I
106TH CONGRESS
1ST SESSION
H. R. 440
To make technical corrections to the Microloan Program.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 2, 1999
Mr. TALENT
(for himself, Ms. VELA´ZQUEZ, Mr. PASCRELL, and Ms.
SCHAKOWSKY) introduced the following bill; which was referred to the
Committee on Small Business
A BILL
To make technical corrections to the Microloan Program.
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‘‘Microloan Program
Technical Corrections Act of 1999’’.
SEC. 2. TECHNICAL CORRECTIONS.
Section 7(m) of the Small Business Act (15 U.S.C.
636(m)) is amended—
(1) by amending paragraph (7)(B) to read as
follows:
‘‘(B) AVAILABILITY
OF
FUNDS.—Subject
to appropriations, the Administration shall en-
sure that at least $800,000 of new loan funds
are available for each State in any fiscal year.
All funds are to be made available subject to
approval of the Administration. If, at the begin-
ning of the third quarter of a fiscal year, the
Administration determines that the funds nec-
essary to comply with this provision are unlikely
to be awarded that year, the Administration
may make those funds available to any State or
intermediary.’’; and
(2) in paragraph (8)—
(A) by inserting ‘‘and providing funding to
intermediaries’’ after ‘‘program applicants’’;
and
(B) by inserting ‘‘and provide funding to’’
after ‘‘shall select’’.
SEC. 3. LOAN LOSS RESERVE.
Section 7(m)(3)(D) of the Small Business Act (15
U.S.C. 636(m)(3)(D)) is amended to read as follows:
‘‘(D)(i) IN GENERAL.—The Administrator
shall, by regulation, require each intermediary
to establish a loan loss reserve fund, and to
maintain such reserve fund until all obligations
owed to the Administration under this sub-
section are repaid.
‘‘(ii) LEVEL
OF
LOAN
LOSS
RESERVE
FUND.—
‘‘(I) Subject to subclause (III), the
Administration shall require the loan loss
reserve fund of an intermediary to be
maintained at a level equal to 15 percent
of the outstanding balance of the notes re-
ceivable owed to the intermediary.
‘‘(II) REVIEW OF LOAN LOSS.—After
the initial 5 years of each intermediary’s
participation in the program authorized by
this subsection, the Administrator shall, at
the request of the intermediary, conduct a
review of the annual loss rate of each
intermediary. Any intermediary in oper-
ation under this subsection prior to Octo-
ber 1, 1994 that requests a reduction in its
loan loss reserve shall be reviewed based on
the most recent five year period preceding
the request.
‘‘(III) REDUCTION
OF
THE
LOAN
LOSS
RESERVE.—Subject to the require-
ments of this subclause the Administrator
may reduce the annual loan loss reserve re-
quirement to reflect the actual average
loan loss rate for the intermediary during
the preceding five year period, except that
in no case shall the loan loss reserve be re-
duced to less than 10 percent of the out-
standing balance of the notes receivable
owed to the intermediary.
‘‘A reduction may be allowed only if
the intermediary demonstrates to the satis-
faction of the Administrator that—
‘‘(aa) the average annual loss
rate for the intermediary during the
preceding 5 year period is less than
15 percent; and
‘‘(bb) that no other factors exist
that may impair the ability of the
intermediary to repay all obligations
owed to the Administration under this
subsection.’’.
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