‘‘(7) PERMISSIBLE DEBT REFINANCING.—Any 
financing approved under this title may also include 
a limited amount of debt refinancing for debt that 
was not previously guaranteed by the Administra-
tion. If the project involves expansion of a small 
business 
which 
has 
existing 
indebtedness 
collateralized by fixed assets, a limited amount may 
be refinanced and added to the expansion cost, pro-
viding— 
‘‘(A) the proceeds of the indebtedness were 
used to acquire land, including a building situ-
ated thereon, to construct a building thereon or 
to purchase equipment; 
‘‘(B) the borrower has been current on all 
payments due on the existing debt for at least 
the past year; and 
‘‘(C) the financing under the Certified De-
velopment Company Economic Development 
Loan Program will provide better terms or rate 
of interest than now exists on the debt.’’. 
SEC. 207. ADDITIONAL EQUITY INJECTIONS. 
Clause (ii) of section 502(3)(B) of the Small Business 
Investment Act of 1958 (15 U.S.C. 696(3)(B)) is amend-
ed to read as follows:
‘‘(ii) 
FUNDING
FROM
INSTITU-
TIONS.— 
‘‘(I) If a small business concern 
provides the minimum contribution re-
quired under paragraph (C), not less 
than 50 percent of the total cost of 
any project financed pursuant to 
clauses (i), (ii), or (iii) of subpara-
graph (C) shall come from the institu-
tions described in subclauses (I), (II), 
and (III) of clause (i). 
‘‘(II) If a small business concern 
provides more than the minimum con-
tribution required under paragraph 
(C), any excess contribution may be 
used to reduce the amount required 
from the institutions described in sub-
clauses (I), (II), and (III) of clause (i) 
except that the amount from such in-
stitutions may not be reduced to an 
amount less than the amount of the 
loan made by the Administration.’’. 
SEC. 208. LOAN LIQUIDATIONS. 
Section 510 of the Small Business Investment Act 
of 1958 (15 U.S.C. 697g) is amended—
(1) by redesignating subsection (e) as sub-
section (g); and 
(2) by inserting after subsection (d) the fol-
lowing: 
‘‘(e) PARTICIPATION.— 
‘‘(1) MANDATORY.—Any certified development 
company which elects not to apply for authority to 
foreclose and liquidate defaulted loans under this 
section or which the Administration determines to be 
ineligible for such authority shall contract with a 
qualified third-party to perform foreclosure and liq-
uidation of defaulted loans in its portfolio. The con-
tract shall be contingent upon approval by the Ad-
ministration with respect to the qualifications of the 
contractor, the terms and conditions of liquidation 
activities, and the ability to reimburse such con-
tractor. 
‘‘(2) COMMENCEMENT.—The provisions of this 
subsection shall not require any development com-
pany to liquidate defaulted loans until the Adminis-
tration has adopted and implemented a program to 
compensate and reimburse development companies 
as provided under subsection (f). 
‘‘(f) COMPENSATION AND REIMBURSEMENT.—
‘‘(1) REIMBURSEMENT
OF
EXPENSES.—The 
Administration shall reimburse each certified devel-
opment company for all expenses paid by such com-
pany as part of the foreclosure and liquidation ac-
tivities if the expenses— 
‘‘(A) were approved in advance by the Ad-
ministration either specifically or generally; or 
‘‘(B) were incurred by the company on an 
emergency basis without Administration prior 
approval but which were reasonable and appro-
priate. 
‘‘(2) COMPENSATION FOR RESULTS.—The Ad-
ministration shall develop a schedule to compensate 
and provide an incentive to qualified State or local 
development companies which foreclose and liquidate 
defaulted loans. The schedule shall be based on a 
percentage of the net amount recovered but shall not 
exceed a maximum amount. The schedule shall not 
apply to any foreclosure which is conducted pursu-
ant to a contract between a development company 
and a qualified third-party to perform the fore-
closure and liquidation.’’.
SEC. 209. CLOSING COSTS. 
