[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1256 Reported in Senate (RS)]

                                                       Calendar No. 352
110th CONGRESS
  1st Session
                                S. 1256

                          [Report No. 110-154]

To amend the Small Business Act to reauthorize loan programs under that 
                      Act, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 1, 2007

Mr. Kerry (for himself, Ms. Snowe, Mr. Levin, Ms. Landrieu, Mr. Obama, 
and Mr. Tester) introduced the following bill; which was read twice and 
    referred to the Committee on Small Business and Entrepreneurship

                           September 12, 2007

                Reported by Mr. Kerry, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 A BILL


 
To amend the Small Business Act to reauthorize loan programs under that 
                      Act, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``Small Business Lending 
Reauthorization and Improvements Act of 2007''.</DELETED>

<DELETED>SEC. 2. TABLE OF CONTENTS.</DELETED>

<DELETED>    The table of contents of this Act is as follows:</DELETED>

<DELETED>Sec. 1. Short title.
<DELETED>Sec. 2. Table of contents.
<DELETED>Sec. 3. Definitions.
<DELETED>Sec. 4. Authorization of appropriations.
                  <DELETED>TITLE I--MICROLOAN PROGRAMS

<DELETED>Sec. 101. Conforming technical change in average smaller loan 
                            size.
<DELETED>Sec. 102. Inclusion of persons with disabilities.
<DELETED>Sec. 103. Microloan program improvements.
<DELETED>Sec. 104. PRIME reauthorization and transfer to the Small 
                            Business Act.
         <DELETED>TITLE II--INTERMEDIARY LENDING PILOT PROGRAM

<DELETED>Sec. 201. Findings.
<DELETED>Sec. 202. Small business intermediary lending pilot program.
                 <DELETED>TITLE III--7(a) LOAN PROGRAM

<DELETED>Sec. 301. Preferred lenders program.
<DELETED>Sec. 302. Maximum loan amount.
<DELETED>Sec. 303. Maximum 504 and 7(a) loan eligibility.
<DELETED>Sec. 304. Loan pooling.
<DELETED>Sec. 305. Alternative size standard.
<DELETED>Sec. 306. Alternative variable interest rate.
<DELETED>Sec. 307. Minority small business development.
<DELETED>Sec. 308. Lowering of fees.
<DELETED>Sec. 309. International trade loans.
<DELETED>Sec. 310. Rural lending outreach program.
  <DELETED>TITLE IV--CERTIFIED DEVELOPMENT COMPANIES; 504 LOAN PROGRAM

<DELETED>Sec. 401. Development company loan programs.
<DELETED>Sec. 402. Loan liquidations.
<DELETED>Sec. 403. Additional equity injections.
<DELETED>Sec. 404. Businesses in low-income areas.
<DELETED>Sec. 405. Combinations of certain goals.
<DELETED>Sec. 406. Refinancing under the Local Development Business 
                            Loan Program.
<DELETED>Sec. 407. Technical correction.
<DELETED>Sec. 408. Definitions for the Small Business Investment Act of 
                            1958.
<DELETED>Sec. 409. Repeal of sunset on reserve requirements for premier 
                            certified lenders.
<DELETED>Sec. 410. Certified development companies.
<DELETED>Sec. 411. Conforming amendments.
<DELETED>Sec. 412. Closing costs.
<DELETED>Sec. 413. Definition of rural.
<DELETED>Sec. 414. Regulations and effective date.
<DELETED>Sec. 415. Limitation on time for final approval of companies.
<DELETED>Sec. 416. Child Care Lending Pilot Program.

<DELETED>SEC. 3. DEFINITIONS.</DELETED>

<DELETED>    In this Act--</DELETED>
        <DELETED>    (1) the terms ``Administration'' and 
        ``Administrator'' mean the Small Business Administration and 
        the Administrator thereof, respectively;</DELETED>
        <DELETED>    (2) the term ``504 Loan Program'' means the 
        program to provide financing to small business concerns by 
        guarantees of loans under title V of the Small Business 
        Investment Act of 1958 (15 U.S.C. 695 et seq.), which are 
        funded by debentures guaranteed by the Administrator; 
        and</DELETED>
        <DELETED>    (3) the term ``small business concern'' has the 
        meaning given that term in section 3 of the Small Business Act 
        (15 U.S.C. 632).</DELETED>

<DELETED>SEC. 4. AUTHORIZATION OF APPROPRIATIONS.</DELETED>

<DELETED>    Section 20 of the Small Business Act (15 U.S.C. 631 note) 
is amended--</DELETED>
        <DELETED>    (1) by redesignating subsection (j) as subsection 
        (f); and</DELETED>
        <DELETED>    (2) by adding at the end the following:</DELETED>
<DELETED>    ``(g) Microloan.--For each of fiscal years 2007 through 
2010, the Administration is authorized to make, as provided in section 
7(m)--</DELETED>
        <DELETED>    ``(1) $80,000,000 in technical assistance 
        grants;</DELETED>
        <DELETED>    ``(2) $110,000,000 in direct loans; and</DELETED>
        <DELETED>    ``(3) $50,000,000 in deferred participation 
        loans.</DELETED>
<DELETED>    ``(h) General Business Loans.--The Administration is 
authorized to make, as provided in section 7(a)--</DELETED>
        <DELETED>    ``(1) $18,000,000,000 in general business loans in 
        fiscal year 2007;</DELETED>
        <DELETED>    ``(2) $19,000,000,000 in general business loans in 
        fiscal year 2008;</DELETED>
        <DELETED>    ``(3) $20,000,000,000 in general business loans in 
        fiscal year 2009; and</DELETED>
        <DELETED>    ``(4) $21,000,000,000 in general business loans in 
        fiscal year 2010.</DELETED>
<DELETED>    ``(i) Certified Development Company Financings.--The 
Administration is authorized to make, as provided in section 7(a)(13) 
and as provided in section 504 of the Small Business Investment Act of 
1958 (15 U.S.C. 697a)--</DELETED>
        <DELETED>    ``(1) $8,000,000,000 in certified development 
        company financings in fiscal year 2007;</DELETED>
        <DELETED>    ``(2) $8,500,000,000 in certified development 
        company financings in fiscal year 2008;</DELETED>
        <DELETED>    ``(3) $9,000,000,000 in certified development 
        company financings in fiscal year 2009; and</DELETED>
        <DELETED>    ``(4) $9,500,000,000 in certified development 
        company financings in fiscal year 2010.</DELETED>
<DELETED>    ``(j) Department of Defense.--For each of fiscal years 
2007 through 2010, the Administration is authorized to make 
$500,000,000 in loans as provided in section 7(a)(21).</DELETED>
<DELETED>    ``(k) PRIME Program.--</DELETED>
        <DELETED>    ``(1) In general.--There are authorized to be 
        appropriated to the Administrator $15,000,000 for each of 
        fiscal years 2007 through 2010 to carry out section 37, which 
        shall remain available until expended.</DELETED>
        <DELETED>    ``(2) Certain programs.--In addition to the amount 
        authorized under paragraph (1), there are authorized to be 
        appropriated to the Administrator $2,000,000 each of fiscal 
        years 2007 through 2010 to carry out section 37(c)(4), which 
        shall remain available until expended.</DELETED>
<DELETED>    ``(l) Additional Authorizations and Limitations.--
</DELETED>
        <DELETED>    ``(1) In general.--There are authorized to be 
        appropriated to the Administration for each of fiscal years 
        2007 through 2010 such sums as may be necessary to carry out 
        the provisions of this Act not elsewhere provided for, 
        including administrative expenses and necessary loan capital 
        for disaster loans pursuant to section 7(b), and to carry out 
        the Small Business Investment Act of 1958, including salaries 
        and expenses of the Administration.</DELETED>
        <DELETED>    ``(2) Limitations.--Notwithstanding any other 
        provision of this section, for each of fiscal years 2007 
        through 2010--</DELETED>
                <DELETED>    ``(A) no funds are authorized to be used 
                as loan capital for the loan program authorized by 
                section 7(a)(21) in any such fiscal year, except by 
                transfer from another Federal department or agency to 
                the Administration, unless the program level authorized 
                for general business loans under subsection (h) is 
                fully funded for that fiscal year; and</DELETED>
                <DELETED>    ``(B) the Administration may not approve 
                loans on its own behalf or on behalf of any other 
                Federal department or agency, by contract or otherwise, 
                under terms and conditions other than those 
                specifically authorized under this Act or the Small 
                Business Investment Act of 1958, except that it may 
                approve loans under section 7(a)(21) of this Act in 
                gross amounts of not more than $2,000,000.''.</DELETED>

             <DELETED>TITLE I--MICROLOAN PROGRAMS</DELETED>

<DELETED>SEC. 101. CONFORMING TECHNICAL CHANGE IN AVERAGE SMALLER LOAN 
              SIZE.</DELETED>

<DELETED>    Section 7(m) of the Small Business Act (15 U.S.C. 636(m)) 
is amended--</DELETED>
        <DELETED>    (1) in paragraph (3)(F)(iii), by striking 
        ``$7,500'' and inserting ``$10,000''; and</DELETED>
        <DELETED>    (2) in paragraph (6)(C), by striking ``$7,500'' 
        each place that term appears and inserting 
        ``$10,000''.</DELETED>

<DELETED>SEC. 102. INCLUSION OF PERSONS WITH DISABILITIES.</DELETED>

<DELETED>    Section 7(m)(1)(A)(i) of the Small Business Act (15 U.S.C. 
636(m)(1)(A)(i)) is amended by inserting ``persons with disabilities,'' 
before ``and minority''.</DELETED>

<DELETED>SEC. 103. MICROLOAN PROGRAM IMPROVEMENTS.</DELETED>

<DELETED>    (a) Intermediary Eligibility Requirements.--Section 
7(m)(2) of the Small Business Act (15 U.S.C. 636(m)(2)) is amended--
</DELETED>
        <DELETED>    (1) in subparagraph (A), by striking ``in 
        paragraph (10); and'' and inserting ``of the term 
        `intermediary' under paragraph (11);''; and</DELETED>
        <DELETED>    (2) in subparagraph (B)--</DELETED>
                <DELETED>    (A) by striking ``(B) has at least'' and 
                inserting the following:</DELETED>
                <DELETED>    ``(B) has--</DELETED>
                        <DELETED>    ``(i) at least''; and</DELETED>
                <DELETED>    (B) by striking the period at the end and 
                inserting the following: ``; or</DELETED>
                        <DELETED>    ``(ii) a full-time employee who 
                        has not less than 3 years experience making 
                        microloans to startup, newly established, or 
                        growing small business concerns; and</DELETED>
                <DELETED>    ``(C) has at least 1 year experience 
                providing, as an integral part of its microloan 
                program, intensive marketing, management, and technical 
                assistance to its borrowers.''.</DELETED>
<DELETED>    (b) Limitation on Third Party Technical Assistance.--
Section 7(m)(4)(E)(ii) of the Small Business Act (15 U.S.C. 
636(m)(4)(E)(ii)) is amended--</DELETED>
        <DELETED>    (1) in the clause heading, by striking ``Technical 
        assistance'' and inserting ``Third party technical 
        assistance''; and</DELETED>
        <DELETED>    (2) by striking ``25 percent'' and inserting ``30 
        percent''.</DELETED>
<DELETED>    (c) Loan Terms.--Section 7(m) of the Small Business Act 
(15 U.S.C. 636(m)) is amended--</DELETED>
        <DELETED>    (1) in paragraph (1)(B)(i), by striking ``short-
        term,''; and</DELETED>
        <DELETED>    (2) in paragraph (11)(B), by striking ``short-
        term,''.</DELETED>
<DELETED>    (d) Increased Flexibility for Providing Technical 
Assistance to Potential Borrowers.--Section 7(m)(4)(E)(i) of the Small 
Business Act (15 U.S.C. 636(m)(4)(E)(i)) is amended by striking ``25 
percent'' and inserting ``30 percent''.</DELETED>

<DELETED>SEC. 104. PRIME REAUTHORIZATION AND TRANSFER TO THE SMALL 
              BUSINESS ACT.</DELETED>

<DELETED>    (a) Program Reauthorization.--The Small Business Act (15 
U.S.C. 631 et seq.) is amended--</DELETED>
        <DELETED>    (1) by redesignating section 37 as section 39; 
        and</DELETED>
        <DELETED>    (2) by inserting after section 36 the 
        following:</DELETED>

<DELETED>``SEC. 37. PROGRAM FOR INVESTMENT IN 
              MICROENTREPRENEURS.</DELETED>

<DELETED>    ``(a) Definitions.--In this section:</DELETED>
        <DELETED>    ``(1) Capacity building services.--The term 
        `capacity building services' means services provided to an 
        organization that is, or that is in the process of becoming, a 
        microenterprise development organization or program, for the 
        purpose of enhancing its ability to provide training and 
        services to disadvantaged entrepreneurs.</DELETED>
        <DELETED>    ``(2) Collaborative.--The term `collaborative' 
        means 2 or more nonprofit entities that agree to act jointly as 
        a qualified organization under this section.</DELETED>
        <DELETED>    ``(3) Disadvantaged entrepreneur.--The term 
        `disadvantaged entrepreneur' means a microentrepreneur that--
        </DELETED>
                <DELETED>    ``(A) is a low-income person;</DELETED>
                <DELETED>    ``(B) is a very low-income person; 
                or</DELETED>
                <DELETED>    ``(C) lacks adequate access to capital or 
                other resources essential for business success, or is 
                economically disadvantaged, as determined by the 
                Administrator.</DELETED>
        <DELETED>    ``(4) Disadvantaged native american 
        entrepreneur.--The term `disadvantaged Native American 
        entrepreneur' means a disadvantaged entrepreneur who is also a 
        member of an Indian Tribe.</DELETED>
        <DELETED>    ``(5) Indian tribe.--The term `Indian tribe' has 
        the meaning given that term in section 4(a) of the Indian Self-
        Determination and Education Assistance Act.</DELETED>
        <DELETED>    ``(6) Intermediary.--The term `intermediary' means 
        a private, nonprofit entity that seeks to serve microenterprise 
        development organizations and programs, as authorized under 
        subsection (d).</DELETED>
        <DELETED>    ``(7) Low-income person.--The term `low-income 
        person' means having an income, adjusted for family size, of 
        not more than--</DELETED>
                <DELETED>    ``(A) for metropolitan areas, 80 percent 
                of the area median income; and</DELETED>
                <DELETED>    ``(B) for nonmetropolitan areas, the 
                greater of--</DELETED>
                        <DELETED>    ``(i) 80 percent of the area 
                        median income; or</DELETED>
                        <DELETED>    ``(ii) 80 percent of the statewide 
                        nonmetropolitan area median income.</DELETED>
        <DELETED>    ``(8) Microentrepreneur.--The term 
        `microentrepreneur' means the owner or developer of a 
        microenterprise.</DELETED>
        <DELETED>    ``(9) Microenterprise.--The term `microenterprise' 
        means a sole proprietorship, partnership, or corporation that--
        </DELETED>
                <DELETED>    ``(A) has fewer than 5 employees; 
                and</DELETED>
                <DELETED>    ``(B) generally lacks access to 
                conventional loans, equity, or other banking 
                services.</DELETED>
        <DELETED>    ``(10) Microenterprise development organization or 
        program.--The term `microenterprise development organization or 
        program' means a nonprofit entity, or a program administered by 
        such an entity, including community development corporations or 
        other nonprofit development organizations and social service 
        organizations, that provides services to disadvantaged 
        entrepreneurs.</DELETED>
        <DELETED>    ``(11) Training and technical assistance.--The 
        term `training and technical assistance' means services and 
        support provided to disadvantaged entrepreneurs, such as 
        assistance for the purpose of enhancing business planning, 
        marketing, management, financial management skills, and 
        assistance for the purpose of accessing financial 
        services.</DELETED>
        <DELETED>    ``(12) Very low-income person.--The term `very 
        low-income person' means having an income, adjusted for family 
        size, of not more than 150 percent of the poverty line (as 
        defined in section 673(2) of the Community Services Block Grant 
        Act (42 U.S.C. 9902(2)), including any revision required by 
        that section).</DELETED>
<DELETED>    ``(b) Establishment of Program.--The Administrator shall 
establish a microenterprise technical assistance and capacity building 
grant program to provide assistance from the Administration in the form 
of grants to qualified organizations in accordance with this 
section.</DELETED>
<DELETED>    ``(c) Uses of Assistance.--A qualified organization shall 
use grants made under this section--</DELETED>
        <DELETED>    ``(1) to provide training and technical assistance 
        to disadvantaged entrepreneurs;</DELETED>
        <DELETED>    ``(2) to provide training and capacity building 
        services to microenterprise development organizations and 
        programs and groups of such organizations to assist such 
        organizations and programs in developing microenterprise 
        training and services;</DELETED>
        <DELETED>    ``(3) to aid in researching and developing the 
        best practices in the field of microenterprise and technical 
        assistance programs for disadvantaged entrepreneurs;</DELETED>
        <DELETED>    ``(4) to provide training and technical assistance 
        to disadvantaged Native American entrepreneurs and prospective 
        entrepreneurs; and</DELETED>
        <DELETED>    ``(5) for such other activities as the 
        Administrator determines are consistent with the purposes of 
        this section.</DELETED>
<DELETED>    ``(d) Qualified Organizations.--For purposes of 
eligibility for assistance under this section, a qualified organization 
shall be--</DELETED>
        <DELETED>    ``(1) a nonprofit microenterprise development 
        organization or program (or a group or collaborative thereof) 
        that has a demonstrated record of delivering microenterprise 
        services to disadvantaged entrepreneurs;</DELETED>
        <DELETED>    ``(2) an intermediary;</DELETED>
        <DELETED>    ``(3) a microenterprise development organization 
        or program that is accountable to a local community, working in 
        conjunction with a State or local government or Indian tribe; 
        or</DELETED>
        <DELETED>    ``(4) an Indian tribe acting on its own, if the 
        Indian tribe certifies that no private organization or program 
        referred to in this subsection exists within its 
        jurisdiction.</DELETED>
<DELETED>    ``(e) Allocation of Assistance; Subgrants.--</DELETED>
        <DELETED>    ``(1) Allocation of assistance.--</DELETED>
                <DELETED>    ``(A) In general.--The Administrator shall 
                allocate assistance from the Administration under this 
                section to ensure that--</DELETED>
                        <DELETED>    ``(i) activities described in 
                        subsection (c)(1) are funded using not less 
                        than 75 percent of amounts made available for 
                        such assistance; and</DELETED>
                        <DELETED>    ``(ii) activities described in 
                        subsection (c)(2) are funded using not less 
                        than 15 percent of amounts made available for 
                        such assistance.</DELETED>
                <DELETED>    ``(B) Limit on individual assistance.--No 
                single person may receive more than 10 percent of the 
                total funds appropriated under this section in a single 
                fiscal year.</DELETED>
        <DELETED>    ``(2) Targeted assistance.--The Administrator 
        shall ensure that not less than 50 percent of the grants made 
        under this section are used to benefit very low-income persons, 
        including those residing on Indian reservations.</DELETED>
        <DELETED>    ``(3) Subgrants authorized.--</DELETED>
                <DELETED>    ``(A) In general.--A qualified 
                organization receiving assistance under this section 
                may provide grants using that assistance to qualified 
                small and emerging microenterprise organizations and 
                programs, subject to such rules and regulations as the 
                Administrator determines to be appropriate.</DELETED>
                <DELETED>    ``(B) Limit on administrative expenses.--
                Not more than 7.5 percent of assistance received by a 
                qualified organization under this section may be used 
                for administrative expenses in connection with the 
                making of subgrants under subparagraph (A).</DELETED>
        <DELETED>    ``(4) Diversity.--In making grants under this 
        section, the Administrator shall ensure that grant recipients 
        include both large and small microenterprise organizations, 
        serving urban, rural, and Indian tribal communities serving 
        diverse populations.</DELETED>
        <DELETED>    ``(5) Prohibition on preferential consideration of 
        certain administration program participants.--In making grants 
        under this section, the Administrator shall ensure that any 
        application made by a qualified organization that is a 
        participant in the program established under section 7(m) does 
        not receive preferential consideration over applications from 
        other qualified organizations that are not participants in such 
        program.</DELETED>
<DELETED>    ``(f) Matching Requirements.--</DELETED>
        <DELETED>    ``(1) In general.--Financial assistance under this 
        section shall be matched with funds from sources other than the 
        Federal Government on the basis of not less than 50 percent of 
        each dollar provided by the Administration.</DELETED>
        <DELETED>    ``(2) Sources of matching funds.--Fees, grants, 
        gifts, funds from loan sources, and in-kind resources of a 
        grant recipient from public or private sources may be used to 
        comply with the matching requirement in paragraph 
        (1).</DELETED>
        <DELETED>    ``(3) Exception.--</DELETED>
                <DELETED>    ``(A) In general.--In the case of an 
                applicant for assistance under this section with severe 
                constraints on available sources of matching funds, the 
                Administrator may reduce or eliminate the matching 
                requirements of paragraph (1).</DELETED>
                <DELETED>    ``(B) Limitation.--Not more than 10 
                percent of the total funds made available from the 
                Administration in any fiscal year to carry out this 
                section may be excepted from the matching requirements 
                of paragraph (1), as authorized by subparagraph (A) of 
                this paragraph.</DELETED>
<DELETED>    ``(g) Applications for Assistance.--An application for 
assistance under this section shall be submitted in such form and in 
accordance with such procedures as the Administrator shall 
establish.</DELETED>
<DELETED>    ``(h) Recordkeeping and Reporting.--</DELETED>
        <DELETED>    ``(1) In general.--Each organization that receives 
        assistance from the Administration under this section shall--
        </DELETED>
                <DELETED>    ``(A) submit to the Administration not 
                less than once in every 18-month period, financial 
                statements audited by an independent certified public 
                accountant;</DELETED>
                <DELETED>    ``(B) submit an annual report to the 
                Administration on its activities; and</DELETED>
                <DELETED>    ``(C) keep such records as may be 
                necessary to disclose the manner in which any 
                assistance under this section is used.</DELETED>
        <DELETED>    ``(2) Access.--The Administration shall have 
        access upon request, for the purposes of determining compliance 
        with this section, to any records of any organization that 
        receives assistance from the Administration under this 
        section.</DELETED>
        <DELETED>    ``(3) Data collection.--Each organization that 
        receives assistance from the Administration under this section 
        shall collect information relating to, as applicable--
        </DELETED>
                <DELETED>    ``(A) the number of individuals counseled 
                or trained;</DELETED>
                <DELETED>    ``(B) the number of hours of counseling 
                provided;</DELETED>
                <DELETED>    ``(C) the number of startup small business 
                concerns formed;</DELETED>
                <DELETED>    ``(D) the number of small business 
                concerns expanded;</DELETED>
                <DELETED>    ``(E) the number of low-income individuals 
                counseled or trained; and</DELETED>
                <DELETED>    ``(F) the number of very low-income 
                individuals counseled or trained.''.</DELETED>
<DELETED>    (b) Conforming Repeal.--Subtitle C of title I of the 
Riegle Community Development and Regulatory Improvement Act of 1994 (15 
U.S.C. 6901 note) is repealed.</DELETED>
<DELETED>    (c) References.--All references in Federal law, other than 
subsection (d) of this section, to the ``Program for Investment in 
Microentrepreneurs Act of 1999'' or the ``PRIME Act'' shall be deemed 
to be references to section 37 of the Small Business Act, as added by 
this section.</DELETED>
<DELETED>    (d) Rule of Construction.--Nothing in this section or the 
amendments made by this section shall affect any grant or assistance 
provided under the Program for Investment in Microentrepreneurs Act of 
1999, before the date of enactment of this Act, and any such grant or 
assistance shall be subject to the Program for Investment in 
Microentrepreneurs Act of 1999, as in effect on the day before the date 
of enactment of this Act.</DELETED>

