106TH CONGRESS
1ST SESSION
H. R. 440
AN ACT
To make technical corrections to the Microloan
Program.
106TH CONGRESS
1ST SESSION
H. R. 440
AN ACT
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) IN
GENERAL.—Subject to sub-
clause (III), the Administrator shall re-
quire the loan loss reserve fund of an
intermediary to be maintained at a level
equal to 15 percent of the outstanding bal-
ance of the notes receivable owed to the
intermediary.
‘‘(II) REVIEW
OF
LOAN
LOSS
RE-
SERVE.—After the initial 5 years of an
intermediary’s participation in the program
authorized by this subsection, the Adminis-
trator shall, at the request of the inter-
mediary, conduct a review of the annual
loss rate of the intermediary. Any inter-
mediary in operation under this subsection
prior to October 1, 1994, that requests a
reduction in its loan loss reserve shall be
reviewed based on the most recent 5-year
period preceding the request.
‘‘(III) REDUCTION OF LOAN LOSS RE-
SERVE.—Subject to the requirements of
clause IV, the Administrator may reduce
the annual loan loss reserve requirement of
an intermediary to reflect the actual aver-
age loan loss rate for the intermediary dur-
ing the preceding 5-year period, except
that in no case shall the loan loss reserve
be reduced to less than 10 percent of the
outstanding balance of the notes receivable
owed to the intermediary.
‘‘(IV) REQUIREMENTS.—The Admin-
istrator may reduce the annual loan loss
reserve requirement of an intermediary
only if the intermediary demonstrates to
the satisfaction 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.’’.
Passed the House of Representatives February 9,
1999.
Attest:
Clerk.