Paragraph (4) of section 503(b) of the Small Busi-
ness Investment Act of 1958 (15 U.S.C. 697(b)) is amend-
ed to read as follows: 
‘‘(4) the aggregate amount of such debenture 
does not exceed the amount of loans to be made 
from the proceeds of such debenture plus, at the 
election of the borrower under the Certified Develop-
ment Company Economic Development Loan Pro-
gram, other amounts attributable to the administra-
tive and closing costs of such loans, except for the 
borrower’s attorney fees;’’. 
SEC. 210. UNIFORM LEASING POLICY. 
(a) IN GENERAL.—Section 502 of the Small Business 
Investment Act of 1958 (15 U.S.C. 696) is amended 
(1) by striking paragraphs (4) and (5) and in-
serting the following: 
‘‘(4) LIMITATION ON LEASING.—If the use of a 
loan under this section includes the acquisition of a 
facility or the construction of a new facility, the 
small business concern assisted 
‘‘(A) shall permanently occupy and use not 
less than a total of 50 percent of the space in 
the facility; and
‘‘(B) may, on a temporary or permanent 
basis, lease to others not more than 50 percent 
of the space in the facility.’’; and 
(2) by redesignating paragraph (6) as para-
graph (5). 
(b) POLICY FOR 7(A) LOANS.—Section 7(a)(28) of 
the Small Business Act (15 U.S.C. 636(a)(28)) is amend-
ed to read as follows: 
‘‘(28) LIMITATION ON LEASING.—If the use of 
a loan under this subsection includes the acquisition 
of a facility or the construction of a new facility, the 
small business concern assisted 
‘‘(A) shall permanently occupy and use not 
less than a total of 50 percent of the space in 
the facility; and 
‘‘(B) may, on a temporary or permanent 
basis, lease to others not more than 50 percent 
of the space in the facility.’’. 
TITLE III—SMALL BUSINESS IN-
VESTMENT 
COMPANY 
PRO-
GRAM 
SEC. 301. SIMPLIFIED MAXIMUM LEVERAGE LIMITS. 
Section 303(b) of the Small Business Investment Act 
of 1958 (15 U.S.C. 683(b)) is amended—
(1) by striking paragraph (2) and inserting the 
following: 
‘‘(2) MAXIMUM LEVERAGE.— 
‘‘(A) 
IN
GENERAL.—The 
maximum 
amount of outstanding leverage made available 
to any one company licensed under section 
301(c) of this Act may not exceed the lesser 
of— 
‘‘(i) 300 percent of such company’s 
private capital; or 
‘‘(ii) $150,000,000. 
‘‘(B) MULTIPLE
LICENSES
UNDER
COM-
MON CONTROL.—The maximum amount of out-
standing leverage made available to two or more 
companies licensed under section 301(c) of this 
Act that are commonly controlled (as deter-
mined by the Administrator) and not under 
capital 
impairment 
may 
not 
exceed 
$225,000,000.’’; and 
(2) by striking paragraph (4). 
SEC. 302. SIMPLIFIED AGGREGATE INVESTMENT LIMITA-
TIONS. 
Section 306(a) of the Small Business Investment Act 
of 1958 (15 U.S.C. 686(a)) is amended to read as follows:
‘‘(a) PERCENTAGE LIMITATION ON PRIVATE CAP-
ITAL.—If any small business investment company has ob-
tained financing from the Administration and such financ-
ing remains outstanding, the aggregate amount of securi-
ties acquired and for which commitments may be issued 
by such company under the provisions of this title for any 
single enterprise shall not, without the approval of the Ad-
ministration, exceed 10 percent of the sum of— 
‘‘(1) the private capital of such company; and 
‘‘(2) the total amount of leverage projected by 
the company in the company’s business plan that 
was approved by the Administration at the time of 
the grant of the company’s license.’’. 
Passed the House of Representatives September 29, 
2008. 
Attest: 
Clerk.
110TH CONGRESS 
2D SESSION 
H. R. 7175 
AN ACT 
To amend the Small Business Act to improve the 
section 7(a) lending program, and for other pur-
poses.