[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 10375 Introduced in House (IH)]

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119th CONGRESS
  2d Session
                               H. R. 10375

To amend the Small Business Investment Act of 1958 to improve the loan 
guaranty program, enhance the ability of small manufacturers to access 
              affordable capital, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 14, 2026

 Ms. Velazquez (for herself and Mr. Williams of Texas) introduced the 
 following bill; which was referred to the Committee on Small Business

_______________________________________________________________________

                                 A BILL


 
To amend the Small Business Investment Act of 1958 to improve the loan 
guaranty program, enhance the ability of small manufacturers to access 
              affordable capital, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``504 Modernization and Small 
Manufacturer Enhancement Act of 2026''.

SEC. 2. ADDITIONS TO POLICY GOALS FOR THE DEVELOPMENT COMPANY PROGRAM.

    Section 501(d)(3) of the Small Business Investment Act of 1958 (15 
U.S.C. 695(d)(3)) is amended--
            (1) by redesignating subparagraphs (A) through (L) as 
        subparagraphs (B) through (M), respectively;
            (2) by inserting before subparagraph (B), as so 
        redesignated, the following:
                    ``(A) workforce development through work-based or 
                work-integrated training, which shall be satisfied by 
                demonstrating that a small business concern that is a 
                subject of the project has--
                            ``(i) a documented in-house training 
                        program, the duration of which is not shorter 
                        than 12 weeks; or
                            ``(ii) entered into a contract with an 
                        entity--
                                    ``(I) to provide trained applicants 
                                for any open position of employment at 
                                the small business concern; and
                                    ``(II) that ensures that any 
                                applicant provided to the small 
                                business concern under subclause (I) 
                                has undergone not fewer than 12 weeks 
                                of training that is relevant to the 
                                open position described in that 
                                subclause,'';
            (3) in subparagraph (L), as so redesignated, by striking 
        ``producers, or'' and inserting ``producers,'';
            (4) in subparagraph (M), as so redesignated, by striking 
        the period at the end and inserting a comma;
            (5) by inserting after subparagraph (M), as so 
        redesignated, the following:
                    ``(N) aid revitalizing of an area for which a 
                disaster has been declared or determined under 
                subparagraph (A), (B), (C), or (E) of section 7(b)(2) 
                of the Small Business Act (15 U.S.C. 636(b)(2)) during 
                the five-year period beginning on the date on which the 
                disaster was declared or determined under such 
                subparagraph, except that the Administrator may extend 
                such period if, for each extension of such period, the 
                Administrator determines that such extension will 
                facilitate the recovery of such area from such disaster 
                and such extension is for a period of one year, or
                    ``(O) expansion of small business concerns with 10 
                or fewer employees.''; and
            (6) in the flush text following subparagraph (O), as added 
        by paragraph (5), by striking ``subparagraphs (J) and (K)'' and 
        inserting ``subparagraphs (K) and (L)''.

SEC. 3. IMPROVEMENTS TO 504 LOAN CLOSING PROCEDURE.

    Title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 
et seq.) is amended--
            (1) in section 502 (15 U.S.C. 696), by adding at the end 
        the following:
            ``(8) Closing.--An accredited lender certified company may 
        take any of the following actions to facilitate the closing of 
        a loan made under this section:
                    ``(A) Reallocate the cost of the project with 
                respect to which the loan is made in an amount that is 
                not more than 10 percent of the overall cost of the 
                project.
                    ``(B) Make typographical corrections to any name 
                that is applicable to the loan, including the name of 
                any borrower, guarantor, eligible passive company 
                described in subparagraph (C)(i), and operating company 
                described in subparagraph (C)(i).
                    ``(C) Add any of the following to receive proceeds 
                of the loan:
                            ``(i) An eligible passive company, as 
                        defined by the Administrator.
                            ``(ii) If an eligible passive company is 
                        added under clause (i), an operating company 
                        with respect to that eligible passive company.
                    ``(D) Make typographical corrections to the address 
                of any property with respect to which the loan is made.
                    ``(E) Make typographical corrections to the name of 
                any interim lender, third-party lender, or provider of 
                funds described in subclause (I), (II), or (III) of 
                section 502(3)(B)(i).
                    ``(F) Make a guarantor a co-borrower or a co-
                borrower a guarantor.
                    ``(G) Add a guarantor that does not have any 
                ownership interest in the business seeking financing or 
                project being financed under this section.
                    ``(H) Reduce the amount of debt owed by the 
                borrower before the closing as a result of regularly 
                scheduled payments.
                    ``(I) Reduce the cost of the project with respect 
                to which the loan is made.
            ``(9) Accredited lender certified company defined.--In this 
        section, the term `accredited lender certified company' means a 
        certified development company that the Administration has 
        designated as an accredited lender under such section 
        507(b).''; and
            (2) by adding at the end the following:

``SEC. 511. CLOSING AND OVERSIGHT.

