[Congressional Record Volume 141, Number 151 (Tuesday, September 26, 1995)]
[Senate]
[Page S14333]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




[[Page S 14333]]


             SMALL BUSINESS LENDING ENHANCEMENT ACT OF 1995

  Mr. BOND. Mr. President, I ask that the Chair lay before the Senate a 
message from the House of Representatives on S. 895.
  The PRESIDING OFFICER laid before the Senate the following message 
from the House of Representatives:

       Resolved, That the bill from the Senate (S. 895) entitled 
     ``An Act 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'', do pass with the following amendments:
       Strike out all after the enacting clause, and insert:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Small Business Credit 
     Efficiency Act of 1995''.

     SEC. 2. FEE FOR LOAN GUARANTEES SOLD ON SECONDARY MARKET.

       Section 5(g)(4)(A) of the Small Business Act (15 U.S.C. 
     634(g)(4)(A)) is amended by striking ``\4/10\ of one 
     percent'' and inserting ``one-half of 1 percent''.

     SEC. 3. GENERAL BUSINESS LOANS.

       (a) 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.--In agreements to participate in loans on 
     a deferred basis under this subsection, such participation by 
     the Administration shall be--
       ``(i) equal to 80 percent of the balance of the financing 
     outstanding at the time of disbursement if such financing is 
     less than or equal to $100,000; and
       ``(ii) equal to 75 percent of the balance of the financing 
     outstanding at the time of disbursement if such financing is 
     greater than $100,000.
       ``(B) Reduced participation.--The guarantee percentage 
     specified by subparagraph (A) for any loan may be reduced 
     upon the request of the participating lender. The 
     Administration shall not use the percent of guarantee 
     requested as a criterion for establishing priorities in 
     approving guarantee requests.
       ``(C) Interest rate under preferred lenders program.--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, which is 
     made applicable to other loan guarantees under this 
     subsection.
       ``(D) Preferred lenders program defined.--In this 
     paragraph, the term `Preferred Lenders Program' means a 
     program 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.''.
       (b) Guarantee 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) General fee.--For any loan or financing made under 
     this subsection other than a loan repayable in a period of 
     one year or less, the Administration shall collect a 
     guarantee fee equal to--
       ``(i) 2 percent of the gross amount of any loan guaranteed 
     under this subsection of an amount less than $250,000;
       ``(ii) 2.5 percent of the gross amount of any loan 
     guaranteed under this subsection of an amount equal to or 
     greater than $250,000 and less than $500,000; or
       ``(iii) 3 percent of the gross amount of any loan 
     guaranteed under this subsection of an amount equal to or 
     greater than $500,000.

     Such fee shall be payable by the participating lending 
     institution and may be charged to the borrower.
       ``(B) Additional fee to offset cost.--
       ``(i) In general.--In addition to the guarantee fee to be 
     collected under subparagraph (A), the Administration shall 
     collect a fee for loans guaranteed under this subsection 
     (other than loans for which a guarantee fee may be collected 
     under section 5(g)(4)(A)) in an amount equal to not more than 
     four-tenths of 1 percent per year of the outstanding 
     principal portion of such loan guaranteed by the 
     Administration.
       ``(ii) Use.--Fees collected under clause (i) shall be used 
     solely to offset the cost (as defined by section 502(5) of 
     the Congressional Budget Act of 1974) of guaranteeing loans 
     under this subsection.
       ``(iii) Payment.--Fees collected under clause (i) shall be 
     payable by the participating lending institution and shall 
     not be charged to the borrower.''.
       (c) Repeal of Provisions Allowing Retention of Guarantee 
     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 before 
     the period at the end; and
       (2) by striking subparagraph (C).

     SEC. 4. MODIFICATIONS TO DEVELOPMENT COMPANY DEBENTURE 
                   PROGRAM.

       (a) Maximum Loan Amount.--Section 502(2) of the Small 
     Business Investment Act of 1958 (15 U.S.C. 696(2)) is amended 
     to read as follows:
       ``(2) Loans made by the Administration under this section 
     shall be limited to $1,250,000 for each such identifiable 
     small business concern.''.
       (b) Fee to Offset Cost.--Section 503(b)(3) of the Small 
     Business Investment Act of 1958 (15 U.S.C. 697(b)(3)) is 
     amended by inserting before the semicolon the following: 
     ``and includes a one-eighth of 1 percent fee which shall be 
     paid to the Administration and which shall be used solely to 
     offset the cost (as defined by section 502(5) of the 
     Congressional Budget Act of 1974) of guaranteeing the 
     debenture.''.

       Amend the title so as to read: ``An Act 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.''.
  Mr. BOND. Mr. President, I ask unanimous consent that the Senate 
disagree to the House amendments, agree to a request for a conference 
with the House, and that the Chair be authorized to appoint conferees 
on the part of the Senate.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Thereupon, the Presiding Officer (Mr. Grams) appointed Mr. Bond, Mr. 
Burns, Mr. Coverdell, Mr. Bumpers, and Mr. Nunn conferees on the part 
of the Senate.

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