I 
117TH CONGRESS 
1ST SESSION H. R. 1490 
To amend the Small Business Investment Act of 1958 to improve the loan 
guaranty program, enhance the ability of small manufacturers to access 
affordable capital, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 2, 2021 
Ms. CRAIG (for herself, Mrs. KIM of California, Ms. DAVIDS of Kansas, and 
Mr. CHABOT) introduced the following bill; which was referred to the 
Committee on Small Business 
A BILL 
To amend the Small Business Investment Act of 1958 to 
improve the loan guaranty program, enhance the ability 
of small manufacturers to access affordable capital, 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 ‘‘504 Modernization and 
Small Manufacturer Enhancement Act of 2021’’. 
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SEC. 2. ADDITIONS TO POLICY GOALS FOR THE DEVELOP-
MENT COMPANY PROGRAM. 
Section 501(d)(3) of the Small Business Investment 
Act of 1958 (15 U.S.C. 695(d)(3)) is amended— 
(1) by redesignating subparagraphs (A) through 
(L) as subparagraphs (B) through (M), respectively; 
(2) by inserting before subparagraph (B) (as so 
redesignated) the following: 
‘‘(A) workforce development through work- 
based or work-integrated training, which shall 
be satisfied by demonstrating that a small busi-
ness concern that is a subject of the project 
has— 
‘‘(i) a documented in-house training 
program, the duration of which is not 
shorter than 12 weeks; or 
‘‘(ii) entered into a contract with an 
entity— 
‘‘(I) to provide trained applicants 
for any open position of employment 
at the small business concern; and 
‘‘(II) that ensures that any appli-
cant provided to the small business 
concern under subclause (I) has un-
dergone not fewer than 12 weeks of 
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training that is relevant to the open 
position described in that subclause,’’; 
(3) by amending subparagraph (D) (as so re-
designated) to read as follows: 
‘‘(D) expansion of minority-owned, em-
ployee-owned, or women-owned business devel-
opment,’’; 
(4) in subparagraph (L) (as so redesignated), 
by striking ‘‘producers, or’’ and inserting ‘‘pro-
ducers,’’; 
(5) in subparagraph (M) (as so redesignated), 
by striking the period at the end and inserting a 
comma; 
(6) by inserting after subparagraph (M) the fol-
lowing new subparagraphs: 
‘‘(N) enhanced ability for small business 
concerns to reduce costs by using energy effi-
cient products and generating renewable en-
ergy, 
‘‘(O) aid revitalizing of any area for which 
a disaster has been declared or determined 
under subparagraph (A), (B), (C), or (E) of 
section 7(b)(2) of the Small Business Act, or 
‘‘(P) expansion of small business concerns 
with 10 or fewer employees.’’; and 
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(7) in the flush text following subparagraph 
(P), as added by paragraph (6), by striking ‘‘sub-
paragraphs (J) and (K)’’ and inserting ‘‘subpara-
graphs (K) and (L)’’. 
SEC. 3. INCREASE IN LOAN AMOUNTS FOR MANUFAC-
TURING LOANS. 
Section 502 of the Small Business Investment Act 
of 1958 (15 U.S.C. 696) is amended— 
(1) in the matter preceding paragraph (1), by 
striking ‘‘The Administration’’ and inserting the fol-
lowing: 
‘‘(a) IN GENERAL.—The Administration’’; and 
(2) in subsection (a), as so designated— 
(A) in paragraph (2)(A)— 
(i) in the matter preceding clause (i), 
by striking ‘‘section’’ and inserting ‘‘sub-
section’’; and 
(ii) 
in 
clause 
(iii), 
by 
striking 
‘‘$5,500,000’’ and inserting ‘‘$6,500,000’’; 
and 
(B) in paragraph (3)(A), by striking ‘‘this 
section’’ and inserting ‘‘this subsection’’. 
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SEC. 4. IMPROVEMENTS TO 504 LOAN CLOSING PROCE-
DURE. 
Title V of the Small Business Investment Act of 1958 
(15 U.S.C. 695 et seq.) is amended— 
(1) in section 502, as amended by section 3, by 
adding at the end the following new subsections: 
‘‘(b) CLOSING.— 
‘‘(1) AUTHORITY
OF
CERTAIN
DEVELOPMENT 
COMPANIES.—An accredited lender certified com-
pany may take any of the following actions to facili-
tate the closing of a loan made under subsection (a): 
‘‘(A) Reallocate the cost of the project with 
respect to which the loan is made in an amount 
that is not more than 10 percent of the overall 
cost of the project. 
