In the Senate of the United States,
June 14, 2000.
Resolved, That the bill from the House of Representa-
tives (H.R. 2614) entitled ‘‘An Act to amend the Small Busi-
ness Investment Act to make improvements to the certified
development company program, and for other purposes.’’, do
pass with the following
AMENDMENT:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Certified Development
Company Program Improvements Act of 2000’’.
SEC. 2. WOMEN-OWNED BUSINESSES.
Section 501(d)(3)(C) of the Small Business Investment
Act of 1958 (15 U.S.C. 695(d)(3)(C)) is amended by insert-
ing before the comma ‘‘or women-owned business develop-
ment’’.
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SEC. 3. MAXIMUM DEBENTURE SIZE.
Section 502(2) of the Small Business Investment Act
of 1958 (15 U.S.C. 696(2)) is amended to read as follows:
‘‘(2) LOAN LIMITS.—Loans made by the Admin-
istration under this section shall be limited to
$1,000,000 for each such identifiable small business
concern, other than loans meeting the criteria speci-
fied in section 501(d)(3), which shall be limited to
$1,300,000 for each such identifiable small business
concern.’’.
SEC. 4. FEES.
Section 503(f) of the Small Business Investment Act
of 1958 (15 U.S.C. 697(f)) is amended to read as follows:
‘‘(f) EFFECTIVE DATE.—The fees authorized by sub-
sections (b) and (d) shall apply to any financing approved
by the Administration during the period beginning on Octo-
ber 1, 1996 and ending on September 30, 2003.’’.
SEC. 5. PREMIER CERTIFIED LENDERS PROGRAM.
Section 217(b) of the Small Business Administration
Reauthorization and Amendments Act of 1994 (15 U.S.C.
697e note) is repealed.
SEC. 6. SALE OF CERTAIN DEFAULTED LOANS.
Section 508 of the Small Business Investment Act of
1958 (15 U.S.C. 697e) is amended—
(1) in subsection (a), by striking ‘‘On a pilot
program basis, the’’ and inserting ‘‘The’’;
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(2) by redesignating subsections (d) though (i) as
subsections (e) though (j), respectively;
(3) in subsection (f) (as redesignated by para-
graph (2)), by striking ‘‘subsection (f)’’ and inserting
‘‘subsection (g)’’;
(4) in subsection (h) (as redesignated by para-
graph (2)), by striking ‘‘subsection (f)’’ and inserting
‘‘subsection (g)’’; and
(5) by inserting after subsection (c) the fol-
lowing:
‘‘(d) SALE OF CERTAIN DEFAULTED LOANS.—
‘‘(1) NOTICE.—
‘‘(A) IN GENERAL.—If, upon default in re-
payment, the Administration acquires a loan
guaranteed under this section and identifies such
loan for inclusion in a bulk asset sale of de-
faulted or repurchased loans or other financings,
the Administration shall give prior notice thereof
to any certified development company that has a
contingent liability under this section.
‘‘(B) TIMING.—The notice required by sub-
paragraph (A) shall be given to the certified de-
velopment company as soon as possible after the
financing is identified, but not later than 90
days before the date on which the Administration
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first makes any record on such financing avail-
able for examination by prospective purchasers
prior to its offering in a package of loans for
bulk sale.
‘‘(2) LIMITATIONS.—The Administration may
not offer any loan described in paragraph (1)(A) as
part of a bulk sale, unless the Administration—
‘‘(A) provides prospective purchasers with
the opportunity to examine the records of the Ad-
ministration with respect to such loan; and
‘‘(B) provides the notice required by para-
graph (1).’’.
SEC. 7. LOAN LIQUIDATION.
(a) LIQUIDATION AND FORECLOSURE.—Title V of the
Small Business Investment Act of 1958 (15 U.S.C. 695 et
seq.) is amended by adding at the end the following:
‘‘SEC. 510. FORECLOSURE AND LIQUIDATION OF LOANS.
‘‘(a) DELEGATION
OF AUTHORITY.—In accordance
with this section, the Administration shall delegate to any
qualified State or local development company (as defined
in section 503(e)) that meets the eligibility requirements of
subsection (b)(1) of this section the authority to foreclose
and liquidate, or to otherwise treat in accordance with this
section, defaulted loans in its portfolio that are funded with
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the proceeds of debentures guaranteed by the Administra-
tion under section 503.
