[Congressional Record Volume 153, Number 67 (Wednesday, April 25, 2007)]
[House]
[Pages H4108-H4119]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            SMALL BUSINESS LENDING IMPROVEMENTS ACT OF 2007

  The SPEAKER pro tempore. Pursuant to House Resolution 330 and rule 
XVIII, the Chair declares the House in the Committee of the Whole House 
on the state of the Union for the consideration of the bill, H.R. 1332.

                              {time}  1635


                     In the Committee of the Whole

  Accordingly, the House resolved itself into the Committee of the 
Whole House on the state of the Union for the consideration of the bill 
(H.R. 1332) to improve the access to capital programs of the Small 
Business Administration, and for other purposes, with Mr. Pastor in the 
chair.
  The Clerk read the title of the bill.
  The CHAIRMAN. Pursuant to the rule, the bill is considered read the 
first time.
  The gentlewoman from New York (Ms. Velazquez) and the gentleman from 
Ohio (Mr. Chabot) each will control 30 minutes.
  The Chair recognizes the gentlewoman from New York.
  Ms. VELAZQUEZ. Mr. Chairman, I yield myself as much time as I may 
consume.
  Small businesses are this country's economic drivers, yet they 
continually face challenges that make it hard for them to succeed in 
today's marketplace. Entrepreneurs are already dealing with rising 
energy and health care costs as well as the increasing regulatory 
burden. The last thing they need is for accessing affordable capital to 
be another barrier in the way of their success.
  What we continue to see is a steady increase in costs and a decrease 
in access for the very programs that are intended to help 
entrepreneurs. Over the

[[Page H4109]]

past 2 years, for the 7(a) program alone, costs have doubled for 
smaller loans, and the average loan size has declined by 37 percent.
  A recent study released by the National Small Business Association 
found that access to capital is the number two concern for 
entrepreneurs. This means that it is more of a concern than taxes and 
even the regulatory burden.
  The Small Business Lending Improvements Act of 2007 is a bipartisan 
effort introduced by Ms. Bean and Mr. Chabot. This bill will make loans 
more economical, while providing long-term stability for small business 
owners.
  H.R. 1332 touches all aspects of the SBA lending initiative, 
including the 504 program.
  Not only will this legislation put affordable financing back into the 
hands of entrepreneurs, but will also accomplish a number of important 
public policy initiatives. H.R. 1332 provides incentives for medical 
professionals to locate in low income areas, establishes a rural lender 
program, and allows for veterans to secure funds to start or expand 
their firms.
  With the number of veterans returning from Iraq and Afghanistan, the 
need for affordable financing is more important than ever. When 
Congress passed the GI bill, we made a commitment to education and 
homeownership for veterans. Today we have an opportunity to show our 
commitment to their entrepreneurial endeavors.
  Small businesses must have the ability to continue spurring economic 
growth and creating jobs. For these reasons, H.R. 1332 has the support 
of American Community Bankers, Independent Community Bankers of 
America, American Veterans, Credit Union National Association, National 
Small Business Association, Veterans of Foreign Wars, American Bankers 
Association, the U.S. Women's Chamber of Commerce, the U.S. Hispanic 
Chamber of Commerce and the American Dental Association.
  I strongly urge my colleagues to vote for the Small Business Lending 
Improvements Act of 2007.
  Mr. Chairman, I reserve the balance of my time.
  Mr. CHABOT. Mr. Chairman, I yield myself such time as I might 
consume.
  Mr. Chairman, today, Madam Chairwoman and I rise to support H.R. 
1332, the Small Business Lending Improvements Act of 2007. I want to 
especially thank the chairwoman and the gentlelady, Congresswoman Bean, 
for working in a cooperative and bipartisan manner to bring this bill 
before the House, and I want to commend them for again working with us 
on this.
  The Small Business Lending Improvements Act amends the Small Business 
Act to make necessary improvements and technical changes to the primary 
lending program offered by the Small Business Administration, the SBA, 
the 7(a) guaranteed loan program. H.R. 1332 also amends title V of the 
Small Business Investment Act of 1958 to make significant and necessary 
changes to the loan program, sometimes called the 504 loan program.
  Before addressing the particulars of the legislation, it is important 
to note what H.R. 1332 does not do. The legislation does not modify the 
subsidy rate for the 7(a) guaranteed lending program. The subsidy rate 
for the program currently is zero. After this bill is enacted, the 
subsidy rate for the 7(a) lending program will be zero. In fact, if 
this bill attempted to modify the subsidy rate, it could not because it 
would require an appropriation. And of course, as an authorizing 
committee, we are unable to appropriate. So any argument that this bill 
will cost hundreds of millions or even billions of dollars over 10 
years or so is just plain wrong.
  At the correct time, I will oppose adding a subsidy for a program 
that works just fine without one.
  And now, I turn my attention to what this bill does. The SBA charges 
a fee to borrowers which can be viewed as akin to paying points on a 
mortgage, which many people are familiar with doing. In addition, banks 
pay an ongoing fee each year on the amount of unpaid balance of the 
loan as guaranteed. Although some confusion exists about this point, I 
read the Small Business Act as authorizing the SBA to adjust the up 
front fee or points paid by borrowers in the same way that the SBA has 
the unquestioned authority to reduce fees to lenders. Despite the 
authority that the SBA has, the agency has not in recent memory 
reduced, except when dictated by Congress, the up front fees paid by 
borrowers. The SBA, on the other hand, has modified the annual fee paid 
by the lender. The SBA even testified at a committee hearing recently 
that it would be reducing the fees paid by lenders.
  Section 101 does two very important things. First, it clarifies that 
the SBA has the authority to reduce or increase the fees paid by the 
borrower. This should resolve any confusion as to whether the SBA has 
the power to reduce the points or up front borrowing fee, as well as 
the annual fee paid by the lender. And as already noted, section 101 
requires that these fees be calculated to arrive at a zero subsidy. 
That is so that the fees will cover the cost of the 7(a) loan program, 
without an appropriation, as I just mentioned. The section then goes on 
to restrict the administrator's discretion in only one regard; if an 
appropriation is made to support the 7(a) loan program, section 101 
directs the administrator to first utilize the funds to reduce fees to 
borrowers and not lenders.
  I support this change because the Small Business Act is, first and 
foremost, legislation designed to assist small businesses, not to 
assist small banks or any other banks. Therefore, the bill takes the 
logical step of directing that, should funds be made available, the 
administrator should reduce the fees to small businesses, not to banks.
  Section 101 also requires that the administrator update quarterly the 
reduction in fees given available funding remaining. That makes sense, 
because if the SBA did not make that calculation, they would not know 
how much to reduce fees in an upcoming quarter, if at all. The need for 
this calculation simply recognizes that loan demand is not constant 
throughout the year and ensures that administrator properly allocates 
available funds. Once funds are exhausted, the legislation simply 
directs the administrator to operate the program at zero subsidy, the 
up front annual fees needed to cover the cost of the 7(a) loan program 
as if there was no appropriation.
  Finally, to the extent that loan demand is not high, and there are 
sufficient funds available, the administrator may use any available 
extra funds to reduce the annual fee paid by banks. Although this is a 
possibility, the greater probability is that all funds will be utilized 
to reduce cost to small business owners.
  There is more to H.R. 1332 than providing the administrator with a 
mechanism to reduce fees under the 7(a) loan program, if an 
appropriation is available. The guaranteed loan program is the largest 
of the SBA's financing programs, reaching the greatest number of 
businesses, yet there are businesses whose access to this program 
remains limited.
  The SBA loan program is a fairly complex operation, and many banks, 
particularly community banks, do not have a sufficient loan volume to 
justify the expenses associated with a 7(a) loan program. This is 
particularly true for independent and community banks located in rural 
areas.
  The bill requires the SBA to establish a low-document, or LowDoc, 
loan program for banks located in rural areas. To the extent that a 
rural community has no bank willing to participate in the program, 
there is nothing in the Small Business Act or the bill that prohibits a 
small business from using a rural lender not in the immediate vicinity.
  Title I also makes the Community Express Loan Program permanent. I 
support this because I believe it can provide the same assistance to 
low income communities, including those in my district in Cincinnati, 
which would otherwise be provided under a more costly micro loan 
program.
  In addition to providing greater assistance in rural communities and 
low income communities, the bill also reduces the cost of the 7(a) 
loans to veterans. In addition, the bill also provides for a reduction 
in fees to medical practitioners seeking to establish or expand 
practices in areas deficient of such practitioners. These are noble 
goals and deserve the support of all Members of the House.
  Although title I is a significant achievement, I am particularly 
pleased

[[Page H4110]]

with title II of this bill. It modifies and strengthens the loan 
program operator pursuant to title V of the Small Business Investment 
Act of 1958.
  Certified development companies, or CDCs, are vital to long-term 
economic and community development in many districts, including mine, 
around the country. CDCs operate to provide long-term, fixed rate 
financing for small business concerns who find their financing needs 
cannot be met due to the loan limits of the 7(a) loan program.

