C) In the event the Administration pays a claim
under a guarantee issued under this Act, the servicing fees
paid to the lender 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.
(2) PAYMENT OF ACCRUED INTEREST.—Section
7(a)(17) is amended—
(A) by striking ‘‘(17) The Administration’’
and inserting ‘‘(17)(A) The Administration’’;
and
(B) by adding at the end the following:
‘‘(B) Any bank or other lending institution
making a claim for payment on the guaranteed por-
tion of a loan 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 exceed the rate of interest on
the loan on the date of default, minus one percent.
(f) TRANSFER OF LOAN SERVICING FUNCTIONS TO
CENTRALIZED CENTERS.—Not later than 60 days after
the date of the enactment of this Act, the Administrator
shall complete the transfer of loan servicing functions of
the Administration, including arrangement for the trans-
fer of appropriate personnel, from district offices to cen-
tralized loan servicing centers.
(g) PREFERRED LENDER STANDARD REVIEW PRO-
GRAM.—Not later than 30 days after the date of the en-
actment of this Act, the Administrator shall implement the
(i) type of lender (separately address-
ing preferred lenders, certified lenders, and
general participation lenders);
(ii) term of the loan; and
(iii) dollar value of the loan at dis-
bursement; and
(D) the economic models used by the Of-
fice of Management and Budget to calculate the
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 the first full fiscal
year of the implementation of each loan program de-
scribed in paragraph (1) through fiscal year 1995.
(4) PERFORMANCE BY THE PRIVATE SECTOR.—
(A) CONTRACTOR PERFORMANCE.—A pri-
vate sector contractor shall be used by the Ad-
ministrator to conduct the assessment required
by paragraph (1) and to prepare the report to
Congress required by paragraph (3).
(B) SOLICITATION AND AWARD.—The con-
tract shall be awarded pursuant to a solicitation
issued not later than 60 days after the date of
the enactment of this Act, which shall provide
for full and open competition. The Adminis-
trator shall make every reasonable effort to
award the contract not later that 60 days after
the date specified in the solicitation for receipt
of proposals.
(C) ACCESS TO INFORMATION.—The Ad-
ministrator shall provide to the contractor ac-
cess to any information collected by or available
to the Administration with regard to the loan
programs being assessed. The contractor shall
preserve the confidentiality of any information
for which confidentiality is protected by law or
properly asserted by the person submitting such
information.
(D) CONTRACT FUNDING.—The Adminis-
trator shall fund the cost of the contract from
the amounts appropriated for the salaries and
expenses of the Administration for fiscal year
1997.
(5) REPORT TO CONGRESS.
(A) CONTENTS.—The contractor shall sub-
mit a report of—
(i) its analyses of the matters to be
assessed pursuant to paragraph (2);
(ii) its independent recommendations,
with respect to each loan program, regard-
ing the following:
(I) improving the Administra-
tion’s timely collection and subsequent
management of data to measure the
performance of each loan program de-
scribed in paragraph (1); and
(II) reducing loss rates for each
such loan program.
(B) SUBMISSION
BY
CONTRACTOR.—The
contractor shall submit the report required by
subparagraph (A) not later than 6 months after
the date of the contract award.
(C) SUBMISSION TO CONGRESS.—The Ad-
ministrator shall submit the report received
from the contractor pursuant to subparagraph
(B) to the Committees on Small Business of the
House of Representatives and the Senate within
15 days of receipt of the report.
SEC. 104. DISASTER LOAN PROGRAM.
(a) INTEREST RATE.—Section 7(c)(5) (15 U.S.C.
636(c)(5)) is amended to read as follows:
‘‘(5) INTEREST
RATE
FOR
DISASTERS
COM-
MENCING AFTER OCTOBER 1, 1996.—Notwithstand-
ing any other provision of law, the interest rate on
the Federal share of any loan made under para-
graph (1) or (2) of subsection (b) on account of a
disaster commencing on or after October 1, 1996,
shall be the rate determined by the Secretary of the
Treasury, taking into consideration the current aver-
age market yield on outstanding marketable obliga-
tions of the United States with remaining periods to
maturity comparable to the average maturities of
such loan plus an additional charge of 2 percent per
year, adjusted to the nearest one-eighth of 1 per-
cent.’’.
(b) REPEAL OF OBSOLETE PROVISIONS.—
(1) The undesignated paragraph following sub-
paragraph (D) of section 7(b)(2) (15 U.S.C. 636(b))
is amended by striking the sentence that begins
‘‘Notwithstanding any other provision of law’’
through the end of subsection (b).
(2) Paragraphs (3) and (4) of section 7(c) (15
U.S.C. 636(c)) are repealed.
(c) OUTSOURCING OF LOAN SERVICING.—
(1) PILOT PROGRAM.—The Administrator shall
carry out a pilot program under which the servicing
of not less than 20 percent of the total portfolio of
loans made to homeowners under section 7(b) of the
Small Business Act (including loans made before the
date of the enactment of this Act) will be carried
out by 1 or more private entities under contracts
entered into by the Administration.
(2) INITIATION DATE.—Not later than 90 days
after the date of enactment of this Act, the Adminis-
trator shall begin implementation of the pilot pro-
gram.
(3) REPORT.—Not later than 2 fiscal years
after the date of award of the contracts provided for
in paragraph (1), the Administrator shall transmit
to Congress a report containing a description and
assessment of the results of the pilot program.
SEC. 105. MICROLOAN DEMONSTRATION PROGRAM.
(a) TECHNICAL
ASSISTANCE
GRANT
REQUIRE-
MENTS.—Section 7(m)(4) (15 U.S.C. 636(m)(4)) is
amended—
(1) in subparagraph (A) by striking ‘‘25 per-
cent’’ and inserting ‘‘20 percent’’; and
(2) in subparagraph (B) by striking ‘‘25 per-
cent’’ and inserting ‘‘35 percent’’.
(b) LIMITATION ON SPENDING.— Section 7(m)(12)
(15 U.S.C. 636(m)(12)) is amended by adding at the end
the following new subparagraph:
‘‘(D) LIMITATION ON SPENDING.—None of the
amounts appropriated to carry out this subsection
for fiscal year 1997 may be expended until such date
as the Administrator has implemented the pilot pro-
gram under this paragraph.’’.
SEC. 106. SMALL BUSINESS DEVELOPMENT CENTER PRO-
GRAM.
(a) ELIMINATION OF REQUIREMENT FOR LOCATION
AT
INSTITUTIONS
OF
HIGHER
LEARNING.—Section
21(a)(1) (15 U.S.C. 648(a)(1)) is amended by striking
‘‘: Provided, That’’ and all that follows through ‘‘small
business community’’.
(b) AUTHORITY TO CHARGE REASONABLE FEES.—
(1) IN GENERAL.—Section 21(a)(3) (15 U.S.C.
648(a)(3)) is amended by adding at the end the fol-
lowing:
‘‘(D) FEES.—Small business development
centers may charge reasonable and necessary
fees for their services. Such fees may not exceed
$15.00 per hour and may not be mandated by
the Administration.’’.
(2) CONFORMING
AMENDMENTS.—Section 21
(15 U.S.C. 648) is amended—
(A) in subsection (a)(3)—