‘‘(B) Correct any name that is applicable 
to the loan, including the name of any bor-
rower, guarantor, eligible passive company de-
scribed in subparagraph (C)(i), and operating 
company described in subparagraph (C)(ii). 
‘‘(C) Form any of the following to receive 
proceeds of the loan: 
‘‘(i) An eligible passive company that 
complies with section 120.111 of title 13, 
Code of Federal Regulations, or any suc-
cessor regulation. 
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‘‘(ii) If an eligible passive company is 
formed under clause (i), an operating com-
pany with respect to that eligible passive 
company. 
‘‘(D) Correct the address of any property 
with respect to which the loan is made. 
‘‘(E) Correct the name of any interim 
lender or third-party lender. 
‘‘(F) Change any third-party lender or in-
terim lender if that lender is a financial institu-
tion that is regulated by the Federal Govern-
ment or a State government. 
‘‘(G) Make a guarantor a co-borrower or a 
co-borrower a guarantor. 
‘‘(H) Add a guarantor that does not 
change ownership with respect to the loan. 
‘‘(I) Reduce the amount of standby debt 
before the closing as a result of regularly sched-
uled payments. 
‘‘(J) Reduce the cost of the project with 
respect to which the loan is made. 
‘‘(2) FEES.—The Administrator shall— 
‘‘(A) issue a rule regarding the amount of 
a closing fee that may be financed in a deben-
ture that is issued by a certified development 
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company to make one or more loans to small 
business concerns, the proceeds of which are 
used by that concern for the purposes described 
in subsection (a), except that such amount shall 
be not less than $3,500; and 
‘‘(B) periodically update the rule issued 
under subparagraph (A). 
‘‘(3) NO
ADVERSE
CHANGE
AND
FINANCIAL 
STATEMENT.—Before the closing with respect to a 
loan made under subsection (a), the borrower and 
any operating company shall— 
‘‘(A) make the certification required under 
section 120.892 of title 13, Code of Federal 
Regulations, or any successor regulation; and 
‘‘(B) submit to the certified development 
company a financial statement that is not more 
than 180 days old, which the company shall 
certify not later than 120 days before the date 
on which the certified development company 
issues a debenture with respect to the project to 
which the loan relates. 
‘‘(c) ACCREDITED LENDER CERTIFIED COMPANY 
DEFINED.—In this section, the term ‘accredited lender 
certified company’ means a certified development company 
that meets the requirements under section 507(b), includ-
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ing a certified development company that the Administra-
tion has designated as an accredited lender under such 
section 507(b).’’; and 
(2) by adding at the end the following new sec-
tion: 
‘‘SEC. 511. CLOSING AND OVERSIGHT. 
‘‘(a) SBA DISTRICT COUNSELS.—Beginning on the 
date of enactment of this section, with respect to the pro-
gram established under this title, district counsels of the 
Administration shall be subject to the same requirements, 
and shall have the same authority and responsibilities, as 
in effect with respect to that program on the day before 
the date of enactment of this section, except that— 
‘‘(1) the Office of Credit Risk Management of 
the Administration shall have the responsibility for 
all duties relating to conducting file reviews of loans 
made under this title; and 
‘‘(2) district counsels of the Administration 
shall not have any responsibility relating to the re-
view of closing packages with respect to a loan made 
under this title. 
‘‘(b) DESIGNATED ATTORNEYS.—For the purposes of 
this title, the following provisions and requirements shall 
apply with respect to a designated attorney of a certified 
development company: 
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‘‘(1) A designated attorney that meets the re-
quirements determined under paragraph (2) shall be 
responsible for certifying documents relating to the 
closing of a loan described in this title. 
‘‘(2) The Administrator may determine any 
continuing education requirements that the des-
ignated attorney shall be required to satisfy in order 
to be permitted to close a loan made under this title. 
‘‘(3) If, as of the date of enactment of this sec-
tion, a certified development company does not have 
a designated attorney, during the 270-day period be-
ginning on that date of enactment, the certified de-
velopment company may identify such an attorney, 
subject to the approval of the Administrator.’’. 
SEC. 5. CERTIFIED DEVELOPMENT COMPANY LOANS FOR 
SMALL MANUFACTURERS. 