                              {time}  1645

  And unlike many 7(a) lenders, CDCs must be locally based so they have 
a keen understanding of the needs of the communities they serve.
  The first thing that title II does is change the name of the program. 
While this may sound minor, it is actually important. Colloquially, the 
program is known as the ``504 loan'' program for section 504 of title V 
of the Small Business Investment Act. This section authorizes the 
administrator to sell the loans made by the CDCs in a secondary market. 
It is not at all descriptive of the program or the entities involved in 
the program. By accurately describing the program, it will provide 
greater recognition to CDCs and enable them to better promote their 
important mission.
  Section 202 makes important technical changes to the definitions in 
the CDC program, including, most importantly, defining the term 
``certified development company.'' As a corollary, title II eliminates 
the outdated term ``qualified State and local development company'' 
from the Small Business Investment Act of 1958.
  In my estimation section 203 is the most important provision in the 
bill. It statutorily establishes the procedures by which the SBA 
designates entities as CDCs. The most important requirement of these 
statutory procedures is the mandate that the CDC have local board 
members familiar with the economic development needs of their 
communities. Even though the bill authorizes expansion only into 
neighboring States, the CDC must have representatives that understand 
the local economic development needs of the new State of operation.
  Another very important aspect of the bill authorizes CDCs to perform 
their own liquidations. Data that I have seen shows that current loan 
liquidation returns are about 20 cents on the dollar. Think of that. 
Only 20 cents on the dollar liquidation rate. That is very inadequate. 
By having CDCs with their local expertise perform liquidations, the 
government should get a better return when a loan goes bad, and that 
should save the taxpayers money.
  Title II also makes other changes that will benefit greater financial 
opportunities to small businesses under the CDC program. Together all 
these changes made will ensure a robust CDC program that will spur 
economic development.
  For these reasons I ask my colleagues to support passage of this 
important bill.
  Mr. Chairman, I reserve the balance of my time.
  Ms. VELAZQUEZ. Mr. Chairman, I yield such time as she may consume to 
the gentlewoman from Illinois (Ms. Bean), who is a member of the Small 
Business Committee and sponsor of the legislation.
  (Ms. BEAN asked and was given permission to revise and extend her 
remarks.)
  Ms. BEAN. Mr. Chairman, the Small Business Lending Improvements Act 
of 2007, which I introduced earlier this year, was recently reported 
out of the Committee on Small Business, without objection, and I am 
pleased that it is being given consideration on the House floor today.
  I would like to begin by thanking Chairwoman Velazquez and Ranking 
Member Chabot for cosponsoring this legislation and for their 
leadership in moving this bill forward. The expedited consideration of 
this bill, as well as the bipartisan support it has received, 
underscores the importance of ensuring access to capital to our small 
business community.
  I am also very appreciative of the expert assistance provided by the 
House Small Business Committee staff, especially Michael Day, whose 
work on this issue has been invaluable.
  Having been a small business owner myself, I can appreciate the 
challenges that entrepreneurs and small business owners face in gaining 
access to the capital that they need to grow. That is why I have long 
been active in my support of measures to improve and expand the SBA 
loan programs, which offer low-interest, long-term loans, not 
subsidies, to business owners seeking affordable options.
  This bill is no exception. H.R. 1332 makes much-needed changes to 
SBA's lending initiatives and, most importantly, helps to preserve the 
original intent of these programs, to help make available affordable 
sources of financing. This is of particular importance as the cost of 
capital through these programs has risen rapidly over the last few 
years, stifling plans for both new businesses and those ready for plant 
and equipment expansion. This bill helps to reverse this discouraging 
trend by supporting our entrepreneurs and not stifling their visions 
for growth.
  In addition, H.R. 1332 addresses the need for lending in our rural 
communities by restoring the LowDoc program and by strengthening the 
504 initiative, which is integral in stimulating economic growth in 
rural America.
  Together, these initiatives will streamline and reduce the fees for 
SBA's lending programs, making it easier for small lenders to 
participate. Local economies throughout the country will benefit from 
new jobs and economic development that will occur in their communities 
as a result.
  Again, I commend the work of the Small Business Committee, under the 
leadership of Chairwoman Velazquez, for recognizing the need for this 
legislation and prioritizing it relative to other committee work. Small 
businesses are the backbone of our Nation's economic stimulus, driving 
80 percent of domestic job growth, and their success is dependent upon 
their ability to grow and to expand. This legislation helps provide 
them with the fundamental tools they need to do so.
  I urge your support of this bill.
  Mr. CHABOT. Mr. Chairman, I would like to yield such time as she may 
consume to the gentlewoman from Oklahoma (Ms. Fallin) for the purpose 
of entering into a colloquy with the gentlewoman from New York.
  Ms. FALLIN. Mr. Chairman, I thank the ranking member for yielding.
  I would now like to yield to the gentlelady from New York for the 
purposes of entering into a colloquy.
  Ms. VELAZQUEZ. Mr. Chairman, I thank the gentlelady for yielding.
  I know that the gentlelady has worked tirelessly to ensure that 
certain independently owned and operated franchises are afforded access 
to the SBA's 7(a) loan program. You have my assurance that I will work 
to address this concern as the bill moves forward.
  Ms. FALLIN. Thank you.
  Mr. Chairman, reclaiming my time, it is my goal to address the issue 
of certain franchisees, who by all intents and purposes are small 
businesses, not being allowed to receive 7(a) loans due to their 
affiliation with larger franchisors.
  I believe the Small Business Lending Improvements Act should 
eventually contain language to modify the SBA's affiliation standard to 
allow that a business, if it is affiliated with another business and 
therefore determined to be something other than small, to still be 
eligible for a loan if it has no financial recourse to its affiliates 
for repayment of any of its debt.
  These businesses operate financially independent of their franchisor 
and therefore operate like all other small businesses, and I believe 
they should be offered the same opportunity to receive the 7(a) loans 
as any other small business.
  I ask that the gentlelady work with me to address this issue in the 
underlying legislation.
  Ms. VELAZQUEZ. Mr. Chairman, again I thank the gentlewoman for 
raising this important issue. I agree that this is an issue that we 
need to address, and I will make a commitment to work with you and your 
staff as this legislation heads to conference.
  Ms. FALLIN. Mr. Chairman, I thank the chairwoman and ranking member 
for their work on this issue.
  Mr. CHABOT. Mr. Chairman, I want to commend the gentlewoman from 
Oklahoma for her work on this issue. I know she has worked very hard to 
make this happen. So I want to commend her for that.

[[Page H4111]]

  Mr. Chairman, I reserve the balance of my time.
  Ms. VELAZQUEZ. Mr. Chairman, I yield 2 minutes to the gentleman from 
Texas (Mr. Gonzalez), a member of the Small Business Committee.
  Mr. GONZALEZ. Mr. Chairman, I thank my colleague for yielding.
  Mr. Chairman, I rise today to express my strong support for H.R. 
1332, the Small Business Lending Improvements Act of 2007.
  I want to express my special thanks to the chairwoman of the Small 
Business Committee, Nydia Velazquez, as well as Ranking Member Steve 
Chabot, for their leadership in bringing this important bill which has 
strong bipartisan support to the floor today. I am honored to work with 
these fine leaders as we strive to support the small business community 
of this Nation.
  The Small Business Lending Improvements Act of 2007 will boost our 
economic might by expanding entrepreneurs' access to capital through 
the Small Business Administration's 7(a) and 504 programs. The 7(a) and 
504 programs are the SBA's largest in terms of number of loans made and 
amount of funds made available to small businesses. In fact, over the 
last decade, the SBA has approved more than 424,000 loans for over $90 
billion. Furthermore, the programs operate as public-private 
partnerships to provide important financing for small firms through 
private sector lenders, greatly limiting costs to the United States 
Government.
  Despite the positive impact of these programs, they must now be 
modernized and strengthened in order to continue to meet their goals. 
The Small Business Lending Improvements Act of 2007 provides much-
needed changes to these programs. Provisions of this bill will give the 
SBA the authority to contribute funds for the purpose of reducing the 
burden associated with borrower and lender fees on 7(a) loans. It will 
also make it easier for rural lenders to assist local small businesses. 
It will increase access to capital for socially and economically 
disadvantaged small businesses. It will improve access to the program 
for medical professionals in health professional shortage areas. And, 
finally, it will expand opportunities for veterans to obtain such 
loans.
  I think all of us in this Chamber often enough go back to our 
districts, and all small businesses will tell us that the greatest 
challenge is the lack of access to capital. This is a first step in 
addressing that very important challenge.
  Mr. CHABOT. Mr. Chairman, I have no further requests for time, and I 
will continue to reserve the balance of my time.
  Ms. VELAZQUEZ. Mr. Chairman, I yield 2 minutes to the gentleman from 
North Carolina (Mr. Shuler), a member of the Small Business Committee.
  Mr. SHULER. Mr. Chairman, I thank the gentlewoman for yielding.
  Mr. Chairman, I rise today in support of H.R. 1332, the Small 
Business Lending Improvements Act of 2007.
  As an entrepreneur, I understand the difficulties that small business 
owners face on a daily basis. I also know that small businesses are the 
backbone of our economy, both nationally and in western North Carolina.
  Small businesses account for over half of all of our jobs in the U.S. 
and are responsible for 60 to 80 percent of all of our new jobs. For 
our small businesses to continue to grow and prosper, we must help them 
gain access to capital.
  The bill will grant American entrepreneurs that access to capital by 
updating and streamlining SBA's 7(a) and 504 loan programs. 
Additionally, this bill will eliminate loan fees for veterans returning 
from Iraq and Afghanistan.
  As a member of the Small Business Committee, I urge all Members to 
support this important legislation.
  Mr. CHABOT. Mr. Chairman, I reserve the balance of my time.
  Ms. VELAZQUEZ. Mr. Chairman, I yield 2 minutes to the gentleman from 
Illinois (Mr. Rush).
  Mr. RUSH. Mr. Chairman, I want to thank the gentlewoman for yielding. 
I also want to commend her for her outstanding leadership on this issue 
and other important issues that face this Congress.
  And I want to also commend the ranking member, Mr. Chabot, for his 
outstanding leadership on this particular issue.
  Mr. Chairman, today I rise in strong support of H.R. 1332, the Small 
Business Lending Improvements Act of 2007.
  As a former small business owner and an advocate for minority 
entrepreneurship and franchising, I might add, I am pleased that this 
legislation would target money more aggressively and efficiently 
towards small businesses and finally put them in a position to compete.
  Mr. Chairman, the Small Business Administration's support of 
communities like my own in the First Congressional District of Illinois 
needs to be improved. One of the services that I provide to my 
constituents is monthly small business development seminars that we are 
conducting in cooperation with the local SBA. Also, I have hosted two 
franchise fairs to educate and engage my constituents on the power of 
minority entrepreneurship.
  Mr. Chairman, one of the biggest issues raised is the accessibility 
of the SBA loans. Small business owners and startups have a hard time 
navigating the SBA. This important legislation bridges the financial 
gap for small business owners, particularly minority businesses. These 
owners are trying to create economic opportunities. They are trying to 
create jobs, and they are trying to increase the competition of goods 
and services. Not only do they need and deserve our support, but, Mr. 
Chairman, by focusing on these urban business pioneers, we honor the 
entrepreneur spirit that this Nation was built on.
  I encourage my colleagues to support this legislation.
  I fully support this bill's provision of:
  Establishing a small bank outreach division;
  Increasing capital for socially and economically disadvantaged small 
businesses; and
  Completely eliminating loan fees to veteran-owned small businesses.
  Mr. Chairman, this bill ensures that the mission and goals of the 
Small Business Administration are not only being maintained but that 
their standards for aggressive outreach, increasing access and 
promoting equitable lending are raised.