‘‘(b) ELIGIBILITY FOR DELEGATION.—
‘‘(1) REQUIREMENTS.—A qualified State or local
development company shall be eligible for a delegation
of authority under subsection (a) if—
‘‘(A) the company—
‘‘(i) has participated in the loan liq-
uidation pilot program established by the
Small Business Programs Improvement Act
of 1996 (15 U.S.C. 695 note), as in effect on
the day before the date of issuance of final
regulations by the Administration imple-
menting this section;
‘‘(ii) is participating in the Premier
Certified Lenders Program under section
508; or
‘‘(iii) during the 3 fiscal years imme-
diately prior to seeking such a delegation,
has made an average of not fewer than 10
loans per year that are funded with the pro-
ceeds of debentures guaranteed under section
503; and
‘‘(B) the company—
‘‘(i) has 1 or more employees—
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‘‘(I) with not less than 2 years of
substantive, decision-making experience
in administering the liquidation and
workout of problem loans secured in a
manner substantially similar to loans
funded with the proceeds of debentures
guaranteed under section 503; and
‘‘(II) who have completed a train-
ing program on loan liquidation devel-
oped by the Administration in con-
junction with qualified State and local
development companies that meet the
requirements of this paragraph; or
‘‘(ii) submits to the Administration
documentation demonstrating that the com-
pany has contracted with a qualified third-
party to perform any liquidation activities
and secures the approval of the contract by
the Administration with respect to the
qualifications of the contractor and the
terms and conditions of liquidation activi-
ties.
‘‘(2) CONFIRMATION.—On request, the Adminis-
tration shall examine the qualifications of any com-
pany described in subsection (a) to determine if such
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company is eligible for the delegation of authority
under this section. If the Administration determines
that a company is not eligible, the Administration
shall provide the company with the reasons for such
ineligibility.
‘‘(c) SCOPE OF DELEGATED AUTHORITY.—
‘‘(1) IN GENERAL.—Each qualified State or local
development company to which the Administration
delegates authority under subsection (a) may, with re-
spect to any loan described in subsection (a)—
‘‘(A) perform all liquidation and foreclosure
functions, including the purchase in accordance
with this subsection of any other indebtedness se-
cured by the property securing the loan, in a
reasonable and sound manner, according to com-
mercially accepted practices, pursuant to a liq-
uidation plan approved in advance by the Ad-
ministration under paragraph (2)(A);
‘‘(B) litigate any matter relating to the per-
formance of the functions described in subpara-
graph (A), except that the Administration
may—
‘‘(i) defend or bring any claim if—
‘‘(I) the outcome of the litigation
may adversely affect management by
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the Administration of the loan pro-
gram established under section 502; or
‘‘(II) the Administration is enti-
tled to legal remedies not available to
a qualified State or local development
company, and such remedies will ben-
efit either the Administration or the
qualified State or local development
company; or
‘‘(ii) oversee the conduct of any such
litigation; and
‘‘(C) take other appropriate actions to miti-
gate loan losses in lieu of total liquidation or
foreclosure, including the restructuring of a loan
in accordance with prudent loan servicing prac-
tices and pursuant to a workout plan approved
in advance by the Administration under para-
graph (2)(C).
‘‘(2) ADMINISTRATION APPROVAL.—
‘‘(A) LIQUIDATION PLAN.—
‘‘(i) IN GENERAL.—Before carrying out
functions described in paragraph (1)(A), a
qualified State or local development com-
pany shall submit to the Administration a
proposed liquidation plan.
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‘‘(ii) 
ADMINISTRATION
ACTION
ON
PLAN.—
‘‘(I) TIMING.—Not later than 15
business days after a liquidation plan
is received by the Administration
under clause (i), the Administration
shall approve or reject the plan.
‘‘(II) NOTICE OF NO DECISION.—
With respect to any liquidation plan
that cannot be approved or denied
within the 15-day period required by
subclause (I), the Administration shall,
during such period, provide notice in
accordance with subparagraph (E) to
the company that submitted the plan.
‘‘(iii) ROUTINE ACTIONS.—In carrying
out 
functions 
described 
in 
paragraph
(1)(A), a qualified State or local develop-
ment company may undertake any routine
action not addressed in a liquidation plan
without obtaining additional approval from
the Administration.
