[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 1345 Reported in Senate (RS)]
<DOC>
Calendar No. 167
118th CONGRESS
1st Session
S. 1345
To amend the Small Business Act to enhance the Office of Credit Risk
Management, to require the Administrator of the Small Business
Administration to issue rules relating to environmental obligations of
certified development companies, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 27, 2023
Mr. Young (for himself, Ms. Klobuchar, and Mr. Booker) introduced the
following bill; which was read twice and referred to the Committee on
Small Business and Entrepreneurship
July 25, 2023
Reported by Mr. Cardin, 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 enhance the Office of Credit Risk
Management, to require the Administrator of the Small Business
Administration to issue rules relating to environmental obligations of
certified development companies, 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 ``504 Credit Risk Management
Improvement Act of 2023''.</DELETED>
<DELETED>SEC. 2. ENHANCEMENTS TO THE OFFICE OF CREDIT RISK
MANAGEMENT.</DELETED>
<DELETED> Section 47 of the Small Business Act (15 U.S.C. 657t) is
amended--</DELETED>
<DELETED> (1) by striking subsection (b) and inserting the
following:</DELETED>
<DELETED> ``(b) Duties.--The Office--</DELETED>
<DELETED> ``(1) shall be responsible for--</DELETED>
<DELETED> ``(A) supervising--</DELETED>
<DELETED> ``(i) any lender making loans
under section 7(a) (in this section referred to
as a `7(a) lender');</DELETED>
<DELETED> ``(ii) any Lending Partner or
Intermediary participant of the Administration
in a lending program of the Office of Capital
Access of the Administration;</DELETED>
<DELETED> ``(iii) any small business lending
company or a non-Federally regulated lender
without regard to the requirements of section
23; and</DELETED>
<DELETED> ``(iv) any certified development
company described under the program established
under title V of the Small Business Investment
Act of 1958 (15 U.S.C. 695 et seq.) (referred
to in this section as a `certified development
company'), as provided in subsection (k);
and</DELETED>
<DELETED> ``(B) conducting file reviews with respect
to loan closings under the program established under
title V of the Small Business Investment Act of 1958
(15 U.S.C. 695 et seq.), as provided in subsection (j);
and</DELETED>
<DELETED> ``(2) may--</DELETED>
<DELETED> ``(A) take formal and informal enforcement
actions against a certified development company, as
provided in subsection (l); and</DELETED>
<DELETED> ``(B) charge a certified development
company a fee, as provided in subsection (m).'';
and</DELETED>
<DELETED> (2) by adding at the end the following:</DELETED>
<DELETED> ``(j) Loan Closing File Reviews.--With respect to a loan
closing under the program established under title V of the Small
Business Investment Act of 1958 (15 U.S.C. 695 et seq.), the Office
shall be responsible for the following:</DELETED>
<DELETED> ``(1) Conducting a complete file review of a
random selection of all loan closings, the number, frequency,
and conduct of which shall be at the discretion of the Office,
to ensure program integrity, including a review of the items
listed on the Checklist for Complete File Review contained in
the appropriate form of the Administration.</DELETED>
<DELETED> ``(2) Not later than 60 days after the date on
which each complete file review conducted under paragraph (1)
is completed, preparing a written report documenting the
results of that review, which the Office shall send to--
</DELETED>
<DELETED> ``(A) the applicable certified development
company;</DELETED>
<DELETED> ``(B) the designated attorney that closed
the loan for the certified development company;
and</DELETED>
<DELETED> ``(C) the Commercial Loan Service