    <DELETED>TITLE II--INTERMEDIARY LENDING PILOT PROGRAM</DELETED>

<DELETED>SEC. 201. FINDINGS.</DELETED>

<DELETED>    Congress finds the following:</DELETED>
        <DELETED>    (1) Small and emerging businesses, particularly 
        startups and businesses that lack sufficient or conventional 
        collateral, continue to face barriers accessing midsized loans 
        in amounts between $35,000 and $200,000, with affordable terms 
        and conditions.</DELETED>
        <DELETED>    (2) Consolidation in the banking industry has 
        resulted in a decrease in the number of small, locally 
        controlled banks with not more than $100,000,000 in assets and 
        has changed the method by which banks make small business 
        credit decisions with--</DELETED>
                <DELETED>    (A) credit scoring techniques replacing 
                relationship-based lending, which often works to the 
                disadvantage of small or start-up businesses that do 
                not conform with a bank's standardized credit formulas; 
                and</DELETED>
                <DELETED>    (B) less flexible terms and conditions, 
                which are often necessary for small and emerging 
                businesses.</DELETED>
        <DELETED>    (3) In the environment described in paragraphs (1) 
        and (2), nonprofit intermediary lenders, including community 
        development corporations, provide financial resources that 
        supplement the small business lending and investments of a bank 
        by--</DELETED>
                <DELETED>    (A) providing riskier, up front, or 
                subordinated capital;</DELETED>
                <DELETED>    (B) offering flexible terms and 
                underwriting procedures; and</DELETED>
                <DELETED>    (C) providing technical assistance to 
                businesses in order to reduce the transaction costs and 
                risk exposure of banks.</DELETED>
        <DELETED>    (4) Several Federal programs, including the 
        Microloan Program under section 7(m) of the Small Business Act 
        (15 U.S.C. 636(m)) and the Intermediary Relending Program of 
        the Department of Agriculture, have demonstrated the 
        effectiveness of working through nonprofit intermediaries to 
        address the needs of small business concerns that are unable to 
        access capital through conventional sources.</DELETED>
        <DELETED>    (5) More than 1,000 nonprofit intermediary lenders 
        in the United States are--</DELETED>
                <DELETED>    (A) successfully providing financial and 
                technical assistance to small and emerging 
                businesses;</DELETED>
                <DELETED>    (B) working with banks and other lenders 
                to leverage additional capital for their business 
                borrowers; and</DELETED>
                <DELETED>    (C) creating employment opportunities for 
                low-income individuals through their lending and 
                business development activities.</DELETED>

<DELETED>SEC. 202. SMALL BUSINESS INTERMEDIARY LENDING PILOT 
              PROGRAM.</DELETED>

<DELETED>    (a) In General.--Section 7 of the Small Business Act (15 
U.S.C. 636) is amended by inserting after subsection (k) the 
following:</DELETED>
<DELETED>    ``(l) Small Business Intermediary Lending Program.--
</DELETED>
        <DELETED>    ``(1) Definitions.--In this subsection--</DELETED>
                <DELETED>    ``(A) the term `intermediary' means a 
                private, nonprofit entity that seeks to borrow, or has 
                borrowed, funds from the Administration to provide 
                midsize loans to small business concerns under this 
                subsection, including--</DELETED>
                        <DELETED>    ``(i) a private, nonprofit 
                        community development corporation;</DELETED>
                        <DELETED>    ``(ii) a consortium of private, 
                        nonprofit organizations or nonprofit community 
                        development corporations;</DELETED>
                        <DELETED>    ``(iii) a quasi-governmental 
                        economic development entity (such as a planning 
                        and development district), other than a State, 
                        county, or municipal government; and</DELETED>
                        <DELETED>    ``(iv) an agency of or nonprofit 
                        entity established by a Native American Tribal 
                        Government; and</DELETED>
                <DELETED>    ``(B) the term `midsize loan' means a 
                fixed rate loan of not less than $35,000 and not more 
                than $200,000, made by an intermediary to a startup, 
                newly established, or growing small business 
                concern.</DELETED>
        <DELETED>    ``(2) Establishment.--There is established a 3-
        year pilot program to be know as the `Small Business 
        Intermediary Lending Pilot Program' (referred to in this 
        subsection as the `Program'), under which the Administrator may 
        provide direct loans to eligible intermediaries, for the 
        purpose of making fixed interest rate midsize loans to startup, 
        newly established, and growing small business 
        concerns.</DELETED>
        <DELETED>    ``(3) Purposes.--The purposes of the Program are--
        </DELETED>
                <DELETED>    ``(A) to assist small business concerns in 
                those areas suffering from a lack of credit due to poor 
                economic conditions;</DELETED>
                <DELETED>    ``(B) to create employment opportunities 
                for low-income individuals;</DELETED>
                <DELETED>    ``(C) to establish a midsize loan program 
                to be administered by the Administrator to provide 
                loans to eligible intermediaries to enable such 
                intermediaries to provide midsize loans, particularly 
                loans in amounts averaging not more than $150,000, to 
                startup, newly established, or growing small business 
                concerns for working capital or the acquisition of 
                materials, supplies, or equipment;</DELETED>
                <DELETED>    ``(D) to test the effectiveness of 
                nonprofit intermediaries--</DELETED>
                        <DELETED>    ``(i) as a delivery system for a 
                        midsize loan program; and</DELETED>
                        <DELETED>    ``(ii) in addressing the credit 
                        needs of small business concerns and leveraging 
                        other sources of credit; and</DELETED>
                <DELETED>    ``(E) to determine the advisability and 
                feasibility of implementing a midsize loan program 
                nationwide.</DELETED>
        <DELETED>    ``(4) Eligibility for participation.--An 
        intermediary shall be eligible to receive loans under the 
        Program if the intermediary has not less than 1 year of 
        experience making loans to startup, newly established, or 
        growing small business concerns.</DELETED>
        <DELETED>    ``(5) Loans to intermediaries.--</DELETED>
                <DELETED>    ``(A) Application.--Each intermediary 
                desiring a loan under this subsection shall submit an 
                application to the Administrator that describes--
                </DELETED>
                        <DELETED>    ``(i) the type of small business 
                        concerns to be assisted;</DELETED>
                        <DELETED>    ``(ii) the size and range of loans 
                        to be made;</DELETED>
                        <DELETED>    ``(iii) the geographic area to be 
                        served and its economic, poverty, and 
                        unemployment characteristics;</DELETED>
                        <DELETED>    ``(iv) the status of small 
                        business concerns in the area to be served and 
                        an analysis of the availability of credit; 
                        and</DELETED>
                        <DELETED>    ``(v) the qualifications of the 
                        applicant to carry out this 
                        subsection.</DELETED>
                <DELETED>    ``(B) Loan limits.--Notwithstanding 
                subsection (a)(3), no loan may be made to an 
                intermediary under this subsection if the total amount 
                outstanding and committed to the intermediary from the 
                business loan and investment fund established by this 
                Act would, as a result of such loan, exceed $1,000,000 
                during the participation of the intermediary in the 
                Program.</DELETED>
                <DELETED>    ``(C) Loan duration.--Loans made by the 
                Administrator under this subsection shall be for a 
                maximum term of 20 years.</DELETED>
                <DELETED>    ``(D) Applicable interest rates.--Loans 
                made by the Administrator to an intermediary under the 
                Program shall bear an annual interest rate equal to 
                1.00 percent.</DELETED>
                <DELETED>    ``(E) Fees; collateral.--The Administrator 
                may not charge any fees or require collateral with 
                respect to any loan made to an intermediary under this 
                subsection.</DELETED>
                <DELETED>    ``(F) Leverage.--Any loan to a small 
                business concern under this subsection shall not exceed 
                75 percent of the total cost of the project funded by 
                such loan, with the remaining funds being leveraged 
                from other sources, including--</DELETED>
                        <DELETED>    ``(i) banks or credit 
                        unions;</DELETED>
                        <DELETED>    ``(ii) community development 
                        financial institutions; and</DELETED>
                        <DELETED>    ``(iii) other sources with funds 
                        available to the intermediary lender.</DELETED>
                <DELETED>    ``(G) Delayed payments.--The Administrator 
                shall not require the repayment of principal or 
                interest on a loan made to an intermediary under the 
                Program during the first 2 years of the loan.</DELETED>
        <DELETED>    ``(6) Program funding for midsize loans.--
        </DELETED>
                <DELETED>    ``(A) Number of participants.--Under the 
                Program, the Administrator may provide loans, on a 
                competitive basis, to not more than 20 
                intermediaries.</DELETED>
                <DELETED>    ``(B) Equitable distribution of 
                intermediaries.--The Administrator shall select and 
                provide funding under the Program to such 
                intermediaries as will ensure geographic diversity and 
                representation of urban and rural 
                communities.</DELETED>
        <DELETED>    ``(7) Report to congress.--</DELETED>
                <DELETED>    ``(A) Annual report.--Not later than 12 
                months after the date of enactment of the Small 
                Business Lending Reauthorization and Improvements Act 
                of 2007, and annually thereafter, the Administrator 
                shall submit a report containing an evaluation of the 
                effectiveness of the Program to--</DELETED>
                        <DELETED>    ``(i) the Committee on Small 
                        Business and Entrepreneurship of the Senate; 
                        and</DELETED>
                        <DELETED>    ``(ii) the Committee on Small 
                        Business of the House of 
                        Representatives.</DELETED>
                <DELETED>    ``(B) Contents.--Each report submitted 
                under subparagraph (A) shall include, for the 12-month 
                period before the date of that report--</DELETED>
                        <DELETED>    ``(i) the numbers and locations of 
                        the intermediaries receiving funds to provide 
                        midsize loans;</DELETED>
                        <DELETED>    ``(ii) the amounts of each loan to 
                        an intermediary;</DELETED>
                        <DELETED>    ``(iii) the numbers and amounts of 
                        midsize loans made by intermediaries to small 
                        business concerns;</DELETED>
                        <DELETED>    ``(iv) the repayment history of 
                        each intermediary;</DELETED>
                        <DELETED>    ``(v) a description of the loan 
                        portfolio of each intermediary, including the 
                        extent to which it provides midsize loans to 
                        small business concerns in rural and 
                        economically depressed areas;</DELETED>
                        <DELETED>    ``(vi) an estimate of the number 
                        of low-income individuals who have been 
                        employed as a direct result of the Program; 
                        and</DELETED>
                        <DELETED>    ``(vii) any recommendations for 
                        legislative changes that would improve the 
                        operation of the Program.</DELETED>
        <DELETED>    ``(8) Termination.--The authority to make loans 
        under this subsection shall terminate 3 years after the date of 
        enactment of the Small Business Lending Reauthorization and 
        Improvements Act of 2007.''.</DELETED>
<DELETED>    (b) Rulemaking Authority.--Not later than 180 days after 
the date of enactment of this Act, the Administrator shall issue 
regulations to carry out section 7(l) of the Small Business Act, as 
added by subsection (a).</DELETED>
<DELETED>    (c) Authorization of Appropriations.--</DELETED>
        <DELETED>    (1) In general.--There are authorized to be 
        appropriated to the Administrator such sums as may be necessary 
        for each of fiscal years 2008 through 2010 to provide 
        $20,000,000 in loans under section 7(l) of the Small Business 
        Act, as added by subsection (a).</DELETED>
        <DELETED>    (2) Availability.--Any amounts appropriated 
        pursuant to paragraph (1) shall remain available until 
        expended.</DELETED>

            <DELETED>TITLE III--7(a) LOAN PROGRAM</DELETED>

<DELETED>SEC. 301. PREFERRED LENDERS PROGRAM.</DELETED>

<DELETED>    (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:</DELETED>
        <DELETED>    ``(32) Preferred lenders program.--</DELETED>
                <DELETED>    ``(A) Definitions.--In this paragraph--
                </DELETED>
                        <DELETED>    ``(i) the term `national preferred 
                        lender' means a preferred lender authorized to 
                        operate in any area served by an office of the 
                        Administration under subparagraph 
                        (G);</DELETED>
                        <DELETED>    ``(ii) the term `preferred lender' 
                        means a qualified lender participating in the 
                        program;</DELETED>
                        <DELETED>    ``(iii) the term `program' means 
                        the Preferred Lenders Program established under 
                        subparagraph (B); and</DELETED>
                        <DELETED>    ``(iv) the term `qualified lender' 
                        means a lender that demonstrates--</DELETED>
                                <DELETED>    ``(I) knowledge of and 
                                proficiency in the requirements of the 
                                program under this 
                                subsection;</DELETED>
                                <DELETED>    ``(II) the ability to 
                                process, close, service, and liquidate 
                                loans;</DELETED>
                                <DELETED>    ``(III) the ability to 
                                develop and analyze complete loan 
                                packages; and</DELETED>
                                <DELETED>    ``(IV) a satisfactory 
                                performance history of participation in 
                                the program under this 
                                subsection.</DELETED>
                <DELETED>    ``(B) Establishment.--There is established 
                a Preferred Lenders Program under which the 
                Administrator may authorize qualified lenders to make 
                and service loans.</DELETED>
                <DELETED>    ``(C) Application.--A qualified lender 
                desiring to participate in the program shall submit an 
                application at such time, in such manner, and 
                accompanied by such information as the Administrator 
                shall establish.</DELETED>
                <DELETED>    ``(D) Delegated authority.--The 
                Administrator shall authorize a preferred lender to 
                take actions relating to loan servicing on behalf of 
                the Administrator, including--</DELETED>
                        <DELETED>    ``(i) determining eligibility and 
                        creditworthiness and loan monitoring, 
                        collection, and liquidation;</DELETED>
                        <DELETED>    ``(ii) authority to make and close 
                        loans with a guarantee from the Administrator 
                        without obtaining the prior specific approval 
                        of the Administrator; and</DELETED>
                        <DELETED>    ``(iii) authority to service and 
                        liquidate such loans without obtaining the 
                        prior specific approval of the Administrator 
                        for routine servicing and liquidation 
                        activities.</DELETED>
                <DELETED>    ``(E) Area of operations.--The 
                Administrator shall designate the area for which a 
                preferred lender may exercise the authority under 
                subparagraph (D).</DELETED>
                <DELETED>    ``(F) Conflict.--A preferred lender shall 
                not take any action creating an actual or apparent 
                conflict of interest.</DELETED>
                <DELETED>    ``(G) National operation.--</DELETED>
                        <DELETED>    ``(i) In general.--A preferred 
                        lender may request designation as a national 
                        preferred lender by the Administrator, and, 
                        upon such designation, shall have the authority 
                        to operate in any area served by an office of 
                        the Administration.</DELETED>
                        <DELETED>    ``(ii) Eligibility.--The 
                        Administration shall designate a preferred 
                        lender as a national preferred lender if the 
                        Administrator determines that preferred lender 
                        has--</DELETED>
                                <DELETED>    ``(I) satisfactorily 
                                operated as a preferred lender in areas 
                                encompassing all or part of the 
                                territory in not fewer than 5 district 
                                offices of the Administration for a 
                                minimum of 3 years in each 
                                territory;</DELETED>
                                <DELETED>    ``(II) centralized loan 
                                approval, servicing, and liquidation 
                                functions and processes that are 
                                satisfactory to the 
                                Administration;</DELETED>
                                <DELETED>    ``(III) uniform written 
                                policies and procedures;</DELETED>
                                <DELETED>    ``(IV) a currency rate 
                                that is not less than the 
                                Administration's national average 
                                currency rate for all loans under this 
                                subsection;</DELETED>
                                <DELETED>    ``(V) a currency rate for 
                                loans made under this subsection that 
                                is not less than the Administration's 
                                national average currency rate for 
                                loans made under this 
                                subsection;</DELETED>
                                <DELETED>    ``(VI) a default rate that 
                                is not more than the Administration's 
                                national average default rate for loans 
                                made under this subsection; 
                                and</DELETED>
                                <DELETED>    ``(VII) received, in the 
                                most recent audit and review as a 
                                preferred lender conducted by the 
                                Administrator, a rating that is 
                                acceptable or acceptable with 
                                corrective actions required.</DELETED>
                <DELETED>    ``(H) Corrective action.--If a national 
                preferred lender fails to continue to meet the 
                eligibility criteria under subparagraph (G)(ii), the 
                Administrator shall notify that national preferred 
                lender of the deficiency and allow a reasonable period 
                of time for that national preferred lender to meet such 
                criteria.</DELETED>
                <DELETED>    ``(I) Suspension or revocation.--
                </DELETED>
                        <DELETED>    ``(i) In general.--The designation 
                        of a lender as a national preferred lender 
                        shall be suspended or revoked at any time that 
                        the Administration determines that the lender--
                        </DELETED>
                                <DELETED>    ``(I) is not adhering to 
                                the rules or regulations established by 
                                the Administrator for the program; 
                                or</DELETED>
                                <DELETED>    ``(II) has failed to 
                                continue to meet the eligibility 
                                criteria specified in paragraph (G) or 
                                take corrective action under 
                                subparagraph (H).</DELETED>
                        <DELETED>    ``(ii) Effect.--A suspension or 
                        revocation under clause (i) shall not affect 
                        any outstanding guarantee of a national 
                        preferred lender.''.</DELETED>
<DELETED>    (b) Clerical Amendment.--Section 7(a)(2)(C) of the Small 
Business Act (15 U.S.C. 636(a)(2)(C)) is amended to read as 
follows:</DELETED>
                <DELETED>    ``(C) Interest rate under preferred 
                lenders program.--The maximum interest rate for a loan 
                guaranteed under the Preferred Lenders Program under 
                paragraph (32) shall not exceed the maximum interest 
                rate as determined by the Administration, applicable to 
                other loans guaranteed under this 
                subsection.''.</DELETED>
<DELETED>    (c) Conforming Amendment.--Section 7(a)(19) of the Small 
Business Act (15 U.S.C. 636(a)(19)) is amended by striking ``the 
proviso in section 5(b)(7)'' and inserting ``paragraph 
(32)''.</DELETED>

<DELETED>SEC. 302. MAXIMUM LOAN AMOUNT.</DELETED>

<DELETED>    Section 7(a)(3)(A) of the Small Business Act (15 U.S.C. 
636(a)(3)(A)) is amended by striking ``$1,500,000 (or if the gross loan 
amount would exceed $2,000,000'' and inserting ``$2,250,000 (or if the 
gross loan amount would exceed $3,000,000''.</DELETED>

<DELETED>SEC. 303. MAXIMUM 504 AND 7(A) LOAN ELIGIBILITY.</DELETED>

<DELETED>    (a) Combination Financing.--</DELETED>
        <DELETED>    (1) In general.--Section 502(2) of the Small 
        Business Investment Act of 1958 (15 U.S.C. 696(2)) is amended 
        by adding at the end the following:</DELETED>
                <DELETED>    ``(C) Combination financing under small 
                business act.--Notwithstanding any other provision of 
                law, financing under this title may be provided to a 
                borrower in the maximum amount provided in this 
                subsection, and a loan guarantee under section 7(a) of 
                the Small Business Act may be provided to the same 
                borrower in the maximum amount provided in section 
                7(a)(3)(A) of such Act, to the extent that the borrower 
                otherwise qualifies for such assistance.''.</DELETED>
        <DELETED>    (2) Conforming amendment.--Section 7(a)(1) of the 
        Small Business Act (15 U.S.C. 636(a)(1) is amended by adding at 
        the end the following:</DELETED>
                <DELETED>    ``(C) Combination financing under small 
                business investment act of 1958.--Financing under this 
                subsection may be provided to a borrower in the maximum 
                amount as provided in subsection (b)(2) of section 502 
                of the Small Business Investment Act of 1958 (15 U.S.C. 
                696).''.</DELETED>
<DELETED>    (b) Reporting.--Not later than 90 days after the date of 
enactment of this Act, and annually thereafter, the Administrator shall 
submit a report to the Committee on Small Business and Entrepreneurship 
of the Senate and the Committee on Small Business of the House of 
Representatives that--</DELETED>
        <DELETED>    (1) includes the number of small business concerns 
        that have financings under both section 7(a) of the Small 
        Business Act (15 U.S.C. 636(a)) and title V of the Small 
        Business Investment Act of 1958 (15 U.S.C. 695 et seq.) during 
        the year before the year of that report; and</DELETED>
        <DELETED>    (2) describes the total amount and general 
        performance of the financings described in paragraph 
        (1).</DELETED>

