[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 440 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 440

        To make technical corrections to the Microloan Program.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 2, 1999

     Mr. Talent (for himself, Ms. Velazquez, Mr. Pascrell, and Ms. 
 Schakowsky) introduced the following bill; which was referred to the 
                      Committee on Small Business

_______________________________________________________________________

                                 A BILL


 
        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) by amending paragraph (7)(B) to read as follows:
                    ``(B) Availability of funds.--Subject to 
                appropriations, the Administration shall ensure that at 
                least $800,000 of new loan funds are available for each 
                State in any fiscal year. All funds are to be made 
                available subject to approval of the Administration. 
                If, at the beginning of the third quarter of a fiscal 
                year, the Administration determines that the funds 
                necessary to comply with this provision are unlikely to 
                be awarded that year, the Administration may make those 
                funds available to any State or intermediary.''; 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) Subject to subclause (III), the 
                        Administration 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.--After the 
                        initial 5 years of each 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 each 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 five 
                        year period preceding the request.
                            ``(III) Reduction of the loan loss 
                        reserve.--Subject to the requirements of this 
                        subclause the Administrator may reduce the 
                        annual loan loss reserve requirement to reflect 
                        the actual average loan loss rate for the 
                        intermediary during the preceding five 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.
                            ``A reduction may be allowed 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.''.
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