                              {time}  1700

  Ms. VELAZQUEZ. I yield 2 minutes to the gentlewoman from Ohio (Mrs. 
Jones), a former member of the Small Business Committee.
  Mrs. JONES of Ohio. I want to thank the Chair of this wonderful 
committee, Nydia Velazquez. I was on this committee when I came to 
Congress, and she helped me understand what legislative bodies were all 
about, and I want to thank her for her leadership because many times 
people want to give small business to the Republican Party, but this 
Chair has shown that small business is a Democratic as well as a 
Republican issue. And I thank my colleague from Ohio (Mr. Chabot) for 
the work that he has done.
  Today, I rise in support of H.R. 1332, the Small Business Lending 
Improvements Act of 2007. This act is a tremendous effort to adapt the 
sometimes arcane SBA rules to the American businesswoman.
  Among the impressive provisions of this act are a requirement to 
authorize SBA loans for projects that reduce energy consumption by at 
least 10 percent. In addition, the rural lending outreach program sends 
a great message to our small businesses in rural areas, who sometimes 
have to manage isolation and lack of resources because they have no 
proximity.
  In addition, by making the Community Express Program permanent, you 
provide an attractive incentive for the erstwhile disenfranchised 
entrepreneurs to set up legitimate businesses. These businesses help to 
keep families together, and eventually contribute to our tax base.
  I am from Cleveland, Ohio, which at the moment is said to be the 
poorest city in the Nation. Ninety-five percent of the private sector 
jobs are provided by small businesses. Therefore, the creation of jobs 
and growth of our small businesses is vital to our economic recovery.
  The Small Business Administration's 7(a) lending program is essential 
for small business owners who cannot access capital through 
conventional markets. However, the program has been and is currently 
underfunded, and the burden has been shifting increasingly onto small 
business owners. Recent

[[Page H4112]]

changes to the program have increased the fees to access 7(a) programs, 
which diminishes access of small business owners.
  I want to thank the chairwoman and the ranking member for their 
leadership around this issue. I want to thank you for the opportunity 
to be heard. And small business is not only a Republican issue, it is a 
Democratic issue. It's an American issue.
  Mr. CHABOT. Mr. Chairman, I yield myself such time as I may consume.
  I want to again thank the chairwoman for her leadership on this 
particular piece of legislation, which I think is very good for small 
businesses across the country.
  Mr. Chairman, as was mentioned in the Rules Committee yesterday I 
believe by Mr. Dreier, it's preferable for small businesses to get 
their loans through the private sector if they're able to do so. And as 
one who believes in less government as opposed to more government, that 
would certainly be my preference. But there are some cases in which the 
private sector at this point just wouldn't cover those particular 
entities, some of the start-up small businesses, especially some in 
struggling areas, some disadvantaged areas as we have in some urban 
areas, and some rural areas as well. And so there is an appropriate 
place for 7(a) loans and the 504 loans. As I mentioned, the name of 
that particular program is going to be changed as a result of this 
bill.
  I think these are vital improvements. A streamlining of the process 
will be helpful to small businesses all across the country. I think we 
have a responsibility to improve the climate for small businesses, 
especially when one considers that somewhere between 60 and 80 percent 
of the new jobs that are created in this country are created not by 
large corporations, but by small businesses. So I think this bill helps 
businesses who need it most. I think this is a good bill, and so I urge 
my colleagues to support it.
  Mr. Chairman, I yield back the balance of my time.
  Ms. VELAZQUEZ. Mr. Chairman, I yield myself as much time as I may 
consume.
  Mr. Chairman, this week is Small Business Week, a time to honor 
entrepreneurs for the contributions they make to this country. Small 
businesses create three out of every four new jobs. They are the 
economic backbone, and our largest job creators.
  However, it is not easy to be a small business owner. They struggle 
every day to provide health care for their employees, to comply with 
increasing regulatory burdens, and to access financing to keep their 
businesses up and running.
  This week, rather than just talk about supporting our Nation's 26 
million small businesses, we have an opportunity to do something, 
provide them with the support they deserve, and ensure it is not a 
struggle to access much needed capital.
  H.R. 1332 will make loans more economical while providing long-term 
stability for small business owners. Ensuring loans are affordable and 
that relief from rising capital costs is available is critical for 
small firms to remain a driving force in today's economy. Let's put the 
money back into the hands of entrepreneurs where it belongs.
  I want to thank the ranking member, Mr. Chabot, for his work and his 
leadership in working with me on this legislation. I also want to thank 
the staff that worked on this bill; from the minority staff, Mike 
Smullen, Barry Pineles and Kevin Fitzpatrick; and from the majority 
staff, Michael Day, Adam Minehardt, Andy Jiminez and Tim Slattery, and 
Elizabeth Hart and Sam Hodas from Representative Bean's staff.
  I strongly urge my colleagues to vote for the Small Business Lending 
Improvements Act of 2007.
  Ms. JACKSON-LEE of Texas. Madam Chairman, I rise in support of H.R. 
1332, the Small Business Lending Improvements Act. As a member of 
Congress, I have been a strong supporter of our Nation's small 
businesses. Already this week, we have debated bills seeking to ensure 
that America remains competitive in the global economy, and, in doing 
so, we have recognized the importance of ongoing technological 
innovation. Small businesses comprise an important segment of this 
process of development; by acting as a catalyst within our economy, 
they spur growth for all sectors of business.
  Small businesses represent the American dream, and they define the 
American economy. These businesses currently account for 95 percent of 
all employers, create half of our gross domestic product, and provide 
three out of four new jobs in this country. However, to keep this 
sector of the economy thriving, small businesses require access to 
loans to initiate, develop, and expand their range of goods and 
services. The Small Business Administration (SBA), a Federal 
organization that aids small businesses with loan and development 
programs, is a key provider of support to small businesses. The SBA's 
main loan program accounts for 30 percent of all long-term small 
business borrowing in America.
  By streamlining the SBA's two largest finance programs directed at 
small businesses, H.R. 1332 would offer these businesses the crucial 
tools that they need to be successful in today's marketplace. This bill 
gives the SBA authority to contribute funds to reduce the burden 
associated with borrower and lender fees on 7(a) loans, making these 
loans more economical, without upsetting the program's current 
stability.

  H.R. 1332 also creates several new loan programs under the 7(a) 
umbrella. It specifically reaches out to rural lenders, reducing their 
7(a) loan paperwork. It makes permanent the Community Express Program, 
granting improved access to capital for socially and economically 
disadvantaged small businesses. It recognizes the I need for doctors 
and dentists in federally designated Health Professional Shortage 
Areas, and establishes a program to reduce borrower and lender fees in 
these areas. Finally, this bill offers help to our returning veterans, 
those who have served our Nation bravely in Iraq and Afghanistan, to 
establish and expand their own businesses. In addition to all these 
programs, H.R. 1332 seeks to establish a Small Bank Outreach division 
within SBA. This new division would provide direct support to community 
banks participating in the 7(a) program, and would enable these local 
banks to make loans to a wider range of deserving businesses. It would 
also work to strengthen local economies by providing lenders deemed 
Certified Development Companies with a range of tools to grant loans to 
businesses within their own communities.
  As we consider what we as a Congress might do to make our Nation more 
economically secure, and to continue to augment our position within the 
global economy, it is crucial that we focus on the importance of small 
businesses. Small business owners are leaders in innovation, creative 
business operations and new technologies and products. I continue to 
believe that the success of our economy is dependent on these 
businesses. I urge my colleagues to support this bill, and to continue 
to assist small business owners to realize their potential.
  Mrs. CHRISTENSEN. Mr. Chairman, I rise in support of H.R. 1332, the 
Small Business Lending Improvements Act of 2007.
  As we celebrate Small Business Week, it is only appropriate that we 
recognize the enormous contribution of small businesses to our economy 
by passing legislation that would facilitate access to capital. Without 
ready access to capital, small businesses are often forced to turn to 
more costly lending alternatives, including credit cards, which carry 
high interest rates and fees. Without access to financing, companies 
are unable to target new markets, grow, or hire new workers.
  Currently, the SBA's 7(a) and 504 programs are the only federal 
lending programs available to small businesses and there are no federal 
grants for starting and/or financing small businesses. The SBA 7(a) and 
504 programs were created to help small businesses gain access to 
affordable financing. However, these programs are in dire need to be 
modernized and strengthened if they are to continue to meet their 
important goals.
  H.R. 1332 would make these necessary changes by updating and 
streamlining the 7(a) loan programs by reducing fees, make the 
Community Express Program permanent and reduce the paperwork generated 
by these loans. As a physician and Chair of the Congressional Black 
Caucus Health Braintrust, I am pleased that this bill also includes a 
provision to adapt the 7(a) program to improve access to the program 
for medical professionals in health professional shortage areas. 
Physicians are viewed first and foremost as health care providers but 
they are also small businesses and in today's economic environment many 
are struggling to stay afloat.
  Mr. Chairman, I join the many organizations that support the passage 
this bill and urge my colleagues to support the bill as well. I would 
like to commend Chairwoman Velazquez for her continued leadership and 
congratulate her and Ranking Member Chabot for bringing this bill to 
the House floor.
  Mr. INSLEE. Mr. Chairman, I thank the Chairwoman and Ranking Member 
for their this issue. I rise today to support my amendment to the Small 
Business Lending Improvements Act (H.R. 1332) which would add an 
eligibility area to Section 504 loans. My amendment will ensure that 
American entrepreneurs

[[Page H4113]]

have the opportunity to start, build and, grow green small businesses 
by adding a sustainable design or low-impact design to the public 
policy goals of this lending program.
  This common-sense amendment would decrease long-term operating costs 
for small business owners, stimulate green building technologies, 
create a better work environment for employees and reduce carbon 
emissions in the United States.
  Buildings account for one-third of carbon emissions per year. It is 
important that we help small business owners make sustainable choices 
that they might not otherwise make due to cost, or simply due to the 
fact that some of these technologies are new. My amendment will help 
SBA expand their financing structure to help businesses use sustainable 
building standards, such as LEED certified, which have a minimal impact 
on our environment. Currently, SBA loans can help a company upgrade to 
required standards, but very few Small Business Loans have helped 
owners choose green building standards.
  Furthermore, green buildings benefit workers. Case studies show 
examples of 2 to 16 percent increase in productivity in among employees 
who work in buildings that incorporate sustainable building design.
  Sustainable design and green building practices are easy and 
available. An excellent example of how this can be done, and why green 
technologies help small businesses and the community, is the Snoqualmie 
Gourmet Ice Cream factory in Maltby, Wash. I recently toured this 
factory, which is Snohomish County's first sustainable commercial 
project, owned by Barry Bettinger. Barry used Small Business 
Administration (SBA) loans for low impact development strategies. With 
assistance from the Sustainable Development Task Force, he used 
technologies to cut his lighting costs by 50 percent, reduce his water 
usage by 40 percent and reduce energy for cooling fans by 75 percent.
  I hope that the SBA and experts in sustainable design such as the 
National Institute of Building Sciences will work together to develop 
meaningful standards in this eligibility area of sustainable design.
  Congress has a huge opportunity here to further improve the small 
business lending program to meet goals of reducing energy consumption 
in this country. Thank you for supporting this amendment.
  Ms. VELAZQUEZ. Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. All time for general debate has expired.
  Pursuant to the rule, the amendment in the nature of a substitute 
printed in the bill will be considered as an original bill for the 
purpose of amendment under the 5-minute rule and shall be considered 
read.
  The text of the amendment in the nature of a substitute is as 
follows:

                               H.R. 1332

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Small 
     Business Lending Improvements Act of 2007''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.

