[Congressional Record Volume 141, Number 141 (Tuesday, September 12, 1995)]
[House]
[Pages H8776-H8777]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             SMALL BUSINESS LENDING ENHANCEMENT ACT OF 1995

  Mrs. MEYERS of Kansas. Mr. Speaker, I ask unanimous consent to take 
from the Speaker's table the Senate bill (S. 895) to amend the Small 
Business Act to reduce the level of participation by the Small Business 
Administration in certain loans guaranteed by the administration, and 
for other purposes, and ask for its immediate consideration in the 
House.
  The Clerk read the title of the Senate bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from Kansas?
  There was no objection.
  The Clerk read the Senate bill, as follows:

                                 S. 895

       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 ``Small Business Lending 
     Enhancement Act of 1995''.

[[Page H 8777]]


     SEC. 2. REDUCED LEVEL OF PARTICIPATION IN GUARANTEED LOANS.

       Section 7(a)(2) of the Small Business Act (15 U.S.C. 
     636(a)(2)) is amended to read as follows:
       ``(2) Level of participation in guaranteed loans.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     in an agreement to participate in a loan on a deferred basis 
     under this subsection (including a loan made under the 
     Preferred Lenders Program), such participation by the 
     Administration shall be equal to--
       ``(i) 75 percent of the balance of the financing 
     outstanding at the time of disbursement of the loan, if such 
     balance exceeds $100,000; or
       ``(ii) 80 percent of the balance of the financing 
     outstanding at the time of disbursement of the loan, if such 
     balance is less than or equal to $100,000.
       ``(B) Reduced participation upon request.--
       ``(i) In general.--The guarantee percentage specified by 
     subparagraph (A) for any loan under this subsection may be 
     reduced upon the request of the participating lender.
       ``(ii) Prohibition.--The Administration shall not use the 
     guarantee percentage requested by a participating lender 
     under clause (i) as a criterion for establishing priorities 
     in approving loan guarantee requests under this subsection.
       ``(C) Interest rate under preferred lenders program.--
       ``(i) In general.--The maximum interest rate for a loan 
     guaranteed under the Preferred Lenders Program shall not 
     exceed the maximum interest rate, as determined by the 
     Administration, applicable to other loans guaranteed under 
     this subsection.
       ``(ii) Preferred lenders program defined.--For purposes of 
     this subparagraph, the term `Preferred Lenders Program' means 
     any program established by the Administrator, as authorized 
     under the proviso in section 5(b)(7), under which a written 
     agreement between the lender and the Administration delegates 
     to the lender--
       ``(I) complete authority to make and close loans with a 
     guarantee from the Administration without obtaining the prior 
     specific approval of the Administration; and
       ``(II) authority to service and liquidate such loans.''.

     SEC. 3. GUARANTEE FEES.

       (a) Amount of Fees.--Section 7(a)(18) of the Small Business 
     Act (15 U.S.C. 636(a)(18)) is amended to read as follows:
       ``(18) Guarantee fees.--
       ``(A) In general.--With respect to each loan guaranteed 
     under this subsection (other than a loan that is repayable in 
     1 year or less), the Administration shall collect a guarantee 
     fee, which shall be payable by the participating lender and 
     may be charged to the borrower, in an amount equal to the sum 
     of--
       ``(i) 2.5 percent of the amount of the deferred 
     participation share of the loan that is less than or equal to 
     $250,000;
       ``(ii) if the deferred participation share of the loan 
     exceeds $250,000, 3 percent of the difference between--
       ``(I) $500,000 or the total deferred participation share of 
     the loan, whichever is less; and
       ``(II) $250,000; and
       ``(iii) if the deferred participation share of the loan 
     exceeds $500,000, 3.5 percent of the difference between--
       ``(I) $750,000 or the total deferred participation share of 
     the loan, whichever is less; and
       ``(II) $500,000.
       ``(B) Exception for certain loans.--Notwithstanding 
     subparagraph (A), if the total deferred participation share 
     of a loan guaranteed under this subsection is less than or 
     equal to $80,000, the guarantee fee collected under 
     subparagraph (A) shall be in an amount equal to 2 percent of 
     the total deferred participation share of the loan.
       ``(C) Discretionary increase.--Notwithstanding 
     subparagraphs (A) and (B), during the 90-day period beginning 
     on the first day of any fiscal year, the Administration may 
     increase the guarantee fee collected under this paragraph by 
     an amount not to exceed 0.375 percent of the total deferred 
     participation share of the loan, if the Administration--
       ``(i) determines that such action is necessary to meet 
     projected borrower demand for loans under this subsection 
     during that fiscal year, based on the subsidy cost of the 
     loan program under this subsection and amounts provided in 
     advance for such program in appropriations Acts; and
       ``(ii) not less than 15 days prior to imposing any such 
     increase, notifies the Committees on Small Business of the 
     Senate and the House of Representatives of the determination 
     made under clause (i).''.
       (b) Repeal of Provisions Allowing Retention of Fees by 
     Lenders.--Section 7(a)(19) of the Small business Act (15 
     U.S.C. 636(a)(19)) is amended--
       (1) in subparagraph (B)--
       (A) by striking ``shall (i) develop'' and inserting ``shall 
     develop''; and
       (B) by striking ``, and (ii)'' and all that follows through 
     the end of the subparagraph and inserting a period; and
       (2) by striking subparagraph (C).

