[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 895 Enrolled Bill (ENR)]
S.895
One Hundred Fourth Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Wednesday,
the fourth day of January, one thousand nine hundred and ninety-five
An Act
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 Lending Enhancement
Act of 1995''.
SEC. 2. 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.--Except as provided in subparagraph (B),
in an agreement to participate in a loan on a deferred basis
under this subsection (including a loan made under the
Preferred Lenders Program), such participation by the
Administration shall be equal to--
``(i) 75 percent of the balance of the financing
outstanding at the time of disbursement of the loan, if
such balance exceeds $100,000; or
``(ii) 80 percent of the balance of the financing
outstanding at the time of disbursement of the loan, if
such balance is less than or equal to $100,000.
``(B) Reduced participation upon request.--
``(i) In general.--The guarantee percentage specified
by subparagraph (A) for any loan under this subsection may
be reduced upon the request of the participating lender.
``(ii) Prohibition.--The Administration shall not use
the guarantee percentage requested by a participating
lender under clause (i) as a criterion for establishing
priorities in approving loan guarantee requests under this
subsection.
``(C) Interest rate under preferred lenders program.--
``(i) In general.--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, applicable to other loans guaranteed under
this subsection.
``(ii) Preferred lenders program defined.--For purposes
of this subparagraph, the term `Preferred Lenders Program'
means any program established by the Administrator, as
authorized under the proviso in section 5(b)(7), 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.''.
SEC. 3. GUARANTEE FEES.
(a) Amount of 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) In general.--With respect to each loan guaranteed
under this subsection (other than a loan that is repayable in 1
year or less), the Administration shall collect a guarantee
fee, which shall be payable by the participating lender and may
be charged to the borrower, in an amount equal to the sum of--
``(i) 3 percent of the amount of the deferred
participation share of the loan that is less than or equal
to $250,000;
``(ii) if the deferred participation share of the loan
exceeds $250,000, 3.5 percent of the difference between--
``(I) $500,000 or the total deferred participation
share of the loan, whichever is less; and
``(II) $250,000; and
``(iii) if the deferred participation share of the loan
exceeds $500,000, 3.875 percent of the difference between--
``(I) the total deferred participation share of the
loan; and
``(II) $500,000.
``(B) Exception for certain loans.--Notwithstanding
subparagraph (A), if the total deferred participation share of
a loan guaranteed under this subsection is less than or equal
to $80,000, the guarantee fee collected under subparagraph (A)
shall be in an amount equal to 2 percent of the total deferred
participation share of the loan.''.
(b) Repeal of Provisions Allowing Retention of 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 through
the end of the subparagraph and inserting a period; and
(2) by striking subparagraph (C).
SEC. 4. ESTABLISHMENT OF ANNUAL FEE.
(a) In General.--Section 7(a) of the Small Business Act (15 U.S.C.
636(a)) is amended by adding at the end the following new paragraph:
``(23) Annual fee.--
``(A) In general.--With respect to each loan guaranteed
under this subsection, the Administration shall, in accordance
with such terms and procedures as the Administration shall
establish by regulation, assess and collect an annual fee in an
amount equal to 0.5 percent of the outstanding balance of the
deferred participation share of the loan.
``(B) Payer.--The annual fee assessed under subparagraph
(A) shall be payable by the participating lender and shall not
be charged to the borrower.''.
(b) Conforming Amendment.--Section 5(g)(4)(A) of the Small Business
Act (15 U.S.C. 634(g)(4)(A)) is amended--
(1) by striking the first sentence and inserting the following:
``The Administration may collect a fee for any loan guarantee sold
into the secondary market under subsection (f) in an amount equal
to not more than 50 percent of the portion of the sale price that
exceeds 110 percent of the outstanding principal amount of the
portion of the loan guaranteed by the Administration.''; and
(2) by striking ``fees'' each place such term appears and
inserting ``fee''.
SEC. 5. NOTIFICATION REQUIREMENT.
Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is
amended by adding at the end the following new paragraph:
``(24) Notification requirement.--The Administration shall
notify the Committees on Small Business of the Senate and the House
of Representatives not later than 15 days before making any
significant policy or administrative change affecting the operation
of the loan program under this subsection.''.
SEC. 6. DEVELOPMENT COMPANY DEBENTURES.
Section 503(b) of the Small Business Investment Act of 1958 (15
U.S.C. 697(b)) is amended--
(1) in paragraph (5), by striking ``and'' at the end;
(2) in paragraph (6), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(7) with respect to each loan made from the proceeds of such
debenture, the Administration--
``(A) assesses and collects a fee, which shall be payable
by the borrower, in an amount equal to 0.125 percent per year
of the outstanding balance of the loan; and
``(B) uses the proceeds of such fee to offset the cost (as
such term is defined in section 502 of the Federal Credit
Reform Act of 1990) to the Administration of making guarantees
under subsection (a).''.
SEC. 7. PILOT PREFERRED SURETY BOND GUARANTEE PROGRAM EXTENSION.
Section 207 of the Small Business Administration Reauthorization
and Amendment Act of 1988 (15 U.S.C. 694b note) is amended by striking
``September 30, 1995'' and inserting ``September 30, 1997''.
SEC. 8. APPLICABILITY.
(a) In General.--Except as provided in subsection (b), the
amendments made by this Act do not apply with respect to any loan made
or guaranteed under the Small Business Act or the Small Business
Investment Act of 1958 before the date of enactment of this Act.
(b) Exceptions.--The amendments made by this Act apply to a loan
made or guaranteed under the Small Business Act or the Small Business
Investment Act of 1958 before the date of enactment of this Act, if the
loan is refinanced, extended, restructured, or renewed on or after the
date of enactment of this Act.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.