[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2150 Introduced in House (IH)]







104th CONGRESS
  1st Session
                                H. R. 2150

 To amend the Small Business Act and the Small Business Investment Act 
 of 1958 to reduce the cost to the Federal Government of guaranteeing 
         certain loans and debentures, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             August 1, 1995

Mrs. Meyers of Kansas introduced the following bill; which was referred 
                   to the Committee on Small Business

_______________________________________________________________________

                                 A BILL


 
 To amend the Small Business Act and the Small Business Investment Act 
 of 1958 to reduce the cost to the Federal Government of guaranteeing 
         certain loans and debentures, 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. SHORT TITLE.

    This Act may be cited as the ``Small Business Credit Efficiency Act 
of 1995''.

SEC. 2. FEE FOR LOAN GUARANTEES SOLD ON SECONDARY MARKET.

    Section 5(g)(4)(A) of the Small Business Act (15 U.S.C. 
634(g)(4)(A)) is amended by striking ``\4/10\ of one percent'' and 
inserting ``one-half of 1 percent''.

SEC. 3. GENERAL BUSINESS LOANS.

    (a) Reduced Level of Participation in Guaranteed Loans.--Section 
7(a)(2) of the Small Business Act (15 U.S.C. 636(a)(2)) is amended to 
read as follows:
            ``(2) Level of participation in guaranteed loans.--
                    ``(A) In general.--In agreements to participate in 
                loans on a deferred basis under this subsection, such 
                participation by the Administration shall be--
                            ``(i) equal to 80 percent of the balance of 
                        the financing outstanding at the time of 
                        disbursement if such financing is less than or 
                        equal to $100,000; and
                            ``(ii) equal to 75 percent of the balance 
                        of the financing outstanding at the time of 
                        disbursement if such financing is greater than 
                        $100,000.
                    ``(B) Reduced participation.--The guarantee 
                percentage specified by subparagraph (A) for any loan 
                may be reduced upon the request of the participating 
                lender. The Administration shall not use the percent of 
                guarantee requested as a criterion for establishing 
                priorities in approving guarantee requests.
                    ``(C) Interest rate under preferred lenders 
                program.--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 this subsection.
                    ``(D) Preferred lenders program defined.--In this 
                paragraph, the term `Preferred Lenders Program' means a 
                program under which a written agreement between the 
                lender and the Administration delegates to the lender--
                            ``(i) complete authority to make and close 
                        loans with a guarantee from the Administration 
                        without obtaining the prior specific approval 
                        of the Administration; and
                            ``(ii) authority to service and liquidate 
                        such loans.''.
    (b) Guarantee Fees.--Section 7(a)(18) of the Small Business Act (15 
U.S.C. 636(a)(18)) is amended to read as follows:
            ``(18) Guarantee fees.--
                    ``(A) General fee.--The Administration shall 
                collect a guarantee fee equal to--
                            ``(i) 2 percent of the gross amount of any 
                        loan guaranteed under this subsection of an 
                        amount less than $250,000;
                            ``(ii) 2.5 percent of the gross amount of 
                        any loan guaranteed under this subsection of an 
                        amount equal to or greater than $250,000 and 
                        less than $500,000; or
                            ``(iii) 3 percent of the gross amount of 
                        any loan guaranteed under this subsection of an 
                        amount equal to or greater than $500,000.
                Such fee shall be payable by the participating lending 
                institution and may be charged to the borrower.
                    ``(B) Additional fee to offset cost.--
                            ``(i) In general.--In addition to the 
                        guarantee fee to be collected under 
                        subparagraph (A), the Administration shall 
                        collect a fee for loans guaranteed under this 
                        subsection (other than loans for which a 
                        guarantee fee may be collected under section 
                        5(g)(4)(A)) in an amount equal to not more than 
                        four-tenths of 1 percent per year of the 
                        outstanding principal portion of such loan 
                        guaranteed by the Administration.
                            ``(ii) Use.--Fees collected under clause 
                        (i) shall be used solely to offset the cost (as 
                        defined by section 502(5) of the Congressional 
                        Budget Act of 1974) of guaranteeing loans under 
                        this subsection.
                            ``(iii) Payment.--Fees collected under 
                        clause (i) shall be payable by the 
                        participating lending institution and shall not 
                        be charged to the borrower.''.
    (c) Repeal of Provisions Allowing Retention of Guarantee Fees by 
Lenders.--Section 7(a)(19) of the Small Business Act (15 U.S.C. 
636(a)(19)) is amended--
            (1) in subparagraph (B)--
                    (A) by striking ``shall (i) develop'' and inserting 
                ``shall develop''; and
                    (B) by striking ``, and (ii)'' and all that follows 
                before the period at the end; and
            (2) by striking subparagraph (C).

SEC. 4. MODIFICATIONS TO DEVELOPMENT COMPANY DEBENTURE PROGRAM.

    (a) Maximum Loan Amount.--Section 502(2) of the Small Business 
Investment Act of 1958 (15 U.S.C. 696(2)) is amended to read as 
follows:
            ``(2) Loans made by the Administration under this section 
        shall be limited to $1,250,000 for each such identifiable small 
        business concern.''.
    (b) Fee to Offset Cost.--Section 503(b)(3) of the Small Business 
Investment Act of 1958 (15 U.S.C. 697(b)(3)) is amended by inserting 
before the semicolon the following: ``and includes a one-eighth of 1 
percent fee which shall be paid to the Administration and which shall 
be used solely to offset the cost (as defined by section 502(5) of the 
Congressional Budget Act of 1974) of guaranteeing the debenture.''.
                                 <all>