     SEC. 4. ESTABLISHMENT OF ANNUAL FEE.
       (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 
     new paragraph:
       ``(23) Annual fee.--
       ``(A) In general.--With respect to each loan guaranteed 
     under this subsection, the Administration shall, in 
     accordance with such terms and procedures as the 
     Administration shall establish by regulation, assess and 
     collect an annual fee in an amount equal to 0.5 percent of 
     the outstanding balance of the deferred participation share 
     of the loan.
       ``(B) Payer.--The annual fee assessed under subparagraph 
     (A) shall be payable by the participating lender and shall 
     not be charged to the borrower.''.
       (b) Conforming Amendment.--Section 5(g)(4)(A) of the Small 
     Business Act (15 U.S.C. 634(g)(4)(A)) is amended--
       (1) by striking the first sentence and inserting the 
     following: ``The Administration may collect a fee for any 
     loan guarantee sold into the secondary market under 
     subsection (f) in an amount equal to not more than 50 percent 
     of the portion of the sale price that exceeds 110 percent of 
     the outstanding principal amount of the portion of the loan 
     guaranteed by the Administration.''; and
       (2) by striking ``fees'' each place such term appears and 
     inserting ``fee''.

     SEC. 5. NOTIFICATION REQUIREMENT.

       (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 
     new paragraph:
       ``(24) Notification requirement.--The Administration shall 
     notify the Committees on Small Business of the Senate and the 
     House of Representatives not later than 15 days before making 
     any significant policy or administrative change affecting the 
     operation of the loan program under this subsection.''.

     SEC. 6. DEVELOPMENT COMPANY DEBENTURES.

       Section 503(b) of the Small Business Investment Act of 1958 
     (15 U.S.C. 697(b)) is amended--
       (1) in paragraph (5), by striking ``and'' at the end;
       (2) in paragraph (6), by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following new paragraph:
       ``(7) with respect to each loan made from the proceeds of 
     such debenture, the Administration--
       ``(A) assess and collects a fee, which shall be payable by 
     the borrower, in an amount equal to 0.0625 percent per year 
     of the outstanding balance of the loan; and
       ``(B) uses the proceeds of such fee to offset the cost (as 
     such term is defined in section 502 of the Federal Credit 
     Reform Act of 1990) to the Administration of making 
     guarantees under subsection (a).''.

     SEC. 7. PILOT PREFERRED SURETY BOND GUARANTEE PROGRAM 
                   EXTENSION.

       Section 207 of the Small Business Administration 
     Reauthorization and Amendment Act of 1988 (15 U.S.C. 694b 
     note) is amended by striking ``September 30, 1995'' and 
     inserting ``September 30, 1997''.
                motion offered by mrs. meyers of kansas

  Mrs. MEYERS of Kansas. Mr. Speaker, I offer a motion.
  The Clerk read as follows:
  Mrs. Meyers of Kansas moves to strike out all after the enacting 
clause of the Senate bill, S. 895, and insert the text of H.R. 2150 as 
passed the House.
  The motion was agreed to.
  The Senate bill was ordered to be read a third time, was read the 
third time, and passed.
  The title of the Senate bill was amended so as to read: ``A bill to 
amend the Small Business Act and the Small Business Investment Act of 
1958 to reduce the cost to the Federal Government of guaranteeing 
certain loans and debentures, and for other purposes.''
  A motion to reconsider was laid on the table.
  A similar House bill (H.R. 2150) was laid on the table.


                        appointment of conferees

  Mrs. MEYERS of Kansas. Mr. Speaker, I offer a motion.
  The Clerk read as follows:

       Mrs. Meyers of Kansas moves that the House insist on its 
     amendment to the Senate bill, S. 895, and request a 
     conference with the Senate thereon.

  The motion was agreed to.
  The SPEAKER pro tempore. Without objection, the Chair appoints the 
following conferees:
  Mrs. Meyers of Kansas; and Messrs. Torkildsen, Longley, LaFalce, and 
Poshard.

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