                         TITLE I--7(A) PROGRAM

Sec. 101. Authority for fee contributions.
Sec. 102. Rural Lending Outreach Program.
Sec. 103. Community Express program made permanent.
Sec. 104. Medical Professionals in Designated Shortage Areas Program.
Sec. 105. Increased Veteran Participation Program.
Sec. 106. Alternative size standard.
Sec. 107. Support to regional offices.

   TITLE II--CERTIFIED DEVELOPMENT COMPANY ECONOMIC DEVELOPMENT LOAN 
                                PROGRAM

Sec. 201. Certified Development Company Economic Development Loan 
              Program.
Sec. 202. Definitions.
Sec. 203. Eligibility of development companies to be designated as 
              certified development companies.
Sec. 204. Definition of rural areas.
Sec. 205. Businesses in low-income areas.
Sec. 206. Combinations of certain goals.
Sec. 207. Refinancing.
Sec. 208. Additional equity injections.
Sec. 209. Loan liquidations.
Sec. 210. Closing costs.
Sec. 211. Maximum Certified Development Company and 7(a) loan 
              eligibility.
Sec. 212. Eligibility for energy efficiency projects.
Sec. 213. Loans for plant projects used for energy-efficient purposes.
Sec. 214. Extension of period during which loss reserves of premier 
              certified lenders determined on the basis of outstanding 
              balance of debentures.
Sec. 215. Extension of alternative loss reserve pilot program for 
              certain premier certified lenders.

                         TITLE I--7(A) PROGRAM

     SEC. 101. AUTHORITY FOR FEE CONTRIBUTIONS.

       Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) 
     is amended--
       (1) in paragraph (18)(A) by striking ``shall collect'' and 
     inserting ``shall assess and collect'';
       (2) in paragraph (18) by adding at the end the following:
       ``(C) Offset.--The Administrator may, as provided in 
     paragraph (32), offset fees assessed and collected under 
     subparagraph (A).'';
       (3) in paragraph (23) by striking subparagraph (C) and 
     adding at the end the following:
       ``(C) Offset.--The Administrator may, as provided in 
     paragraph (32), offset fees assessed and collected under 
     subparagraph (A).''; and
       (4) by adding at the end the following:
       ``(32) Fee contributions.--
       ``(A) In general.--To the extent that amounts are made 
     available to the Administrator for the purpose of fee 
     contributions, the Administrator shall--
       ``(i) first consider contributing to fees paid by small 
     business borrowers under clauses (i) through (iii) of 
     paragraph (18)(A), to the maximum extent possible; and
       ``(ii) then consider contributing to fees paid by small 
     business lenders under paragraph (23)(A).
       ``(B) Quarterly adjustment.--Each fee contribution under 
     subparagraph (A) shall be effective for one fiscal quarter 
     and shall be adjusted as necessary for each fiscal quarter 
     thereafter to ensure that the amounts under subparagraph (A) 
     are fully used. The fee contribution for a fiscal quarter 
     shall be based on the loans that the Administrator projects 
     will be made during that fiscal quarter, given the program 
     level authorized by law for that fiscal year and any other 
     factors that the Administrator considers appropriate.''.

     SEC. 102. RURAL LENDING OUTREACH PROGRAM.

       Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) 
     is amended--
       (1) by striking paragraph (25)(C); and
       (2) by adding at the end the following:
       ``(33) Rural lending outreach program.--The Administrator 
     shall carry out a rural lending outreach program to provide 
     up to an 85 percent guaranty for loans of $250,000 or less. 
     The program shall be carried out only through lenders located 
     in rural areas (as `rural' is defined in section 501(f) of 
     the Small Business Investment Act of 1958). For a loan made 
     through the program, the following shall apply:
       ``(A) The Administrator shall approve or disapprove the 
     loan within 36 hours.
       ``(B) The program shall use abbreviated application and 
     documentation requirements.
       ``(C) Minimum credit standards, as the Administrator 
     considers necessary to limit the rate of default on loans 
     made under the program, shall apply.''.

     SEC. 103. COMMUNITY EXPRESS PROGRAM MADE PERMANENT.

       (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:
       ``(34) Community express program.--The Administrator shall 
     carry out a Community Express Program for loans of $250,000 
     or less. For a loan made under this paragraph, the following 
     shall apply:
       ``(A) The loan shall be made to a business concern--
       ``(i) the majority ownership interest of which is directly 
     held by individuals who are women, socially or economically 
     disadvantaged individuals (as defined by the Administrator), 
     or veterans of the Armed Forces; or
       ``(ii) that is located in a low- or moderate-income area, 
     as defined by the Administrator.
       ``(B) The loan shall comply with the collateral policy of 
     the Administration, except that, if the amount of the loan is 
     less than or equal to $25,000, the Administration shall not 
     require the lender to take collateral.
       ``(C) The loan shall include terms requiring the lender to 
     ensure that technical assistance is provided to the borrower, 
     through the lender or a third-party provider.
       ``(D) The Administration shall approve or disapprove the 
     loan within 36 hours.''.
       (b) Notice and Comment.--The program required by section 
     7(a)(34) of the Small Business Act, as added by subsection 
     (a), shall be established after the opportunity for notice 
     and comment and not later than 180 days after the date of the 
     enactment of this Act.

     SEC. 104. MEDICAL PROFESSIONALS IN DESIGNATED SHORTAGE AREAS 
                   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:
       ``(35) Medical professionals in designated shortage areas 
     program.--The Administrator shall carry out a Medical 
     Professionals in Designated Shortage Areas Program. For a 
     loan made under this paragraph, the following shall apply:
       ``(A) The loan shall be made to a business concern that 
     provides properly licensed medical, dental, or psychiatric 
     services to the public.
       ``(B) The loan shall be for the purpose of opening a 
     business concern in a health professional shortage area (as 
     defined in section 332 of the Public Health Service Act (42 
     U.S.C. 254e)).
       ``(C) The loan shall include the participation by the 
     Administration equal to 90 percent of the balance of the 
     financing outstanding at the time of disbursement.
       ``(D) The fees on the loan under paragraphs (18) and (23) 
     shall be reduced by half.''.
       (b) Notice and Comment.--The program required by section 
     7(a)(35) of the Small Business Act, as added by subsection 
     (a), shall be established after the opportunity for notice 
     and comment and not later than 180 days after the date of the 
     enactment of this Act.

     SEC. 105. INCREASED VETERAN PARTICIPATION 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:

[[Page H4114]]

       ``(36) Increased veteran participation program.--The 
     Administrator shall carry out an Increased Veteran 
     Participation Program. For a loan made under this paragraph, 
     the following shall apply:
       ``(A) The loan shall be made to a business concern the 
     majority ownership interest of which is directly held by 
     individuals who are veterans of the Armed Forces.
       ``(B) The loan shall include the participation by the 
     Administration equal to 90 percent of the balance of the 
     financing outstanding at the time of disbursement.
       ``(C) The fees on the loan under paragraphs (18) and (23) 
     shall not apply.''.
       (b) Notice and Comment.--The program required by section 
     7(a)(36) of the Small Business Act, as added by subsection 
     (a), shall be established after the opportunity for notice 
     and comment and not later than 180 days after the date of the 
     enactment of this Act.

     SEC. 106. ALTERNATIVE SIZE STANDARD.

       (a) In General.--Section 3(a) of the Small Business Act (15 
     U.S.C. 632(a)) is amended by adding at the end the following:
       ``(5) In addition to any other size standard under this 
     subsection, the Administrator shall establish, and permit a 
     lender making a loan under section 7(a) and a lender making a 
     loan under the development company loan program to use, an 
     alternative size standard. The alternative size standard 
     shall be based on factors including maximum tangible net 
     worth and average net income.''.
       (b) Applicability.--Until the Administrator establishes, 
     under section 3(a)(5) of the Small Business Act (as added by 
     subsection (a)), an alternative size standard in the case of 
     a lender making a loan under section 7(a) of that Act, the 
     alternative size standard in section 121.301(b) of title 13, 
     Code of Federal Regulations, shall apply to such a case.

     SEC. 107. SUPPORT TO REGIONAL OFFICES.

       Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) 
     is amended by adding at the end the following:
       ``(37) Support to regional offices.--The Administrator 
     shall carry out a program, within an element of the 
     Administration already in existence as of the date of the 
     enactment of the Small Business Lending Improvements Act of 
     2007, to provide support to regional offices of the 
     Administration in assisting small lenders who do not 
     participate in the preferred lender program to participate in 
     the 7(a) program.''.

   TITLE II--CERTIFIED DEVELOPMENT COMPANY ECONOMIC DEVELOPMENT LOAN 
                                PROGRAM

     SEC. 201. CERTIFIED DEVELOPMENT COMPANY ECONOMIC DEVELOPMENT 
                   LOAN PROGRAM.

       Section 504 of the Small Business Investment Act of 1958 
     (15 U.S.C. 697a) is amended--
       (1) by redesignating subsections (a) and (b) as subsections 
     (b) and (c); and
       (2) by inserting before subsection (b) (as so redesignated) 
     the following:
       ``(a) The program to provide financing to small businesses 
     by guarantees of loans under this Act which are funded by 
     debentures guaranteed by the Administration may be known as 
     the `Certified Development Company Economic Development Loan 
     Program'.''.

     SEC. 202. DEFINITIONS.

       Section 103(6) of the Small Business Investment Act of 1958 
     (15 U.S.C. 662(6)) is amended to read as follows:
       ``(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 Administration, and the term `certified development 
     company' means a development company which the Administration 
     has determined meets the criteria of section 506;''.

     SEC. 203. ELIGIBILITY OF DEVELOPMENT COMPANIES TO BE 
                   DESIGNATED AS CERTIFIED DEVELOPMENT COMPANIES.

       Section 506 of the Small Business Investment Act of 1958 
     (15 U.S.C. 697c) is amended to read as follows:

     ``SEC. 506. CERTIFIED DEVELOPMENT COMPANIES.

