[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 440 Enrolled Bill (ENR)]

        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 availability 
            of appropriations, of the total amount of new loan funds 
            made available for award under this subsection 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 
            determines 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 
        intermediaries'' after ``program applicants''; and
            (B) by inserting ``and provide funding to'' after ``shall 
        select''.

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 
        regulation, 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 subsection 
        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 intermediary. 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 
                intermediary 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 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.