<DELETED>SEC. 304. LOAN POOLING.</DELETED>

<DELETED>    Section 5(g)(1) of the Small Business Act (15 U.S.C. 
634(g)(1)) is amended--</DELETED>
        <DELETED>    (1) by inserting ``(A)'' before ``The 
        Administration'';</DELETED>
        <DELETED>    (2) by striking the colon and all that follows and 
        inserting a period; and</DELETED>
        <DELETED>    (3) by adding at the end the following:</DELETED>
<DELETED>    ``(B) A trust certificate issued under subparagraph (A) 
shall be based on, and backed by, a trust or pool approved by the 
Administrator and composed solely of the guaranteed portion of such 
loans.</DELETED>
<DELETED>    ``(C) The interest rate on a trust certificate issued 
under subparagraph (A) shall be either--</DELETED>
        <DELETED>    ``(i) the lowest interest rate on any individual 
        loan in the pool; or</DELETED>
        <DELETED>    ``(ii) the weighted average interest rate of all 
        loans in the pool, subject to such limited variations in loan 
        characteristics as the Administrator determines appropriate to 
        enhance marketability of the pool certificates.''.</DELETED>

<DELETED>SEC. 305. ALTERNATIVE SIZE STANDARD.</DELETED>

<DELETED>    Section 3(a) of the Small Business Act (15 U.S.C. 632(a)) 
is amended by adding at the end the following:</DELETED>
<DELETED>    ``(5) Optional Size Standard.--</DELETED>
        <DELETED>    ``(A) In general.--The Administrator shall 
        establish an optional size standard for business loan 
        applicants under section 7(a) and development company loan 
        applicants under title V of the Small Business Investment Act 
        of 1958, which uses maximum tangible net worth and average net 
        income as an alternative to the use of industry 
        standards.</DELETED>
        <DELETED>    ``(B) Interim rule.--Until the date on which the 
        optional size standards established under subparagraph (A) are 
        in effect, the alternative size standard in section 121.301(b) 
        of title 13, Code of Federal Regulations, or any successor 
        thereto, may be used by business loan applicants under section 
        7(a) and development company loan applicants under title V of 
        the Small Business Investment Act of 1958.''.</DELETED>

<DELETED>SEC. 306. ALTERNATIVE VARIABLE INTEREST RATE.</DELETED>

<DELETED>    (a) In General.--Section 7(a)(4)(A) of the Small Business 
Act (15 U.S.C. 636(a)(4)(A)) is amended by striking ``prescribed by the 
Administration,'' and inserting: ``prescribed by the Administration, 
including, on variable rate loans, a nationally recognized prime rate 
of interest and at least 1 other index as an alternative thereto at the 
option of the participating lender,''.</DELETED>
<DELETED>    (b) Applicability.--Not later than 180 days after the date 
of enactment of this Act, the Administrator of the Small Business 
Administration shall select not less than 1 alternative index under 
section 7(a)(4)(A) of the Small Business Act, as amended by subsection 
(a), and make such index available for use by participating 
lenders.</DELETED>

<DELETED>SEC. 307. MINORITY SMALL BUSINESS DEVELOPMENT.</DELETED>

<DELETED>    (a) In General.--The Small Business Act (15 U.S.C. 631 et 
seq.) is amended by inserting after section 37, as added by this Act, 
the following:</DELETED>

<DELETED>``SEC. 38. MINORITY SMALL BUSINESS DEVELOPMENT.</DELETED>

<DELETED>    ``(a) Office of Minority Small Business Development.--
There is established in the Administration an Office of Minority Small 
Business Development, which shall be administered by the Associate 
Administrator for Minority Small Business Development (in this section 
referred to as the `Associate Administrator') appointed under section 
4(b)(1).</DELETED>
<DELETED>    ``(b) Associate Administrator for Minority Small Business 
Development.--The Associate Administrator--</DELETED>
        <DELETED>    ``(1) shall be either--</DELETED>
                <DELETED>    ``(A) an appointee in the Senior Executive 
                Service who is a career appointee; or</DELETED>
                <DELETED>    ``(B) an employee in the competitive 
                service;</DELETED>
        <DELETED>    ``(2) shall be responsible for the formulation, 
        execution, and promotion of policies and programs of the 
        Administration that provide assistance to small business 
        concerns owned and controlled by minorities;</DELETED>
        <DELETED>    ``(3) shall act as an ombudsman for full 
        consideration of minorities in all programs of the 
        Administration (including those under sections 7(j) and 
        8(a));</DELETED>
        <DELETED>    ``(4) shall work with the Associate Deputy 
        Administrator for Capital Access to increase the proportion of 
        loans and loan dollars, and investments and investment dollars, 
        going to minorities through the finance programs under this Act 
        and the Small Business Investment Act of 1958 (including 
        subsections (a), (b), and (m) of section 7 of this Act and the 
        programs under part A and B of title III and title V of the 
        Small Business Investment Act of 1958);</DELETED>
        <DELETED>    ``(5) shall work with the Associate Deputy 
        Administrator for Entrepreneurial Development to increase the 
        proportion of counseling and training that goes to minorities 
        through the entrepreneurial development programs of the 
        Administration;</DELETED>
        <DELETED>    ``(6) shall work with the Associate Deputy 
        Administrator for Government Contracting and Minority 
        Enterprise Development to increase the proportion of contracts, 
        including through the Small Business Innovation Research 
        Program and the Small Business Technology Transfer Program, to 
        minorities;</DELETED>
        <DELETED>    ``(7) shall work with the partners of the 
        Administration, trade associations, and business groups to 
        identify and carry out policies and procedures to more 
        effectively market the resources of the Administration to 
        minorities;</DELETED>
        <DELETED>    ``(8) shall work with the Office of Field 
        Operations to ensure that district offices and regional offices 
        have adequate staff, funding, and other resources to market the 
        programs of the Administration to meet the objectives described 
        in paragraphs (4) through (7); and</DELETED>
        <DELETED>    ``(9) shall report to and be responsible directly 
        to the Administrator.</DELETED>
<DELETED>    ``(c) Authorization of Appropriations.--There are 
authorized to be appropriated to carry out this section--</DELETED>
        <DELETED>    ``(1) $5,000,000 for fiscal year 2007;</DELETED>
        <DELETED>    ``(2) $5,000,000 for fiscal year 2008;</DELETED>
        <DELETED>    ``(3) $5,000,000 for fiscal year 2009; 
        and</DELETED>
        <DELETED>    ``(4) $5,000,000 for fiscal year 
        2010.''.</DELETED>
<DELETED>    (b) Conforming Amendments.--Section 4(b)(1) of the Small 
Business Act (15 U.S.C. 633(b)(1)) is amended in sixth sentence, by 
striking ``Minority Small Business and Capital Ownership Development'' 
and all that follows through the end of the sentence and inserting 
``Minority Small Business Development.''.</DELETED>

<DELETED>SEC. 308. LOWERING OF FEES.</DELETED>

<DELETED>    Section 7(a)(23) of the Small Business Act (15 U.S.C. 
636(a)(23)) is amended by striking subparagraph (C) and inserting the 
following:</DELETED>
                <DELETED>    ``(C) Lowering of fees.--</DELETED>
                        <DELETED>    ``(i) In general.--For loan 
                        guarantees made or approved in each full fiscal 
                        year after the date of enactment of the Small 
                        Business Lending Reauthorization and 
                        Improvements Act of 2007, if the fees paid by 
                        all small business borrowers and by lenders for 
                        guarantees under this subsection, or the sum of 
                        such fees plus any funds made available for the 
                        purpose of reducing fees for loans under this 
                        subsection, as applicable, is more than the 
                        amount necessary to equal the cost to the 
                        Administration of making such guarantees, the 
                        Administrator shall reduce fees paid by small 
                        business borrowers and lenders under clauses 
                        (i) through (iv) of paragraph (18)(A) and 
                        subparagraph (A) of this paragraph.</DELETED>
                        <DELETED>    ``(ii) Maximum.--The fees paid by 
                        small business borrowers and lenders for 
                        guarantees under this subsection may not be 
                        increased above the maximum level authorized 
                        under the amendments made by division K of the 
                        Consolidated Appropriations Act, 2005 (Public 
                        Law 108-447; 118 Stat. 3441).''.</DELETED>

<DELETED>SEC. 309. INTERNATIONAL TRADE LOANS.</DELETED>

<DELETED>    (a) In General.--Section 7(a)(3)(B) of the Small Business 
Act (15 U.S.C. 636(a)(3)(B)) is amended by striking ``$1,750,000, of 
which not more than $1,250,000'' and inserting ``$2,750,000 (or if the 
gross loan amount would exceed $3,670,000), of which not more than 
$2,000,000''.</DELETED>
<DELETED>    (b) Working Capital.--Section 7(a)(16)(A) of the Small 
Business Act (15 U.S.C. 636(a)(16)(A)) is amended--</DELETED>
        <DELETED>    (1) in the matter preceding clause (i), by 
        striking ``in--'' and inserting ``--'';</DELETED>
        <DELETED>    (2) in clause (i)--</DELETED>
                <DELETED>    (A) by inserting ``in'' after ``(i)''; 
                and</DELETED>
                <DELETED>    (B) by striking ``or'' at the 
                end;</DELETED>
        <DELETED>    (3) in clause (ii)--</DELETED>
                <DELETED>    (A) by inserting ``in'' after ``(ii)''; 
                and</DELETED>
                <DELETED>    (B) by striking the period and inserting 
                ``; or''; and</DELETED>
        <DELETED>    (4) by adding at the end the following:</DELETED>
                        <DELETED>    ``(iii) by providing working 
                        capital.''.</DELETED>
<DELETED>    (c) Collateral.--Section 7(a)(16)(B) of the Small Business 
Act (15 U.S.C. 636(a)(16)(B)) is amended--</DELETED>
        <DELETED>    (1) by striking ``Each loan'' and inserting the 
        following:</DELETED>
                        <DELETED>    ``(i) In general.--Except as 
                        provided in clause (ii), each loan''; 
                        and</DELETED>
        <DELETED>    (2) by adding at the end the following:</DELETED>
                        <DELETED>    ``(ii) Exception.--A loan under 
                        this paragraph may be secured by a second lien 
                        position on the property or equipment financed 
                        by the loan or on other assets of the small 
                        business concern, if the Administrator 
                        determines such lien provides adequate 
                        assurance of the payment of such 
                        loan.''.</DELETED>
<DELETED>    (d) Refinancing.--Section 7(a)(16)(A)(ii) of the Small 
Business Act (15 U.S.C. 636(a)(16)(A)(ii)), as amended by this section, 
is amended by inserting ``, including any debt that qualifies for 
refinancing under any other provision of this subsection'' before the 
semicolon.</DELETED>

<DELETED>SEC. 310. RURAL LENDING OUTREACH PROGRAM.</DELETED>

<DELETED>    Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), 
as amended by this Act, is amended--</DELETED>
        <DELETED>    (1) by striking paragraph (25)(C); and</DELETED>
        <DELETED>    (2) by adding at the end the following:</DELETED>
        <DELETED>    ``(33) Rural lending outreach program.--</DELETED>
                <DELETED>    ``(A) In general.--The Administrator shall 
                carry out a rural lending outreach program to provide 
                not more than an 85 percent guaranty for loans of not 
                more than $250,000. The program shall be carried out 
                only through lenders located in rural areas (as the 
                term `rural' is defined in section 501(f) of the Small 
                Business Investment Act of 1958 (15 U.S.C. 
                695(f)).</DELETED>
                <DELETED>    ``(B) Loan terms.--For a loan made through 
                the program under this paragraph--</DELETED>
                        <DELETED>    ``(i) the Administrator shall 
                        approve or disapprove the loan within 36 hours 
                        of the time the Administrator receives the 
                        application;</DELETED>
                        <DELETED>    ``(ii) the program shall use 
                        abbreviated application and documentation 
                        requirements; and</DELETED>
                        <DELETED>    ``(iii) minimum credit standards, 
                        as the Administrator considers necessary to 
                        limit the rate of default on loans made under 
                        the program, shall apply.''.</DELETED>

     <DELETED>TITLE IV--CERTIFIED DEVELOPMENT COMPANIES; 504 LOAN 
                           PROGRAM</DELETED>

<DELETED>SEC. 401. DEVELOPMENT COMPANY LOAN PROGRAMS.</DELETED>

<DELETED>    (a) Title of Program.--Title V of the Small Business 
Investment Act of 1958 (15 U.S.C. 695 et seq.) is amended by adding at 
the end the following:</DELETED>

<DELETED>``SEC. 511. PROGRAM TITLE.</DELETED>

<DELETED>    ``(a) In General.--Except as provided in subsection (b), 
the programs authorized by this title shall be known collectively as 
the `Local Development Business Loan Program'. The Administrator may 
refer to such program as the `504 Loan Program', until such usage is no 
longer necessary.</DELETED>
<DELETED>    ``(b) Existing Name.--Participants in the Local 
Development Business Loan Program may continue to refer to such program 
as `the 504 Loan Program'.''.</DELETED>
<DELETED>    (b) Existing Materials.--The Administrator may use 
informational materials created, or that were in the process of being 
created, before the date of enactment of this Act that do not refer to 
a program under title V of the Small Business Investment Act of 1958 
(15 U.S.C. 695 et seq.) as the ``Local Development Business Loan 
Program''.</DELETED>
<DELETED>    (c) New Materials.--Any informational materials created by 
the Administrator on or after the date of enactment of this Act shall 
refer to any program under title V of the Small Business Investment Act 
of 1958 (15 U.S.C. 695 et seq.) as the ``Local Development Business 
Loan Program'', except that informational materials may refer to such 
program as the ``504 Loan Program'', until such usage is no longer 
necessary.</DELETED>

<DELETED>SEC. 402. LOAN LIQUIDATIONS.</DELETED>

<DELETED>    Section 510 of the Small Business Investment Act of 1958 
(15 U.S.C. 697g) is amended--</DELETED>
        <DELETED>    (1) by redesignating subsection (e) as subsection 
        (g); and</DELETED>
        <DELETED>    (2) by inserting after subsection (d) the 
        following:</DELETED>
<DELETED>    ``(e) Participation.--</DELETED>
        <DELETED>    ``(1) In general.--Any qualified State or local 
        development company which elects not to apply for authority to 
        foreclose and liquidate defaulted loans under this section, or 
        which the Administrator determines to be ineligible for such 
        authority, shall contract with a qualified third-party to 
        perform foreclosure and liquidation of defaulted loans in its 
        portfolio. The contract shall be contingent upon approval by 
        the Administrator with respect to the qualifications of the 
        contractor and the terms and conditions of liquidation 
        activities.</DELETED>
        <DELETED>    ``(2) Commencement.--This subsection does not 
        require any development company to liquidate defaulted loans 
        until the Administrator has adopted and implemented a program 
        to compensate and reimburse development companies, as provided 
        under subsection (f).</DELETED>
<DELETED>    ``(f) Compensation and Reimbursement.--</DELETED>
        <DELETED>    ``(1) Reimbursement of expenses.--The 
        Administrator shall reimburse each qualified State or local 
        development company for all expenses paid by such company as 
        part of the foreclosure and liquidation activities, if the 
        expenses--</DELETED>
                <DELETED>    ``(A) were--</DELETED>
                        <DELETED>    ``(i) approved in advance by the 
                        Administrator, either specifically or 
                        generally; or</DELETED>
                        <DELETED>    ``(ii) incurred by the development 
                        company on an emergency basis without prior 
                        approval from the Administrator, if the 
                        Administrator determines that the expenses were 
                        reasonable and appropriate; and</DELETED>
                <DELETED>    ``(B) are submitted by the development 
                company to the Administrator not later than 3 years 
                after the date of the purchase of the debenture by the 
                Administrator.</DELETED>
        <DELETED>    ``(2) Compensation for results.--</DELETED>
                <DELETED>    ``(A) Development.--The Administrator 
                shall develop a schedule to compensate and provide an 
                incentive to qualified State or local development 
                companies that foreclose and liquidate defaulted 
                loans.</DELETED>
                <DELETED>    ``(B) Criteria.--The schedule required 
                under this paragraph shall--</DELETED>
                        <DELETED>    ``(i) be based on a percentage of 
                        the net amount recovered, but shall not exceed 
                        a maximum amount; and</DELETED>
                        <DELETED>    ``(ii) not apply to any 
                        foreclosure which is conducted under a contract 
                        between a development company and a qualified 
                        third party to perform the foreclosure and 
                        liquidation.''.</DELETED>

<DELETED>SEC. 403. ADDITIONAL EQUITY INJECTIONS.</DELETED>

<DELETED>    Section 502(3)(B)(ii) of the Small Business Investment Act 
of 1958 (15 U.S.C. 696(3)(B)(ii)) is amended to read as 
follows:</DELETED>
                        <DELETED>    ``(ii) Funding from 
                        institutions.--If a small business concern--
                        </DELETED>
                                <DELETED>    ``(I) provides the minimum 
                                contribution required under 
                                subparagraph (C), not less than 50 
                                percent of the total cost of any 
                                project financed under clause (i), 
                                (ii), or (iii) of subparagraph (C) 
                                shall come from the institutions 
                                described in subclauses (I), (II), and 
                                (III) of clause (i); and</DELETED>
                                <DELETED>    ``(II) provides more than 
                                the minimum contribution required under 
                                subparagraph (C), any excess 
                                contribution may be used to reduce the 
                                amount required from the institutions 
                                described in subclauses (I), (II), and 
                                (III) of clause (i), except that the 
                                amount from such institutions may not 
                                be reduced to an amount that is less 
                                than the amount of the loan made by the 
                                Administrator.''.</DELETED>

<DELETED>SEC. 404. BUSINESSES IN LOW-INCOME AREAS.</DELETED>

<DELETED>    (a) Goals.--Section 501(d)(3)(A) of the Small Business 
Investment Act of 1958 (15 U.S.C. 695(d)(3)(A)) is amended by inserting 
after ``business district revitalization,'' the following: ``or 
expansion of businesses in low-income communities which would be 
eligible for a new markets tax credit under section 45D(a) of the 
Internal Revenue Code of 1986, or implementing regulations issued 
thereunder,''.</DELETED>
<DELETED>    (b) Loan Amount.--Section 502 of the Small Business 
Investment Act of 1958 (15 U.S.C. 696) is amended by adding at the end 
the following:</DELETED>
        <DELETED>    ``(7) Low-income geographic areas.--
        Notwithstanding any other provision of law, a loan under this 
        section for use in a low-income geographic area (as that term 
        is defined in section 351) may be for not more than 
        $4,000,000.''.</DELETED>

<DELETED>SEC. 405. COMBINATIONS OF CERTAIN GOALS.</DELETED>

<DELETED>    Section 501(e) of the Small Business Investment Act of 
1958 (15 U.S.C. 695(e)) is amended by adding at the end the 
following:</DELETED>
<DELETED>    ``(7) A small business concern that is unconditionally 
owned by more than 1 individual, or a corporation, the stock of which 
is owned by more than 1 individual, shall be deemed to have achieved a 
public policy goal required under subsection (d)(3) if a combined 
ownership share of not less than 51 percent is held by individuals who 
are in 1 of, or a combination of, the groups described in subparagraph 
(C) or (E) of subsection (d)(3).''.</DELETED>

<DELETED>SEC. 406. REFINANCING UNDER THE LOCAL DEVELOPMENT BUSINESS 
              LOAN PROGRAM.</DELETED>

<DELETED>    Section 502 of the Small Business Investment Act of 1958 
(15 U.S.C. 696) is amended by adding at the end the 
following:</DELETED>
        <DELETED>    ``(7) Permissible debt refinancing.--</DELETED>
                <DELETED>    ``(A) In general.--Any financing approved 
                under this title may include a limited amount of debt 
                refinancing.</DELETED>
                <DELETED>    ``(B) Expansions.--If the project involves 
                expansion of a small business concern which has 
                existing indebtedness collateralized by fixed assets, 
                any amount of existing indebtedness that does not 
                exceed </DELETED>\<DELETED>1/2</DELETED>\ <DELETED>of 
                the project cost of the expansion may be refinanced and 
                added to the expansion cost, if--</DELETED>
                        <DELETED>    ``(i) the proceeds of the 
                        indebtedness were used to acquire land, 
                        including a building situated thereon, to 
                        construct a building thereon, or to purchase 
                        equipment;</DELETED>
                        <DELETED>    ``(ii) the borrower has been 
                        current on all payments due on the existing 
                        debt for not less than 1 year preceding the 
                        date of refinancing; and</DELETED>
                        <DELETED>    ``(iii) the financing under 
                        section 504 will provide better terms or rate 
                        of interest than exists on the debt at the time 
                        of refinancing.''.</DELETED>

<DELETED>SEC. 407. TECHNICAL CORRECTION.</DELETED>

<DELETED>    Section 501(e)(2) of the Small Business Investment Act of 
1958 (15 U.S.C. 695(e)(2)) is amended by striking 
``outstanding''.</DELETED>

<DELETED>SEC. 408. DEFINITIONS FOR THE SMALL BUSINESS INVESTMENT ACT OF 
              1958.</DELETED>

<DELETED>    Section 103 of the Small Business Investment Act of 1958 
(15 U.S.C. 662) is amended--</DELETED>
        <DELETED>    (1) by striking paragraph (6) and inserting the 
        following:</DELETED>
        <DELETED>    ``(6) the term `development company' means an 
        entity incorporated under State law with the authority to 
        promote and assist the growth and development of small business 
        concerns in the areas in which it is authorized to operate by 
        the Administrator;'';</DELETED>
        <DELETED>    (2) in paragraph (16), by striking ``and'' at the 
        end;</DELETED>
        <DELETED>    (3) in paragraph (17), by striking the period at 
        the end and inserting ``; and''; and</DELETED>
        <DELETED>    (4) by adding at the end the following:</DELETED>
        <DELETED>    ``(18) the term `certified development company' 
        means a development company that the Administrator has 
        certified meets the criteria of section 506.''.</DELETED>

