Small Business Lending Reauthorization and Improvements Act of 2007

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

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

[Report No. 110-154]

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

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

May 1, 2007

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

September 12, 2007

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

_______________________________________________________________________

A BILL

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SECTION 1. SHORT TITLE.

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

SEC. 2. TABLE OF CONTENTS.

The table of contents of this Act is as follows:

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

TITLE I--MICROLOAN PROGRAMS

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

TITLE II--INTERMEDIARY LENDING PILOT PROGRAM

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

TITLE III--7(a) LOAN PROGRAM

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

TITLE IV--CERTIFIED DEVELOPMENT COMPANIES; 504 LOAN PROGRAM

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

SEC. 3. DEFINITIONS.

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

SEC. 4. AUTHORIZATION OF APPROPRIATIONS.

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

TITLE I--MICROLOAN PROGRAMS

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

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

SEC. 102. INCLUSION OF PERSONS WITH DISABILITIES.

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

SEC. 103. MICROLOAN PROGRAM IMPROVEMENTS.

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

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

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

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

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

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

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

TITLE II--INTERMEDIARY LENDING PILOT PROGRAM

SEC. 201. FINDINGS.

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

SEC. 202. SMALL BUSINESS INTERMEDIARY LENDING PILOT PROGRAM.

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

TITLE III--7(a) LOAN PROGRAM

SEC. 301. PREFERRED LENDERS PROGRAM.

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

SEC. 302. MAXIMUM LOAN AMOUNT.

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

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

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

SEC. 304. LOAN POOLING.

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

SEC. 305. ALTERNATIVE SIZE STANDARD.

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

SEC. 306. ALTERNATIVE VARIABLE INTEREST RATE.

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

SEC. 307. MINORITY SMALL BUSINESS DEVELOPMENT.

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

``SEC. 38. MINORITY SMALL BUSINESS DEVELOPMENT.

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

SEC. 308. LOWERING OF FEES.

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

SEC. 309. INTERNATIONAL TRADE LOANS.

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

SEC. 310. RURAL LENDING OUTREACH PROGRAM.

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

TITLE IV--CERTIFIED DEVELOPMENT COMPANIES; 504 LOAN PROGRAM

SEC. 401. DEVELOPMENT COMPANY LOAN PROGRAMS.

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

``SEC. 511. PROGRAM TITLE.

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

SEC. 402. LOAN LIQUIDATIONS.

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

SEC. 403. ADDITIONAL EQUITY INJECTIONS.

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

SEC. 404. UNIFORM LEASING POLICY.

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

SEC. 405. BUSINESSES IN LOW-INCOME COMMUNITIES.

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

SEC. 406. COMBINATIONS OF CERTAIN GOALS.

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

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

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

SEC. 408. TECHNICAL CORRECTION.

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

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

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

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

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

SEC. 411. CERTIFIED DEVELOPMENT COMPANIES.

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

SEC. 412. CONFORMING AMENDMENTS.

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

SEC. 413. CLOSING COSTS.

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

SEC. 414. DEFINITION OF RURAL.

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

SEC. 415. REGULATIONS AND EFFECTIVE DATE.

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

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

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

SEC. 417. CHILD CARE LENDING PILOT PROGRAM.

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

SEC. 418. DEBENTURE REPAYMENT.

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

SEC. 419. REAL ESTATE APPRAISALS.

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

110th CONGRESS

1st Session

S. 1256

[Report No. 110-154]

_______________________________________________________________________

A BILL

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

_______________________________________________________________________

September 12, 2007

Reported with an amendment