‘‘(B) PURCHASE OF INDEBTEDNESS.—
‘‘(i) IN
GENERAL.—In carrying out
functions described in paragraph (1)(A), a
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qualified State or local development com-
pany shall submit to the Administration a
request for written approval before commit-
ting the Administration to the purchase of
any other indebtedness secured by the prop-
erty securing a defaulted loan.
‘‘(ii) ADMINISTRATION ACTION ON RE-
QUEST.—
‘‘(I) TIMING.—Not later than 15
business days after receiving a request
under clause (i), the Administration
shall approve or deny the request.
‘‘(II) NOTICE OF NO DECISION.—
With respect to any request that cannot
be approved or denied within the 15-
day period required by subclause (I),
the Administration shall, during such
period, provide notice in accordance
with subparagraph (E) to the company
that submitted the request.
‘‘(C) WORKOUT PLAN.—
‘‘(i) IN
GENERAL.—In carrying out
functions described in paragraph (1)(C), a
qualified State or local development com-
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pany shall submit to the Administration a
proposed workout plan.
‘‘(ii) 
ADMINISTRATION
ACTION
ON
PLAN.—
‘‘(I) TIMING.—Not later than 15
business days after a workout plan is
received by the Administration under
clause (i), the Administration shall ap-
prove or reject the plan.
‘‘(II) NOTICE OF NO DECISION.—
With respect to any workout plan that
cannot be approved or denied within
the 15-day period required by sub-
clause (I), the Administration shall,
during such period, provide notice in
accordance with subparagraph (E) to
the company that submitted the plan.
‘‘(D) COMPROMISE OF INDEBTEDNESS.—In
carrying out functions described in paragraph
(1)(A), a qualified State or local development
company may—
‘‘(i) consider an offer made by an obli-
gor to compromise the debt for less than the
full amount owing; and
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flict of interest between the company (or any em-
ployee of the company) and any third party lender
(or any associate of a third party lender) or any
other person participating in a liquidation, fore-
closure, or loss mitigation action.
‘‘(d) SUSPENSION OR REVOCATION OF AUTHORITY.—
The Administration may revoke or suspend a delegation of
authority under this section to any qualified State or local
development company, if the Administration determines
that the company—
‘‘(1) does not meet the requirements of subsection
(b)(1);
‘‘(2) has violated any applicable rule or regula-
tion of the Administration or any other applicable
provision of law; or
‘‘(3) has failed to comply with any reporting re-
quirement that may be established by the Administra-
tion relating to carrying out functions described in
subsection (c)(1).
‘‘(e) REPORT.—
‘‘(1) IN GENERAL.—Based on information pro-
vided by qualified State and local development com-
panies and the Administration, the Administration
shall annually submit to the Committees on Small
Business of the House of Representatives and the Sen-
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ate a report on the results of delegation of authority
under this section.
‘‘(2) CONTENTS.—Each report submitted under
paragraph (1) shall include—
‘‘(A) with respect to each loan foreclosed or
liquidated by a qualified State or local develop-
ment company under this section, or for which
losses were otherwise mitigated by the company
pursuant to a workout plan under this section—
‘‘(i) the total cost of the project fi-
nanced with the loan;
‘‘(ii) the total original dollar amount
guaranteed by the Administration;
‘‘(iii) the total dollar amount of the
loan at the time of liquidation, foreclosure,
or mitigation of loss;
‘‘(iv) the total dollar losses resulting
from the liquidation, foreclosure, or mitiga-
tion of loss; and
‘‘(v) the total recoveries resulting from
the liquidation, foreclosure, or mitigation of
loss, both as a percentage of the amount
guaranteed and the total cost of the project
financed;
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‘‘(B) with respect to each qualified State or
local development company to which authority is
delegated under this section, the totals of each of
the amounts described in clauses (i) through (v)
of subparagraph (A);
‘‘(C) with respect to all loans subject to fore-
closure, liquidation, or mitigation under this sec-
tion, the totals of each of the amounts described
in clauses (i) through (v) of subparagraph (A);
‘‘(D) a comparison between—
‘‘(i) the information provided under
subparagraph (C) with respect to the 12-
month period preceding the date on which
the report is submitted; and
‘‘(ii) the same information with respect
to loans foreclosed and liquidated, or other-
wise treated, by the Administration during
the same period; and
‘‘(E) the number of times that the Adminis-
tration has failed to approve or reject a liquida-
tion 
plan 
in 
accordance 
with 
subsection
(c)(2)(A) or a workout plan in accordance with
subsection (c)(2)(C), or to approve or deny a re-
quest for purchase of indebtedness under sub-
section (c)(2)(B), including specific information
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regarding the reasons for the failure of the Ad-
ministration and any delay that resulted.’’.