       ``(a) Authority To Issue Debentures.--A development company 
     may issue debentures pursuant to this Act if the 
     Administration certifies that the company meets the following 
     criteria:
       ``(1) Size.--The development company is required to be a 
     small concern with fewer than 500 employees and not under the 
     control of any entity which does not meet the 
     Administration's size standards as a small business, except 
     that any development company which was certified by the 
     Administration prior to December 31, 2005 may continue to 
     issue debentures.
       ``(2) Purpose.--The primary purpose of the development 
     company is to benefit the community by fostering economic 
     development to create and preserve jobs and stimulate private 
     investment.
       ``(3) Primary function.--The primary function of the 
     development company is to accomplish its purpose by providing 
     long term financing to small businesses by the utilization of 
     the Certified Development Company Economic Development Loan 
     Program. It may also provide or support such other local 
     economic development activities to assist the community.
       ``(4) Non-profit status.--The development company is a non-
     profit corporation, except that a development company 
     certified by the Administration prior to January 1, 1987, may 
     retain its status as a for-profit corporation.
       ``(5) Good standing.--The development company is in good 
     standing in its State of incorporation and in any other State 
     in which it conducts business, and is in compliance with all 
     laws, including taxation requirements, in its State of 
     incorporation and in any other State in which it conducts 
     business.
       ``(6) Membership.--The development company has at least 25 
     members (or stockholders if the corporation is a for-profit 
     entity), none of whom may own or control more than 10 percent 
     of the company's voting membership, consisting of 
     representation from each of the following groups (none of 
     which are in a position to control the development company):
       ``(A) Government organizations that are responsible for 
     economic development.
       ``(B) Financial institutions that provide commercial long 
     term fixed asset financing.
       ``(C) Community organizations that are dedicated to 
     economic development.
       ``(D) Businesses.
       ``(7) Board of directors.--The development company has a 
     board of directors that--
       ``(A) is elected from the membership by the members;
       ``(B) represents at least three of the four groups 
     enumerated in subsection (a)(6) and no group is in a position 
     to control the company; and
       ``(C) meets on a regular basis to make policy decisions for 
     such company.
       ``(8) Professional management and staff.--The development 
     company has full-time professional management, including a 
     chief executive officer to manage daily operations, and a 
     full-time professional staff qualified to market the 
     Certified Development Company Economic Development Loan 
     Program and handle all aspects of loan approval and 
     servicing, including liquidation, if appropriate. The 
     development company is required to be independently managed 
     and operated to pursue its economic development mission and 
     to employ its chief executive officer directly, with the 
     following exceptions:
       ``(A) A development company may be an affiliate of another 
     local non-profit service corporation (specifically excluding 
     another development company) whose mission is to support 
     economic development in the area in which the development 
     company operates. In such a case:
       ``(i) The development company may satisfy the requirement 
     for full-time professional staff by contracting with a local 
     non-profit service corporation (or one of its non-profit 
     affiliates), or a governmental or quasi-governmental agency, 
     to provide the required staffing.
       ``(ii) The development company and the local non-profit 
     service corporation may have partially common boards of 
     directors.
       ``(B) A development company in a rural area (as defined in 
     section 501(f)) shall be deemed to have satisfied the 
     requirements of a full-time professional staff and 
     professional management ability if it contracts with another 
     certified development company which has such staff and 
     management ability and which is located in the same general 
     area to provide such services.
       ``(C) A development company that has been certified by the 
     Administration as of December 31, 2005, and that has 
     contracted with a for-profit company to provide services as 
     of such date may continue to do so.
       ``(b) Area of Operations.--The Administration shall specify 
     the area in which an applicant is certified to provide 
     assistance to small businesses under this title, which may 
     not initially exceed its State of incorporation unless it 
     proposes to operate in a local economic area which is 
     required to include part of its State of incorporation and 
     may include adjacent areas within several States. After a 
     development company has demonstrated its ability to provide 
     assistance in its area of operations, it may request the 
     Administration to be allowed to operate in one or more 
     additional States as a multi-state certified development 
     company if it satisfies the following criteria:
       ``(1) Each additional State is contiguous to the State of 
     incorporation, except the States of Alaska and Hawaii shall 
     be deemed to be contiguous to any State abutting the Pacific 
     ocean.
       ``(2) It demonstrates its proficiency in making and 
     servicing loans under the Certified Development Company 
     Economic Development Loan Program by--
       ``(A) requesting and receiving designation as an accredited 
     lender under section 507 or a premier certified lender under 
     section 508; and
       ``(B) meeting or exceeding performance standards 
     established by the Administration.
       ``(3) The development company adds to the membership of its 
     State of incorporation additional membership from each 
     additional State and the added membership meets the 
     requirements of subsection (a)(6).
       ``(4) The development company adds at least one member to 
     its board of directors in the State of incorporation, 
     providing that added member was selected by the membership of 
     the development company.
       ``(5) The company meets such other criteria or complies 
     with such conditions as the Administration deems appropriate.
       ``(c) Processing of Expansion Applications.--The 
     Administration shall respond to the request of a certified 
     development company for certification as a multi-state 
     company on an expedited basis within 30 days of receipt of a 
     completed application if the application demonstrates that 
     the development company meets the requirements of subsection 
     (b)(1) through (b)(4).
       ``(d) Use of Funds Limited to State Where Generated.--Any 
     funds generated by a development company from making loans 
     under the Certified Development Company Economic Development 
     Loan Program which remain after payment of staff, operating 
     and overhead expenses shall be retained by the development 
     company as a reserve for future operations, for expanding its 
     area of operations in a local economic area as authorized by 
     the Administration, or for investment in other local economic 
     development activity in the State from which the funds were 
     generated.
       ``(e) Ethical Requirements.--

[[Page H4115]]

       ``(1) In general.--Certified development companies, their 
     officers, employees and other staff, shall at all times act 
     ethically and avoid activities which constitute a conflict of 
     interest or appear to constitute a conflict of interest. No 
     one may serve as an officer, director or chief executive 
     officer of more than one certified development company.
       ``(2) Prohibited conflict in project loans.--As part of a 
     project under the Certified Development Company Economic 
     Development Loan Program, no certified development company 
     may recommend or approve a guarantee of a debenture by the 
     Administration that is collateralized by a second lien 
     position on the property being constructed or acquired and 
     also provide, or be affiliated with a corporation or other 
     entity, for-profit or non-profit, which provides, financing 
     collateralized by a first lien on the same property. A 
     business development company that was participating as a 
     first mortgage lender, either directly or through an 
     affiliate, for the Certified Development Company Economic 
     Development Loan Program in either fiscal years 2004 or 2005 
     may continue to do so.
       ``(3) Other economic development activities.--Operation of 
     multiple programs to assist small business concerns in order 
     for a certified development company to carry out its economic 
     development mission shall not be deemed a conflict of 
     interest, but notwithstanding any other provision of law, no 
     development company may accept funding from any source, 
     including but not limited to any department or agency of the 
     United States Government--
       ``(A) if such funding includes any conditions, priorities 
     or restrictions upon the types of small businesses to which 
     they may provide financial assistance under this title; or
       ``(B) if it includes any conditions or imposes any 
     requirements, directly or indirectly, upon any recipient of 
     assistance under this title unless the department or agency 
     also provides all of the financial assistance to be delivered 
     by the development company to the small business and such 
     conditions, priorities or restrictions are limited solely to 
     the financial assistance so provided.''.

     SEC. 204. DEFINITION OF RURAL AREAS.

       Section 501 of the Small Business Investment Act of 1958 
     (15 U.S.C. 695) is amended by adding at the end the following 
     new subsection:
       ``(f) As used in subsection (d)(3)(D), the term `rural' 
     shall include any area other than--
       ``(1) a city or town that has a population greater than 
     50,000 inhabitants; and
       ``(2) the urbanized area contiguous and adjacent to such a 
     city or town.''.

     SEC. 205. BUSINESSES IN LOW-INCOME AREAS.

       Section 501(d)(3) of the Small Business Investment Act of 
     1958 (15 U.S.C. 695(d)(3)) is amended by inserting after 
     ``business district revitalization'' the following: ``or 
     expansion of businesses in low-income communities that would 
     be eligible for new market tax credit investments under 
     section 45D of the Internal Revenue Code of 1986 (26 U.S.C. 
     45D)''.

     SEC. 206. 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 one individual, or a corporation whose 
     stock is owned by more than one individual, is deemed to 
     achieve a public policy goal under subsection (d)(3) if a 
     combined ownership share of at least 51 percent is held by 
     individuals who are in one of the groups listed as public 
     policy goals specified in subsection (d)(3)(C) or 
     (d)(3)(E).''.

     SEC. 207. REFINANCING.

       Section 502 of the Small Business Investment Act of 1958 
     (15 U.S.C. 696) is amended by adding at the end the 
     following:
       ``(7) Permissible debt refinancing.--Any financing approved 
     under this title may also include a limited amount of debt 
     refinancing for debt that was not previously guaranteed by 
     the Administration. If the project involves expansion of a 
     small business which has existing indebtedness collateralized 
     by fixed assets, any amount of existing indebtedness that 
     does not exceed one-half of the project cost of the expansion 
     may be refinanced and added to the expansion cost, 
     providing--
       ``(A) the proceeds of the indebtedness were used to acquire 
     land, including a building situated thereon, to construct a 
     building thereon or to purchase equipment;
       ``(B) the borrower has been current on all payments due on 
     the existing debt for at least the past year; and
       ``(C) the financing under the Certified Development Company 
     Economic Development Loan Program will provide better terms 
     or rate of interest than now exists on the debt.''.

     SEC. 208. ADDITIONAL EQUITY INJECTIONS.

       Clause (ii) of section 502(3)(B) of the Small Business 
     Investment Act of 1958 (15 U.S.C. 696(3)(B)) is amended to 
     read as follows:
       ``(ii) Funding from institutions.--

       ``(I) If a small business concern provides the minimum 
     contribution required under paragraph (C), not less than 50 
     percent of the total cost of any project financed pursuant to 
     clauses (i), (ii), or (iii) of subparagraph (C) shall come 
     from the institutions described in subclauses (I), (II), and 
     (III) of clause (i).
       ``(II) If a small business concern provides more than the 
     minimum contribution required under paragraph (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 less than the amount of the 
     loan made by the Administration.''.

     SEC. 209. 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) Mandatory.--Any certified development company which 
     elects not to apply for authority to foreclose and liquidate 
     defaulted loans under this section or which the 
     Administration 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 Administration with respect to the qualifications of the 
     contractor and the terms and conditions of liquidation 
     activities.
       ``(2) Commencement.--The provisions of this subsection 
     shall not require any development company to liquidate 
     defaulted loans until the Administration 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 Administration shall 
     reimburse each certified development company for all expenses 
     paid by such company as part of the foreclosure and 
     liquidation activities if the expenses--
       ``(A) were approved in advance by the Administration either 
     specifically or generally; or
       ``(B) were incurred by the company on an emergency basis 
     without Administration prior approval but which were 
     reasonable and appropriate.
       ``(2) Compensation for results.--The Administration shall 
     develop a schedule to compensate and provide an incentive to 
     qualified State or local development companies which 
     foreclose and liquidate defaulted loans. The schedule shall 
     be based on a percentage of the net amount recovered but 
     shall not exceed a maximum amount. The schedule shall not 
     apply to any foreclosure which is conducted pursuant to a 
     contract between a development company and a qualified third-
     party to perform the foreclosure and liquidation.''.

