[Congressional Bills 103th Congress]
[From the U.S. Government Printing Office]
[S. 1274 Enrolled Bill (ENR)]
S.1274
One Hundred Third Congress
of the
United States of America
AT THE FIRST SESSION
Begun and held at the City of Washington on Tuesday,
the fifth day of January, one thousand nine hundred and ninety-three
An Act
To reduce the subsidy cost for the Guaranteed Business Loan Program of
the
Small Business Administration, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,

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(a) Short Title.--This Act may be cited as the ``Small Business
Guaranteed Credit Enhancement Act of 1993''.
(b) Table of Contents.--The table of contents for this Act is as
follows:

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Section 20 of the Small Business Act (15 U.S.C. 631 note) is
amended--
(1) in subsection (g)(2) by striking ``$7,030,000,000'' and by
inserting in lieu thereof ``$7,155,000,000'';
(2) in subsection (g)(2) by striking ``$775,000,000'' and by
inserting in lieu thereof ``$900,000,000'';
(3) in subsection (i)(2) by striking ``$8,083,000,000'' and by
inserting in lieu thereof ``$8,458,000,000''; and
(4) in subsection (i)(2) by striking ``$825,000,000'' and by
inserting in lieu thereof ``$1,200,000,000''.

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(a) Additional Guarantee Fees.--Section 5(g) of the Small Business
Act (15 U.S.C. 634) is amended by striking paragraph (4) and by
inserting in lieu thereof the following:
``(4)(A) The Administration may collect the following fees for
loan guarantees sold into the secondary market pursuant to the
provisions of subsection (f): an amount equal to (A)
not more than \4/10\ of one percent per year of the outstanding
principal amount of the portion of such loan guaranteed by the
Administration, and (B) not more than 50 percent of the portion of
the sale price which is in excess of 110 percent of the outstanding
principal amount of the portion of such loan guaranteed by the
Administration. Any such fees imposed by the Administration shall be
collected by the Administration or by the agent which carries out on
behalf of the Administration the central registration functions
required by subsection (h) of this section and shall be paid to the
Administration and used solely to reduce the subsidy on loans
guaranteed under section 7(a) of this Act: Provided, That such fees
shall not be charged to the borrower whose loan is guaranteed: and,
Provided further, That nothing herein shall preclude any agent of
the Administration from collecting a fee approved by the
Administration for the functions described in subsection (h)(2).
``(B) The Administration is authorized to impose and collect,
either directly or through a fiscal and transfer agent, a reasonable
penalty on late payments of the fee authorized under subparagraph
(A) in an amount not to exceed 5 percent of such fee per month plus
interest.''.
(b) Any new fees imposed by the Administration pursuant to the
authority conferred by subsection (a) shall be applicable only to loans
initially sold in the secondary market pursuant to the provisions of
section 5(f) of the Small Business Act after August 31, 1993.

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Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is amended
by adding at the end the following new paragraph:
``(22) The Administration is authorized to permit participating
lenders to impose and collect a reasonable penalty fee on late
payments of loans guaranteed under this subsection in an amount not
to exceed 5 percent of the monthly loan payment per month plus
interest.''.

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(a) Guarantee Percentages.--Section 7(a)(2) of the Small Business
Act (15 U.S.C. 636) is amended--
(1) by striking from the end of clause (B)(i) the word ``and''
and by redesignating clause (B)(ii) as (B)(iv) and by inserting the
following after clause (B)(i):
``(ii) not less than 75 percent of the financing outstanding
at the time of disbursement, if such financing is more than
$155,000 and the period of maturity of such financing is more
than 10 years, except that the participation by the
Administration may be reduced below 75 percent upon request of
the participating lender;
``(iii) not less than 85 percent of the financing
outstanding at the time of disbursement, if such financing is
more than $155,000 and the period of maturity of such financing
is 10 years or less, except that the participation by the
Administration may be reduced below 85 percent upon request of
the participating lender; and'';
(2) by striking the words ``85 percent under subparagraph (B)''
and by inserting in lieu thereof the following: ``the above
specified percentums'';
(3) by striking from paragraph (B) the words ``not less than 80
percent, except upon'' and by inserting in lieu thereof the
following: ``not less than 70 percent, unless a lesser percent is
required by clause (B)(ii) or upon the''; and
(4) by inserting after the third sentence the following: ``The
maximum interest rate for a loan guaranteed under the Preferred
Lenders Program shall not exceed the maximum interest rate, as
determined by the Administration, which is made applicable to other
loan guarantees under section 7(a).''.
(b) Application.--Notwithstanding any other provision of law, the
amendments made by subsection (a) shall be effective September 1, 1993,
but shall not be applicable to loan guarantee applications received by
the Administration prior to August 21, 1993. In order to determine the
percent of the loan to be guaranteed pursuant to the amendments made by
subsection (a), the Administration shall aggregate the outstanding
guaranteed principal of multiple loan guarantees issued on behalf of the
same borrower.