Center.</DELETED>
<DELETED> ``(3) If a complete file review conducted under
paragraph (1) reveals a deficiency that could result in a loss
to the Administration, requiring the applicable certified
development company or the designated attorney to promptly
correct the deficiency.</DELETED>
<DELETED> ``(k) Supervision of Certified Development Companies.--
With respect to the supervision of certified development companies--
</DELETED>
<DELETED> ``(1) an employee of the Office shall--</DELETED>
<DELETED> ``(A) be present for, and supervise, the
review of any such company that is conducted by a
contractor of the Office on the premises of the
company; and</DELETED>
<DELETED> ``(B) supervise the review of any such
company that is conducted by a contractor of the Office
that is not conducted on the premises of the company;
and</DELETED>
<DELETED> ``(2) the Administrator shall--</DELETED>
<DELETED> ``(A) develop a timeline for the review by
the Office of certified development companies and the
submission of reports regarding those reviews, under
which the Administrator shall--</DELETED>
<DELETED> ``(i) submit to a certified
development company a written report of any
review of the company not later than 90 days
after the date on which the review is
concluded; or</DELETED>
<DELETED> ``(ii) if the Administrator
expects to submit the report after the end of
the 90-day period described in clause (i),
notify the company of the expected date of
submission of the report and the reason for the
delay; and</DELETED>
<DELETED> ``(B) if a response by a certified
development company is requested in a report submitted
under subparagraph (A)(i), require the company to
submit responses to the Administrator not later than 45
business days after the date on which the company
receives the report.</DELETED>
<DELETED> ``(l) Enforcement Authority Against Certified Development
Companies.--</DELETED>
<DELETED> ``(1) Informal enforcement authority.--The
Director may take an informal enforcement action against a
certified development company if the Director finds that the
company has violated a statutory or regulatory requirement or
any requirement in a Standard Operating Procedures Manual or
Policy Notice relating to a program or function of the Office
of Capital Access.</DELETED>
<DELETED> ``(2) Formal enforcement authority.--</DELETED>
<DELETED> ``(A) In general.--With the approval of
the Lender Oversight Committee established under
section 48, the Director may take a formal enforcement
action against any certified development company if the
Director finds that the company has violated--
</DELETED>
<DELETED> ``(i) a statutory or regulatory
requirement, including a requirement relating
to the necessary funds for making loans when
those funds are not made available to the
company from private sources on reasonable
terms; or</DELETED>
<DELETED> ``(ii) any requirement described
in a Standard Operating Procedures Manual or
Policy Notice relating to a program or function
of the Office of Capital Access.</DELETED>
<DELETED> ``(B) Enforcement actions.--The decision
to take an enforcement action against a certified
development company under subparagraph (A) shall be
based on the severity or frequency of the violation and
may include assessing a civil monetary penalty against
the company in an amount that is not greater than
$250,000.</DELETED>
<DELETED> ``(3) Failure to submit annual report.--With
respect to a certified development company that, as of the date
that is 30 days after the date on which the company is required
to submit any report, fails to submit that report, the Director
may--</DELETED>
<DELETED> ``(A) suspend the company from
participating in the program established under title V
of the Small Business Investment Act of 1958 (15 U.S.C.