     SEC. 210. CLOSING COSTS.

       Paragraph (4) of section 503(b) of the Small Business 
     Investment Act of 1958 (15 U.S.C. 697(b)) is amended to read 
     as follows:
       ``(4) the aggregate amount of such debenture does not 
     exceed the amount of loans to be made from the proceeds of 
     such debenture plus, at the election of the borrower under 
     the Certified Development Company Economic Development Loan 
     Program, other amounts attributable to the administrative and 
     closing costs of such loans, except for the borrower's 
     attorney fees;''.

     SEC. 211. MAXIMUM CERTIFIED DEVELOPMENT COMPANY AND 7(A) LOAN 
                   ELIGIBILITY.

       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.--Financing under this title 
     may be provided to a borrower in the maximum amount provided 
     in this subsection, plus a loan guarantee under section 7(a) 
     of the Small Business Act may also be provided to the same 
     borrower in the maximum provided in section 7(a)(3)(A) of 
     such Act.''.

     SEC. 212. ELIGIBILITY FOR ENERGY EFFICIENCY PROJECTS.

       Section 501(d)(3) of the Small Business Investment Act of 
     1958 (15 U.S.C. 695(d)(3)) is amended--
       (1) in subparagraph (G) by striking ``or'' at the end;
       (2) in subparagraph (H) by striking the period at the end 
     and inserting ``, or''; and
       (3) by inserting after subparagraph (H) the following:
       ``(I) reduction of energy consumption by at least 10 
     percent.''.

     SEC. 213. LOANS FOR PLANT PROJECTS USED FOR ENERGY-EFFICIENT 
                   PURPOSES.

       Section 502(2)(A) of the Small Business Investment Act of 
     1958 (15 U.S.C. 696(2)(A)) is amended--
       (1) in clause (ii) by striking ``and'' at the end;
       (2) in clause (iii) by striking the period at the end and 
     inserting ``; and''; and
       (3) by adding at the end the following:
       ``(iv) $4,000,000 for each project that reduces the 
     borrower's energy consumption by at least 10 percent.''.

     SEC. 214. EXTENSION OF PERIOD DURING WHICH LOSS RESERVES OF 
                   PREMIER CERTIFIED LENDERS DETERMINED ON THE 
                   BASIS OF OUTSTANDING BALANCE OF DEBENTURES.

       Section 508(c)(6)(B) of the Small Business Investment Act 
     of 1958 (15 U.S.C. 697e(c)(6)(B)) is amended by striking 
     ``during the 2-year period beginning on the date that is 90 
     days after the date of the enactment of this subparagraph,'' 
     and inserting ``through the end of fiscal year 2008,''.

     SEC. 215. EXTENSION OF ALTERNATIVE LOSS RESERVE PILOT PROGRAM 
                   FOR CERTAIN PREMIER CERTIFIED LENDERS.

       Section 508(c)(7)(J) of the Small Business Investment Act 
     of 1958 (15 U.S.C. 697e(c)(7)(J)) is amended by striking 
     ``means'' and all that follows through the period at the end 
     and inserting ``means each calendar quarter through the end 
     of fiscal year 2008.''

  The CHAIRMAN. No amendment to the committee amendment is in order 
except those printed in House Report 110-108. Each amendment may be 
offered only in the order printed in the report, by a Member designated 
in the report, shall be considered read, shall be debatable for the 
time specified in the report, equally divided and controlled by the 
proponent and an opponent of the amendment, shall not be

[[Page H4116]]

subject to amendment, and shall not be subject to a demand for division 
of the question.


                Amendment No. 1 Offered by Mr. Matheson

  The CHAIRMAN. It is now in order to consider amendment No. 1 printed 
in House Report 110-108.
  Mr. MATHESON. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 1 offered by Mr. Matheson:
       Page 6, line 4, insert after ``Forces'' the following: ``or 
     members of the reserve components of the Armed Forces''.

       Page 8, line 14, insert after ``Forces'' the following: 
     ``or members of the reserve components of the Armed Forces''.

  The CHAIRMAN. Pursuant to House Resolution 330, the gentleman from 
Utah (Mr. Matheson) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Utah.
  Mr. MATHESON. Mr. Chairman, I rise as a supporter of H.R. 1332, the 
underlying bill, and I would particularly like to thank the sponsor of 
the bill, Representative Melissa Bean, as well as the chairwoman of the 
Small Business Committee, Ms. Velazquez, and the ranking member, Mr. 
Chabot, for all their hard work in bringing this bipartisan bill to the 
floor today.
  Now, the 7(a) program is SBA's largest primary business loan program 
and provides loan guarantees to thousands of small businesses that are 
unable to obtain financing through the traditional lending market. That 
is why I am pleased that section 105 of the underlying bill will 
establish the Increased Veteran Participation Program to help increase 
7(a) loans to military veterans, which declined by over $170 million 
between fiscal year 2005 and fiscal year 2006.
  Section 103 of the bill, which permanently establishes the Community 
Express Program, will also provide much needed loans to veterans.
  As 14 percent of small businesses in America are owned by veterans, 
we should do all we can to support those who have served our country. 
However, we should not leave out the men and women who continue to 
serve our country honorably every day in the military reserves. Small 
business ownership is extremely challenging, especially for members of 
the Reserve component of the Armed Forces who must carefully balance 
their civilian careers with their duty to serve our Nation.
  My amendment would simply include members of the Reserve components 
of the Armed Forces as eligible to receive loans under the Community 
Express Program in section 103 of the bill and as eligible to 
participate in the Increased Veteran Participation Program in section 
105.
  Since 9/11, I think we all know we have relied on members of the 
Reserve more and more to participate in serving our country, and this 
increased role should be recognized and supported.
  I urge colleagues to support my amendment.
  I yield to the Chair of the full committee, Ms. Velazquez.
  Ms. VELAZQUEZ. I want to thank the gentleman for yielding.
  Mr. Chairman, I am prepared to accept the amendment, and I will yield 
to Mr. Chabot for any comments that he may have.
  Mr. CHABOT. Mr. Chairman, we have no objection to the amendment. We 
commend the gentleman for offering this helpful amendment.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Utah (Mr. Matheson).
  The amendment was agreed to.


                Amendment No. 2 Offered by Mr. Matheson

  The CHAIRMAN. It is now in order to consider amendment No. 2 printed 
in House Report 110-108.
  Mr. MATHESON. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 2 offered by Mr. Matheson:
       Page 6, line 1, insert after ``women,'' the following: 
     ``members of qualified Indian tribes,''.

  The CHAIRMAN. Pursuant to House Resolution 330, the gentleman from 
Utah (Mr. Matheson) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Utah.
  Mr. MATHESON. Mr. Chairman, as I just explained in the discussion on 
my previous amendment, SBA's 7(a) loan program helps thousands of 
entrepreneurs start new businesses, create jobs and grow the economy 
here in the United States. Unfortunately, many segments of the American 
population are still unable to obtain necessary capital to successfully 
become entrepreneurs. Now to help remedy this inequity, the SBA created 
the Community Express Program to reach out to segments of the small 
business community that have difficulty accessing capital from 
traditional lending markets. These businesses are typically owned by 
women, veterans and socially or economically disadvantaged individuals 
who are underrepresented as business owners and who need smaller 
business loans accompanied by technical assistance.
  Members of Indian tribes especially lack sufficient access to capital 
for starting new businesses. Of minority-owned businesses, only 6.6 
percent were owned by American Indians, the least percentage of any 
minority group surveyed. And of U.S. nonfarm businesses, less than 1 
percent are owned by American Indians.
  I represent many Native American tribes in my district, and I know 
the entrepreneurial spirit is alive and well if only scarce capital can 
be attained for new businesses.
  My amendment would simply include members of qualified Indian tribes 
as eligible to receive loans under the Community Express Program in 
section 103 of the underlying bill. This minor revision will provide 
loans to a currently underserved population and help participating 
lenders better determine who is actually eligible to receive loans 
under the Community Express Program.
  I urge my colleagues to support this amendment.
  I yield to the Chair of the full committee, Ms. Velazquez.
  Ms. VELAZQUEZ. Mr. Chairman, I am prepared to accept this amendment. 
I want to thank you for bringing this issue.
  I yield to the ranking member, Mr. Chabot, for any comment.
  Mr. CHABOT. I thank the gentlelady for yielding. We would also agree 
with this amendment. I think they are both excellent amendments. And I 
meant to comment on the other one as well. When the gentleman included 
our Reserve forces as well as other member veterans in Armed Forces, I 
think when one considers how patriotic our Reservists are and how many 
of them, especially with our involvement in Iraq and Afghanistan, are 
literally putting their lives on the line, I think this is a very 
helpful and important amendment, both of them. And so we would commend 
the gentleman for introducing them.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Utah (Mr. Matheson).
  The amendment was agreed to.


                 Amendment No. 3 Offered by Mr. Cuellar

  The CHAIRMAN. It is now in order to consider amendment No. 3 printed 
in House Report 110-108.
  Mr. CUELLAR. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 3 offered by Mr. Cuellar:
       Page 5, line 2, strike the period and insert the following: 
     ``or, in the case of a small business concern located in a 
     rural area that does not have a lender located within 30 
     miles of the principal place of business, through any lender 
     that is enrolled in, and administers, the 7(a) loan program 
     that the small business concern chooses.''.

  The CHAIRMAN. Pursuant to House Resolution 330, the gentleman from 
Texas (Mr. Cuellar) and a Member opposed each will control 5 minutes.
  The Chair recognizes the gentleman from Texas.
  Mr. CUELLAR. Mr. Chairman, I yield myself such time as I may consume.
  I rise today to encourage my colleagues to support my amendment and 
help rural small businesses receive the access to capital they need to 
grow.
  I would like to thank my good friend, Chairwoman Velazquez, for 
reporting out this critical bill, and to Congresswoman Bean for taking 
the lead on this issue. I also want to thank the

[[Page H4117]]

ranking member, Mr. Chabot, for the leadership and bipartisan support 
that he has shown in this bill and in the committee.
  My amendment would strengthen the underlying bill and ensure that we 
solve one of the most critical problems facing rural small businesses.
  Like many parts of the United States, my congressional district is 
the home to many rural companies. It is well known that small 
businesses found in rural communities have a more difficult time 
accessing affordable capital than their counterparts in the large 
metropolitan areas.
  Considering that there are probably about 1.2 million rural 
businesses, it is important to reach out to this vital part of our 
economy. The Rural Indian Outreach Program proposed in this bill will 
be a tremendous tool for lenders located in rural communities.

