[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5924 Introduced in House (IH)]
109th CONGRESS
2d Session
H. R. 5924
To amend the Small Business Act to provide for loan guarantees for
certain private disaster loans.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 27, 2006
Mr. Baker introduced the following bill; which was referred to the
Committee on Small Business
_______________________________________________________________________
A BILL
To amend the Small Business Act to provide for loan guarantees for
certain private disaster loans.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. PRIVATE DISASTER LOANS.
(a) In General.--Section 7 of the Small Business Act (15 U.S.C.
636) is amended--
(1) by redesignating subsections (c) and (d) as subsections
(d) and (e), respectively; and
(2) by inserting after subsection (b) the following:
``(c) Private Disaster Loans.--
``(1) Definitions.--In this subsection--
``(A) the term `disaster area' means a county,
parish, or similar unit of general local government in
which a disaster was declared under subsection (b);
``(B) the term `eligible small business concern'
means a business concern that is--
``(i) is a small business concern, as
defined in this Act; or
``(ii) is a small business concern, as
defined in section 103 of the Small Business
Investment Act of 1958; and
``(C) the term `qualified private lender' means any
privately-owned bank or other lending institution that
the Administrator determines meets the criteria
established under paragraph (10).
``(2) Authorization.--The Administrator may guarantee
timely payment of all principal and interest as scheduled on
any loan issued--
``(A) by a qualified private lender to an eligible
small business concern located in a disaster area; and
``(B) during the 24-month period beginning on the
date on which the disaster area is designated.
``(3) Use of loans.--A loan guaranteed by the Administrator
under this subsection may be used for--
``(A) any purpose authorized under subsection (a)
or (b); and
``(B) acquiring or developing real estate for the
purpose of selling or renting such real estate.
``(4) Online applications.--
``(A) In general.--
``(i) Establishment.--The Administrator may
establish, directly or through an agreement
with another entity, an online application
process for loans guaranteed under this
subsection.
``(ii) Other federal assistance.--The
Administrator may coordinate with the head of
any other appropriate Federal agency so that
any application submitted through an online
application process established under clause
(i) may be considered for any other Federal
assistance program for disaster relief.
``(B) Contents.--
``(i) In general.--An online application
process established under subparagraph (A)
shall allow an applicant for a guarantee under
this subsection to specify the qualified
private lender from which the applicant seeks
to obtain a loan.
``(ii) Offers for loans.--
``(I) In general.--If an applicant
does not specify a qualified private
lender under clause (i), any qualified
private lender may be selected to or
opt to consider the application.
``(II) Process.--The Administrator
may, via the online process or another
predetermined and objective process,
determine a means of distributing or
otherwise making available for
consideration applications where a
qualified private lender has not been
specified by the applicant.
``(5) Refinancing.--A loan guaranteed under this subsection
may be used to refinance any debt under this Act or the Small
Business Investment Act of 1958.
``(6) Maximum amounts.--
``(A) Guarantee percentage.--The Administrator may
guarantee not more than 85 percent of a loan under this
subsection.
``(B) Loan amounts.--The maximum amount of a loan
guaranteed under this subsection shall be $3,000,000.
``(7) Loan term.--The longest term of a loan for a loan
guaranteed under this subsection shall be--
``(A) 15 years for any loan that is issued without
collateral; and
``(B) 25 years for any loan that is issued with
collateral.
``(8) Fees.--
``(A) In general.--The Administrator may not
collect a guarantee fee under this subsection.
``(B) Origination fee.--The Administrator shall pay
a qualified private lender an origination fee for a
loan guaranteed under this subsection equal to \15/100\
of 1 percent of the amount of the loan.
``(9) Documentation.--A qualified private lender may use
its own loan documentation for a loan guaranteed by the
Administrator, to the extent authorized by the Administrator,
except that the Administrator may not require such use by
regulation, or otherwise.
``(10) Implementation.--
``(A) In general.--Not later than 30 days after the
date of enactment of this subsection, the Administrator
shall--
``(i) establish interim criteria for
qualified private lenders; and
``(ii) begin accepting applications from
banks and lending institutions.
``(B) Regulations.--
``(i) In general.--Not later than 90 days
after the date of enactment of this subsection,
the Administrator shall promulgate regulations
establishing permanent criteria for qualified
private lenders.
``(ii) Existing qualified private
lenders.--A bank or lending institution that
the Administrator determined met the criteria
established under subparagraph (A)(i) may
continue to operate as a qualified private
lender if the Administrator determines that
such bank or lending institution meets the
criteria established under clause (i).
``(11) Other assistance.--The fact that a small business
concern receives assistance under this subsection shall not
preclude such business concern from receiving other assistance
under this Act.
``(12) Authorization of appropriations.--
``(A) In general.--Amounts necessary to carry out
this subsection shall be made available from amounts
appropriated to the Administration under subsection
(b).
``(B) Authority to reduce interest rates.--Funds
appropriated to the Administration to carry out this
subsection, may be used by the Administrator, to the
extent available, to reduce the applicable rate of
interest for a loan guaranteed under this subsection by
not more than 3 percentage points.''.
(b) Effective Date.--
(1) In general.--The amendments made by this section shall
apply to disasters declared under section 7(b)(2) of the Small
Business Act (631 U.S.C. 636(b)(2)) before, on, or after the
date of enactment of this Act.
(2) Construction.--For any disaster described in paragraph
(1) that was declared before the date of enactment of this Act,
the 24-month period described in section 7(c)(2)(B) of the
Small Business Act, as amended by this Act, shall begin on the
date on which such disaster was declared.
SEC. 2. TECHNICAL AND CONFORMING AMENDMENTS.
The Small Business Act (15 U.S.C. 631 et seq.) is amended--
(1) in section 4(c)--
(A) in paragraph (1), by striking ``7(c)(2)'' and
inserting ``7(d)(2)''; and
(B) in paragraph (2)--
(i) by striking ``7(c)(2)'' and inserting
``7(d)(2)''; and
(ii) by striking ``7(e),''; and
(2) in section 7(b), in the undesignated matter following
paragraph (3)--
(A) by striking ``That the provisions of paragraph
(1) of subsection (c)'' and inserting ``That the
provisions of paragraph (1) of subsection (d)''; and
(B) by striking ``Notwithstanding the provisions of
any other law the interest rate on the Administration's
share of any loan made under subsection (b) except as
provided in subsection (c),'' and inserting
``Notwithstanding any other provision of law, and
except as provided in subsection (d), the interest rate
on the Administration's share of any loan made under
subsection (b)''.
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