[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 440 Referred in Senate (RFS)]

  1st Session
                                H. R. 440


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                   IN THE SENATE OF THE UNITED STATES

                           February 11, 1999

                                Received

                           February 22, 1999

       Read twice and referred to the Committee on Small Business

_______________________________________________________________________

                                 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) 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) 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.''.

            Passed the House of Representatives February 9, 1999.

            Attest:

                                                 JEFF TRANDAHL,

                                                                 Clerk.