                              {time}  1715

  The provisions outlined will take a major step toward expanding the 
financial options for the rural economy.
  Unfortunately, this bill in the current form, the rural small 
businesses owner needs access to the rural lenders that use this 
particular program. In my rural areas, many small businesses do not 
live close to a bank and therefore they are forced to do banking many 
miles away from the closest city. We must make sure that we help both 
the rural lender and the rural business owner.
  The amendment that I have, Mr. Chairman, states that a rural small 
business who is not within 30 miles of a rural lender can take 
advantage of the rural lending outreach program through any lender in 
the SBA 7(a) loan program. It is my hope that this amendment will 
further increase opportunities for small businesses and expand the 
rural economies throughout our Nation.
  Mr. Chairman, I yield to Chairwoman Velazquez at this time. And I 
believe there is support for this amendment.
  Ms. VELAZQUEZ. In our hearings, Mr. Chairman, the committee heard 
testimony on the various challenges facing the 7(a) program. One of the 
more troubling developments has been a steady decline in the number of 
lenders participating in the 7(a) program, particularly among small 
lenders and community banks located in rural areas. With fewer lenders 
in the program, we all lose.
  The rural lender outreach program is intended to help remedy this 
problem. With simpler application standards and a streamlined lending 
process, the rural lender outreach program will facilitate 
participation in the 7(a) among small lenders in rural communities.
  I look forward to working with my colleague to ensure that this 
amendment will help the rural lender outreach program achieve its 
important objectives.
  I yield to the gentleman from Ohio for any comments that he might 
have.
  Mr. CHABOT. I thank the gentlelady for yielding, and I want to 
commend the gentleman from Texas for offering a very thoughtful 
amendment here.
  Oftentimes when you have a bill as complicated as this one is, the 
point of the bill obviously is pretty straightforward: It is to 
streamline and improve the process, make it more accessible to small 
business people, because that is one of the main problems that we have, 
that small businessmen have, and small businesswomen as well, is access 
to capital.
  One has to look at this sometimes what do you do to benefit rural 
communities, and sometimes it is more urban communities. I happen to 
represent an overall fairly urban community, the city of Cincinnati. 
But I know the gentleman has a much larger district in mind, one in 
which the challenges may be somewhat different. And I think it is very 
good that the gentleman took the time to go through this bill with such 
care to find a way that he can benefit the people in his community and 
at the same time make it a better bill.
  So I again commend the gentleman for his thoughtful approach to this 
bill, thank him for offering this amendment, and we are in a position 
to accept it. And I again thank him for his hard work on this.
  Ms. VELAZQUEZ. Mr. Chairman, we are prepared to accept the amendment.
  Mr. CUELLAR. Mr. Chairman, I want to thank again Chairwoman Velazquez 
and the ranking member for their support and leadership, their 
bipartisan support.
  Mr. Chairman, I yield back the balance of my time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Texas (Mr. Cuellar).
  The amendment was agreed to.


                 Amendment No. 4 Offered by Mr. Inslee

  The CHAIRMAN. It is now in order to consider amendment No. 4 printed 
in House Report 110-108.
  Mr. INSLEE. Mr. Chairman, I offer an amendment.
  The CHAIRMAN. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amendment No. 4 offered by Mr. Inslee:
       Page 26, strike lines 3 through 8 and insert the following:
       (2) in subparagraph (H) by striking the period at the end 
     and inserting a comma; and
       (3) by inserting after subparagraph (H) the following:
       ``(I) reduction of energy consumption by at least 10 
     percent, or
       ``(J) increased use of sustainable design or low-impact 
     design to produce buildings that reduce the use of non-
     renewable resources, minimize environmental impact, and 
     relate people with the natural environment.''.

  The CHAIRMAN. Pursuant to House Resolution 330, the gentleman from 
Washington (Mr. Inslee) and a Member opposed each will control 5 
minutes.
  The Chair recognizes the gentleman from Washington.
  Mr. INSLEE. My fellow Members, we know that small businesses have 
been leaders in job creation and are the dynamic growth center for the 
American economy, and now they are poised to become the leaders in our 
green building revolution. We know that we have challenges on energy 
security, we know we have challenges to deal with on global warming, 
and we know that small businesses have challenges to receive capital to 
help in their programs to make their businesses more efficient, less 
costly for energy consumption, and less emitting of greenhouse gases.
  Our amendment would create the ability of the SBA to provide capital 
to our small businesses across the country to do thousands of things 
that they want to start doing, items like putting additional energy-
efficient equipment into their businesses, building green roofs that 
can prevent energy loss, installation of renewable energy sources like 
photovoltaic cells and energy equipment heating and cooling systems. 
The list is endless.
  I would like to think of a little small business called the 
Snoqualmie Ice Cream Company, which is some of the best ice cream in 
the world, but they used an SBA loan essentially to put impervious 
concrete and build a green roof, which helped their business operations 
and helped the environment to boot.
  So we would propose that we expand the SBA purposes to allow our 
small businessmen and women to be on the cutting edge of green building 
and green businesses across the country. This will help them move a 
step forward to use their dynamic leadership.
  Mr. Chairman, I yield to Ms. Velazquez.
  Ms. VELAZQUEZ. Mr. Chairman, we are prepared to accept the amendment. 
I yield to the ranking member for any comments that he might have.
  Mr. CHABOT. I thank the gentlelady for yielding. We are in a position 
to accept this amendment as well, and I commend the gentleman for 
offering it.
  Mr. INSLEE. Mr. Chairman, I yield back the balance of our time.
  The CHAIRMAN. The question is on the amendment offered by the 
gentleman from Washington (Mr. Inslee).
  The amendment was agreed to.
  The CHAIRMAN. The question is on the committee amendment in the 
nature of a substitute, as amended.
  The committee amendment in the nature of a substitute, as amended, 
was agreed to.
  The CHAIRMAN. Under the rule, the Committee rises.
  Accordingly, the Committee rose; and the Speaker pro tempore (Ms. 
DeGette) having assumed the chair, Mr. Pastor, Chairman of the 
Committee of the Whole House on the state of the Union, reported that 
that Committee, having had under consideration the bill (H.R. 1332) to 
improve the access to capital programs of the Small Business 
Administration, and for other purposes, pursuant to House Resolution 
330, he reported the bill back to the

[[Page H4118]]

House with an amendment adopted by the Committee of the Whole.
  The SPEAKER pro tempore. Under the rule, the previous question is 
ordered.
  Is a separate vote demanded on any amendment to the amendment 
reported from the Committee of the Whole? If not, the question is on 
the amendment.
  The amendment was agreed to.
  The SPEAKER pro tempore. The question is on the engrossment and third 
reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.


               Motion to Recommit Offered by Mr. McCrery

  Mr. McCRERY. Madam Speaker, I offer a motion to recommit.
  The SPEAKER pro tempore. Is the gentleman opposed to the bill?
  Mr. McCRERY. In its current form.
  The SPEAKER pro tempore. The Clerk will report the motion to 
recommit.
  The Clerk read as follows:

       Mr. McCrery moves to recommit the bill, H.R. 1332, to the 
     Committee on Small Business, with instructions to report back 
     the same forthwith with the following amendments:

       Page 6, after line 7, insert the following:
       ``(B) For purposes of subparagraph (A)(i), the 
     Administrator shall consider any small business concern that 
     can demonstrate it is adversely affected by a raise in the 
     Federal minimum wage to be economically disadvantaged.''.

       Page 6, line 8, strike ``(B)'' and insert ``(C)''.
       Page 6, line 13, strike ``(C)'' and insert ``(D)''.
       Page 6, line 17, strike ``(D)'' and insert ``(E)''.

  Ms. VELAZQUEZ. Madam Speaker, I reserve a point of order against the 
motion.
  The SPEAKER pro tempore. The point of order is reserved.
  The gentleman from Louisiana is recognized for 5 minutes.
  Mr. McCRERY. Madam Speaker, the motion to recommit that I am offering 
makes an important point about how we treat small businesses, the 
engine that drives much of our economy and creates many of our jobs in 
this country.
  The underlying bill makes permanent the Community Express Program, 
which provides loans up to $250,000 to businesses which are owned by 
certain favored groups such as women, minorities, veterans, or socially 
or economically disadvantaged individuals. The measure does not define 
what it means for a business owner to be ``economically 
disadvantaged.''
  This would require that the Small Business Administration would 
consider as economically disadvantaged those business owners that can 
demonstrate that they have been adversely impacted by an increase in 
the Federal minimum wage.
  The importance of this motion is clear in the face of the failure of 
this House and the conferees on the supplemental appropriations bill 
that will be considered later tonight to adequately provide tax relief 
to those small businesses most impacted by an increase in the minimum 
wage.
  The agreement reached by the majority and inserted into the 
supplemental does provide a larger dollar figure for relief than was 
passed by the House earlier this year, but almost none of the added tax 
revenues will provide relief to the small businesses most in need of 
assistance because of the increase in the minimum wage.
  For example, more than 53 percent of the tax relief is in the form of 
a 44-month extension of the work opportunity tax credit. While 
extending the work opportunity tax credit may be good policy, and I 
happen to like that credit, more than 90 percent of the credits are 
claimed by firms with gross receipts over $50 million, hardly small 
businesses.
  Other provisions, while well intentioned, will have little or no 
impact on small businesses. The S-Corp reforms, which costs almost $1 
billion, have no direct relation to firms impacted by the minimum wage.
  I support the changes in the package to the low income housing tax 
credit, but that $237 million in tax relief, again, does nothing 
towards satisfying the stated purpose of helping small businesses cope 
with the increase in the minimum wage.
  While the work opportunity tax credit was expanded and was given a 
longer extension than in the House-passed package, provisions to help 
small businesses by increasing expensing were not given similar 
treatment. Other depreciation changes included in the Senate-passed 
bill that could have helped small businesses were completely left out 
of the conference agreement. In fact, barely $1 billion of the total 
almost $5 billion package provides relief to small businesses; and 
almost half of that, $457 million of it, exists solely to protect 
restaurant owners from the tax increase they would otherwise face from 
a minimum wage increase. Thus, only about one-eighth of the new 
benefits are targeted at small businesses.
  That minimal relief for small businesses looks even smaller when 
compared against the Congressional Budget Office's estimate that the 
increase in the minimum wage will impose more than $16 billion in costs 
on the private sector over the next 5 years.
  It should come as no surprise to anyone to learn that the National 
Federation of Independent Business, a small business association, 
released a statement today criticizing Congress for failing to deliver 
meaningful tax relief to the American small business community in the 
face of a mandated Federal minimum wage hike.
  I submit for printing in the Record the entire statement of NFIB.