(a) 
CONTRIBUTION
REQUIREMENT.—Section 
502(a)(3)(C) of the Small Business Investment Act of 
1958, as designated by section 3, is amended— 
(1) by redesignating clauses (i), (ii), (iii), and 
(iv) as subclauses (I), (II), (III), and (IV), respec-
tively, and adjusting the margins of such subclauses 
accordingly; 
(2) by inserting before subclause (I), as so re-
designated, the following: 
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‘‘(i) for a small business concern that 
is not a small manufacturer (as defined in 
section 501(e)(7))—’’; 
(3) in subclause (III), as so redesignated, by 
striking ‘‘clauses (i) and (ii)’’ and inserting ‘‘sub-
clauses (I) and (II)’’; 
(4) in subclause (IV) as so redesignated, by 
striking the period and the end and inserting ‘‘; or’’; 
and 
(5) by adding at the end the following: 
‘‘(ii) for a small manufacturer (as de-
fined in section 501(e)(7))— 
‘‘(I) at least 5 percent of the 
total cost of the project financed, if 
the small business concern has been in 
operation for a period of 2 years or 
less; 
‘‘(II) at least 5 percent of the 
total cost of the project financed, if 
the project involves a limited or single 
purpose building or structure; 
‘‘(III) at least 10 percent of the 
total cost of the project financed if the 
project involves both of the conditions 
set forth in subclauses (I) and (II); or 
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‘‘(IV) at least 5 percent of the 
total cost of the project financed, in 
all other circumstances, at the discre-
tion of the development company.’’. 
(b) CREATION OR RETENTION OF JOBS REQUIRE-
MENT.—Section 501(e) of the Small Business Investment 
Act of 1958 (15 U.S.C. 695(e)) is amended— 
(1) in paragraph (1), by striking ‘‘creates or re-
tains’’ and all that follows through the period at the 
end and inserting ‘‘creates or retains 1 job for every 
$75,000 guaranteed by the Administration, except 
that the amount is $150,000 in the case of a project 
of a small manufacturer.’’; 
(2) in paragraph (2), by striking ‘‘creates or re-
tains’’ and all that follows through the period at the 
end and inserting ‘‘creates or retains 1 job for every 
$75,000 guaranteed by the Administration, except 
that the amount is $150,000 in the case of a project 
of a small manufacturer.’’; 
(3) by redesignating paragraph (6) as para-
graph (7); and 
(4) by inserting after paragraph (5) the fol-
lowing: 
‘‘(6) For a loan for a project directed toward the cre-
ation of job opportunities under subsection (d)(1), the Ad-
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ministrator shall publish on the website of the Administra-
tion the number of jobs created or retained under the 
project as of the date that is 2 years after the completion 
(as determined based on information provided by the de-
velopment company) of the project.’’. 
(c) 
COLLATERAL
REQUIREMENTS.—Section 
502(a)(3)(E)(i) of the Small Business Investment Act of 
1958, as designated by section 3, is amended by adding 
at the end the following: ‘‘Additional collateral shall not 
be required in the case of a small manufacturer (as de-
fined in section 501(e)(7)).’’. 
(d) DEBT REFINANCING.—Section 502(a)(7)(B) of 
the Small Business Investment Act of 1958, as designated 
by section 3, is amended— 
(1) in the matter preceding clause (i) by insert-
ing ‘‘(or in the case of a small manufacturer (as de-
fined in section 501(e)(7)), that does not exceed 100 
percent of the project cost of the expansion)’’ after 
‘‘cost of the expansion’’; 
(2) in clause (v), by adding ‘‘and’’ at the end; 
(3) by striking clause (vi); and 
(4) by redesignating clause (vii) as clause (vi). 
(e) AMOUNT OF GUARANTEED DEBENTURE.—Sec-
tion 503(a) of the Small Business Investment Act of 1958 
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(15 U.S.C. 697(a)) is amended by adding at the end the 
following: 
‘‘(5) Any debenture issued by a State or local devel-
opment company to a small manufacturer (as defined in 
section 501(e)(7)) with respect to which a guarantee is 
made under this subsection shall be in an amount equal 
to not more than 50 percent of the cost of the project 
with respect to which such debenture is issued, without 
regard to whether good cause has been shown.’’. 
SEC. 6. ASSISTANCE FOR SMALL MANUFACTURERS. 
Title V of the Small Business Investment Act of 1958 
(15 U.S.C. 695 et seq.), as amended by section 4(2), is 
further amended by adding at the end the following new 
section: 
‘‘SEC. 512. ASSISTANCE FOR SMALL MANUFACTURERS. 