<DELETED>SEC. 409. REPEAL OF SUNSET ON RESERVE REQUIREMENTS FOR PREMIER 
              CERTIFIED LENDERS.</DELETED>

<DELETED>    Section 508(c)(6)(B) of the Small Business Investment Act 
of 1958 (15 U.S.C. 697e(c)(6)(B)) is amended--</DELETED>
        <DELETED>    (1) in the subparagraph heading, by striking 
        ``Temporary reduction'' and inserting ``Reduction''; 
        and</DELETED>
        <DELETED>    (2) by striking ``Notwithstanding subparagraph 
        (A), during the 2-year period beginning on the date that is 90 
        days after the date of enactment of this subparagraph, the'' 
        and inserting ``The''.</DELETED>

<DELETED>SEC. 410. CERTIFIED DEVELOPMENT COMPANIES.</DELETED>

<DELETED>    Section 506 of the Small Business Investment Act of 1958 
(15 U.S.C. 697c) is amended--</DELETED>
        <DELETED>    (1) in the section heading, by striking 
        ``restrictions on development company assistance'' and 
        inserting ``certified development companies''; and</DELETED>
        <DELETED>    (2) by inserting before ``Notwithstanding any 
        other provision of law'' the following:</DELETED>
<DELETED>    ``(a) Authority To Issue Debentures.--A development 
company may issue debentures under this title if the Administrator 
certifies that the company meets the following criteria:</DELETED>
        <DELETED>    ``(1) Size.--</DELETED>
                <DELETED>    ``(A) In general.--Except as provided in 
                subparagraph (B), the development company shall be a 
                small business concern with fewer than 500 employees, 
                and shall not be under the control of any entity that 
                does not meet the size standards established by the 
                Administrator for a small business concern.</DELETED>
                <DELETED>    ``(B) Exception.--Any development company 
                that was certified by the Administrator before December 
                31, 2005, may continue to issue debentures under this 
                title.</DELETED>
        <DELETED>    ``(2) Primary purpose.--The primary purpose of the 
        development company shall be to benefit the community by 
        fostering economic development to create and preserve jobs and 
        stimulate private investment.</DELETED>
        <DELETED>    ``(3) Primary function.--A primary function of the 
        development company shall be to accomplish its purpose by 
        providing long-term financing to small business concerns under 
        the Local Development Business Loan Program. The development 
        company shall also provide or support other community and local 
        economic development activities to assist the 
        community.</DELETED>
        <DELETED>    ``(4) Nonprofit status.--</DELETED>
                <DELETED>    ``(A) In general.--Except as provided in 
                subparagraph (B), the development company shall be a 
                nonprofit corporation.</DELETED>
                <DELETED>    ``(B) Exception.--A development company 
                certified by the Administrator before January 1, 1987, 
                may continue to issue debentures under this title and 
                retain its status as a for-profit enterprise.</DELETED>
        <DELETED>    ``(5) Good standing.--The development company--
        </DELETED>
                <DELETED>    ``(A) shall be in good standing in the 
                State in which such company is incorporated and in any 
                other State in which it conducts business; 
                and</DELETED>
                <DELETED>    ``(B) shall be in compliance with all 
                laws, including taxation requirements, in the State in 
                which such company is incorporated and in any other 
                State in which it conducts business.</DELETED>
        <DELETED>    ``(6) Membership of development company.--There 
        shall be--</DELETED>
                <DELETED>    ``(A) not fewer than 25 members of the 
                development company (or owners or stockholders, if the 
                corporation is a for-profit entity), none of whom may 
                own or control more than 10 percent of the voting 
                membership of the company; and</DELETED>
                <DELETED>    ``(B) at least 1 member of the development 
                company (none of whom is in a position to control the 
                development company) from each of the 
                following:</DELETED>
                        <DELETED>    ``(i) Government organizations 
                        that are responsible for economic 
                        development.</DELETED>
                        <DELETED>    ``(ii) Financial institutions that 
                        provide commercial long-term fixed asset 
                        financing.</DELETED>
                        <DELETED>    ``(iii) Community organizations 
                        that are dedicated to economic 
                        development.</DELETED>
                        <DELETED>    ``(iv) Businesses.</DELETED>
        <DELETED>    ``(7) Board of directors.--</DELETED>
                <DELETED>    ``(A) In general.--The development company 
                shall have a board of directors.</DELETED>
                <DELETED>    ``(B) Members of board.--Each member of 
                the board of directors shall be--</DELETED>
                        <DELETED>    ``(i) a member of the development 
                        company; and</DELETED>
                        <DELETED>    ``(ii) elected by a majority of 
                        the members of the development 
                        company.</DELETED>
                <DELETED>    ``(C) Representation of organizations and 
                institutions.--</DELETED>
                        <DELETED>    ``(i) In general.--There shall be 
                        at least 1 member of the board of directors 
                        from not fewer than 3 of the 4 organizations 
                        and institutions described in paragraph (6)(B), 
                        none of whom is in a position to control the 
                        development company.</DELETED>
                        <DELETED>    ``(ii) Maximum percentage.--Not 
                        more than 50 percent of the members of the 
                        board of directors shall be from any 1 of the 
                        organizations and institutions described in 
                        paragraph (6)(B).</DELETED>
                <DELETED>    ``(D) Meetings.--The board of directors of 
                the development company shall meet on a regular basis 
                to make policy decisions for such company.</DELETED>
        <DELETED>    ``(8) Professional management and staff.--
        </DELETED>
                <DELETED>    ``(A) In general.--The development company 
                shall have full-time professional management, including 
                a chief executive officer to manage daily operations 
                and a full-time professional staff qualified to market 
                the Local Development Business Loan Program and handle 
                all aspects of loan approval and servicing, including 
                liquidation, if appropriate.</DELETED>
                <DELETED>    ``(B) Independent management and 
                operation.--Except as provided in paragraph (9), the 
                development company shall be independently managed and 
                operated to pursue the economic development purpose of 
                the company and shall employ directly the chief 
                executive officer.</DELETED>
        <DELETED>    ``(9) Management and operation exceptions.--
        </DELETED>
                <DELETED>    ``(A) Affiliation.--A development company 
                may be an affiliate of another local nonprofit service 
                corporation (other than a development company), a 
                purpose of which is to support economic development in 
                the area in which the development company 
                operates.</DELETED>
                <DELETED>    ``(B) Staffing.--A development company may 
                satisfy the requirement for full-time professional 
                staff under paragraph (8)(A) by contracting for the 
                required staffing with--</DELETED>
                        <DELETED>    ``(i) a local nonprofit service 
                        corporation;</DELETED>
                        <DELETED>    ``(ii) a nonprofit affiliate of a 
                        local nonprofit service corporation;</DELETED>
                        <DELETED>    ``(iii) an entity wholly or 
                        partially operated by a governmental agency; 
                        or</DELETED>
                        <DELETED>    ``(iv) another entity approved by 
                        the Administrator.</DELETED>
                <DELETED>    ``(C) Directors.--A development company 
                and a local nonprofit service corporation with which it 
                is affiliated may have in common some, but not all, 
                members of their respective board of 
                directors.</DELETED>
                <DELETED>    ``(D) Rural areas.--A development company 
                in a rural area may satisfy the requirements of a full-
                time professional staff and professional management 
                ability under paragraph (8)(A) by contracting for such 
                services with another certified development company 
                that--</DELETED>
                        <DELETED>    ``(i) has such staff and 
                        management ability; and</DELETED>
                        <DELETED>    ``(ii) is located in the same 
                        State as the development company or in a State 
                        that is contiguous to the State in which the 
                        development company is located.</DELETED>
                <DELETED>    ``(E) Previously certified.--A development 
                company that, on or before December 31, 2005, was 
                certified by the Administrator and had contracted with 
                a for-profit company to provide staffing and management 
                services, may continue to do so.</DELETED>
<DELETED>    ``(b) Use of Excess Funds.--Any funds generated by a 
certified development company from making loans under section 503 or 
504 that remain unexpended after payment of staff, operating, and 
overhead expenses shall be retained by the certified development 
company as a reserve for--</DELETED>
        <DELETED>    ``(1) future operations;</DELETED>
        <DELETED>    ``(2) expanding the area in which the certified 
        development company operates through the methods authorized by 
        this Act; or</DELETED>
        <DELETED>    ``(3) investment in other community and local 
        economic development activity or community development in the 
        State from which such funds were generated.</DELETED>
<DELETED>    ``(c) Ethical Requirements.--</DELETED>
        <DELETED>    ``(1) In general.--A certified development company 
        and the officers, employees, and other staff of the company 
        shall at all times act ethically and avoid activities which 
        constitute a conflict of interest or appear to constitute a 
        conflict of interest.</DELETED>
        <DELETED>    ``(2) Prohibited conflict in project loans.--
        </DELETED>
                <DELETED>    ``(A) In general.--No certified 
                development company may--</DELETED>
                        <DELETED>    ``(i) recommend or approve a 
                        guarantee of a debenture by the Administrator 
                        under the Local Business Development Loan 
                        Program that is collateralized by a second lien 
                        position on the property being constructed or 
                        acquired; and</DELETED>
                        <DELETED>    ``(ii) provide, or be affiliated 
                        with a corporation or other entity which 
                        provides, financing collateralized by a first 
                        lien on the same property.</DELETED>
                <DELETED>    ``(B) Exception.--During the 2-year period 
                beginning on the date of enactment of the Small 
                Business Lending Reauthorization and Improvements Act 
                of 2007, a certified development company that was 
                participating as a first mortgage lender for the Local 
                Business Development Loan Program in either of fiscal 
                years 2004 or 2005 may continue to do so.</DELETED>
        <DELETED>    ``(3) Other economic development activities.--It 
        shall not be a conflict of interest for a certified development 
        company to operate multiple programs to assist small business 
        concerns as part of carrying out its economic development 
        purpose.</DELETED>
<DELETED>    ``(d) Multistate Operations.--</DELETED>
        <DELETED>    ``(1) Authorization.--Notwithstanding any other 
        provision of law, the Administrator shall permit a certified 
        development company to make loans in any State that is 
        contiguous to the State of incorporation of that certified 
        development company, only if such company--</DELETED>
                <DELETED>    ``(A) is--</DELETED>
                        <DELETED>    ``(i) an accredited lender under 
                        section 507; or</DELETED>
                        <DELETED>    ``(ii) a premier certified lender 
                        under section 508;</DELETED>
                <DELETED>    ``(B) has a membership that contains, from 
                each of the States in which it operates, not fewer than 
                25 members who reside in that State;</DELETED>
                <DELETED>    ``(C) has a board of directors that 
                contains not fewer than 2 members from each State in 
                which the company makes loans;</DELETED>
                <DELETED>    ``(D) maintains not fewer than 1 loan 
                committee, which shall have not fewer than 1 member 
                from each State in which the company makes loans; 
                and</DELETED>
                <DELETED>    ``(E) submits to the Administrator, in 
                writing--</DELETED>
                        <DELETED>    ``(i) a notice of the intention of 
                        the company to make loans in multiple 
                        States;</DELETED>
                        <DELETED>    ``(ii) the names of the States in 
                        which the company intends to make loans; 
                        and</DELETED>
                        <DELETED>    ``(iii) a detailed statement of 
                        how the company will comply with this 
                        paragraph, including a list of the members 
                        described in subparagraph (B).</DELETED>
        <DELETED>    ``(2) Review.--The Administrator shall verify 
        whether a certified development company satisfies the 
        requirements of paragraph (1) on an expedited basis and, not 
        later than 30 days after the date on which the Administrator 
        receives the statement described in paragraph (1)(E)(iii), the 
        Administrator shall determine whether such company satisfies 
        such criteria and provide notice to such company.</DELETED>
        <DELETED>    ``(3) Loan committee participation.--For any loan 
        made by a company described in paragraph (1), not fewer than 1 
        member of the loan committee from the State in which the loan 
        is to be made shall participate in the review of such 
        loan.</DELETED>
        <DELETED>    ``(4) Aggregate accounting.--A company described 
        in paragraph (1) may maintain an aggregate accounting of all 
        revenue and expenses of the company for purposes of this 
        title.</DELETED>
        <DELETED>    ``(5) Service to certified development 
        companies.--</DELETED>
                <DELETED>    ``(A) In general.--Except as provided in 
                subparagraph (B), an associate of a certified 
                development company may not be an officer, director, or 
                manager of more than 1 certified development 
                company.</DELETED>
                <DELETED>    ``(B) Exception.--</DELETED>
                        <DELETED>    ``(i) In general.--Notwithstanding 
                        any other provision of law, a person who is 
                        serving on the board of directors of a 
                        certified development company may serve on the 
                        board of directors, but not as an officer, of 
                        not more than 1 additional certified 
                        development company, if--</DELETED>
                                <DELETED>    ``(I) such companies are 
                                not located in the same 
                                State;</DELETED>
                                <DELETED>    ``(II) each board of 
                                directors determines that the service 
                                by such person on such board does not 
                                constitute a conflict of interest; 
                                and</DELETED>
                                <DELETED>    ``(III) there is not a 
                                contractual relationship between--
                                </DELETED>
                                        <DELETED>    ``(aa) the person 
                                        and such additional certified 
                                        development company, except for 
                                        the contract of such person to 
                                        serve as a member of the board 
                                        of directors of such company, 
                                        if any; or</DELETED>
                                        <DELETED>    ``(bb) the 
                                        certified development companies 
                                        of which such person is a 
                                        member of the board of 
                                        directors.</DELETED>
                        <DELETED>    ``(ii) Maximum number of 
                        members.--A certified development company may 
                        not have more than 1 member of the board of 
                        directors of such company in common with any 
                        other board of directors of a certified 
                        development company.</DELETED>
                <DELETED>    ``(C) Definition.--As used in this 
                paragraph, the term `associate of a certified 
                development company' has the meaning given the term 
                `Associate of a CDC' in section 120.10 of title 13, 
                Code of Federal Regulations (or any corresponding 
                similar regulation or ruling).</DELETED>
        <DELETED>    ``(6) Local job creation requirements.--</DELETED>
                <DELETED>    ``(A) In general.--Subject to subparagraph 
                (B), any certified development company making loans in 
                multiple States shall satisfy any applicable job 
                creation or retention requirements separately for each 
                such State. Such a company shall not count jobs created 
                or retained in 1 State towards any applicable job 
                creation or retention requirement in another 
                State.</DELETED>
                <DELETED>    ``(B) Applicability.--This paragraph shall 
                apply to a certified development company relating to a 
                State beginning 2 years after the date that certified 
                development company began making loans in that 
                State.</DELETED>
        <DELETED>    ``(7) Contiguous states.--For purposes of this 
        subsection, the States of Alaska and Hawaii shall be deemed to 
        be contiguous to any State abutting the Pacific 
        Ocean.</DELETED>
        <DELETED>    ``(8) Local economic area requirement and 
        exemption.--</DELETED>
                <DELETED>    ``(A) Definition.--In this paragraph, the 
                term `local economic area' means an area, as determined 
                by the Administrator, that--</DELETED>
                        <DELETED>    ``(i) is in a State other than the 
                        State in which a development company is 
                        incorporated;</DELETED>
                        <DELETED>    ``(ii) shares a border with the 
                        area of operations of the development company; 
                        and</DELETED>
                        <DELETED>    ``(iii) is a part of a local trade 
                        area (including a city that is bisected by a 
                        State line and a metropolitan statistical area 
                        that is bisected by a State line) that is 
                        contiguous to the area of operations of the 
                        development company.</DELETED>
                <DELETED>    ``(B) Exemption.--An applicant operating 
                in a local economic area shall not be considered to be 
                operating in a multistate area, and shall not be 
                required to comply with the requirements for multistate 
                operation.</DELETED>
<DELETED>    ``(e) Restrictions on Development Company Assistance.--
''.</DELETED>

<DELETED>SEC. 411. CONFORMING AMENDMENTS.</DELETED>

<DELETED>    Section 503 of the Small Business Investment Act of 1958 
(15 U.S.C. 697) is amended--</DELETED>
        <DELETED>    (1) in subsection (a)(1), by striking ``qualified 
        State or local development company'' and inserting ``certified 
        development company''; and</DELETED>
        <DELETED>    (2) by striking subsection (e) and inserting the 
        following:</DELETED>
<DELETED>    ``(e) Section 7(a) Loans.--Notwithstanding any other 
provision of law, a certified development company is authorized to 
prepare applications for deferred participation loans under section 
7(a) of the Small Business Act, to service such loans, and to charge a 
reasonable fee for servicing such loans.''.</DELETED>

<DELETED>SEC. 412. CLOSING COSTS.</DELETED>

<DELETED>    Section 503(b) of the Small Business Investment Act of 
1958 (15 U.S.C. 697(b)) is amended by striking paragraph (4) and 
inserting the following:</DELETED>
        <DELETED>    ``(4) the aggregate amount of such debenture does 
        not exceed the amount of the loans to be made from the proceeds 
        of such debenture plus, at the election of the borrower, other 
        amounts attributable to the administrative and closing costs of 
        such loans, except for the attorney fees of the 
        borrower;''.</DELETED>

<DELETED>SEC. 413. DEFINITION OF RURAL.</DELETED>

<DELETED>    Section 501 of the Small Business Investment Act of 1958 
(15 U.S.C. 695) is amended by adding at the end the 
following:</DELETED>
<DELETED>    ``(f) As used in this title, the term `rural' includes any 
area that is not--</DELETED>
        <DELETED>    ``(1) a city or town that has a population greater 
        than 50,000 inhabitants; or</DELETED>
        <DELETED>    ``(2) the urbanized area contiguous and adjacent 
        to a city or town described in paragraph (1).''.</DELETED>

<DELETED>SEC. 414. REGULATIONS AND EFFECTIVE DATE.</DELETED>

<DELETED>    (a) In General.--Except as provided in subsection (b), the 
Administrator shall--</DELETED>
        <DELETED>    (1) publish proposed rules to implement this title 
        and the amendments made by this title, not later than 120 days 
        after the date of enactment of this Act; and</DELETED>
        <DELETED>    (2) publish such rules in final form not later 
        than 120 days after the date of publication under paragraph 
        (1).</DELETED>
<DELETED>    (b) Multistate Operations.--As soon as is practicable 
after the date of enactment of this Act, the Administrator shall 
promulgate regulations to implement section 506(d) of the Small 
Business Investment Act of 1958, as added by this title. Such 
regulations shall become effective not later than 120 days after the 
date of enactment of this Act.</DELETED>
<DELETED>    (c) Effective Date.--</DELETED>
        <DELETED>    (1) In general.--Except as otherwise specifically 
        provided this title, this title and the amendments made by this 
        title shall become effective 240 days after the date of 
        enactment of this Act, regardless of whether the Administrator 
        has promulgated the regulations required under subsection 
        (a).</DELETED>
        <DELETED>    (2) Multistate operations.--Section 506(d) of the 
        Small Business Investment Act of 1958, as added by this title, 
        shall become effective 120 days after the date of enactment of 
        this Act, regardless of whether the Administrator has 
        promulgated the regulations required under subsection 
        (b).</DELETED>

<DELETED>SEC. 415. LIMITATION ON TIME FOR FINAL APPROVAL OF 
              COMPANIES.</DELETED>

<DELETED>    Section 354(d) of the Small Business Investment Act of 
1958 (15 U.S.C. 689c(d)) is amended by striking ``a period of time, not 
to exceed 2 years,'' and inserting ``2 years''.</DELETED>

