H. R. 440
One Hundred Sixth Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Wednesday,
the sixth day of January, one thousand nine hundred and ninety-nine
An Act
To make technical corrections to the Microloan Program.
Be it enacted by the Senate and House of Representatives 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) in paragraph (7), by striking subparagraph (B) and
inserting the following:
‘‘(B) ALLOCATION.—
‘‘(i) MINIMUM ALLOCATION.—Subject to the avail-
ability of appropriations, of the total amount of new
loan funds made available for award under this sub-
section in each fiscal year, the Administration shall
make available for award in each State (including the
District of Columbia, the Commonwealth of Puerto
Rico, the United States Virgin Islands, Guam, and
American Samoa) an amount equal to the sum of—
‘‘(I) the lesser of—
‘‘(aa) $800,000; or
‘‘(bb) 1⁄55 of the total amount of new loan
funds made available for award under this
subsection for that fiscal year; and
‘‘(II) any additional amount, as determined by
the Administration.
‘‘(ii) REDISTRIBUTION.—If, at the beginning of the
third quarter of a fiscal year, the Administration deter-
mines that any portion of the amount made available
to carry out this subsection is unlikely to be made
available under clause (i) during that fiscal year, the
Administration may make that portion available for
award in any one or more States (including the District
of Columbia, the Commonwealth of Puerto Rico, the
United States Virgin Islands, Guam, and American
Samoa) without regard to clause (i).’’; and
(2) in paragraph (8)—
(A) by inserting ‘‘and providing funding to inter-
mediaries’’ after ‘‘program applicants’’; and
(B) by inserting ‘‘and provide funding to’’ after ‘‘shall
select’’.
H. R. 440—2
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 regu-
lation, 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 subclause (III), the
Administrator shall require the loan loss reserve fund
of an intermediary to be maintained at a level equal
to 15 percent of the outstanding balance of the notes
receivable owed to the intermediary.
‘‘(II) REVIEW OF LOAN LOSS RESERVE.—After the
initial 5 years of an intermediary’s participation in
the program authorized by this subsection, the
Administrator shall, at the request of the intermediary,
conduct a review of the annual loss rate of the inter-
mediary. Any intermediary 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 RESERVE.—Subject
to the requirements of clause IV, the Administrator
may reduce the annual loan loss reserve requirement
of an intermediary to reflect the actual average loan
loss rate for the intermediary during 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 Administrator 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 inter-
mediary 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
H. R. 440—3
all obligations owed to the Administration under
this subsection.’’.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.