IV
106TH CONGRESS
2D SESSION
H. RES. 533
Providing for the concurrence by the House with an amendment in the
amendment of the Senate to H.R. 2614.
IN THE HOUSE OF REPRESENTATIVES
JUNE 27, 2000
Mr. TALENT submitted the following resolution; which was considered and
agreed to
RESOLUTION
Providing for the concurrence by the House with an
amendment in the amendment of the Senate to H.R. 2614.
Resolved, That upon the adoption of this resolution
the House shall be considered to have taken from the
Speaker’s table the bill H.R. 2614, with the amendment
of the Senate thereto, and to have concurred in the
amendment of the Senate with an amendment as follows:
In lieu of the matter proposed to be inserted by the
amendment of the Senate, insert the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Certified Development
Company Program Improvements Act of 2000’’.
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SEC. 2. WOMEN-OWNED BUSINESSES.
Section 501(d)(3)(C) of the Small Business Invest-
ment Act of 1958 (15 U.S.C. 695(d)(3)(C)) is amended
by inserting before the comma ‘‘or women-owned business
development’’.
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 Ad-
ministration 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 Oc-
tober 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697e note) is repealed.
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‘‘(B) TIMING.—The notice required by
subparagraph (A) shall be given to the certified
development company as soon as possible after
the financing is identified, but not later than 90
days before the date on which the Administra-
tion first makes any record on such financing
available for examination by prospective pur-
chasers 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
Administration 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 fol-
lowing:
‘‘SEC. 510. FORECLOSURE AND LIQUIDATION OF LOANS.
‘‘(a) DELEGATION OF AUTHORITY.—In accordance
with this section, the Administration shall delegate to any
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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 fore-
close and liquidate, or to otherwise treat in accordance
with this section, defaulted loans in its portfolio that are
funded with the proceeds of debentures guaranteed by the
Administration under section 503.
‘‘(b) ELIGIBILITY FOR DELEGATION.—
‘‘(1) REQUIREMENTS.—A qualified State or
local development company shall be eligible for a del-
egation 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 Admin-
istration implementing 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
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loans per year that are funded with the
proceeds of debentures guaranteed under
section 503; and
‘‘(B) the company—
‘‘(i) has 1 or more employees—
‘‘(I) with not less than 2 years of
substantive, decision-making experi-
ence in administering the liquidation
and workout of problem loans secured
in a manner substantially similar to
loans funded with the proceeds of de-
bentures 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
company has contracted with a qualified
third-party to perform any liquidation ac-
tivities and secures the approval of the
contract by the Administration with re-
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spect to the qualifications of the contractor
and the terms and conditions of liquidation
activities.
‘‘(2) CONFIRMATION.—On request, the Admin-
istration shall examine the qualifications of any com-
pany described in subsection (a) to determine if such
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 Administra-
tion delegates authority under subsection (a) may,
with respect to any loan described in subsection
(a)—
‘‘(A) perform all liquidation and fore-
closure functions, including the purchase in ac-
cordance with this subsection of any other in-
debtedness secured by the property securing the
loan, in a reasonable and sound manner, ac-
cording to commercially accepted practices, pur-
suant to a liquidation plan approved in advance
by the Administration under paragraph (2)(A);
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‘‘(B) litigate any matter relating to the
performance of the functions described in sub-
paragraph (A), except that the Administration
may—
‘‘(i) defend or bring any claim if—
‘‘(I) the outcome of the litigation
may adversely affect management by
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
mitigate loan losses in lieu of total liquidation
or foreclosure, including the restructuring of a
loan in accordance with prudent loan servicing
practices and pursuant to a workout plan ap-
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proved in advance by the Administration under
paragraph (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 develop-
ment company shall submit to the Admin-
istration a proposed liquidation plan.
‘‘(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 no-
tice in accordance with subparagraph
(E) to the company that submitted
the plan.
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‘‘(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
qualified State or local development com-
pany shall submit to the Administration a
request for written approval before com-
mitting the Administration to the purchase
of any other indebtedness secured by the
property 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 can-
not be approved or denied within the
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15-day period required by subclause
(I), the Administration shall, during
such period, provide notice in accord-
ance 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-
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
approve 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
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accordance with subparagraph (E) to
the company that submitted the plan.
‘‘(D) COMPROMISE OF INDEBTEDNESS.—
In carrying out functions described in para-
graph (1)(A), a qualified State or local develop-
ment company may—
‘‘(i) consider an offer made by an obli-
gor to compromise the debt for less than
the full amount owing; and
‘‘(ii) pursuant to such an offer, re-
lease any obligor or other party contin-
gently liable, if the company secures the
written approval of the Administration.
‘‘(E) CONTENTS OF NOTICE OF NO DECI-
SION.—Any notice provided by the Administra-
tion under subparagraph (A)(ii)(II), (B)(ii)(II),
or (C)(ii)(II)—
‘‘(i) shall be in writing;
‘‘(ii) shall state the specific reason for
the inability of the Administration to act
on the subject plan or request;
‘‘(iii) shall include an estimate of the
additional time required by the Adminis-
tration to act on the plan or request; and
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‘‘(iv) if the Administration cannot act
because insufficient information or docu-
mentation was provided by the company
submitting the plan or request, shall speci-
fy the nature of such additional informa-
tion or documentation.
‘‘(3) CONFLICT OF INTEREST.—In carrying out
functions described in paragraph (1), a qualified
State or local development company shall take no ac-
tion that would result in an actual or apparent con-
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 AUTHOR-
ITY.—The Administration may revoke or suspend a dele-
gation 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 sub-
section (b)(1);
‘‘(2) has violated any applicable rule or regula-
tion of the Administration or any other applicable
provision of law; or
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‘‘(3) has failed to comply with any reporting re-
quirement that may be established by the Adminis-
tration 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
Senate a report on the results of delegation of au-
thority 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 devel-
opment 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;