<DELETED>SEC. 416. CHILD CARE LENDING PILOT PROGRAM.</DELETED>

<DELETED>    (a) Child Care Lending Pilot Program.--Section 502 of the 
Small Business Investment Act of 1958 (15 U.S.C. 696), as amended by 
this Act, is amended--</DELETED>
        <DELETED>    (1) in the matter preceding paragraph (1)--
        </DELETED>
                <DELETED>    (A) by striking ``The Administration'' and 
                inserting the following:</DELETED>
<DELETED>    ``(a) Authorization.--The Administration'';</DELETED>
                <DELETED>    (B) by striking ``and such loans'' and 
                inserting ``. Such loans'';</DELETED>
                <DELETED>    (C) by striking ``: Provided, however, 
                That the foregoing powers shall be subject to the 
                following restrictions and limitations:'' and inserting 
                a period; and</DELETED>
                <DELETED>    (D) by adding at the end the 
                following:</DELETED>
<DELETED>    ``(b) Restrictions and Limitations.--The authority under 
subsection (a) shall be subject to the following restrictions and 
limitations:''; and</DELETED>
        <DELETED>    (2) in subsection (b)(1), as so redesignated--
        </DELETED>
                <DELETED>    (A) by inserting after ``Use of 
                proceeds.--'' the following:</DELETED>
                <DELETED>    ``(A) In general.--''; and</DELETED>
                <DELETED>    (B) by adding at the end the 
                following:</DELETED>
                <DELETED>    ``(B) Loans to small, nonprofit child care 
                businesses.--</DELETED>
                        <DELETED>    ``(i) In general.--Notwithstanding 
                        subsection (a), the proceeds of any loan 
                        described in subsection (a) may be used by the 
                        certified development company to assist a 
                        small, nonprofit child care business, if--
                        </DELETED>
                                <DELETED>    ``(I) the loan is used for 
                                a sound business purpose that has been 
                                approved by the 
                                Administrator;</DELETED>
                                <DELETED>    ``(II) each such business 
                                meets all of the same eligibility 
                                requirements applicable to for-profit 
                                businesses under this title, except for 
                                status as a for-profit 
                                business;</DELETED>
                                <DELETED>    ``(III) 1 or more 
                                individuals has personally guaranteed 
                                the loan;</DELETED>
                                <DELETED>    ``(IV) each such business 
                                has clear and singular title to the 
                                collateral for the loan; and</DELETED>
                                <DELETED>    ``(V) each such business 
                                has sufficient cash flow from its 
                                operations to meet its obligations on 
                                the loan and its normal and reasonable 
                                operating expenses.</DELETED>
                        <DELETED>    ``(ii) Limitation on volume.--Not 
                        more than 7 percent of the total number of 
                        loans guaranteed in any fiscal year under this 
                        title may be awarded under this 
                        subparagraph.</DELETED>
                        <DELETED>    ``(iii) Defined term.--For 
                        purposes of this subparagraph, the term `small, 
                        nonprofit child care business' means an 
                        establishment that--</DELETED>
                                <DELETED>    ``(I) is organized in 
                                accordance with section 501(c)(3) of 
                                the Internal Revenue Code of 
                                1986;</DELETED>
                                <DELETED>    ``(II) is primarily 
                                engaged in providing child care for 
                                infants, toddlers, pre-school, or pre-
                                kindergarten children (or any 
                                combination thereof), and may provide 
                                care for older children when they are 
                                not in school, and may offer pre-
                                kindergarten educational 
                                programs;</DELETED>
                                <DELETED>    ``(III) including its 
                                affiliates, has tangible net worth that 
                                does not exceed $7,000,000, and has 
                                average net income (excluding any 
                                carryover losses) for the 2 completed 
                                fiscal years preceding the date of the 
                                application for assistance under this 
                                subparagraph that does not exceed 
                                $2,500,000; and</DELETED>
                                <DELETED>    ``(IV) is licensed as a 
                                child care provider by the State, 
                                insular area, or the District of 
                                Columbia, in which it is 
                                located.</DELETED>
                        <DELETED>    ``(iv) Sunset provision.--This 
                        subparagraph shall cease to have effect on 
                        September 30, 2010, and shall apply to all 
                        loans authorized under this subparagraph that 
                        are applied for, approved, or disbursed during 
                        the period beginning on the date of enactment 
                        of this subparagraph and ending on September 
                        30, 2010.''.</DELETED>
<DELETED>    (b) Reports.--</DELETED>
        <DELETED>    (1) Small business administration.--</DELETED>
                <DELETED>    (A) In general.--Not later than 6 months 
                after the date of enactment of this Act, and every 6 
                months thereafter until September 30, 2010, the 
                Administrator shall submit a report on the 
                implementation of the program under section 
                502(b)(1)(B) of the Small Business Investment Act of 
                1958, as added by this Act, to--</DELETED>
                        <DELETED>    (i) the Committee on Small 
                        Business and Entrepreneurship of the Senate; 
                        and</DELETED>
                        <DELETED>    (ii) the Committee on Small 
                        Business of the House of 
                        Representatives.</DELETED>
                <DELETED>    (B) Contents.--Each report under 
                subparagraph (A) shall contain--</DELETED>
                        <DELETED>    (i) the date on which the program 
                        is implemented;</DELETED>
                        <DELETED>    (ii) the date on which the rules 
                        are issued under subsection (c); and</DELETED>
                        <DELETED>    (iii) the number and dollar amount 
                        of loans under the program applied for, 
                        approved, and disbursed during the 6-month 
                        period ending on the date of that report--
                        </DELETED>
                                <DELETED>    (I) with respect to 
                                nonprofit child care businesses; 
                                and</DELETED>
                                <DELETED>    (II) with respect to for-
                                profit child care businesses.</DELETED>
        <DELETED>    (2) Government accountability office.--</DELETED>
                <DELETED>    (A) In general.--Not later than March 31, 
                2010, the Comptroller General of the United States 
                shall submit a report on the child care small business 
                loans authorized by section 502(b)(1)(B) of the Small 
                Business Investment Act of 1958, as added by this Act, 
                to--</DELETED>
                        <DELETED>    (i) the Committee on Small 
                        Business and Entrepreneurship of the Senate; 
                        and</DELETED>
                        <DELETED>    (ii) the Committee on Small 
                        Business of the House of 
                        Representatives.</DELETED>
                <DELETED>    (B) Contents.--The report under 
                subparagraph (A) shall contain information gathered 
                during the first 2 years of the loan program, 
                including--</DELETED>
                        <DELETED>    (i) an evaluation of the 
                        timeliness of the implementation of the loan 
                        program;</DELETED>
                        <DELETED>    (ii) a description of the 
                        effectiveness and ease with which certified 
                        development companies, lenders, and small 
                        business concerns have participated in the loan 
                        program;</DELETED>
                        <DELETED>    (iii) a description and assessment 
                        of how the loan program was marketed;</DELETED>
                        <DELETED>    (iv) by location (State, insular 
                        area, and the District of Columbia) and in 
                        total, the number of child care small 
                        businesses, categorized by status as a for-
                        profit or nonprofit business, that--</DELETED>
                                <DELETED>    (I) applied for a loan 
                                under the program (and whether it was a 
                                new or expanding child care 
                                provider);</DELETED>
                                <DELETED>    (II) were approved for a 
                                loan under the program; and</DELETED>
                                <DELETED>    (III) received a loan 
                                disbursement under the program (and 
                                whether they are a new or expanding 
                                child care provider); and</DELETED>
                        <DELETED>    (v) with respect to businesses 
                        described under clause (iv)(III)--</DELETED>
                                <DELETED>    (I) the number of such 
                                businesses in each State, insular area, 
                                and the District of Columbia, as of the 
                                year of enactment of this 
                                Act;</DELETED>
                                <DELETED>    (II) the total amount 
                                loaned to such businesses under the 
                                program;</DELETED>
                                <DELETED>    (III) the total number of 
                                loans to such businesses under the 
                                program;</DELETED>
                                <DELETED>    (IV) the average loan 
                                amount and term;</DELETED>
                                <DELETED>    (V) the currency rate, 
                                delinquencies, defaults, and losses of 
                                the loans;</DELETED>
                                <DELETED>    (VI) the number and 
                                percent of children served who receive 
                                subsidized assistance; and</DELETED>
                                <DELETED>    (VII) the number and 
                                percent of children served who are low 
                                income.</DELETED>
                <DELETED>    (C) Access to information.--</DELETED>
                        <DELETED>    (i) In general.--The 
                        Administration shall collect and maintain such 
                        information as may be necessary to carry out 
                        this paragraph from certified development 
                        centers and child care providers, and such 
                        centers and providers shall comply with a 
                        request for information from the Administration 
                        for that purpose.</DELETED>
                        <DELETED>    (ii) Provision of information to 
                        government accountability office.--The 
                        Administration shall provide information 
                        collected under this subparagraph to the 
                        Comptroller General of the United States for 
                        purposes of the report required by this 
                        paragraph.</DELETED>
<DELETED>    (c) Rulemaking Authority.--Not later than 120 days after 
the date of enactment of this Act, the Administrator shall issue final 
rules to carry out the loan program authorized by section 502(b)(1)(B) 
of the Small Business Investment Act of 1958, as added by this 
Act.</DELETED>

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business Lending 
Reauthorization and Improvements Act of 2007''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents of this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Definitions.
Sec. 4. Authorization of appropriations.

                      TITLE I--MICROLOAN PROGRAMS

Sec. 101. Conforming technical change in average smaller loan size.
Sec. 102. Inclusion of persons with disabilities.
Sec. 103. Microloan Program improvements.
Sec. 104. PRIME reauthorization and transfer to the Small Business Act.
Sec. 105. Report to Congress on the Microloan Program.

              TITLE II--INTERMEDIARY LENDING PILOT PROGRAM

Sec. 201. Findings.
Sec. 202. Small business intermediary lending pilot program.

                      TITLE III--7(a) LOAN PROGRAM

Sec. 301. Preferred Lenders Program.
Sec. 302. Maximum loan amount.
Sec. 303. Maximum 504 and 7(a) loan eligibility.
Sec. 304. Loan pooling.
Sec. 305. Alternative size standard.
Sec. 306. Alternative variable interest rate.
Sec. 307. Minority small business development.
Sec. 308. Lowering of fees.
Sec. 309. International trade loans.
Sec. 310. Rural lending outreach program.

      TITLE IV--CERTIFIED DEVELOPMENT COMPANIES; 504 LOAN PROGRAM

Sec. 401. Development company loan programs.
Sec. 402. Loan liquidations.
Sec. 403. Additional equity injections.
Sec. 404. Uniform leasing policy.
Sec. 405. Businesses in low-income communities.
Sec. 406. Combinations of certain goals.
Sec. 407. Refinancing under the Local Development Business Loan 
                            Program.
Sec. 408. Technical correction.
Sec. 409. Definitions for the Small Business Investment Act of 1958.
Sec. 410. Repeal of sunset on reserve requirements for premier 
                            certified lenders.
Sec. 411. Certified development companies.
Sec. 412. Conforming amendments.
Sec. 413. Closing costs.
Sec. 414. Definition of rural.
Sec. 415. Regulations and effective date.
Sec. 416. Limitation on time for final approval of companies.
Sec. 417. Child Care Lending Pilot Program.
Sec. 418. Debenture repayment.
Sec. 419. Real estate appraisals.

SEC. 3. DEFINITIONS.

    In this Act--
            (1) the terms ``Administration'' and ``Administrator'' mean 
        the Small Business Administration and the Administrator 
        thereof, respectively;
            (2) the term ``504 Loan Program'' means the program to 
        provide financing to small business concerns by guarantees of 
        loans under title V of the Small Business Investment Act of 
        1958 (15 U.S.C. 695 et seq.), which are funded by debentures 
        guaranteed by the Administrator; and
            (3) the term ``small business concern'' has the meaning 
        given that term in section 3 of the Small Business Act (15 
        U.S.C. 632).

SEC. 4. AUTHORIZATION OF APPROPRIATIONS.

    Section 20 of the Small Business Act (15 U.S.C. 631 note) is 
amended--
            (1) by redesignating subsection (j) as subsection (f); and
            (2) by adding at the end the following:
    ``(g) Microloan.--For each of fiscal years 2007 through 2010, the 
Administration is authorized to make, as provided in section 7(m)--
            ``(1) $80,000,000 in technical assistance grants;
            ``(2) $110,000,000 in direct loans; and
            ``(3) $50,000,000 in deferred participation loans.
    ``(h) General Business Loans.--The Administration is authorized to 
make, as provided in section 7(a)--
            ``(1) $18,000,000,000 in general business loans in fiscal 
        year 2007;
            ``(2) $19,000,000,000 in general business loans in fiscal 
        year 2008;
            ``(3) $20,000,000,000 in general business loans in fiscal 
        year 2009; and
            ``(4) $21,000,000,000 in general business loans in fiscal 
        year 2010.
    ``(i) Certified Development Company Financings.--The Administration 
is authorized to make, as provided in section 7(a)(13) and as provided 
in section 504 of the Small Business Investment Act of 1958 (15 U.S.C. 
697a)--
            ``(1) $8,000,000,000 in certified development company 
        financings in fiscal year 2007;
            ``(2) $8,500,000,000 in certified development company 
        financings in fiscal year 2008;
            ``(3) $9,000,000,000 in certified development company 
        financings in fiscal year 2009; and
            ``(4) $9,500,000,000 in certified development company 
        financings in fiscal year 2010.
    ``(j) Department of Defense.--For each of fiscal years 2007 through 
2010, the Administration is authorized to make $500,000,000 in loans as 
provided in section 7(a)(21).
    ``(k) PRIME Program.--
            ``(1) In general.--There are authorized to be appropriated 
        to the Administrator $15,000,000 for each of fiscal years 2007 
        through 2010 to carry out section 37, which shall remain 
        available until expended.
            ``(2) Certain programs.--In addition to the amount 
        authorized under paragraph (1), there are authorized to be 
        appropriated to the Administrator $2,000,000 each of fiscal 
        years 2007 through 2010 to carry out section 37(c)(4), which 
        shall remain available until expended.
    ``(l) Additional Authorizations and Limitations.--
            ``(1) In general.--There are authorized to be appropriated 
        to the Administration for each of fiscal years 2007 through 
        2010 such sums as may be necessary to carry out the provisions 
        of this Act not elsewhere provided for, including 
        administrative expenses and necessary loan capital for disaster 
        loans pursuant to section 7(b), and to carry out the Small 
        Business Investment Act of 1958, including salaries and 
        expenses of the Administration.
            ``(2) Limitations.--Notwithstanding any other provision of 
        this section, for each of fiscal years 2007 through 2010--
                    ``(A) no funds are authorized to be used as loan 
                capital for the loan program authorized by section 
                7(a)(21) in any such fiscal year, except by transfer 
                from another Federal department or agency to the 
                Administration, unless the program level authorized for 
                general business loans under subsection (h) is fully 
                funded for that fiscal year; and
                    ``(B) the Administration may not approve loans on 
                its own behalf or on behalf of any other Federal 
                department or agency, by contract or otherwise, under 
                terms and conditions other than those specifically 
                authorized under this Act or the Small Business 
                Investment Act of 1958, except that it may approve 
                loans under section 7(a)(21) of this Act in gross 
                amounts of not more than $2,000,000.''.

                      TITLE I--MICROLOAN PROGRAMS

SEC. 101. CONFORMING TECHNICAL CHANGE IN AVERAGE SMALLER LOAN SIZE.

    Section 7(m) of the Small Business Act (15 U.S.C. 636(m)) is 
amended--
            (1) in paragraph (3)(F)(iii), by striking ``$7,500'' and 
        inserting ``$10,000''; and
            (2) in paragraph (6)(C), by striking ``$7,500'' each place 
        that term appears and inserting ``$10,000''.

SEC. 102. INCLUSION OF PERSONS WITH DISABILITIES.

    Section 7(m)(1)(A)(i) of the Small Business Act (15 U.S.C. 
636(m)(1)(A)(i)) is amended by inserting ``persons with disabilities,'' 
before ``and minority''.

SEC. 103. MICROLOAN PROGRAM IMPROVEMENTS.

    (a) Intermediary Eligibility Requirements.--Section 7(m)(2) of the 
Small Business Act (15 U.S.C. 636(m)(2)) is amended--
            (1) in subparagraph (A), by striking ``in paragraph (10); 
        and'' and inserting ``of the term `intermediary' under 
        paragraph (11);''; and
            (2) in subparagraph (B)--
                    (A) by striking ``(B) has at least'' and inserting 
                the following:
                    ``(B) has--
                            ``(i) at least''; and
                    (B) by striking the period at the end and inserting 
                the following: ``; or
                            ``(ii) a full-time employee who has not 
                        less than 3 years experience making microloans 
                        to startup, newly established, or growing small 
                        business concerns; and
                    ``(C) has at least 1 year experience providing, as 
                an integral part of its microloan program, intensive 
                marketing, management, and technical assistance to its 
                borrowers.''.
    (b) Limitation on Third Party Technical Assistance.--Section 
7(m)(4)(E)(ii) of the Small Business Act (15 U.S.C. 636(m)(4)(E)(ii)) 
is amended--
            (1) in the clause heading, by striking ``Technical 
        assistance'' and inserting ``Third party technical 
        assistance''; and
            (2) by striking ``25 percent'' and inserting ``30 
        percent''.
    (c) Increased Flexibility for Providing Technical Assistance to 
Potential Borrowers.--Section 7(m)(4)(E)(i) of the Small Business Act 
(15 U.S.C. 636(m)(4)(E)(i)) is amended by striking ``25 percent'' and 
inserting ``30 percent''.

SEC. 104. PRIME REAUTHORIZATION AND TRANSFER TO THE SMALL BUSINESS ACT.

    (a) Program Reauthorization.--The Small Business Act (15 U.S.C. 631 
et seq.) is amended--
            (1) by redesignating section 37 as section 39; and
            (2) by inserting after section 36 the following:

``SEC. 37. PROGRAM FOR INVESTMENT IN MICROENTREPRENEURS.

    ``(a) Definitions.--In this section:
            ``(1) Capacity building services.--The term `capacity 
        building services' means services provided to an organization 
        that is, or that is in the process of becoming, a 
        microenterprise development organization or program, for the 
        purpose of enhancing its ability to provide training and 
        services to disadvantaged entrepreneurs.
            ``(2) Collaborative.--The term `collaborative' means 2 or 
        more nonprofit entities that agree to act jointly as a 
        qualified organization under this section.
            ``(3) Disadvantaged entrepreneur.--The term `disadvantaged 
        entrepreneur' means a microentrepreneur that--
                    ``(A) is a low-income person;
                    ``(B) is a very low-income person; or
                    ``(C) lacks adequate access to capital or other 
                resources essential for business success, or is 
                economically disadvantaged, as determined by the 
                Administrator.
            ``(4) Disadvantaged native american entrepreneur.--The term 
        `disadvantaged Native American entrepreneur' means a 
        disadvantaged entrepreneur who is also a member of an Indian 
        Tribe.
            ``(5) Indian tribe.--The term `Indian tribe' has the 
        meaning given that term in section 4(a) of the Indian Self-
        Determination and Education Assistance Act.
            ``(6) Intermediary.--The term `intermediary' means a 
        private, nonprofit entity that seeks to serve microenterprise 
        development organizations and programs, as authorized under 
        subsection (d).
            ``(7) Low-income person.--The term `low-income person' 
        means having an income, adjusted for family size, of not more 
        than--
                    ``(A) for metropolitan areas, 80 percent of the 
                area median income; and
                    ``(B) for nonmetropolitan areas, the greater of--
                            ``(i) 80 percent of the area median income; 
                        or
                            ``(ii) 80 percent of the statewide 
                        nonmetropolitan area median income.
            ``(8) Microentrepreneur.--The term `microentrepreneur' 
        means the owner or developer of a microenterprise.
            ``(9) Microenterprise.--The term `microenterprise' means a 
        sole proprietorship, partnership, or corporation that--
                    ``(A) has fewer than 5 employees; and
                    ``(B) generally lacks access to conventional loans, 
                equity, or other banking services.
            ``(10) Microenterprise development organization or 
        program.--The term `microenterprise development organization or 
        program' means a nonprofit entity, or a program administered by 
        such an entity, including community development corporations or 
        other nonprofit development organizations and social service 
        organizations, that provides services to disadvantaged 
        entrepreneurs.
            ``(11) Training and technical assistance.--The term 
        `training and technical assistance' means services and support 
        provided to disadvantaged entrepreneurs, such as assistance for 
        the purpose of enhancing business planning, marketing, 
        management, financial management skills, and assistance for the 
        purpose of accessing financial services.
            ``(12) Very low-income person.--The term `very low-income 
        person' means having an income, adjusted for family size, of 
        not more than 150 percent of the poverty line (as defined in 
        section 673(2) of the Community Services Block Grant Act (42 
        U.S.C. 9902(2)), including any revision required by that 
        section).
    ``(b) Establishment of Program.--The Administrator shall establish 
a microenterprise technical assistance and capacity building grant 
program to provide assistance from the Administration in the form of 
grants to qualified organizations in accordance with this section.
    ``(c) Uses of Assistance.--A qualified organization shall use 
grants made under this section--
            ``(1) to provide training and technical assistance to 
        disadvantaged entrepreneurs;
            ``(2) to provide training and capacity building services to 
        microenterprise development organizations and programs and 
        groups of such organizations to assist such organizations and 
        programs in developing microenterprise training and services;
            ``(3) to aid in researching and developing the best 
        practices in the field of microenterprise and technical 
        assistance programs for disadvantaged entrepreneurs;
            ``(4) to provide training and technical assistance to 
        disadvantaged Native American entrepreneurs and prospective 
        entrepreneurs; and
            ``(5) for such other activities as the Administrator 
        determines are consistent with the purposes of this section.
    ``(d) Qualified Organizations.--For purposes of eligibility for 
assistance under this section, a qualified organization shall be--
            ``(1) a nonprofit microenterprise development organization 
        or program (or a group or collaborative thereof) that has a 
        demonstrated record of delivering microenterprise services to 
        disadvantaged entrepreneurs;
            ``(2) an intermediary;
            ``(3) a microenterprise development organization or program 
        that is accountable to a local community, working in 
        conjunction with a State or local government or Indian tribe; 
        or
            ``(4) an Indian tribe acting on its own, if the Indian 
        tribe certifies that no private organization or program 
        referred to in this subsection exists within its jurisdiction.
    ``(e) Allocation of Assistance; Subgrants.--
            ``(1) Allocation of assistance.--
                    ``(A) In general.--The Administrator shall allocate 
                assistance from the Administration under this section 
                to ensure that--
                            ``(i) activities described in subsection 
                        (c)(1) are funded using not less than 75 
                        percent of amounts made available for such 
                        assistance; and
                            ``(ii) activities described in subsection 
                        (c)(2) are funded using not less than 15 
                        percent of amounts made available for such 
                        assistance.
                    ``(B) Limit on individual assistance.--No single 
                person may receive more than 10 percent of the total 
                funds appropriated under this section in a single 
                fiscal year.
            ``(2) Targeted assistance.--The Administrator shall ensure 
        that not less than 50 percent of the grants made under this 
        section are used to benefit very low-income persons, including 
        those residing on Indian reservations.
            ``(3) Subgrants authorized.--
                    ``(A) In general.--A qualified organization 
                receiving assistance under this section may provide 
                grants using that assistance to qualified small and 
                emerging microenterprise organizations and programs, 
                subject to such rules and regulations as the 
                Administrator determines to be appropriate.
                    ``(B) Limit on administrative expenses.--Not more 
                than 7.5 percent of assistance received by a qualified 
                organization under this section may be used for 
                administrative expenses in connection with the making 
                of subgrants under subparagraph (A).
            ``(4) Diversity.--In making grants under this section, the 
        Administrator shall ensure that grant recipients include both 
        large and small microenterprise organizations, serving urban, 
        rural, and Indian tribal communities serving diverse 
        populations.
            ``(5) Prohibition on preferential consideration of certain 
        administration program participants.--In making grants under 
        this section, the Administrator shall ensure that any 
        application made by a qualified organization that is a 
        participant in the program established under section 7(m) does 
        not receive preferential consideration over applications from 
        other qualified organizations that are not participants in such 
        program.
    ``(f) Matching Requirements.--
            ``(1) In general.--Financial assistance under this section 
        shall be matched with funds from sources other than the Federal 
        Government on the basis of not less than 50 percent of each 
        dollar provided by the Administration.
            ``(2) Sources of matching funds.--Fees, grants, gifts, 
        funds from loan sources, and in-kind resources of a grant 
        recipient from public or private sources may be used to comply 
        with the matching requirement in paragraph (1).
            ``(3) Exception.--
                    ``(A) In general.--In the case of an applicant for 
                assistance under this section with severe constraints 
                on available sources of matching funds, the 
                Administrator may reduce or eliminate the matching 
                requirements of paragraph (1).
                    ``(B) Limitation.--Not more than 10 percent of the 
                total funds made available from the Administration in 
                any fiscal year to carry out this section may be 
                excepted from the matching requirements of paragraph 
                (1), as authorized by subparagraph (A) of this 
                paragraph.
    ``(g) Applications for Assistance.--An application for assistance 
under this section shall be submitted in such form and in accordance 
with such procedures as the Administrator shall establish.
    ``(h) Recordkeeping and Reporting.--
            ``(1) In general.--Each organization that receives 
        assistance from the Administration under this section shall--
                    ``(A) submit to the Administration not less than 
                once in every 18-month period, financial statements 
                audited by an independent certified public accountant;
                    ``(B) submit an annual report to the Administration 
                on its activities; and
                    ``(C) keep such records as may be necessary to 
                disclose the manner in which any assistance under this 
                section is used.
            ``(2) Access.--The Administration shall have access upon 
        request, for the purposes of determining compliance with this 
        section, to any records of any organization that receives 
        assistance from the Administration under this section.
            ``(3) Data collection.--Each organization that receives 
        assistance from the Administration under this section shall 
        collect information relating to, as applicable--
                    ``(A) the number of individuals counseled or 
                trained;
                    ``(B) the number of hours of counseling provided;
                    ``(C) the number of startup small business concerns 
                formed;
                    ``(D) the number of small business concerns 
                expanded;
                    ``(E) the number of low-income individuals 
                counseled or trained; and
                    ``(F) the number of very low-income individuals 
                counseled or trained.''.
    (b) Conforming Repeal.--Subtitle C of title I of the Riegle 
Community Development and Regulatory Improvement Act of 1994 (15 U.S.C. 
6901 note) is repealed.
    (c) References.--All references in Federal law, other than 
subsection (d) of this section, to the ``Program for Investment in 
Microentrepreneurs Act of 1999'' or the ``PRIME Act'' shall be deemed 
to be references to section 37 of the Small Business Act, as added by 
this section.
    (d) Rule of Construction.--Nothing in this section or the 
amendments made by this section shall affect any grant or assistance 
provided under the Program for Investment in Microentrepreneurs Act of 
1999, before the date of enactment of this Act, and any such grant or 
assistance shall be subject to the Program for Investment in 
Microentrepreneurs Act of 1999, as in effect on the day before the date 
of enactment of this Act.