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The Administration shall study, monitor and evaluate the impact of
the amendments made by sections 3 and 5 of this Act on the ability of
small business concerns and small business concerns owned and controlled
by minorities and women, to obtain financing and the impact of such
sections on the effectiveness, viability and growth of the secondary
market authorized by section 5(f) of the Small Business Act. Not later
than 16 months after the date of enactment, and annually thereafter, the
Administration shall submit to the Committees on Small Business of the
Senate and the House of Representatives a report containing the
Administration's findings and recommendations on such impact,
specifically including changes in the interest rates on financings
provided to small business concerns and small business concerns owned
and controlled by minorities and women, through the use of the secondary
market. The Administration shall segregate such findings and
recommendations in the study according to the ethnic and gender
components in these categories. Solely for the purposes of the study
authorized herein, the term ``small business concerns owned and
controlled by minorities'', includes businesses owned and controlled by
individuals belonging to one of the designated groups listed in section
8(d)(3)(C) of the Small Business Act.

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Sections 3 and 5 of this Act are hereby repealed on September 30,
1996.

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Section 7(m) of the Small Business Act (15 U.S.C. 636(m)) is
amended--
(1) in paragraph (1)(B)(iii), by striking ``$15,000'' and
inserting ``$25,000'';
(2) in paragraph (5)(A), by striking ``6 grants'' and inserting
``25 grants for terms of up to 5 years''; and
(3) in paragraph (9)(B) by striking ``3 percent'' and inserting
``7 percent''.

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(a) Clearinghouse.--Section 21(c)(7) of the Small Business Act (15
U.S.C. 648) is amended by striking ``system which will'' and by
inserting in lieu thereof the following: ``system. Subject to amounts
approved in advance in appropriations Acts, the Administration may make
grants or enter cooperative agreements with one or more centers to carry
out the provisions of this paragraph. Said grants or cooperative
agreements shall be awarded for periods of no more than five years
duration. The matching funds provisions of subsection (a) shall not be
applicable to grants or cooperative agreements under this paragraph. The
system shall''.
(b) Authorization.--Section 25(i) of the Small Business Act (15
U.S.C. 652) is amended by striking ``$8,000,000 for fiscal year 1993''
and by inserting in lieu thereof ``$2,000,000 for each of fiscal years
1993 and 1994''.
(c) Regulations.--Section 223 of the Small Business Credit and
Business Opportunity Enhancement Act of 1992 (15 U.S.C. 631 note) is
amended by striking the last sentence of subsection (b).

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The White House Conference on Small Business Authorization Act (15
U.S.C. 631 note) is amended--
(1) in section 2 by striking from subsection (a) ``not earlier
than January 1, 1994, and not later than April 1, 1994'' and by
inserting in lieu thereof ``not earlier than May 1, 1995, and not
later than September 30, 1995'';
(2) in section 2 by striking from subsection (a) ``December 1,
1992'' and by inserting in lieu thereof ``March 1, 1994''; and
(3) in section 5 by striking the second sentence of subsection
(a) and by inserting in lieu thereof the following: ``Subsequent to
the date of enactment of this Act, but not later than 30 days after
the date of enactment of this Act, the President shall select and
appoint eleven individuals to the Commission.''.

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Section 407 of the Women's Business Ownership Act of 1988 (15 U.S.C.
631 note) is amended to read as follows:
``SEC. 407. AUTHORIZATION.
``(a) In General.--There are authorized to be appropriated to carry
out this title--
``(1) $500,000 for fiscal year 1993; and
``(2) $500,000 for fiscal year 1994.
``(b) Limitation on Authority.--New spending authority or authority
to enter into contracts as authorized in this Act shall be effective
only to such extent and in such amounts as are provided in advance in
appropriation Acts.
``(c) Sunset.--This section shall cease to be effective on November
30, 1995.''.
Speaker of the House of Representatives.
Vice President of the United States and
President of the Senate.

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Small Business Credit Reform Act of 1993 — S. 1274

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