Home > 106th Congressional Bills > H.Res. 534 (eh) [Engrossed in House] ...H.Res. 534 (eh) [Engrossed in House] ...
H. Res. 533
In the House of Representatives, U.S.,
June 27, 2000.
Resolved, That upon the adoption of this resolution the House shall be
considered to have taken from the Speaker's table the bill H.R. 2614, with the
amendment of the Senate thereto, and to have concurred in the amendment of the
Senate with an amendment as follows:
In lieu of the matter proposed to be inserted by the amendment of the
Senate, insert the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Certified Development Company
Program Improvements Act of 2000''.
SEC. 2. WOMEN-OWNED BUSINESSES.
Section 501(d)(3)(C) of the Small Business Investment Act of 1958
(15 U.S.C. 695(d)(3)(C)) is amended by inserting before the comma ``or
women-owned business development''.
SEC. 3. MAXIMUM DEBENTURE SIZE.
Section 502(2) of the Small Business Investment Act of 1958 (15
U.S.C. 696(2)) is amended to read as follows:
``(2) Loan limits.--Loans made by the Administration under
this section shall be limited to $1,000,000 for each such
identifiable small business concern, other than loans meeting
the criteria specified in section 501(d)(3), which shall be
limited to $1,300,000 for each such identifiable small business
concern.''.
SEC. 4. FEES.
Section 503(f) of the Small Business Investment Act of 1958 (15
U.S.C. 697(f)) is amended to read as follows:
``(f) Effective Date.--The fees authorized by subsections (b) and
(d) shall apply to any financing approved by the Administration during
the period beginning on October 1, 1996 and ending on September 30,
2003.''.
SEC. 5. PREMIER CERTIFIED LENDERS PROGRAM.
Section 217(b) of the Small Business Administration Reauthorization
and Amendments Act of 1994 (15 U.S.C. 697e note) is repealed.
SEC. 6. SALE OF CERTAIN DEFAULTED LOANS.
Section 508 of the Small Business Investment Act of 1958 (15 U.S.C.
697e) is amended--
(1) in subsection (a), by striking ``On a pilot program
basis, the'' and inserting ``The'';
(2) by redesignating subsections (d) though (i) as
subsections (e) though (j), respectively;
(3) in subsection (f) (as redesignated by paragraph (2)),
by striking ``subsection (f)'' and inserting ``subsection
(g)'';
(4) in subsection (h) (as redesignated by paragraph (2)),
by striking ``subsection (f)'' and inserting ``subsection
(g)''; and
(5) by inserting after subsection (c) the following:
``(d) Sale of Certain Defaulted Loans.--
``(1) Notice.--
``(A) In general.--If, upon default in repayment,
the Administration acquires a loan guaranteed under
this section and identifies such loan for inclusion in
a bulk asset sale of defaulted or repurchased loans or
other financings, the Administration shall give prior
notice thereof to any certified development company
that has a contingent liability under this section.
``(B) Timing.--The notice required by subparagraph
(A) shall be given to the certified development company
as soon as possible after the financing is identified,
but not later than 90 days before the date on which the
Administration first makes any record on such financing
available for examination by prospective purchasers
prior to its offering in a package of loans for bulk
sale.
``(2) Limitations.--The Administration may not offer any
loan described in paragraph (1)(A) as part of a bulk sale,
unless the Administration--
``(A) provides prospective purchasers with the
opportunity to examine the records of the
Administration with respect to such loan; and
``(B) provides the notice required by paragraph
(1).''.
SEC. 7. LOAN LIQUIDATION.
(a) Liquidation and Foreclosure.--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. 510. FORECLOSURE AND LIQUIDATION OF LOANS.
``(a) Delegation of Authority.--In accordance with this section,
the Administration shall delegate to any qualified State or local
development company (as defined in section 503(e)) that meets the
eligibility requirements of subsection (b)(1) of this section the
authority to foreclose and liquidate, or to otherwise treat in
accordance with this section, defaulted loans in its portfolio that are
funded with the proceeds of debentures guaranteed by the Administration
under section 503.
``(b) Eligibility for Delegation.--
``(1) Requirements.--A qualified State or local development
company shall be eligible for a delegation of authority under
subsection (a) if--
``(A) the company--
``(i) has participated in the loan
liquidation pilot program established by the
Small Business Programs Improvement Act of 1996
(15 U.S.C. 695 note), as in effect on the day
before the date of issuance of final
regulations by the Administration implementing
this section;
``(ii) is participating in the Premier
Certified Lenders Program under section 508; or
``(iii) during the 3 fiscal years
immediately prior to seeking such a delegation,
has made an average of not fewer than 10 loans
per year that are funded with the proceeds of
debentures guaranteed under section 503; and
``(B) the company--
``(i) has one or more employees--
``(I) with not less than 2 years of
substantive, decision-making experience
in administering the liquidation and
workout of problem loans secured in a
manner substantially similar to loans
funded with the proceeds of debentures
guaranteed under section 503; and
``(II) who have completed a
training program on loan liquidation
developed by the Administration in
conjunction with qualified State and
local development companies that meet
the requirements of this paragraph; or
``(ii) submits to the Administration
documentation demonstrating that the company
has contracted with a qualified third-party to
perform any liquidation activities and secures
the approval of the contract by the
Administration with respect to the
qualifications of the contractor and the terms
and conditions of liquidation activities.