SEC. 105. REPORT TO CONGRESS ON THE MICROLOAN PROGRAM.

    Section 7(m)(10) of the Small Business Act (15 U.S.C. 638(m)(10)) 
is amended to read as follows:
            ``(10) Report to congress on the microloan program.--
                    ``(A) In general.--Not later than 6 months after 
                the date of enactment of the Small Business Lending 
                Reauthorization and Improvements Act of 2007, the 
                Comptroller General of the United States shall submit 
                to the Committee on Small Business and Entrepreneurship 
                of the Senate and the Committee on Small Business of 
                the House of Representatives, a report which includes--
                            ``(i) an analysis of the effectiveness of 
                        the Microloan Program and the microloan 
                        technical assistance program;
                            ``(ii) a description of the loan portfolio 
                        of each intermediary, including the extent to 
                        which it provides microloans to small business 
                        concerns in rural areas;
                            ``(iii) the numbers and amounts of 
                        microloans made by the intermediaries to small 
                        business concern borrowers;
                            ``(iv) an accurate measure of the cost of 
                        the microloan and microloan technical 
                        assistance programs; and
                            ``(v) any recommendations for legislative 
                        changes that would improve the program 
                        operations.
                    ``(B) Considerations and consultations.--In 
                developing the report required by subparagraph (A), the 
                Comptroller General shall consult with the microloan 
                intermediaries, the Committee on Small Business and 
                Entrepreneurship of the Senate and the Committee on 
                Small Business of the House of Representatives, and 
                other appropriate industry members, and shall allow for 
                industry comment.''.

              TITLE II--INTERMEDIARY LENDING PILOT PROGRAM

SEC. 201. FINDINGS.

    Congress finds the following:
            (1) Small and emerging businesses, particularly startups 
        and businesses that lack sufficient or conventional collateral, 
        continue to face barriers accessing midsized loans in amounts 
        between $35,000 and $200,000, with affordable terms and 
        conditions.
            (2) Consolidation in the banking industry has resulted in a 
        decrease in the number of small, locally controlled banks with 
        not more than $100,000,000 in assets and has changed the method 
        by which banks make small business credit decisions with--
                    (A) credit scoring techniques replacing 
                relationship-based lending, which often works to the 
                disadvantage of small or start-up businesses that do 
                not conform with a bank's standardized credit formulas; 
                and
                    (B) less flexible terms and conditions, which are 
                often necessary for small and emerging businesses.
            (3) In the environment described in paragraphs (1) and (2), 
        nonprofit intermediary lenders, including community development 
        corporations, provide financial resources that supplement the 
        small business lending and investments of a bank by--
                    (A) providing riskier, up front, or subordinated 
                capital;
                    (B) offering flexible terms and underwriting 
                procedures; and
                    (C) providing technical assistance to businesses in 
                order to reduce the transaction costs and risk exposure 
                of banks.
            (4) Several Federal programs, including the Microloan 
        Program under section 7(m) of the Small Business Act (15 U.S.C. 
        636(m)) and the Intermediary Relending Program of the 
        Department of Agriculture, have demonstrated the effectiveness 
        of working through nonprofit intermediaries to address the 
        needs of small business concerns that are unable to access 
        capital through conventional sources.
            (5) More than 1,000 nonprofit intermediary lenders in the 
        United States are--
                    (A) successfully providing financial and technical 
                assistance to small and emerging businesses;
                    (B) working with banks and other lenders to 
                leverage additional capital for their business 
                borrowers; and
                    (C) creating employment opportunities for low-
                income individuals through their lending and business 
                development activities.

SEC. 202. SMALL BUSINESS INTERMEDIARY LENDING PILOT PROGRAM.

    (a) In General.--Section 7 of the Small Business Act (15 U.S.C. 
636) is amended by inserting after subsection (k) the following:
    ``(l) Small Business Intermediary Lending Program.--
            ``(1) Definitions.--In this subsection--
                    ``(A) the term `intermediary' means a private, 
                nonprofit entity that seeks to borrow, or has borrowed, 
                funds from the Administration to provide midsize loans 
                to small business concerns under this subsection, 
                including--
                            ``(i) a private, nonprofit community 
                        development corporation;
                            ``(ii) a consortium of private, nonprofit 
                        organizations or nonprofit community 
                        development corporations;
                            ``(iii) a quasi-governmental economic 
                        development entity (such as a planning and 
                        development district), other than a State, 
                        county, or municipal government; and
                            ``(iv) an agency of or nonprofit entity 
                        established by a Native American Tribal 
                        Government; and
                    ``(B) the term `midsize loan' means a fixed rate 
                loan of not less than $35,000 and not more than 
                $200,000, made by an intermediary to a startup, newly 
                established, or growing small business concern.
            ``(2) Establishment.--There is established a 3-year pilot 
        program to be know as the `Small Business Intermediary Lending 
        Pilot Program' (referred to in this subsection as the 
        `Program'), under which the Administrator may provide direct 
        loans to eligible intermediaries, for the purpose of making 
        fixed interest rate midsize loans to startup, newly 
        established, and growing small business concerns.
            ``(3) Purposes.--The purposes of the Program are--
                    ``(A) to assist small business concerns in those 
                areas suffering from a lack of credit due to poor 
                economic conditions;
                    ``(B) to create employment opportunities for low-
                income individuals;
                    ``(C) to establish a midsize loan program to be 
                administered by the Administrator to provide loans to 
                eligible intermediaries to enable such intermediaries 
                to provide midsize loans, particularly loans in amounts 
                averaging not more than $150,000, to startup, newly 
                established, or growing small business concerns for 
                working capital or the acquisition of materials, 
                supplies, or equipment;
                    ``(D) to test the effectiveness of nonprofit 
                intermediaries--
                            ``(i) as a delivery system for a midsize 
                        loan program; and
                            ``(ii) in addressing the credit needs of 
                        small business concerns and leveraging other 
                        sources of credit; and
                    ``(E) to determine the advisability and feasibility 
                of implementing a midsize loan program nationwide.
            ``(4) Eligibility for participation.--An intermediary shall 
        be eligible to receive loans under the Program if the 
        intermediary has not less than 1 year of experience making 
        loans to startup, newly established, or growing small business 
        concerns.
            ``(5) Loans to intermediaries.--
                    ``(A) Application.--Each intermediary desiring a 
                loan under this subsection shall submit an application 
                to the Administrator that describes--
                            ``(i) the type of small business concerns 
                        to be assisted;
                            ``(ii) the size and range of loans to be 
                        made;
                            ``(iii) the geographic area to be served 
                        and its economic, poverty, and unemployment 
                        characteristics;
                            ``(iv) the status of small business 
                        concerns in the area to be served and an 
                        analysis of the availability of credit; and
                            ``(v) the qualifications of the applicant 
                        to carry out this subsection.
                    ``(B) Loan limits.--Notwithstanding subsection 
                (a)(3), no loan may be made to an intermediary under 
                this subsection if the total amount outstanding and 
                committed to the intermediary from the business loan 
                and investment fund established by this Act would, as a 
                result of such loan, exceed $1,000,000 during the 
                participation of the intermediary in the Program.
                    ``(C) Loan duration.--Loans made by the 
                Administrator under this subsection shall be for a 
                maximum term of 20 years.
                    ``(D) Applicable interest rates.--Loans made by the 
                Administrator to an intermediary under the Program 
                shall bear an annual interest rate equal to 1.00 
                percent.
                    ``(E) Fees; collateral.--The Administrator may not 
                charge any fees or require collateral with respect to 
                any loan made to an intermediary under this subsection.
                    ``(F) Leverage.--Any loan to a small business 
                concern under this subsection shall not exceed 75 
                percent of the total cost of the project funded by such 
                loan, with the remaining funds being leveraged from 
                other sources, including--
                            ``(i) banks or credit unions;
                            ``(ii) community development financial 
                        institutions; and
                            ``(iii) other sources with funds available 
                        to the intermediary lender.
                    ``(G) Delayed payments.--The Administrator shall 
                not require the repayment of principal or interest on a 
                loan made to an intermediary under the Program during 
                the first 2 years of the loan.
            ``(6) Program funding for midsize loans.--
                    ``(A) Number of participants.--Under the Program, 
                the Administrator may provide loans, on a competitive 
                basis, to not more than 20 intermediaries.
                    ``(B) Equitable distribution of intermediaries.--
                The Administrator shall select and provide funding 
                under the Program to such intermediaries as will ensure 
                geographic diversity and representation of urban and 
                rural communities.
            ``(7) Report to congress.--
                    ``(A) Annual report.--Not later than 12 months 
                after the date of enactment of the Small Business 
                Lending Reauthorization and Improvements Act of 2007, 
                and annually thereafter, the Administrator shall submit 
                a report containing an evaluation of the effectiveness 
                of the Program to--
                            ``(i) the Committee on Small Business and 
                        Entrepreneurship of the Senate; and
                            ``(ii) the Committee on Small Business of 
                        the House of Representatives.
                    ``(B) Contents.--Each report submitted under 
                subparagraph (A) shall include, for the 12-month period 
                before the date of that report--
                            ``(i) the numbers and locations of the 
                        intermediaries receiving funds to provide 
                        midsize loans;
                            ``(ii) the amounts of each loan to an 
                        intermediary;
                            ``(iii) the numbers and amounts of midsize 
                        loans made by intermediaries to small business 
                        concerns;
                            ``(iv) the repayment history of each 
                        intermediary;
                            ``(v) a description of the loan portfolio 
                        of each intermediary, including the extent to 
                        which it provides midsize loans to small 
                        business concerns in rural and economically 
                        depressed areas;
                            ``(vi) an estimate of the number of low-
                        income individuals who have been employed as a 
                        direct result of the Program; and
                            ``(vii) any recommendations for legislative 
                        changes that would improve the operation of the 
                        Program.
            ``(8) Termination.--The authority to make loans under this 
        subsection shall terminate 3 years after the date of enactment 
        of the Small Business Lending Reauthorization and Improvements 
        Act of 2007.''.
    (b) Rulemaking Authority.--Not later than 180 days after the date 
of enactment of this Act, the Administrator shall issue regulations to 
carry out section 7(l) of the Small Business Act, as added by 
subsection (a).
    (c) Authorization of Appropriations.--
            (1) In general.--There are authorized to be appropriated to 
        the Administrator such sums as may be necessary for each of 
        fiscal years 2008 through 2010 to provide $20,000,000 in loans 
        under section 7(l) of the Small Business Act, as added by 
        subsection (a).
            (2) Availability.--Any amounts appropriated pursuant to 
        paragraph (1) shall remain available until expended.

                      TITLE III--7(a) LOAN PROGRAM

SEC. 301. PREFERRED LENDERS PROGRAM.

    (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:
            ``(32) Preferred lenders program.--
                    ``(A) Definitions.--In this paragraph--
                            ``(i) the term `national preferred lender' 
                        means a preferred lender authorized to operate 
                        in any area served by an office of the 
                        Administration under subparagraph (G);
                            ``(ii) the term `preferred lender' means a 
                        qualified lender participating in the program;
                            ``(iii) the term `program' means the 
                        Preferred Lenders Program established under 
                        subparagraph (B); and
                            ``(iv) the term `qualified lender' means a 
                        lender that demonstrates--
                                    ``(I) knowledge of and proficiency 
                                in the requirements of the program 
                                under this subsection;
                                    ``(II) the ability to process, 
                                close, service, and liquidate loans;
                                    ``(III) the ability to develop and 
                                analyze complete loan packages; and
                                    ``(IV) a satisfactory performance 
                                history of participation in the program 
                                under this subsection.
                    ``(B) Establishment.--There is established a 
                Preferred Lenders Program under which the Administrator 
                may authorize qualified lenders to make and service 
                loans.
                    ``(C) Application.--A qualified lender desiring to 
                participate in the program shall submit an application 
                at such time, in such manner, and accompanied by such 
                information as the Administrator shall establish.
                    ``(D) Delegated authority.--The Administrator shall 
                authorize a preferred lender to take actions relating 
                to loan servicing on behalf of the Administrator, 
                including--
                            ``(i) determining eligibility and 
                        creditworthiness and loan monitoring, 
                        collection, and liquidation;
                            ``(ii) authority to make and close loans 
                        with a guarantee from the Administrator without 
                        obtaining the prior specific approval of the 
                        Administrator; and
                            ``(iii) authority to service and liquidate 
                        such loans without obtaining the prior specific 
                        approval of the Administrator for routine 
                        servicing and liquidation activities.
                    ``(E) Area of operations.--The Administrator shall 
                designate the area for which a preferred lender may 
                exercise the authority under subparagraph (D).
                    ``(F) Conflict.--A preferred lender shall not take 
                any action creating an actual or apparent conflict of 
                interest.
                    ``(G) National operation.--
                            ``(i) In general.--A preferred lender may 
                        request designation as a national preferred 
                        lender by the Administrator, and, upon such 
                        designation, shall have the authority to 
                        operate in any area served by an office of the 
                        Administration.
                            ``(ii) Eligibility.--The Administration 
                        shall designate a preferred lender as a 
                        national preferred lender if the Administrator 
                        determines that preferred lender has--
                                    ``(I) satisfactorily operated as a 
                                preferred lender in areas encompassing 
                                all or part of the territory in not 
                                fewer than 5 district offices of the 
                                Administration for a minimum of 3 years 
                                in each territory;
                                    ``(II) centralized loan approval, 
                                servicing, and liquidation functions 
                                and processes that are satisfactory to 
                                the Administration;
                                    ``(III) uniform written policies 
                                and procedures;
                                    ``(IV) a currency rate that is not 
                                less than the Administration's national 
                                average currency rate for all loans 
                                under this subsection;
                                    ``(V) a currency rate for loans 
                                made under this subsection that is not 
                                less than the Administration's national 
                                average currency rate for loans made 
                                under this subsection;
                                    ``(VI) a default rate that is not 
                                more than the Administration's national 
                                average default rate for loans made 
                                under this subsection; and
                                    ``(VII) received, in the most 
                                recent audit and review as a preferred 
                                lender conducted by the Administrator, 
                                a rating that is acceptable or 
                                acceptable with corrective actions 
                                required.
                    ``(H) Corrective action.--If a national preferred 
                lender fails to continue to meet the eligibility 
                criteria under subparagraph (G)(ii), the Administrator 
                shall notify that national preferred lender of the 
                deficiency and allow a reasonable period of time for 
                that national preferred lender to meet such criteria.
                    ``(I) Suspension or revocation.--
                            ``(i) In general.--The designation of a 
                        lender as a national preferred lender shall be 
                        suspended or revoked at any time that the 
                        Administration determines that the lender--
                                    ``(I) is not adhering to the rules 
                                or regulations established by the 
                                Administrator for the program; or
                                    ``(II) has failed to continue to 
                                meet the eligibility criteria specified 
                                in paragraph (G) or take corrective 
                                action under subparagraph (H).
                            ``(ii) Effect.--A suspension or revocation 
                        under clause (i) shall not affect any 
                        outstanding guarantee of a national preferred 
                        lender.''.
    (b) Clerical Amendment.--Section 7(a)(2)(C) of the Small Business 
Act (15 U.S.C. 636(a)(2)(C)) is amended to read as follows:
                    ``(C) Interest rate under preferred lenders 
                program.--The maximum interest rate for a loan 
                guaranteed under the Preferred Lenders Program under 
                paragraph (32) shall not exceed the maximum interest 
                rate as determined by the Administration, applicable to 
                other loans guaranteed under this subsection.''.
    (c) Conforming Amendment.--Section 7(a)(19) of the Small Business 
Act (15 U.S.C. 636(a)(19)) is amended by striking ``the proviso in 
section 5(b)(7)'' and inserting ``paragraph (32)''.

SEC. 302. MAXIMUM LOAN AMOUNT.

    Section 7(a)(3)(A) of the Small Business Act (15 U.S.C. 
636(a)(3)(A)) is amended by striking ``$1,500,000 (or if the gross loan 
amount would exceed $2,000,000'' and inserting ``$2,250,000 (or if the 
gross loan amount would exceed $3,000,000''.

SEC. 303. MAXIMUM 504 AND 7(A) LOAN ELIGIBILITY.

    (a) Combination Financing.--
            (1) In general.--Section 502(2) of the Small Business 
        Investment Act of 1958 (15 U.S.C. 696(2)) is amended by adding 
        at the end the following:
                    ``(C) Combination financing under small business 
                act.--Notwithstanding any other provision of law, 
                financing under this title may be provided to a 
                borrower in the maximum amount provided in this 
                subsection, and a loan guarantee under section 7(a) of 
                the Small Business Act may be provided to the same 
                borrower in the maximum amount provided in section 
                7(a)(3)(A) of such Act, to the extent that the borrower 
                otherwise qualifies for such assistance.''.
            (2) Conforming amendment.--Section 7(a)(1) of the Small 
        Business Act (15 U.S.C. 636(a)(1) is amended by adding at the 
        end the following:
                    ``(C) Combination financing under small business 
                investment act of 1958.--Financing under this 
                subsection may be provided to a borrower in the maximum 
                amount as provided in subsection (b)(2) of section 502 
                of the Small Business Investment Act of 1958 (15 U.S.C. 
                696).''.
    (b) Reporting.--Not later than 90 days after the date of enactment 
of this Act, and annually thereafter, the Administrator shall submit a 
report to the Committee on Small Business and Entrepreneurship of the 
Senate and the Committee on Small Business of the House of 
Representatives that--
            (1) includes the number of small business concerns that 
        have financings under both section 7(a) of the Small Business 
        Act (15 U.S.C. 636(a)) and title V of the Small Business 
        Investment Act of 1958 (15 U.S.C. 695 et seq.) during the year 
        before the year of that report; and
            (2) describes the total amount and general performance of 
        the financings described in paragraph (1).

SEC. 304. LOAN POOLING.

    Section 5(g)(1) of the Small Business Act (15 U.S.C. 634(g)(1)) is 
amended--
            (1) by inserting ``(A)'' before ``The Administration'';
            (2) by striking the colon and all that follows and 
        inserting a period; and
            (3) by adding at the end the following:
    ``(B) A trust certificate issued under subparagraph (A) shall be 
based on, and backed by, a trust or pool approved by the Administrator 
and composed solely of the guaranteed portion of such loans.
    ``(C) The interest rate on a trust certificate issued under 
subparagraph (A) shall be either--
            ``(i) the lowest interest rate on any individual loan in 
        the pool; or
            ``(ii) the weighted average interest rate of all loans in 
        the pool, subject to such limited variations in loan 
        characteristics as the Administrator determines appropriate to 
        enhance marketability of the pool certificates.''.

SEC. 305. ALTERNATIVE SIZE STANDARD.

    Section 3(a) of the Small Business Act (15 U.S.C. 632(a)) is 
amended by adding at the end the following:
    ``(5) Optional Size Standard.--
            ``(A) In general.--The Administrator shall establish an 
        optional size standard for business loan applicants under 
        section 7(a) and development company loan applicants under 
        title V of the Small Business Investment Act of 1958, which 
        uses maximum tangible net worth and average net income as an 
        alternative to the use of industry standards.
            ``(B) Interim rule.--Until the date on which the optional 
        size standards established under subparagraph (A) are in 
        effect, the alternative size standard in section 121.301(b) of 
        title 13, Code of Federal Regulations, or any successor 
        thereto, may be used by business loan applicants under section 
        7(a) and development company loan applicants under title V of 
        the Small Business Investment Act of 1958.''.