    ``(a) SBA District Counsels.--Beginning on the date that is 180 
days after the date of enactment of this section, with respect to the 
program established under this title, district counsels of the 
Administration shall be subject to the same requirements, and shall 
have the same authority and responsibilities, as in effect with respect 
to that program on the day before the date of enactment of this 
section, except that--
            ``(1) the Office of Credit Risk Management of the 
        Administration shall have the responsibility for all duties 
        relating to conducting file reviews of loans reviewed and 
        closed by a designated attorney under this title; and
            ``(2) district counsels of the Administration shall not 
        have any responsibility relating to the review of closing 
        packages with respect to a loan reviewed and closed by a 
        designated attorney under this title.
    ``(b) Designated Attorneys.--For the purposes of this title, the 
following definitions and requirements shall apply with respect to a 
designated attorney of a Priority certified development company:
            ``(1) The term `designated attorney' means a certified 
        development company attorney that the Administrator has 
        approved to close loans for a Priority certified development 
        company.
            ``(2) The term `Priority certified development company' 
        means a certified development company certified to participate 
        on a permanent basis in the program to provide financings 
        established under this title and that the Administrator has 
        approved to participate in an expedited loan and debenture 
        closing process.
            ``(3) A designated attorney shall be responsible for 
        certifying documents relating to the closing of a loan made 
        under this title if such designated attorney submits to the 
        Administrator evidence that such designated attorney--
                    ``(A) is licensed and in good standing to practice 
                law in the State in which such loan is being closed;
                    ``(B) has professional malpractice insurance 
                coverage; and
                    ``(C) has attended a training course on closing 
                loans made under this title that is approved by the 
                Administration.''.

SEC. 4. SBA MARKETING AND OUTREACH.

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

``SEC. 512. SBA MARKETING AND OUTREACH.

    ``The Administrator shall develop and implement a marketing and 
outreach plan with respect to the availability of loans available under 
this title and may partner with 1 or more resource partners to 
implement such plan.''.
    (b) Initial Plan.--The Administrator of the Small Business 
Administration shall begin implementing the plan required under section 
512 of title V of the Small Business Investment Act of 1958 (15 U.S.C. 
695 et seq.), as added by subsection (a), not later than 1 year after 
the date of the enactment of this Act.

SEC. 5. LEASING RULES FOR NEW FACILITIES AND EXISTING BUILDINGS.

    (a) In General.--Section 502 of the Small Business Investment Act 
of 1958 (15 U.S.C. 696) is amended by striking paragraphs (4) and (5) 
and inserting the following:
            ``(4) New facilities.--
                    ``(A) In general.--With respect to a project to 
                construct a new facility, an assisted small business 
                concern may permanently lease not more than 20 percent 
                of the project to commercial or residential tenants if 
                such concern--
                            ``(i) permanently occupies and uses not 
                        less than 60 percent of the project;
                            ``(ii) plans to occupy and use an 
                        additional portion of the project that is not 
                        permanently leased not later than 3 years after 
                        receipt of assistance under this section; and
                            ``(iii) plans to permanently occupy and use 
                        80 percent of the project not later than 10 
                        years after receipt of such assistance.
                    ``(B) Small manufacturers.--With respect to an 
                assisted small business concern that is a small 
                manufacturer (as defined in section 501(e)(6)), 
                subparagraph (A)(i) shall apply with `50 percent' 
                substituted for `60 percent'.
            ``(5) Existing buildings.--With respect to a project to 
        acquire, renovate, or reconstruct an existing building, the 
        following shall apply:
                    ``(A) Occupancy requirements.--The assisted small 
                business concern may permanently lease not more than 50 
                percent of the project if the concern permanently 
                occupies and uses not less than 50 percent of the 
                project.
                    ``(B) Exception.--The assisted small business 
                concern may permanently lease more than 50 percent of 
                the project, but not more than 66 percent of the 
                project, to commercial or residential tenants if--
                            ``(i) such concern--
                                    ``(I) has occupied and used the 
                                existing building for a consecutive 12-
                                month period before submitting an 
                                application for assistance under this 
                                section;
                                    ``(II) agrees to permanently use 
                                less than 50 percent of the existing 
                                building and permanently lease more 
                                than 50 percent for a consecutive 12-
                                month period after receiving such 
                                assistance; and
                                    ``(III) affirms that the existing 
                                building is appropriate for current and 
                                reasonably anticipated needs; and
                            ``(ii) the development company assisting 
                        such project--
                                    ``(I) provides written notice to 
                                the Administrator on the date on which 
                                the development company closes the loan 
                                for such project; and
                                    ``(II) once each year during the 
                                first 5 years of the loan, and once 
                                every 2 years for the remainder of the 
                                loan--
                                            ``(aa) conducts an 
                                        examination of the assisted 
                                        small business concern to 
                                        ensure the concern is not a 
                                        real estate development 
                                        business; and
                                            ``(bb) files with the 
                                        Administrator an anti-investor 
                                        certification signed by the 
                                        development company and the 
                                        assisted small business 
                                        concern.
                    ``(C) Lease term.--Any residential lease made under 
                this paragraph shall be for a term of not more than 1 
                year, and any commercial lease made under this 
                paragraph shall be for a term of not more than 5 
                years.''.
    (b) Report.--Not later than 5 years after the date of enactment of 
this Act, the Administrator of the Small Business Administration shall 
submit to Congress a report analyzing the impact of the amendments made 
by this section on access to capital for small business concerns (as 
defined in section 3 of the Small Business Act (15 U.S.C. 632)).

SEC. 6. CREDIT ELSEWHERE EXEMPTION.

    Section 7(a)(1)(A) of the Small Business Act (15 U.S.C. 
636(a)(1)(A)) is amended--
            (1) in clause (i), by striking ``The Administrator'' and 
        inserting ``Except as provided in clause (iii), the 
        Administrator''; and
            (2) by adding at the end the following:
                            ``(iii) Exemption.--Clause (i) shall not 
                        apply to loans under paragraph (13) of this 
                        subsection, loans or other financings under the 
                        Small Business Investment Act of 1958 (15 
                        U.S.C. 661 et seq.), or any other loan made by 
                        the Administrator to a certified development 
                        company.''.
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