Q: In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
That this Act may be
cited as the ''Certified Development Company Enhancement and
Improvement Act of 1997''.
Sec. 2. Section 20 of the Small Business Act (15 U.S.C. 631 note)
is amended by inserting the following new subsection:
''(r) The following program levels are authorized in financings as
provided in section 7(a)(13) and section 504 of the Small Business
Investment Act of 1958:
''(1) $3,000,000,000 for fiscal year 1998;
''(2) $3,500,000,000 for fiscal year 1999; and
''(3) $4,500,000,000 for fiscal year 2000.''.
Sec. 3. Section 503 of the Small Business Investment Act of 1958
(15 U.S.C. 697) is amended--
(a) by striking subsection (b)(7)(A) and inserting the
following:
''(A) assesses and collects a fee, which shall be
payable by the borrower, in an amount equal to 0.9375
percent per year of the outstanding balance of the
loan; and'';
(b) by striking from subsection (d)(2) ''equal to 50 basis
points'' and inserting ''equal to not more than 50 basis
points'';
(c) by adding the following at the end of subsection
(d)(2): ''The amount of the fee authorized herein shall be
established annually by the Administration in the minimal
amount necessary to reduce the cost (as that term is defined in
section 502 of the Federal Credit Reform Act of 1990) to the
Administration of purchasing and guaranteeing debentures under
this Act to zero.''; and
(d) by striking from subsection (f) ''1997'' and inserting
''2000''.
Sec. 4. Section 508(a) of the Small Business Investment Act of 1958
(15 U.S.C. 697e(a)) is amended by striking ''not more than 15''.
Sec. 5. Section 508(b)(2) of the Small Business Investment Act of
1958 (15 U.S.C. 697e(b)(2)) is amended by striking paragraphs (A) and
(B) and inserting:
''(A) is an active certified development company in
good standing and has been an active participant in the
accredited lenders program during the entire 12-month
period preceding the date on which the company submits
an application under paragraph (1), except that the
Administration may waive this requirement if the
company is qualified to participate in the accredited
lenders program;
''(B) has a history (i) of submitting to the
Administration adequately analyzed debenture guarantee
application packages and (ii) of properly closing
section 504 loans and servicing its loan portfolio;
and''.
Sec. 6. Section 508(c) of the Small Business Investment Act of 1958
(15 U.S.C. 697e(c)) is amended to read as follows:
''(c) Loss Reserve.--
''(1) Establishment.--A company designated as a premier
certified lender shall establish a loss reserve for financings
approved pursuant to this section.
''(2) Amount.--The amount of the loss reserve shall be
equal to 10 percent of the amount of the company's exposure as
determined under subsection (b)(2)(C).
''(3) Assets.--The loss reserve shall be comprised of any
combination of the following types of assets:
''(A) segregated funds on deposit in an account or
accounts with a federally insured depository
institution or institutions selected by the company,
subject to a collateral assignment in favor of, and in
a format acceptable to, the Administration; or
''(B) irrevocable letter or letters of credit, with
a collateral assignment in favor of, and a commercially
reasonable format acceptable to, the Administration.
''(4) Contributions.--The company shall make contributions
to the loss reserve, either cash or letters of credit as
provided above, in the following amounts and at the following
intervals;
''(A) 50 percent when a debenture is closed;
''(B) 25 percent additional not later than 1 year
after a debenture is closed; and
''(C) 25 percent additional not later than 2 years
after a debenture is closed.
''(5) Replenishment.--If a loss has been sustained by the
Administration, any portion of the loss reserve, and other
funds provided by the premier company as necessary, may be used
to reimburse the Administration for the company's 10 percent
share of the loss as provided in subsection (b)(2)(C). If the
company utilizes the reserve, within 30 days it shall replace
an equivalent amount of funds.
''(6) Disbursements.--The Administration shall allow the
certified development company to withdraw from the loss reserve
amounts attributable to any debenture which has been repaid.''
Sec. 7. Section 508 of the Small Business Investment Act of 1958
(15 U.S.C. 697e) is amended by inserting the following after subsection
(d) and by redesignating subsections (e) to (i) as (f) to (j):
''(e) Program Goals.--Certified development companies participating
in this program shall establish a goal of processing a minimum of at
least 50 percent of their loan applications for section 504 assistance
pursuant to the premier certified lender program authorized in this
section.''.
Sec. 8. Section 508(g) of the Small Business Investment Act of 1958
(15 U.S.C. 697e(g)), as redesignated herein, is amended by striking
''State or local'' and inserting ''certified''.