SEC. 306. ALTERNATIVE VARIABLE INTEREST RATE.

    (a) In General.--Section 7(a)(4)(A) of the Small Business Act (15 
U.S.C. 636(a)(4)(A)) is amended by striking ``prescribed by the 
Administration,'' and inserting: ``prescribed by the Administration, 
including, on variable rate loans, a nationally recognized prime rate 
of interest and at least 1 other index as an alternative thereto at the 
option of the participating lender,''.
    (b) Applicability.--Not later than 180 days after the date of 
enactment of this Act, the Administrator of the Small Business 
Administration shall select not less than 1 alternative index under 
section 7(a)(4)(A) of the Small Business Act, as amended by subsection 
(a), and make such index available for use by participating lenders.

SEC. 307. MINORITY SMALL BUSINESS DEVELOPMENT.

    (a) In General.--The Small Business Act (15 U.S.C. 631 et seq.) is 
amended by inserting after section 37, as added by this Act, the 
following:

``SEC. 38. MINORITY SMALL BUSINESS DEVELOPMENT.

    ``(a) Office of Minority Small Business Development.--There is 
established in the Administration an Office of Minority Small Business 
Development, which shall be administered by the Associate Administrator 
for Minority Small Business Development (in this section referred to as 
the `Associate Administrator') appointed under section 4(b)(1).
    ``(b) Associate Administrator for Minority Small Business 
Development.--The Associate Administrator--
            ``(1) shall be either--
                    ``(A) an appointee in the Senior Executive Service 
                who is a career appointee; or
                    ``(B) an employee in the competitive service;
            ``(2) shall be responsible for the formulation, execution, 
        and promotion of policies and programs of the Administration 
        that provide assistance to small business concerns owned and 
        controlled by minorities;
            ``(3) shall act as an ombudsman for full consideration of 
        minorities in all programs of the Administration (including 
        those under sections 7(j) and 8(a));
            ``(4) shall work with the Associate Deputy Administrator 
        for Capital Access to increase the proportion of loans and loan 
        dollars, and investments and investment dollars, going to 
        minorities through the finance programs under this Act and the 
        Small Business Investment Act of 1958 (including subsections 
        (a), (b), and (m) of section 7 of this Act and the programs 
        under part A and B of title III and title V of the Small 
        Business Investment Act of 1958);
            ``(5) shall work with the Associate Deputy Administrator 
        for Entrepreneurial Development to increase the proportion of 
        counseling and training that goes to minorities through the 
        entrepreneurial development programs of the Administration;
            ``(6) shall work with the Associate Deputy Administrator 
        for Government Contracting and Minority Enterprise Development 
        to increase the proportion of contracts, including through the 
        Small Business Innovation Research Program and the Small 
        Business Technology Transfer Program, to minorities;
            ``(7) shall work with the partners of the Administration, 
        trade associations, and business groups to identify and carry 
        out policies and procedures to more effectively market the 
        resources of the Administration to minorities;
            ``(8) shall work with the Office of Field Operations to 
        ensure that district offices and regional offices have adequate 
        staff, funding, and other resources to market the programs of 
        the Administration to meet the objectives described in 
        paragraphs (4) through (7); and
            ``(9) shall report to and be responsible directly to the 
        Administrator.
    ``(c) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section--
            ``(1) $5,000,000 for fiscal year 2007;
            ``(2) $5,000,000 for fiscal year 2008;
            ``(3) $5,000,000 for fiscal year 2009; and
            ``(4) $5,000,000 for fiscal year 2010.''.
    (b) Conforming Amendments.--Section 4(b)(1) of the Small Business 
Act (15 U.S.C. 633(b)(1)) is amended in sixth sentence, by striking 
``Minority Small Business and Capital Ownership Development'' and all 
that follows through the end of the sentence and inserting ``Minority 
Small Business Development.''.

SEC. 308. LOWERING OF FEES.

    Section 7(a)(23) of the Small Business Act (15 U.S.C. 636(a)(23)) 
is amended by striking subparagraph (C) and inserting the following:
                    ``(C) Lowering of fees.--
                            ``(i) In general.--Subject to clause (ii), 
                        for loan guarantees made or approved in each 
                        full fiscal year after the date of enactment of 
                        the Small Business Lending Reauthorization and 
                        Improvements Act of 2007, if the fees paid by 
                        all small business borrowers and by lenders for 
                        guarantees under this subsection, or the sum of 
                        such fees plus any funds made available for the 
                        purpose of reducing fees for loans under this 
                        subsection, as applicable, is more than the 
                        amount necessary to equal the cost to the 
                        Administration of making such guarantees, the 
                        Administrator shall reduce fees paid by small 
                        business borrowers and lenders under clauses 
                        (i) through (iv) of paragraph (18)(A) and 
                        subparagraph (A) of this paragraph.
                            ``(ii) Maximum reduction.--A reduction in 
                        fees under clause (i) in any fiscal year may 
                        not exceed the average amount by which fees 
                        paid by all small business borrowers and by 
                        lenders for guarantees under this subsection 
                        exceeded the amount necessary to equal the cost 
                        to the Administration of making such guarantees 
                        during the 3 most recent fiscal years for which 
                        such information is available before that 
                        fiscal year.
                            ``(iii) Maximum fees.--The fees paid by 
                        small business borrowers and lenders for 
                        guarantees under this subsection may not be 
                        increased above the maximum level authorized 
                        under the amendments made by division K of the 
                        Consolidated Appropriations Act, 2005 (Public 
                        Law 108-447; 118 Stat. 3441).''.

SEC. 309. INTERNATIONAL TRADE LOANS.

    (a) In General.--Section 7(a)(3)(B) of the Small Business Act (15 
U.S.C. 636(a)(3)(B)) is amended by striking ``$1,750,000, of which not 
more than $1,250,000'' and inserting ``$2,750,000 (or if the gross loan 
amount would exceed $3,670,000), of which not more than $2,000,000''.
    (b) Working Capital.--Section 7(a)(16)(A) of the Small Business Act 
(15 U.S.C. 636(a)(16)(A)) is amended--
            (1) in the matter preceding clause (i), by striking ``in--
        '' and inserting ``--'';
            (2) in clause (i)--
                    (A) by inserting ``in'' after ``(i)''; and
                    (B) by striking ``or'' at the end;
            (3) in clause (ii)--
                    (A) by inserting ``in'' after ``(ii)''; and
                    (B) by striking the period and inserting ``; or''; 
                and
            (4) by adding at the end the following:
                            ``(iii) by providing working capital.''.
    (c) Collateral.--Section 7(a)(16)(B) of the Small Business Act (15 
U.S.C. 636(a)(16)(B)) is amended--
            (1) by striking ``Each loan'' and inserting the following:
                            ``(i) In general.--Except as provided in 
                        clause (ii), each loan''; and
            (2) by adding at the end the following:
                            ``(ii) Exception.--A loan under this 
                        paragraph may be secured by a second lien 
                        position on the property or equipment financed 
                        by the loan or on other assets of the small 
                        business concern, if the Administrator 
                        determines such lien provides adequate 
                        assurance of the payment of such loan.''.
    (d) Refinancing.--Section 7(a)(16)(A)(ii) of the Small Business Act 
(15 U.S.C. 636(a)(16)(A)(ii)), as amended by this section, is amended 
by inserting ``, including any debt that qualifies for refinancing 
under any other provision of this subsection'' before the semicolon.

SEC. 310. RURAL LENDING OUTREACH PROGRAM.

    Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as 
amended by this Act, is amended--
            (1) by striking paragraph (25)(C); and
            (2) by adding at the end the following:
            ``(33) Rural lending outreach program.--
                    ``(A) In general.--The Administrator shall carry 
                out a rural lending outreach program to provide not 
                more than an 85 percent guaranty for loans of not more 
                than $250,000. The program shall be carried out only 
                through lenders located in rural areas (as the term 
                `rural' is defined in section 501(f) of the Small 
                Business Investment Act of 1958 (15 U.S.C. 695(f)).
                    ``(B) Loan terms.--For a loan made through the 
                program under this paragraph--
                            ``(i) the Administrator shall approve or 
                        disapprove the loan within 36 hours of the time 
                        the Administrator receives the application;
                            ``(ii) the program shall use abbreviated 
                        application and documentation requirements; and
                            ``(iii) minimum credit standards, as the 
                        Administrator considers necessary to limit the 
                        rate of default on loans made under the 
                        program, shall apply.''.

      TITLE IV--CERTIFIED DEVELOPMENT COMPANIES; 504 LOAN PROGRAM

SEC. 401. DEVELOPMENT COMPANY LOAN PROGRAMS.

    (a) Title of Program.--Title V of the Small Business Investment Act 
of 1958 (15 U.S.C. 695 et seq.) is amended by adding at the end the 
following:

``SEC. 511. PROGRAM TITLE.

    ``(a) In General.--Except as provided in subsection (b), the 
programs authorized by this title shall be known collectively as the 
`Local Development Business Loan Program'. The Administrator may refer 
to such program as the `504 Loan Program', until such usage is no 
longer necessary.
    ``(b) Existing Name.--Participants in the Local Development 
Business Loan Program may continue to refer to such program as `the 504 
Loan Program'.''.
    (b) Existing Materials.--The Administrator may use informational 
materials created, or that were in the process of being created, before 
the date of enactment of this Act that do not refer to a program under 
title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et 
seq.) as the ``Local Development Business Loan Program''.
    (c) New Materials.--Any informational materials created by the 
Administrator on or after the date of enactment of this Act shall refer 
to any program under title V of the Small Business Investment Act of 
1958 (15 U.S.C. 695 et seq.) as the ``Local Development Business Loan 
Program'', except that informational materials may refer to such 
program as the ``504 Loan Program'', until such usage is no longer 
necessary.

SEC. 402. LOAN LIQUIDATIONS.

    Section 510 of the Small Business Investment Act of 1958 (15 U.S.C. 
697g) is amended--
            (1) by redesignating subsection (e) as subsection (g); and
            (2) by inserting after subsection (d) the following:
    ``(e) Participation.--
            ``(1) In general.--Any qualified State or local development 
        company which elects not to apply for authority to foreclose 
        and liquidate defaulted loans under this section, or which the 
        Administrator determines to be ineligible for such authority, 
        shall contract with a qualified third-party to perform 
        foreclosure and liquidation of defaulted loans in its 
        portfolio. The contract shall be contingent upon approval by 
        the Administrator with respect to the qualifications of the 
        contractor and the terms and conditions of liquidation 
        activities.
            ``(2) Commencement.--This subsection does not require any 
        development company to liquidate defaulted loans until the 
        Administrator has adopted and implemented a program to 
        compensate and reimburse development companies, as provided 
        under subsection (f).
    ``(f) Compensation and Reimbursement.--
            ``(1) Reimbursement of expenses.--The Administrator shall 
        reimburse each qualified State or local development company for 
        all expenses paid by such company as part of the foreclosure 
        and liquidation activities, if the expenses--
                    ``(A) were--
                            ``(i) approved in advance by the 
                        Administrator, either specifically or 
                        generally; or
                            ``(ii) incurred by the development company 
                        on an emergency basis without prior approval 
                        from the Administrator, if the Administrator 
                        determines that the expenses were reasonable 
                        and appropriate; and
                    ``(B) are submitted by the development company to 
                the Administrator not later than 3 years after the date 
                of the purchase of the debenture by the Administrator.
            ``(2) Compensation for results.--
                    ``(A) Development.--The Administrator shall develop 
                a schedule to compensate and provide an incentive to 
                qualified State or local development companies that 
                foreclose and liquidate defaulted loans.
                    ``(B) Criteria.--The schedule required under this 
                paragraph shall--
                            ``(i) be based on a percentage of the net 
                        amount recovered, but shall not exceed a 
                        maximum amount; and
                            ``(ii) not apply to any foreclosure which 
                        is conducted under a contract between a 
                        development company and a qualified third party 
                        to perform the foreclosure and liquidation.''.

SEC. 403. ADDITIONAL EQUITY INJECTIONS.

    Section 502(3)(B)(ii) of the Small Business Investment Act of 1958 
(15 U.S.C. 696(3)(B)(ii)) is amended to read as follows:
                            ``(ii) Funding from institutions.--If a 
                        small business concern--
                                    ``(I) provides the minimum 
                                contribution required under 
                                subparagraph (C), not less than 50 
                                percent of the total cost of any 
                                project financed under clause (i), 
                                (ii), or (iii) of subparagraph (C) 
                                shall come from the institutions 
                                described in subclauses (I), (II), and 
                                (III) of clause (i); and
                                    ``(II) provides more than the 
                                minimum contribution required under 
                                subparagraph (C), any excess 
                                contribution may be used to reduce the 
                                amount required from the institutions 
                                described in subclauses (I), (II), and 
                                (III) of clause (i), except that the 
                                amount from such institutions may not 
                                be reduced to an amount that is less 
                                than the amount of the loan made by the 
                                Administrator.''.

SEC. 404. UNIFORM LEASING POLICY.

    (a) In General.--Section 502 of the Small Business Investment Act 
of 1958 (15 U.S.C. 696) is amended--
            (1) by striking paragraphs (4) and (5) and inserting the 
        following:
            ``(4) Limitation on leasing.--If the use of a loan under 
        this section includes the acquisition of a facility or the 
        construction of a new facility, the small business concern 
        assisted--
                    ``(A) shall permanently occupy and use not less 
                than a total of 50 percent of the space in the 
                facility; and
                    ``(B) may, on a temporary or permanent basis, lease 
                to others not more than 50 percent of the space in the 
                facility.''; and
            (2) by redesignating paragraph (6) as paragraph (5).
    (b) Policy for 7(a) Loans.--Section 7(a)(28) of the Small Business 
Act (15 U.S.C. 636(a)(28)) is amended to read as follows:
            ``(28) Limitation on leasing.--If the use of a loan under 
        this subsection includes the acquisition of a facility or the 
        construction of a new facility, the small business concern 
        assisted--
                    ``(A) shall permanently occupy and use not less 
                than a total of 50 percent of the space in the 
                facility; and
                    ``(B) may, on a temporary or permanent basis, lease 
                to others not more than 50 percent of the space in the 
                facility.''.

SEC. 405. BUSINESSES IN LOW-INCOME COMMUNITIES.

    (a) Goals.--Section 501(d)(3)(A) of the Small Business Investment 
Act of 1958 (15 U.S.C. 695(d)(3)(A)) is amended by inserting after 
``business district revitalization,'' the following: ``or expansion of 
businesses in low-income communities which would be eligible for a new 
markets tax credit under section 45D(a) of the Internal Revenue Code of 
1986, or implementing regulations issued under that section,''.
    (b) Additional Incentives.--Section 502 of the Small Business 
Investment Act of 1958 (15 U.S.C. 696), as amended by this Act, is 
amended by adding at the end the following:
            ``(6) Low-income communities.--
                    ``(A) Loan amount.--Notwithstanding paragraph 
                (2)(A)(ii), a loan under this section for use in a low-
                income community (as that term is used in section 
                501(d)(3)(A)) may be for not more than $4,000,000.
                    ``(B) Size standards.--For purposes of determining 
                eligibility for a loan under this section for use in a 
                low-income community (as that term is used in section 
                501(d)(3)(A)), the size standards established under 
                section 3 of the Small Business Act (15 U.S.C. 632) 
                shall be increased by 25 percent.
                    ``(C) Personal liquidity.--
                            ``(i) In general.--For any loan under this 
                        section for use in a low-income community (as 
                        that term is used in section 501(d)(3)(A)), the 
                        amount of personal resources of an owner that 
                        are excluded from the amount required to be 
                        provided to reduce the portion of the project 
                        funded by the Administration shall be not less 
                        than 25 percent more than that required for 
                        other loans under this section.
                            ``(ii) Definition.--In this subparagraph, 
                        the term `owner' means any person that owns not 
                        less than 20 percent of the equity of the small 
                        business concern applying for the applicable 
                        loan.''.

SEC. 406. COMBINATIONS OF CERTAIN GOALS.

    Section 501(e) of the Small Business Investment Act of 1958 (15 
U.S.C. 695(e)) is amended by adding at the end the following:
    ``(7) A small business concern that is unconditionally owned by 
more than 1 individual, or a corporation, the stock of which is owned 
by more than 1 individual, shall be deemed to have achieved a public 
policy goal required under subsection (d)(3) if a combined ownership 
share of not less than 51 percent is held by individuals who are in 1 
of, or a combination of, the groups described in subparagraph (C) or 
(E) of subsection (d)(3).''.

SEC. 407. REFINANCING UNDER THE LOCAL DEVELOPMENT BUSINESS LOAN 
              PROGRAM.

    Section 502 of the Small Business Investment Act of 1958 (15 U.S.C. 
696), as amended by this Act, is amended by adding at the end the 
following:
            ``(7) Permissible debt refinancing.--
                    ``(A) In general.--Any financing approved under 
                this title may include a limited amount of debt 
                refinancing.
                    ``(B) Expansions.--If the project involves 
                expansion of a small business concern which has 
                existing indebtedness collateralized by fixed assets, 
                any amount of existing indebtedness that does not 
                exceed \1/2\ of the project cost of the expansion may 
                be refinanced and added to the expansion cost, if--
                            ``(i) the proceeds of the indebtedness were 
                        used to acquire land, including a building 
                        situated thereon, to construct a building 
                        thereon, or to purchase equipment;
                            ``(ii) the borrower has been current on all 
                        payments due on the existing debt for not less 
                        than 1 year preceding the date of refinancing; 
                        and
                            ``(iii) the financing under section 504 
                        will provide better terms or rate of interest 
                        than exists on the debt at the time of 
                        refinancing.''.

SEC. 408. TECHNICAL CORRECTION.

    Section 501(e)(2) of the Small Business Investment Act of 1958 (15 
U.S.C. 695(e)(2)) is amended by striking ``outstanding''.

SEC. 409. DEFINITIONS FOR THE SMALL BUSINESS INVESTMENT ACT OF 1958.

    Section 103 of the Small Business Investment Act of 1958 (15 U.S.C. 
662) is amended--
            (1) by striking paragraph (6) and inserting the following:
            ``(6) the term `development company' means an entity 
        incorporated under State law with the authority to promote and 
        assist the growth and development of small business concerns in 
        the areas in which it is authorized to operate by the 
        Administrator;'';
            (2) in paragraph (16), by striking ``and'' at the end;
            (3) in paragraph (17), by striking the period at the end 
        and inserting ``; and''; and
            (4) by adding at the end the following:
            ``(18) the term `certified development company' means a 
        development company that the Administrator has certified meets 
        the criteria of section 506.''.

SEC. 410. REPEAL OF SUNSET ON RESERVE REQUIREMENTS FOR PREMIER 
              CERTIFIED LENDERS.

    Section 508(c)(6)(B) of the Small Business Investment Act of 1958 
(15 U.S.C. 697e(c)(6)(B)) is amended--
            (1) in the subparagraph heading, by striking ``Temporary 
        reduction'' and inserting ``Reduction''; and
            (2) by striking ``Notwithstanding subparagraph (A), during 
        the 2-year period beginning on the date that is 90 days after 
        the date of enactment of this subparagraph, the'' and inserting 
        ``The''.

SEC. 411. CERTIFIED DEVELOPMENT COMPANIES.