‘‘(a) IN GENERAL.—The Administrator shall ensure 
that each district office of the Administration partners 
with not less than 1 resource partner to provide training 
to small business concerns assigned a North American In-
dustry Classification System code for manufacturing on 
obtaining assistance under the program carried out under 
this title, including with respect to the application process 
under that program and partnering with development 
companies under this title. 
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‘‘(b) RESOURCE PARTNER DEFINED.—In this sec-
tion, the term ‘resource partner’ means— 
‘‘(1) a small business development center (de-
fined in section 3 of the Small Business Act); 
‘‘(2) a women’s business center (described 
under section 29 of such Act); 
‘‘(3) a chapter of the Service Corps of Retired 
Executives (established under section 8(b)(1)(B) of 
such Act); and 
‘‘(4) a Veteran Business Outreach Center (de-
scribed under section 32 of such Act).’’. 
SEC. 7. LEASING RULES FOR NEW FACILITIES AND EXIST-
ING BUILDINGS. 
(a) IN GENERAL.—Section 502(a) of the Small Busi-
ness Investment Act of 1958, as designated by section 3, 
is amended by striking paragraphs (4) and (5) and insert-
ing the following new paragraphs: 
‘‘(4) NEW FACILITIES.— 
‘‘(A) IN
GENERAL.—With respect to a 
project to construct a new facility, an assisted 
small business concern may permanently lease 
not more than 20 percent of the project if such 
concern— 
‘‘(i) permanently occupies and uses 
not less than 60 percent of the project; 
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‘‘(ii) plans to occupy and use an addi-
tional portion of the project that is not 
permanently leased not later than 3 years 
after receipt of assistance under this sec-
tion; and 
‘‘(iii) plans to permanently occupy and 
use 80 percent of the project not later than 
10 years after receipt of such assistance. 
‘‘(B) SMALL MANUFACTURERS.—With re-
spect to an assisted small business concern that 
is a small manufacturer (as defined in section 
501(e)(6)), subparagraph (A)(i) shall apply 
with ‘50 percent’ substituted for ‘60 percent’. 
‘‘(5) EXISTING BUILDINGS.—With respect to a 
project to acquire, renovate, or reconstruct an exist-
ing building, the following shall apply: 
‘‘(A) OCCUPANCY
REQUIREMENTS.—The 
assisted small business concern may perma-
nently lease not more than 50 percent of the 
project if the concern permanently occupies and 
uses not less than 50 percent of the project. 
‘‘(B) EXCEPTION.—The assisted small 
business concern may permanently lease more 
than 50 percent of the project if— 
‘‘(i) such concern— 
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‘‘(I) has occupied and used the 
existing building for a consecutive 12- 
month period before submitting an 
application for assistance under this 
section; 
‘‘(II) agrees to permanently use 
less than 50 percent of the existing 
building and permanently lease more 
than 50 percent for a consecutive 12- 
month period after receiving such as-
sistance; and 
‘‘(III) affirms that the existing 
building is appropriate for current 
and reasonably anticipated needs; and 
‘‘(ii) the development company assist-
ing such project— 
‘‘(I) provides written notice to 
the Administrator on the date on 
which the development company closes 
the loan for such project; and 
‘‘(II) once each year during the 
first 5 years of the loan, and once 
every 2 years for the remainder of the 
loan— 
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‘‘(aa) conducts an examina-
tion of the assisted small busi-
ness concern to ensure the con-
cern is not a real estate develop-
ment business; and 
‘‘(bb) files with the Adminis-
trator an anti-investor certifi-
cation signed by the development 
company and the assisted small 
business concern. 
‘‘(C) LEASE TERM.—Any residential lease 
made under this paragraph shall be for a term 
of not more than 1 year, and any commercial 
lease made under this paragraph shall be for a 
term of not more than 5 years.’’. 
(b) REPORT.—Not later than 5 years after the date 
of the enactment of this Act, the Administrator of the 
Small Business Administration shall submit to Congress 
a report analyzing the impact of the amendments made 
by this section on access to capital for small business con-
cerns (as defined under section 3 of the Small Business 
Act (15 U.S.C. 632)), and recommending whether similar 
notice, examination, and certifications requirements 
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should be made to the program established under section 
7(a) of the Small Business Act (15 U.S.C. 636(a)). 
Æ 
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