695 et seq.) for a period that is not longer than 30
days; or</DELETED>
<DELETED> ``(B) impose a penalty on the company in
an amount to be determined by the Director, except that
the amount of the penalty shall be not more than
$10,000.</DELETED>
<DELETED> ``(m) Fee Authority Regarding Certified Development
Companies.--</DELETED>
<DELETED> ``(1) In general.--On and after the date that is 1
year after the date of enactment of this subsection, the Office
may collect from each certified development company a fee, the
amount of which--</DELETED>
<DELETED> ``(A) shall be determined on a graduated
scale according to the size of the portfolio of the
certified development company with respect to the
program carried out under title V of the Small Business
Investment Act of 1958 (15 U.S.C. 695 et seq.);
and</DELETED>
<DELETED> ``(B) shall not exceed the amount that is
1 basis point with respect to the value of the
portfolio described in subparagraph (A).</DELETED>
<DELETED> ``(2) Payment.--A certified development company on
which a fee is imposed under paragraph (1) shall pay the fee
from the servicing fees collected by the development company
pursuant to regulation.''.</DELETED>
<DELETED>SEC. 3. RULES RELATING TO OBLIGATIONS OF CERTIFIED DEVELOPMENT
COMPANIES UNDER THE NATIONAL ENVIRONMENTAL POLICY
ACT.</DELETED>
<DELETED> (a) Eligible Certified Development Company Defined.--In
this section, the term ``eligible certified development company'' means
a certified development company defined under title V of the Small
Business Investment Act of 1958 (15 U.S.C. 695 et seq.) that receives
assistance pursuant to that title.</DELETED>
<DELETED> (b) Requirement To Issue Rules.--Not later than 180 days
after the date of enactment of this Act, the Administrator of the Small
Business Administration shall issue rules to clarify the procedures
necessary for an eligible certified development company to comply with
the applicable requirements under National Environmental Policy Act of
1969 (42 U.S.C. 4321 et seq.).</DELETED>
<DELETED> (c) Rule of Construction.--Nothing in this section shall
be construed to modify the requirements of the National Environmental
Policy Act of 1969 (42 U.S.C. 4321 et seq.).</DELETED>
SECTION 1. SHORT TITLE.
This Act may be cited as the ``504 Credit Risk Management
Improvement Act of 2023''.
SEC. 2. ENHANCEMENTS TO THE OFFICE OF CREDIT RISK MANAGEMENT.
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. OFFICE OF CREDIT RISK MANAGEMENT OVERSIGHT.
``(a) Definitions.--In this section--
``(1) the term `Director' means the Director of the Office;
and
``(2) the term `Office' means the Office of Credit Risk
Management established under section 47 of the Small Business
Act (15 U.S.C. 657t).
``(b) Duties Relating to 504 Program.--The Office--
``(1) shall be responsible for--
``(A) supervising any certified development
company, as provided in subsection (d); and
``(B) conducting file reviews with respect to loan
closings under the program established under this
title, as provided in subsection (c); and
``(2) may--
``(A) take formal and informal enforcement actions
against a certified development company, as provided in
subsection (e); and
``(B) charge a certified development company a fee,
as provided in subsection (f).
``(c) Loan Closing File Reviews.--With respect to a loan closing
under the program established under this title, the Office shall be
responsible for the following:
``(1) Conducting a complete file review of a random
selection of all loan closings, the number, frequency, and
conduct of which shall be at the discretion of the Office, to
ensure program integrity, including a review of the items
listed on the Checklist for Complete File Review contained in
the appropriate form of the Administration.
``(2) Not later than 60 days after the date on which each
complete file review conducted under paragraph (1) is
completed, preparing a written report documenting the results
of that review, which the Office shall send to--
``(A) the applicable certified development company;
``(B) the designated attorney that closed the loan
for the certified development company; and
``(C) the Commercial Loan Service Center.
``(3) If a complete file review conducted under paragraph
(1) reveals a deficiency that could result in a loss to the
Administration, requiring the applicable certified development
company or the designated attorney to promptly correct the
deficiency.
``(d) Supervision of Certified Development Companies.--With respect
to the supervision of certified development companies--
``(1) an employee of the Office shall--
``(A) be present for, and supervise, the review of
any such company that is conducted by a contractor of
the Office on the premises of the company; and
``(B) supervise the review of any such company that
is conducted by a contractor of the Office that is not
conducted on the premises of the company; and
``(2) the Administrator shall--
``(A) develop a timeline for the review by the
Office of certified development companies and the
submission of reports regarding those reviews, under
which the Administrator shall--
``(i) submit to a certified development
company a written report of any review of the
company not later than 90 days after the date
on which the review is concluded; or
``(ii) if the Administrator expects to
submit the report after the end of the 90-day
period described in clause (i)--
``(I) notify the company of the
expected date of submission of the
report and the reason for the delay;
and
``(II) submit to the company the
report; and
``(B) if a response by a certified development
company is requested in a report submitted under
subparagraph (A), require the company to submit
responses to the Administrator not later than 45
business days after the date on which the company
receives the report.