Sec. 9. Section 508(h) of the Small Business Investment Act of 1958
(15U.S.C. 697e(h)), as redesignated herein, is amended--
(1) by striking ''Effect of Suspension or Designation'' and
inserting ''Effect of Suspension or Revocation''; and
(2) by striking ''under subsection (f)'' and inserting
''under subsection (g)''.
Sec. 10. Section 508(i) of the Small Business Investment Act of
1958 (15 U.S.C. 697e(i)), as redesignated herein, is amended to read as
follows:
''(i) Regulations.--Not later than 90 days after the date of
enactment of this section, the Administration shall promulgate
regulations to carry out this section. Not later than 120 days after
the date of enactment, the Administration shall issue program
guidelines and implement the changes made herein.''.
Sec. 11. Section 508(j) of the Small Business Investment Act of
1958 (15 U.S.C. 697e(j)), as redesignated herein, is amended by
striking ''other lenders'' and inserting ''other lenders, specifically
comparing default rates and recovery rates on liquidations''.
Sec. 12. Section 217(b) of Public Law 103-403 (108 Stat. 4185) is
repealed.
Sec. 13. Section 508(d) of the Small Business Investment Act of
1958 (15 U.S.C. 697e(d)) is amended by striking ''to approve loans''
and inserting ''to approve, authorize, close, service, and liquidate
loans''.
Sec. 14. Section 502(1) of the Small Business Investment Act of
1958 (15 U.S.C. 696(1)) is amended to read as follows:
''(1) The proceeds of any such loan shall be used solely by
such borrower or borrowers to assist an identifiable small-
business or businesses and for a sound business purpose
approved by the Administration.''.
Sec. 15. Section 502 of the Small Business Investment Act of 1958
(15 U.S.C. 696) is amended by adding the following new subsection:
''(5) Not to exceed 25 per centum of the project may be
leased by the assisted small business: Provided, That the
tenant is a small business concern: And provided further, That
the assisted small business shall be required to occupy and use
not less than 55 per centum of the space in the project after
the execution of any leases authorized in this section.''.
Sec. 16. Section 502(3) of the Small Business Investment Act of
1958 (15 U.S.C. 696(3)) is amended by inserting the following new
paragraphs:
''(D) Seller financing.--Seller provided financing
may be used to meet the requirements of--
''(i) paragraph (B), if the seller
subordinates his interest in the property to
the debenture guaranteed by the Administration;
and
''(ii) not to exceed 50 percent of the
amounts required by paragraph (C).
''(E) Collateral requirements.--Collateral provided
by the small business concern shall be valued in an
amount estimated as the reasonable value of the
property by a willing buyer and a willing seller and
shall include property not a part of the project being
financed only if the Administration determines to
impose such a requirement on a case-by-case basis.''.
A:
Certified Development Company Enhancement and Improvement Act of 1997 - Amends the Small Business Act to authorize appropriations for FY 1998 through 2000 for the certified development company (CDC) program of the Small Business Investment Act of 1958 (the Act).
(Sec. 3) Amends the Act to limit the fee authorized to be assessed and collected by the Small Business Administration (SBA) for each loan made from the proceeds of SBA debentures to a specified percentage of the outstanding balance of the loan. Requires the amount of the fee authorized for administrative expenses under the CDC program to be established annually by the SBA in the minimal amount necessary to reduce to zero the SBA cost of purchasing and issuing debentures under the Act. Extends the applicability of the prescribed fees to financings approved before October 1, 2000.
(Sec. 4) Repeals a provision limiting to 15 the number of CDC participants in the Premier Certified Lenders Program (Program). Revises requirements for Program participation and the required loss reserve for Program financings. Requires loss reserve replenishment within 30 days after its use. Requires companies participating in the Program to establish a goal of processing a minimum of at least 50 percent of their total loan applications for CDC program assistance pursuant to the Program. Revises the period for the promulgation of Program regulations and guidelines.
(Sec. 12) Repeals a provision which provided for termination of the Program on October 1, 1997.
(Sec. 13) Authorizes approved certified lenders to authorize, service, close, and liquidate loans under the Program.
(Sec. 16) Allows up to 25 percent of a Program project for plant acquisition, construction, conversion, or expansion to be leased by the small business assisted under the project, provided such business meets specified conditions and requirements. Permits any development company assisted under a project to finance any required project down payment. Provides for property valuation of collateral being provided by a small business under a project.