Tax Package Tied to Minimum Wage Hike Fails To Deliver Relief for Small 
                                Business

   NFIB disappointed in diminished small-business tax relief in the 
                   federal supplemental spending bill

       Washington, D.C., April 25, 2007--Dan Danner, executive 
     vice president of the National Federation of Independent 
     Business, today made the following statement in reaction to 
     the reduced small-business tax-relief package contained in 
     the federal minimum wage increase legislation, now attached 
     to the Iraq spending bill.
       It's truly disheartening that during National Small 
     Business Week Congress has decided to renege on their promise 
     to deliver meaningful tax relief to the American small-
     business community in the face of a mandated federal minimum 
     wage hike.
       While small businesses appreciate the increased and 
     extended expensing limit, the tax package as a whole simply 
     does not offer enough growth-oriented tax relief to allow 
     small businesses to invest and stay competitive. NFIB is 
     disappointed to see that the reduced tax package falls short 
     of truly offsetting the costs small businesses will be forced 
     to absorb as a result of a minimum wage increase.
       Small-business owners have always opposed mandated wage 
     levels because it leaves them with fewer choices in how they 
     compensate their employees. But in the face of an inevitable 
     wage hike, the small-business community was pleased to hear 
     that Congress was planning to offer a tax package aimed at 
     helping small businesses cope with additional labor costs.
       From the beginning of this debate, the accompanying tax 
     package was supposed to be about helping the country's small 
     businesses. Instead, Congress has spent more time catering to 
     big business demands than providing real tax relief to those 
     who need it most--American small-business owners.
       As this debate continues, NFIB will continue its efforts to 
     educate members of Congress about why small businesses need 
     and deserve meaningful tax relief.

  Last week my friend, the distinguished chairman of the Ways and Means 
Committee, indicated that the tax package on the supplemental was the 
final deal. I suppose he meant the final deal on taxes associated with 
the minimum wage increase. And I guess he meant that, even if the 
supplemental is vetoed, that we don't go back to square one, that there 
will still be no renegotiation of the tax package. That is unfortunate, 
and that is what brings us here today.
  The majority has said it is unwilling to reconsider ways to ensure 
that we provide tax relief to the businesses most in need and to 
examine the shortcomings of the tax package. Thus, we must find other 
ways to help small businesses continue to be the engines of job 
creation in our economy. By making small businesses adversely affected 
by a minimum wage increase eligible for the community express program, 
Madam Speaker, we are offering the House an opportunity, a chance, to 
make good on the promise to help those businesses impacted by an 
increase of the minimum wage.
  Madam Speaker, I urge passage of the motion.

                              {time}  1730

  Madam Speaker, I yield back the balance of my time.

[[Page H4119]]

  Ms. VELAZQUEZ. Madam Speaker, I withdraw my point of order against 
the motion, and I rise in opposition to the motion to recommit.
  The SPEAKER pro tempore. The gentlewoman from New York is recognized 
for 5 minutes.
  Ms. VELAZQUEZ. Madam Speaker, it amazes me if the gentleman from 
Louisiana is so concerned about the state of small businesses in our 
country, why is it that every time that I brought an amendment to any 
bill to reduce the cost of the 7(a) business loan program, you voted 
against that bill, against those amendments? That is the way we provide 
relief to small businesses.
  The problem with the gentleman from Louisiana is that he doesn't 
believe that the minimum wage should be raised, and that 10 years is 
not long enough. So by supporting this motion to recommit, you are 
voting against providing relief to small businesses.
  What we are doing with this bill is reducing up to $50,000 in fees to 
borrowers in this country. That is real relief.
  So I urge my colleagues to vote against this motion, and to support 
the underlying bill.
  Madam Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. McCRERY. Madam Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 9 of rule XX, the Chair 
will reduce to 5 minutes the minimum time for any electronic vote on 
the question of passage.
  The vote was taken by electronic device, and there were--yeas 197, 
nays 224, not voting 11, as follows:

                             [Roll No. 262]

                               YEAS--197

     Aderholt
     Akin
     Alexander
     Bachmann
     Bachus
     Baker
     Barrett (SC)
     Barton (TX)
     Biggert
     Bilbray
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehner
     Bonner
     Bono
     Boozman
     Boustany
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Buchanan
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp (MI)
     Campbell (CA)
     Cannon
     Cantor
     Capito
     Carney
     Carter
     Castle
     Chabot
     Coble
     Cole (OK)
     Conaway
     Crenshaw
     Culberson
     Davis (KY)
     Davis, David
     Davis, Tom
     Deal (GA)
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Doolittle
     Drake
     Dreier
     Duncan
     Ehlers
     Emerson
     English (PA)
     Everett
     Fallin
     Feeney
     Ferguson
     Flake
     Forbes
     Fortenberry
     Fossella
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gilchrest
     Gillmor
     Gingrey
     Gohmert
     Goode
     Goodlatte
     Granger
     Graves
     Hall (TX)
     Hastert
     Hastings (WA)
     Hayes
     Heller
     Hensarling
     Herger
     Hobson
     Hoekstra
     Hulshof
     Inglis (SC)
     Issa
     Jindal
     Johnson (IL)
     Johnson, Sam
     Jones (NC)
     Jordan
     Keller
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kline (MN)
     Knollenberg
     Kuhl (NY)
     LaHood
     Lamborn
     Latham
     LaTourette
     Lewis (CA)
     Lewis (KY)
     Linder
     LoBiondo
     Lucas
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     McCarthy (CA)
     McCaul (TX)
     McCotter
     McCrery
     McHenry
     McHugh
     McKeon
     McMorris Rodgers
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moran (KS)
     Murphy, Tim
     Musgrave
     Myrick
     Neugebauer
     Nunes
     Paul
     Pearce
     Pence
     Peterson (PA)
     Petri
     Pickering
     Pitts
     Platts
     Poe
     Porter
     Price (GA)
     Pryce (OH)
     Putnam
     Radanovich
     Ramstad
     Regula
     Rehberg
     Reichert
     Renzi
     Reynolds
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Ros-Lehtinen
     Roskam
     Royce
     Ryan (WI)
     Sali
     Saxton
     Schmidt
     Sensenbrenner
     Sessions
     Shadegg
     Shays
     Shimkus
     Shuster
     Simpson
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Souder
     Space
     Stearns
     Sullivan
     Tancredo
     Terry
     Thornberry
     Tiahrt
     Tiberi
     Turner
     Upton
     Walberg
     Walden (OR)
     Walsh (NY)
     Wamp
     Weldon (FL)
     Weller
     Wicker
     Wilson (NM)
     Wilson (SC)
     Wolf
     Young (AK)
     Young (FL)

                               NAYS--224

     Abercrombie
     Ackerman
     Allen
     Altmire
     Andrews
     Arcuri
     Baca
     Baird
     Baldwin
     Barrow
     Bean
     Becerra
     Berkley
     Berman
     Berry
     Bishop (NY)
     Blumenauer
     Boren
     Boswell
     Boucher
     Boyda (KS)
     Brady (PA)
     Braley (IA)
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Cardoza
     Carnahan
     Carson
     Castor
     Chandler
     Clarke
     Clay
     Cleaver
     Clyburn
     Cohen
     Conyers
     Cooper
     Costa
     Costello
     Courtney
     Cramer
     Crowley
     Cuellar
     Cummings
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis, Lincoln
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dicks
     Dingell
     Doggett
     Donnelly
     Doyle
     Edwards
     Ellison
     Ellsworth
     Emanuel
     Engel
     Eshoo
     Etheridge
     Farr
     Fattah
     Filner
     Frank (MA)
     Giffords
     Gillibrand
     Gonzalez
     Gordon
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hall (NY)
     Hare
     Harman
     Hastings (FL)
     Herseth Sandlin
     Higgins
     Hill
     Hinchey
     Hinojosa
     Hirono
     Hodes
     Holden
     Holt
     Honda
     Hooley
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     Johnson (GA)
     Johnson, E. B.
     Jones (OH)
     Kagen
     Kanjorski
     Kennedy
     Kildee
     Kilpatrick
     Kind
     Klein (FL)
     Kucinich
     Langevin
     Lantos
     Larsen (WA)
     Larson (CT)
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Loebsack
     Lofgren, Zoe
     Lowey
     Lynch
     Mahoney (FL)
     Maloney (NY)
     Markey
     Marshall
     Matheson
     Matsui
     McCarthy (NY)
     McCollum (MN)
     McDermott
     McGovern
     McNerney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Melancon
     Michaud
     Miller (NC)
     Miller, George
     Mitchell
     Mollohan
     Moore (KS)
     Moore (WI)
     Moran (VA)
     Murphy (CT)
     Murphy, Patrick
     Murtha
     Nadler
     Napolitano
     Neal (MA)
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor
     Payne
     Perlmutter
     Peterson (MN)
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rodriguez
     Ross
     Rothman
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Schakowsky
     Schiff
     Schwartz
     Scott (GA)
     Scott (VA)
     Serrano
     Sestak
     Shea-Porter
     Sherman
     Shuler
     Sires
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Solis
     Spratt
     Stark
     Stupak
     Sutton
     Tanner
     Tauscher
     Taylor
     Thompson (CA)
     Thompson (MS)
     Tierney
     Towns
     Udall (CO)
     Udall (NM)
     Van Hollen
     Velazquez
     Visclosky
     Walz (MN)
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch (VT)
     Wexler
     Wilson (OH)
     Woolsey
     Wu
     Wynn
     Yarmuth

                             NOT VOTING--11

     Bartlett (MD)
     Bishop (GA)
     Boyd (FL)
     Cubin
     Davis, Jo Ann
     Hunter
     Kaptur
     Lampson
     McIntyre
     Westmoreland
     Whitfield


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (during the vote). Members are advised there 
are 2 minutes remaining to vote.

                              {time}  1755

  Mr. MURPHY of Connecticut, Mr. KAGEN, Ms. DeLAURO, Mr. McNERNEY, Ms. 
McCOLLUM of Minnesota, Mrs. GILLIBRAND, Messrs. HOYER, ALTMIRE, HILL, 
and SCOTT of Virginia changed their vote from ``yea'' to ``nay.''
  Mr. MORAN of Kansas and Mr. PICKERING changed their vote from ``nay'' 
to ``yea.''
  So the motion was rejected.
  The result of the vote was announced as above recorded.
  Stated against:
  Mr. BOYD of Florida. Madam Speaker, on rollcall No. 262, had I been 
present, I would have voted ``nay.''

                          ____________________