``(e) Enforcement Authority Against Certified Development
Companies.--
``(1) Informal enforcement authority.--The Director may
take an informal enforcement action against a certified
development company if the Director finds that the company has
violated a statutory or regulatory requirement or any
requirement in a Standard Operating Procedures Manual or Policy
Notice relating to a program or function of the Office of
Capital Access.
``(2) Formal enforcement authority.--
``(A) In general.--With the approval of the Lender
Oversight Committee established under section 48 of the
Small Business Act (15 U.S.C. 657u), the Director may
take a formal enforcement action against any certified
development company if the Director finds that the
company has violated--
``(i) a statutory or regulatory
requirement, including a requirement relating
to the necessary funds for making loans when
those funds are not made available to the
company from private sources on reasonable
terms; or
``(ii) any requirement described in a
Standard Operating Procedures Manual or Policy
Notice relating to a program or function of the
Office of Capital Access.
``(B) Enforcement actions.--The decision to take an
enforcement action against a certified development
company under subparagraph (A) shall be based on the
severity or frequency of the violation and may include
assessing a civil monetary penalty against the company
in an amount that is not greater than $250,000.
``(3) Failure to submit annual report.--With respect to a
certified development company that, as of the date that is 60
days after the date on which the company is required to submit
any report, fails to submit that report, the Director may--
``(A) suspend the company from participating in the
program established under this title for a period that
is not longer than 30 days; or
``(B) impose a penalty on the company in an amount
to be determined by the Director, except that the
amount of the penalty shall be not more than $10,000.
``(f) Fee Authority Regarding Certified Development Companies.--
``(1) In general.--On and after the date that is 1 year
after the date of enactment of this section, the Office may
collect from each certified development company a fee, the
amount of which--
``(A) shall be determined on a graduated scale
according to the size of the portfolio of the certified
development company with respect to the program carried
out under this title; and
``(B) shall not exceed the amount that is 1 basis
point with respect to the value of the portfolio
described in subparagraph (A).
``(2) Payment.--A certified development company on which a
fee is imposed under paragraph (1) shall pay the fee from the
servicing fees collected by the development company pursuant to
regulation.''.
SEC. 3. RULES RELATING TO OBLIGATIONS OF CERTIFIED DEVELOPMENT
COMPANIES UNDER THE NATIONAL ENVIRONMENTAL POLICY ACT.
(a) Eligible Certified Development Company Defined.--In this
section, the term ``eligible certified development company'' means a
certified development company, within the meaning under title V of the
Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.), that
receives assistance pursuant to that title.
(b) Requirement To Issue Rules.--Not later than 180 days after the
date of enactment of this Act, the Administrator of the Small Business
Administration shall issue rules to clarify the procedures necessary
for an eligible certified development company to comply with the
applicable requirements under National Environmental Policy Act of 1969
(42 U.S.C. 4321 et seq.).
(c) Rule of Construction.--Nothing in this section shall be
construed to modify the requirements of the National Environmental
Policy Act of 1969 (42 U.S.C. 4321 et seq.).
SEC. 4. EXTENSION OF SUNSET FOR DELEGATED AUTHORITY FOR ACCREDITED
LENDERS.
Section 328(b)(2) of division N of the Consolidated Appropriations
Act, 2021 (15 U.S.C. 697d note) is amended by striking ``2023'' and
inserting ``2025''.
Calendar No. 167
118th CONGRESS
1st Session
S. 1345
_______________________________________________________________________
A BILL
To amend the Small Business Act to enhance the Office of Credit Risk
Management, to require the Administrator of the Small Business
Administration to issue rules relating to environmental obligations of
certified development companies, and for other purposes.
_______________________________________________________________________
July 25, 2023
Reported with an amendment