    Section 506 of the Small Business Investment Act of 1958 (15 U.S.C. 
697c) is amended--
            (1) in the section heading, by striking ``restrictions on 
        development company assistance'' and inserting ``certified 
        development companies''; and
            (2) by inserting before ``Notwithstanding any other 
        provision of law'' the following:
    ``(a) Authority To Issue Debentures.--A development company may 
issue debentures under this title if the Administrator certifies that 
the company meets the following criteria:
            ``(1) Size.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the development company shall be a 
                small business concern with fewer than 500 employees, 
                and shall not be under the control of any entity that 
                does not meet the size standards established by the 
                Administrator for a small business concern.
                    ``(B) Exception.--Any development company that was 
                certified by the Administrator before December 31, 
                2005, may continue to issue debentures under this 
                title.
            ``(2) Primary purpose.--The primary purpose of the 
        development company shall be to benefit the community by 
        fostering economic development to create and preserve jobs and 
        stimulate private investment.
            ``(3) Primary function.--A primary function of the 
        development company shall be to accomplish its purpose by 
        providing long-term financing to small business concerns under 
        the Local Development Business Loan Program. The development 
        company shall also provide or support other community and local 
        economic development activities to assist the community.
            ``(4) Nonprofit status.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the development company shall be a 
                nonprofit corporation.
                    ``(B) Exception.--A development company certified 
                by the Administrator before January 1, 1987, may 
                continue to issue debentures under this title and 
                retain its status as a for-profit enterprise.
            ``(5) Good standing.--The development company--
                    ``(A) shall be in good standing in the State in 
                which such company is incorporated and in any other 
                State in which it conducts business; and
                    ``(B) shall be in compliance with all laws, 
                including taxation requirements, in the State in which 
                such company is incorporated and in any other State in 
                which it conducts business.
            ``(6) Membership of development company.--There shall be--
                    ``(A) not fewer than 25 members of the development 
                company (or owners or stockholders, if the corporation 
                is a for-profit entity), none of whom may own or 
                control more than 10 percent of the voting membership 
                of the company; and
                    ``(B) at least 1 member of the development company 
                (none of whom is in a position to control the 
                development company) from each of the following:
                            ``(i) Government organizations that are 
                        responsible for economic development.
                            ``(ii) Financial institutions that provide 
                        commercial long-term fixed asset financing.
                            ``(iii) Community organizations that are 
                        dedicated to economic development.
                            ``(iv) Businesses.
            ``(7) Board of directors.--
                    ``(A) In general.--The development company shall 
                have a board of directors.
                    ``(B) Members of board.--Each member of the board 
                of directors shall be--
                            ``(i) a member of the development company; 
                        and
                            ``(ii) elected by a majority of the members 
                        of the development company.
                    ``(C) Representation of organizations and 
                institutions.--
                            ``(i) In general.--There shall be at least 
                        1 member of the board of directors from not 
                        fewer than 3 of the 4 organizations and 
                        institutions described in paragraph (6)(B), 
                        none of whom is in a position to control the 
                        development company.
                            ``(ii) Maximum percentage.--Not more than 
                        50 percent of the members of the board of 
                        directors shall be from any 1 of the 
                        organizations and institutions described in 
                        paragraph (6)(B).
                    ``(D) Meetings.--The board of directors of the 
                development company shall meet on a regular basis to 
                make policy decisions for such company.
            ``(8) Professional management and staff.--
                    ``(A) In general.--The development company shall 
                have full-time professional management, including a 
                chief executive officer to manage daily operations and 
                a full-time professional staff qualified to market the 
                Local Development Business Loan Program and handle all 
                aspects of loan approval and servicing, including 
                liquidation, if appropriate.
                    ``(B) Independent management and operation.--Except 
                as provided in paragraph (9), the development company 
                shall be independently managed and operated to pursue 
                the economic development purpose of the company and 
                shall employ directly the chief executive officer.
            ``(9) Management and operation exceptions.--
                    ``(A) Affiliation.--A development company may be an 
                affiliate of another local nonprofit service 
                corporation (other than a development company), a 
                purpose of which is to support economic development in 
                the area in which the development company operates.
                    ``(B) Staffing.--A development company may satisfy 
                the requirement for full-time professional staff under 
                paragraph (8)(A) by contracting for the required 
                staffing with--
                            ``(i) a local nonprofit service 
                        corporation;
                            ``(ii) a nonprofit affiliate of a local 
                        nonprofit service corporation;
                            ``(iii) an entity wholly or partially 
                        operated by a governmental agency; or
                            ``(iv) another entity approved by the 
                        Administrator.
                    ``(C) Directors.--A development company and a local 
                nonprofit service corporation with which it is 
                affiliated may have in common some, but not all, 
                members of their respective board of directors.
                    ``(D) Rural areas.--A development company in a 
                rural area may satisfy the requirements of a full-time 
                professional staff and professional management ability 
                under paragraph (8)(A) by contracting for such services 
                with another certified development company that--
                            ``(i) has such staff and management 
                        ability; and
                            ``(ii) is located in the same State as the 
                        development company or in a State that is 
                        contiguous to the State in which the 
                        development company is located.
                    ``(E) Previously certified.--A development company 
                that, on or before December 31, 2005, was certified by 
                the Administrator and had contracted with a for-profit 
                company to provide staffing and management services, 
                may continue to do so.
    ``(b) Use of Excess Funds.--
            ``(1) In general.--Any funds generated by a certified 
        development company from making loans under section 503 or 504 
        that remain unexpended after payment of staff, operating, and 
        overhead expenses shall be used by the certified development 
        company for--
                    ``(A) operating reserves;
                    ``(B) expanding the area in which the certified 
                development company operates through the methods 
                authorized by this Act; or
                    ``(C) investment in other community and local 
                economic development activity or community development 
                primarily in the State from which such funds were 
                generated.
            ``(2) Reporting.--Not later than July 1, 2008, and every 
        year thereafter, the Administrator shall compile and submit to 
        Congress a report regarding the economic and community 
        development activities of each certified development company 
        during the fiscal year before the year of that report, other 
        than loans made under this title.
    ``(c) Ethical Requirements.--
            ``(1) In general.--A certified development company and the 
        officers, employees, and other staff of the company shall at 
        all times act ethically and avoid activities which constitute a 
        conflict of interest or appear to constitute a conflict of 
        interest.
            ``(2) Prohibited conflict in project loans.--
                    ``(A) In general.--No certified development company 
                may--
                            ``(i) recommend or approve a guarantee of a 
                        debenture by the Administrator under the Local 
                        Business Development Loan Program that is 
                        collateralized by a second lien position on the 
                        property being constructed or acquired; and
                            ``(ii) provide, or be affiliated with a 
                        corporation or other entity which provides, 
                        financing collateralized by a first lien on the 
                        same property.
                    ``(B) Exception.--During the 2-year period 
                beginning on the date of enactment of the Small 
                Business Lending Reauthorization and Improvements Act 
                of 2007, a certified development company that was 
                participating as a first mortgage lender for the Local 
                Business Development Loan Program in either of fiscal 
                years 2004 or 2005 may continue to do so.
            ``(3) Other economic development activities.--It shall not 
        be a conflict of interest for a certified development company 
        to operate multiple programs to assist small business concerns 
        as part of carrying out its economic development purpose.
    ``(d) Multistate Operations.--
            ``(1) Authorization.--Notwithstanding any other provision 
        of law, the Administrator shall permit a certified development 
        company to make loans in any State that is contiguous to the 
        State of incorporation of that certified development company, 
        only if such company--
                    ``(A) is--
                            ``(i) an accredited lender under section 
                        507; or
                            ``(ii) a premier certified lender under 
                        section 508;
                    ``(B) has a membership that contains, from each of 
                the States in which it operates, not fewer than 25 
                members who reside in that State;
                    ``(C) has a board of directors that contains not 
                fewer than 2 members from each State in which the 
                company makes loans;
                    ``(D) maintains not fewer than 1 loan committee, 
                which shall have not fewer than 1 member from each 
                State in which the company makes loans; and
                    ``(E) submits to the Administrator, in writing--
                            ``(i) a notice of the intention of the 
                        company to make loans in multiple States;
                            ``(ii) the names of the States in which the 
                        company intends to make loans; and
                            ``(iii) a detailed statement of how the 
                        company will comply with this paragraph, 
                        including a list of the members described in 
                        subparagraph (B).
            ``(2) Review.--The Administrator shall verify whether a 
        certified development company satisfies the requirements of 
        paragraph (1) on an expedited basis and, not later than 30 days 
        after the date on which the Administrator receives the 
        statement described in paragraph (1)(E)(iii), the Administrator 
        shall determine whether such company satisfies such criteria 
        and provide notice to such company.
            ``(3) Loan committee participation.--For any loan made by a 
        company described in paragraph (1), not fewer than 1 member of 
        the loan committee from the State in which the loan is to be 
        made shall participate in the review of such loan.
            ``(4) Aggregate accounting.--A company described in 
        paragraph (1) may maintain an aggregate accounting of all 
        revenue and expenses of the company for purposes of this title.
            ``(5) Service to certified development companies.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), an associate of a certified 
                development company may not be an officer, director, or 
                manager of more than 1 certified development company.
                    ``(B) Exception.--
                            ``(i) In general.--Notwithstanding any 
                        other provision of law, a person who is serving 
                        on the board of directors of a certified 
                        development company may serve on the board of 
                        directors, but not as an officer, of not more 
                        than 1 additional certified development 
                        company, if--
                                    ``(I) such companies are not 
                                located in the same State;
                                    ``(II) each board of directors 
                                determines that the service by such 
                                person on such board does not 
                                constitute a conflict of interest; and
                                    ``(III) there is not a contractual 
                                relationship between--
                                            ``(aa) the person and such 
                                        additional certified 
                                        development company, except for 
                                        the contract of such person to 
                                        serve as a member of the board 
                                        of directors of such company, 
                                        if any; or
                                            ``(bb) the certified 
                                        development companies of which 
                                        such person is a member of the 
                                        board of directors.
                            ``(ii) Maximum number of members.--A 
                        certified development company may not have more 
                        than 1 member of the board of directors of such 
                        company in common with any other board of 
                        directors of a certified development company.
                    ``(C) Definition.--As used in this paragraph, the 
                term `associate of a certified development company' has 
                the meaning given the term `Associate of a CDC' in 
                section 120.10 of title 13, Code of Federal Regulations 
                (or any corresponding similar regulation or ruling).
            ``(6) Local job creation requirements.--
                    ``(A) In general.--Subject to subparagraph (B), any 
                certified development company making loans in multiple 
                States shall satisfy any applicable job creation or 
                retention requirements separately for each such State. 
                Such a company shall not count jobs created or retained 
                in 1 State towards any applicable job creation or 
                retention requirement in another State.
                    ``(B) Applicability.--This paragraph shall apply to 
                a certified development company relating to a State 
                beginning 2 years after the date that certified 
                development company began making loans in that State.
            ``(7) Contiguous states.--For purposes of this subsection, 
        the States of Alaska and Hawaii shall be deemed to be 
        contiguous to any State abutting the Pacific Ocean.
            ``(8) Local economic area requirement and exemption.--
                    ``(A) Definition.--In this paragraph, the term 
                `local economic area' means an area, as determined by 
                the Administrator, that--
                            ``(i) is in a State other than the State in 
                        which a development company is incorporated;
                            ``(ii) shares a border with the area of 
                        operations of the development company; and
                            ``(iii) is a part of a local trade area 
                        (including a city that is bisected by a State 
                        line and a metropolitan statistical area that 
                        is bisected by a State line) that is contiguous 
                        to the area of operations of the development 
                        company.
                    ``(B) Exemption.--An applicant operating in a local 
                economic area shall not be considered to be operating 
                in a multistate area, and shall not be required to 
                comply with the requirements for multistate operation.
    ``(e) Restrictions on Development Company Assistance.--''.

SEC. 412. CONFORMING AMENDMENTS.

    Section 503 of the Small Business Investment Act of 1958 (15 U.S.C. 
697) is amended--
            (1) in subsection (a)(1), by striking ``qualified State or 
        local development company'' and inserting ``certified 
        development company''; and
            (2) by striking subsection (e) and inserting the following:
    ``(e) Section 7(a) Loans.--Notwithstanding any other provision of 
law, a certified development company is authorized to prepare 
applications for deferred participation loans under section 7(a) of the 
Small Business Act, to service such loans, and to charge a reasonable 
fee for servicing such loans.''.

SEC. 413. CLOSING COSTS.

    Section 503(b) of the Small Business Investment Act of 1958 (15 
U.S.C. 697(b)) is amended by striking paragraph (4) and inserting the 
following:
            ``(4) the aggregate amount of such debenture does not 
        exceed the amount of the loans to be made from the proceeds of 
        such debenture plus, at the election of the borrower, other 
        amounts attributable to the administrative and closing costs of 
        such loans, except for the attorney fees of the borrower;''.

SEC. 414. DEFINITION OF RURAL.

    Section 501 of the Small Business Investment Act of 1958 (15 U.S.C. 
695) is amended by adding at the end the following:
    ``(f) As used in this title, the term `rural' includes any area 
that is not--
            ``(1) a city or town that has a population greater than 
        50,000 inhabitants; or
            ``(2) the urbanized area contiguous and adjacent to a city 
        or town described in paragraph (1).''.

SEC. 415. REGULATIONS AND EFFECTIVE DATE.

    (a) In General.--Except as provided in subsection (b), the 
Administrator shall--
            (1) publish proposed rules to implement this title and the 
        amendments made by this title, not later than 120 days after 
        the date of enactment of this Act; and
            (2) publish such rules in final form not later than 120 
        days after the date of publication under paragraph (1).
    (b) Multistate Operations.--As soon as is practicable after the 
date of enactment of this Act, the Administrator shall promulgate 
regulations to implement section 506(d) of the Small Business 
Investment Act of 1958, as added by this title. Such regulations shall 
become effective not later than 120 days after the date of enactment of 
this Act.
    (c) Effective Date.--
            (1) In general.--Except as otherwise specifically provided 
        this title, this title and the amendments made by this title 
        shall become effective 240 days after the date of enactment of 
        this Act, regardless of whether the Administrator has 
        promulgated the regulations required under subsection (a).
            (2) Multistate operations.--Section 506(d) of the Small 
        Business Investment Act of 1958, as added by this title, shall 
        become effective 120 days after the date of enactment of this 
        Act, regardless of whether the Administrator has promulgated 
        the regulations required under subsection (b).

SEC. 416. LIMITATION ON TIME FOR FINAL APPROVAL OF COMPANIES.

    Section 354(d) of the Small Business Investment Act of 1958 (15 
U.S.C. 689c(d)) is amended by striking ``a period of time, not to 
exceed 2 years,'' and inserting ``2 years''.

SEC. 417. CHILD CARE LENDING PILOT PROGRAM.

    (a) Child Care Lending Pilot Program.--Section 502 of the Small 
Business Investment Act of 1958 (15 U.S.C. 696), as amended by this 
Act, is amended--
            (1) in the matter preceding paragraph (1)--
                    (A) by striking ``The Administration'' and 
                inserting the following:
    ``(a) Authorization.--The Administration'';
                    (B) by striking ``and such loans'' and inserting 
                ``. Such loans'';
                    (C) by striking ``: Provided, however, That the 
                foregoing powers shall be subject to the following 
                restrictions and limitations:'' and inserting a period; 
                and
                    (D) by adding at the end the following:
    ``(b) Restrictions and Limitations.--The authority under subsection 
(a) shall be subject to the following restrictions and limitations:''; 
and
            (2) in subsection (b)(1), as so redesignated--
                    (A) by inserting after ``Use of proceeds.--'' the 
                following:
                    ``(A) In general.--''; and
                    (B) by adding at the end the following:
                    ``(B) Loans to small, nonprofit child care 
                businesses.--
                            ``(i) In general.--Notwithstanding 
                        subsection (a), the proceeds of any loan 
                        described in subsection (a) may be used by the 
                        certified development company to assist a 
                        small, nonprofit child care business, if--
                                    ``(I) the loan is used for a sound 
                                business purpose that has been approved 
                                by the Administrator;
                                    ``(II) each such business meets all 
                                of the same eligibility requirements 
                                applicable to for-profit businesses 
                                under this title, except for status as 
                                a for-profit business;
                                    ``(III) 1 or more individuals has 
                                personally guaranteed the loan;
                                    ``(IV) each such business has clear 
                                and singular title to the collateral 
                                for the loan;
                                    ``(V) each such business has 
                                sufficient cash flow from its 
                                operations to meet its obligations on 
                                the loan and its normal and reasonable 
                                operating expenses; and
                                    ``(VI) each such business is 
                                located in Arkansas, Connecticut, 
                                Georgia, Indiana, Iowa, Louisiana, 
                                Maine, Maryland, Massachusetts, 
                                Michigan, Minnesota, Missouri, Montana, 
                                North Carolina, South Dakota, 
                                Tennessee, Washington, or Wyoming.
                            ``(ii) Limitation on volume.--Not more than 
                        7 percent of the total number of loans 
                        guaranteed in any fiscal year under this title 
                        may be awarded under this subparagraph.
                            ``(iii) Defined term.--For purposes of this 
                        subparagraph, the term `small, nonprofit child 
                        care business' means an establishment that--
                                    ``(I) is organized in accordance 
                                with section 501(c)(3) of the Internal 
                                Revenue Code of 1986;
                                    ``(II) is primarily engaged in 
                                providing child care for infants, 
                                toddlers, pre-school, or pre-
                                kindergarten children (or any 
                                combination thereof), and may provide 
                                care for older children when they are 
                                not in school, and may offer pre-
                                kindergarten educational programs;
                                    ``(III) including its affiliates, 
                                has tangible net worth that does not 
                                exceed $7,000,000, and has average net 
                                income (excluding any carryover losses) 
                                for the 2 completed fiscal years 
                                preceding the date of the application 
                                for assistance under this subparagraph 
                                that does not exceed $2,500,000; and
                                    ``(IV) is licensed as a child care 
                                provider by the State, insular area, or 
                                the District of Columbia, in which it 
                                is located.
                            ``(iv) Sunset provision.--This subparagraph 
                        shall cease to have effect on September 30, 
                        2010, and shall apply to all loans authorized 
                        under this subparagraph that are applied for, 
                        approved, or disbursed during the period 
                        beginning on the date of enactment of this 
                        subparagraph and ending on September 30, 
                        2010.''.
    (b) Reports.--
            (1) Small business administration.--
                    (A) In general.--Not later than 6 months after the 
                date of enactment of this Act, and every 6 months 
                thereafter until September 30, 2010, the Administrator 
                shall submit a report on the implementation of the 
                program under section 502(b)(1)(B) of the Small 
                Business Investment Act of 1958, as added by this Act, 
                to--
                            (i) the Committee on Small Business and 
                        Entrepreneurship of the Senate; and
                            (ii) the Committee on Small Business of the 
                        House of Representatives.
                    (B) Contents.--Each report under subparagraph (A) 
                shall contain--
                            (i) the date on which the program is 
                        implemented;
                            (ii) the date on which the rules are issued 
                        under subsection (c); and
                            (iii) the number and dollar amount of loans 
                        under the program applied for, approved, and 
                        disbursed during the 6-month period ending on 
                        the date of that report--
                                    (I) with respect to nonprofit child 
                                care businesses; and
                                    (II) with respect to for-profit 
                                child care businesses.
            (2) Government accountability office.--
                    (A) In general.--Not later than March 31, 2010, the 
                Comptroller General of the United States shall submit a 
                report on the child care small business loans 
                authorized by section 502(b)(1)(B) of the Small 
                Business Investment Act of 1958, as added by this Act, 
                to--
                            (i) the Committee on Small Business and 
                        Entrepreneurship of the Senate; and
                            (ii) the Committee on Small Business of the 
                        House of Representatives.
                    (B) Contents.--The report under subparagraph (A) 
                shall--
                            (i) contain information gathered during the 
                        first 2 years of the loan program, including--
                                    (I) an evaluation of the timeliness 
                                of the implementation of the loan 
                                program;
                                    (II) a description of the 
                                effectiveness and ease with which 
                                certified development companies, 
                                lenders, and small business concerns 
                                have participated in the loan program;
                                    (III) a description and assessment 
                                of how the loan program was marketed;
                                    (IV) by location (State, insular 
                                area, and the District of Columbia) and 
                                in total, the number of child care 
                                small businesses, categorized by status 
                                as a for-profit or nonprofit business, 
                                that--
                                            (aa) applied for a loan 
                                        under the program (and whether 
                                        it was a new or expanding child 
                                        care provider);
                                            (bb) were approved for a 
                                        loan under the program; and
                                            (cc) received a loan 
                                        disbursement under the program 
                                        (and whether they are a new or 
                                        expanding child care provider); 
                                        and
                                    (V) with respect to businesses 
                                described under subclause (IV)(cc)--
                                            (aa) the number of such 
                                        businesses in each State, 
                                        insular area, and the District 
                                        of Columbia, as of the year of 
                                        enactment of this Act;
                                            (bb) the total amount 
                                        loaned to such businesses under 
                                        the program;
                                            (cc) the total number of 
                                        loans to such businesses under 
                                        the program;
                                            (dd) the average loan 
                                        amount and term;
                                            (ee) the currency rate, 
                                        delinquencies, defaults, and 
                                        losses of the loans;
                                            (ff) the number and percent 
                                        of children served who receive 
                                        subsidized assistance; and
                                            (gg) the number and percent 
                                        of children served who are low 
                                        income; and
                            (ii) assess whether there are government 
                        programs in place making loans or providing 
                        grant funding to nonprofit child care centers 
                        to address child care shortages.
                    (C) Access to information.--
                            (i) In general.--The Administration shall 
                        collect and maintain such information as may be 
                        necessary to carry out this paragraph from 
                        certified development companies and child care 
                        providers, and such companies and providers 
                        shall comply with a request for information 
                        from the Administration for that purpose.
                            (ii) Provision of information to government 
                        accountability office.--The Administration 
                        shall provide information collected under this 
                        subparagraph to the Comptroller General of the 
                        United States for purposes of the report 
                        required by this paragraph.
    (c) Rulemaking Authority.--Not later than 120 days after the date 
of enactment of this Act, the Administrator shall issue final rules to 
carry out the loan program authorized by section 502(b)(1)(B) of the 
Small Business Investment Act of 1958, as added by this Act.

SEC. 418. DEBENTURE REPAYMENT.

    Section 503(a) of the Small Business Investment Act of 1958 (15 
U.S.C. 697(a)) is amended by adding at the end the following:
    ``(5) Any debenture that is issued under this section shall provide 
for the payment of principal and interest on a semiannual basis.''.

SEC. 419. REAL ESTATE APPRAISALS.

    (a) In General.--Section 7(a)(29) of the Small Business Act (15 
U.S.C. 636(a)(29)) is amended to read as follows:
            ``(29) Real estate appraisals.--
                    ``(A) In general.--For any loan under this 
                subsection that is secured by commercial real property, 
                an appraisal of that property by an appraiser licensed 
                or certified by the State in which that property is 
                located--
                            ``(i) shall be required by the 
                        Administrator if the estimated value of that 
                        property is more than $400,000; and
                            ``(ii) may be required by the Administrator 
                        or the lender if--
                                    ``(I) the estimated value of that 
                                property is less than $400,000; and
                                    ``(II) an appraisal is necessary 
                                for the appropriate evaluation of 
                                creditworthiness.
                    ``(B) Adjustment.--The Administrator--
                            ``(i) shall periodically adjust the amount 
                        under subparagraph (A) to account for the 
                        effects of inflation; and
                            ``(ii) may not make an adjustment under 
                        clause (i) in an amount less than $50,000.''.
    (b) Conforming Amendment.--Section 502(b)(3)(E), as so designated 
by section 417(a) of this Act, is amended--
            (1) in clause (ii), by striking ``$250,000'' each place 
        that term appears and inserting ``$400,000''; and
            (2) by adding at the end the following:
                            ``(iii) Adjustment.--The Administrator--
                                    ``(I) shall periodically adjust the 
                                amount under clause (ii) to account for 
                                the effects of inflation; and
                                    ``(II) may not make an adjustment 
                                under subclause (I) in an amount less 
                                than $50,000.''.
                                                       Calendar No. 352

110th CONGRESS

  1st Session

                                S. 1256

                          [Report No. 110-154]

_______________________________________________________________________

                                 A BILL

To amend the Small Business Act to reauthorize loan programs under that 
                      Act, and for other purposes.

_______________________________________________________________________

                           September 12, 2007

                       Reported with an amendment