[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2766 Engrossed in House (EH)]

103d CONGRESS

  1st Session

                               H. R. 2766

_______________________________________________________________________

                                 AN ACT

        To amend the 7(a) Loan Program, and for other purposes.






103d CONGRESS
  1st Session
                                H. R. 2766

_______________________________________________________________________

                                 AN ACT


 
        To amend the 7(a) Loan Program, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. AUTHORITY TO IMPOSE SECONDARY MARKET FEES.

    (a) Section 5(g) of the Small Business Act (15 U.S.C. 634) is 
amended by striking paragraph (4) and by inserting in lieu thereof the 
following:
    ``(4) The Administration may collect the following fees for loan 
guarantees sold into the secondary market pursuant to the provisions of 
subsection (f): an amount equal to (A) not more than .4 percent per 
year on the outstanding balance of such loan guaranteed by the 
Administration, and (B) not more than 50 percent of that portion of the 
sale price which is in excess of 110 percent of the outstanding 
principal amount of such loan guaranteed by the Administration. Any 
such fees imposed by the Administration shall be collected by the agent 
which carries out on behalf of the Administration the central 
registration functions required by subsection (h) of this section and 
shall be paid to the Administration and used solely to reduce the 
subsidy on loans guaranteed under section 7(a) of this Act: Provided, 
That such fees shall not be charged to the borrower whose loan is 
guaranteed: and, Provided further, That nothing herein shall preclude 
any agent of the Administration from collecting a fee approved by the 
Administration for the functions described in subsection (h)(2).''.
    (b) Any new fees imposed by the Administration pursuant to the 
authority conferred by subsection (a) shall be applicable only to loans 
initially sold in the secondary market pursuant to the provisions of 
section 5(f) of the Small Business Act after August 31, 1993.

SEC. 2. AUTHORITY TO REDUCE LOAN GUARANTEE PERCENTAGES.

    (a) Section 7(a)(2) of the Small Business Act (15 U.S.C. 636) is 
amended--
            (1) by striking from the end of clause (B)(i) the word 
        ``and'' and by redesignating clause (B)(ii) as (B)(iv) and by 
        inserting the following after clause (B)(i):
                            ``(ii) not less than 75 percent of the 
                        financing outstanding at the time of 
                        disbursement, if such financing is more than 
                        $155,000 and the period of maturity of such 
                        financing is more than 10 years, except that 
                        the participation by the Administration may be 
                        reduced below 75 percent upon request of the 
                        participating lender;
                            ``(iii) not less than 85 percent of the 
                        financing outstanding at the time of 
                        disbursement, if such financing is more than 
                        $155,000 and the period of maturity of such 
                        financing is 10 years or less, except that the 
                        participation by the Administration may be 
                        reduced below 85 percent upon request of the 
                        participating lender; and'';
            (2) by striking the words ``85 percent under subparagraph 
        (B)'' and by inserting in lieu thereof the following: ``the 
        above specified percentums'';
            (3) by striking from paragraph (B) the words ``not less 
        than 80 percent, except upon'' and by inserting in lieu thereof 
        the following: ``not less than 70 percent, unless a lesser 
        percent is required by clause (B)(ii) or upon the''; and
            (4) by inserting after the third sentence the following: 
        ``The maximum interest rate for a loan guaranteed under the 
        Preferred Lenders Program shall not exceed the maximum interest 
        rate, as determined by the Administration, which is made 
        applicable to other loan guarantees under section 7(a).''.
    (b) The amendments made by subsection (a) shall be effective 
September 1, 1993, but shall not be applicable to loan guarantee 
applications received by the Administration prior to August 21, 1993.

SEC. 3. STUDY AND REPORT.

    The Administration shall study, monitor and evaluate the impact of 
the amendments made by sections 1 and 2 of this Act on the ability of 
small business concerns and small business concerns owned and 
controlled by minorities and women, to obtain financing and the impact 
of such sections on the effectiveness, viability and growth of the 
secondary market authorized by section 5(f) of the Small Business Act. 
Not later than 16 months after the date of enactment, and annually 
thereafter, the Administration shall submit to the Committees on Small 
Business of the Senate and the House of Representatives a report 
containing the Administration's findings and recommendations on such 
impact, specifically including changes in the interest rates on 
financings provided to small business concerns and small business 
concerns owned and controlled by minorities and women, through the use 
of the secondary market. The Administration shall segregate such 
findings and recommendations in the study according to the ethnic and 
gender components in these categories. Solely for the purposes of the 
study authorized herein, the term ``small business concerns owned and 
controlled by minorities'', includes businesses owned and controlled by 
individuals belonging to one of the designated groups listed in section 
8(d)(3)(C) of the Small Business Act.

SEC. 4. REPEALER.

    Sections 1 and 2 of this Act are hereby repealed on September 30, 
1996.

            Passed the House of Representatives August 2, 1993.

            Attest:






                                                                 Clerk.