``(2) Confirmation.--On request, the Administration shall
examine the qualifications of any company described in
subsection (a) to determine if such company is eligible for the
delegation of authority under this section. If the
Administration determines that a company is not eligible, the
Administration shall provide the company with the reasons for
such ineligibility.
``(c) Scope of Delegated Authority.--
``(1) In general.--Each qualified State or local
development company to which the Administration delegates
authority under subsection (a) may, with respect to any loan
described in subsection (a)--
``(A) perform all liquidation and foreclosure
functions, including the purchase in accordance with
this subsection of any other indebtedness secured by
the property securing the loan, in a reasonable and
sound manner, according to commercially accepted
practices, pursuant to a liquidation plan approved in
advance by the Administration under paragraph (2)(A);
``(B) litigate any matter relating to the
performance of the functions described in subparagraph
(A), except that the Administration may--
``(i) defend or bring any claim if--
``(I) the outcome of the litigation
may adversely affect management by the
Administration of the loan program
established under section 502; or
``(II) the Administration is
entitled to legal remedies not
available to a qualified State or local
development company, and such remedies
will benefit either the Administration
or the qualified State or local
development company; or
``(ii) oversee the conduct of any such
litigation; and
``(C) take other appropriate actions to mitigate
loan losses in lieu of total liquidation or
foreclosure, including the restructuring of a loan in
accordance with prudent loan servicing practices and
pursuant to a workout plan approved in advance by the
Administration under paragraph (2)(C).
``(2) Administration approval.--
``(A) Liquidation plan.--
``(i) In general.--Before carrying out
functions described in paragraph (1)(A), a
qualified State or local development company
shall submit to the Administration a proposed
liquidation plan.
``(ii) Administration action on plan.--
``(I) Timing.--Not later than 15
business days after a liquidation plan
is received by the Administration under
clause (i), the Administration shall
approve or reject the plan.
``(II) Notice of no decision.--With
respect to any liquidation plan that
cannot be approved or denied within the
15-day period required by subclause
(I), the Administration shall, during
such period, provide notice in
accordance with subparagraph (E) to the
company that submitted the plan.
``(iii) Routine actions.--In carrying out
functions described in paragraph (1)(A), a
qualified State or local development company
may undertake any routine action not addressed
in a liquidation plan without obtaining
additional approval from the Administration.
``(B) Purchase of indebtedness.--
``(i) In general.--In carrying out
functions described in paragraph (1)(A), a
qualified State or local development company
shall submit to the Administration a request
for written approval before committing the
Administration to the purchase of any other
indebtedness secured by the property securing a
defaulted loan.
``(ii) Administration action on request.--
``(I) Timing.--Not later than 15
business days after receiving a request
under clause (i), the Administration
shall approve or deny the request.
``(II) Notice of no decision.--With
respect to any request that cannot be
approved or denied within the 15-day
period required by subclause (I), the
Administration shall, during such
period, provide notice in accordance
with subparagraph (E) to the company
that submitted the request.
``(C) Workout plan.--
``(i) In general.--In carrying out
functions described in paragraph (1)(C), a
qualified State or local development company
shall submit to the Administration a proposed
workout plan.
``(ii) Administration action on plan.--
``(I) Timing.--Not later than 15
business days after a workout plan is
received by the Administration under
clause (i), the Administration shall
approve or reject the plan.
``(II) Notice of no decision.--With
respect to any workout plan that cannot
be approved or denied within the 15-day
period required by subclause (I), the
Administration shall, during such
period, provide notice in accordance
with subparagraph (E) to the company
that submitted the plan.
``(D) Compromise of indebtedness.--In carrying out
functions described in paragraph (1)(A), a qualified
State or local development company may--
``(i) consider an offer made by an obligor
to compromise the debt for less than the full
amount owing; and
``(ii) pursuant to such an offer, release
any obligor or other party contingently liable,
if the company secures the written approval of
the Administration.
``(E) Contents of notice of no decision.--Any
notice provided by the Administration under
subparagraph (A)(ii)(II), (B)(ii)(II), or (C)(ii)(II)--
``(i) shall be in writing;
``(ii) shall state the specific reason for
the inability of the Administration to act on
the subject plan or request;
``(iii) shall include an estimate of the
additional time required by the Administration
to act on the plan or request; and
``(iv) if the Administration cannot act
because insufficient information or
documentation was provided by the company
submitting the plan or request, shall specify
the nature of such additional information or
documentation.
``(3) Conflict of interest.--In carrying out functions
described in paragraph (1), a qualified State or local
development company shall take no action that would result in
an actual or apparent conflict of interest between the company
(or any employee of the company) and any third party lender (or
any associate of a third party lender) or any other person
participating in a liquidation, foreclosure, or loss mitigation
action.
``(d) Suspension or Revocation of Authority.--The Administration
may revoke or suspend a delegation of authority under this section to
any qualified State or local development company, if the Administration
determines that the company--
``(1) does not meet the requirements of subsection (b)(1);
``(2) has violated any applicable rule or regulation of the
Administration or any other applicable provision of law; or
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