(b) REGULATIONS.—
(1) IN GENERAL.—Not later than 150 days after
the date of enactment of this Act, the Administrator
shall issue such regulations as may be necessary to
carry out section 510 of the Small Business Invest-
ment Act of 1958, as added by subsection (a) of this
section.
(2) TERMINATION OF PILOT PROGRAM.—Effective
on the date on which final regulations are issued
under paragraph (1), section 204 of the Small Busi-
ness Programs Improvement Act of 1996 (15 U.S.C.
695 note) is repealed.
SEC. 8. FUNDING LEVELS FOR CERTAIN FINANCINGS
UNDER THE SMALL BUSINESS INVESTMENT
ACT OF 1958.
Section 20 of the Small Business Act (15 U.S.C. 631
note) is amended by adding at the end the following:
‘‘(g) PROGRAM LEVELS FOR CERTAIN SMALL BUSI-
NESS INVESTMENT ACT OF 1958 FINANCINGS.—The fol-
lowing program levels are authorized for financings under
section 504 of the Small Business Investment Act of 1958:
‘‘(1) $4,000,000,000 for fiscal year 2001.
‘‘(2) $5,000,000,000 for fiscal year 2002.
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‘‘(3) $6,000,000,000 for fiscal year 2003.’’.
SEC. 9. TIMELY ACTION ON APPLICATIONS.
(a) AUTOMATIC APPROVAL
OF PENDING APPLICA-
TIONS.—An application by a State or local development
company to expand its operations under title V of the Small
Business Investment Act of 1958 into another territory,
county, or State that is pending on the date of enactment
of this Act and that was submitted to the Administration
12 months or more before that date of enactment shall be
deemed to be approved beginning 21 days after that date
of enactment, unless the Administration has taken final ac-
tion to approve or deny the application before the end of
that 21-day period.
(b) DEFINITIONS.—In this section—
(1) the term ‘‘Administration’’ means the head-
quarters of the Small Business Administration; and
(2) the term ‘‘development company’’ has the
same meaning as in section 103 of the Small Business
Investment Act of 1958 (15 U.S.C. 662).
SEC. 10. USE OF CERTAIN UNOBLIGATED AND UNEX-
PENDED FUNDS.
(a) TRANSFER
OF
FUNDS.—Notwithstanding any
other provision of law, unobligated and unexpended bal-
ances of the funds described in subsection (b) are transferred
to and made available to the Small Business Administra-
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tion to fund the costs of guaranteed loans under section 7(a)
of the Small Business Act.
(b) SOURCES.—Funds described in this subsection
are—
(1) funds transferred to the Business Loan Pro-
gram Account of the Small Business Administration
from the Department of Defense under the Depart-
ment of Defense Appropriations Act, 1995 (Public
Law 103-335) and section 507(g) of the Small Busi-
ness Reauthorization Act of 1997 (15 U.S.C. 636
note) for the DELTA Program under that section
507; and
(2) funds previously made available under the
Omnibus Consolidated Rescissions and Appropria-
tions Act of 1996 (110 Stat. 1321 et seq.) and the
Omnibus Consolidated Appropriations Act, 1997 (110
Stat. 3009 et seq.) for the microloan guarantee pro-
gram under section 7(m) of the Small Business Act.
SEC. 11. HUBZONE REDESIGNATED AREAS.
Section 3(p) of the Small Business Act (15 U.S.C.
632(p)) is amended—
(1) in paragraph (1)—
(A) in subparagraph (B), by striking ‘‘or’’
at the end;
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(B) in subparagraph (C), by striking the
period at the end and inserting ‘‘; or’’; and
(C) by adding at the end the following:
‘‘(D) redesignated areas.’’; and
(2) in paragraph (4), by adding at the end the
following:
‘‘(C) REDESIGNATED AREA.—The term ‘re-
designated area’ means any census tract that
ceases to be qualified under subparagraph (A)
and any nonmetropolitan county that ceases to
be qualified under subparagraph (B), except that
a census tract or a nonmetropolitan county may
be a ‘redesignated area’ only for the 3-year pe-
riod following the date on which the census tract
or nonmetropolitan county ceased to be so quali-
fied.’’.
Attest:
Secretary.
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