Pub. L. 102-140, tit. VI, sec. 609

Sec. 609. (a) Section 5(g)(1) of the Small Business Act (15 U.S.C. 634(g)(D) is amended by striking “except separate trust certificates shall be issued for loans approved under section 7(a)(13)” and inserting in lieu thereof the following: “or under section 502 of the Small Business Investment Act of 1958 (15 U.S.C. 660)”. (b) Section 7(a)(18) of the Small Business Act (15 U.S.C. 636(a)(18)) is amended by striking “or a loan under paragraph (13)” from the first sentence. (c) Section 215(a)(2) of the Small Business Administration Reauthorization and Amendments Act of 1990 (Public Law 101–574) is amended by striking “July 1, 1991” and inserting in lieu thereof “July 1, 1992”. (d) The Small Business Act is amended by adding the following new section: “SEC. 28. PILOT TECHNOLOGY ACCESS PROGRAM. “(a) Establishment.—The Administration, in consultation with the National Institute of Standards and Technology and the National Technical Information Service, shall establish a Pilot Technology Access Program, for making awards under this section to Small Business Development Centers (hereinafter in this section referred to as “Centers”). “(b) Criteria for Selection of Centers.—The Administrator of the Small Business Administration shall establish competitive, merit-based criteria for the selection of Centers to receive awards on the basis of— “(1) the ability of the applicant to carry out the purposes described in subsection (d) in a manner relevant to the needs of industries in the area served by the Center; “(2) the ability of the applicant to integrate the implementation of this program with existing Federal and State technical and business assistance resources; and “(3) the ability of the applicant to continue providing technology access after the termination of this pilot program. “(c) Matching Requirement.—To be eligible to receive an award under this section, an applicant shall provide a matching contribution at least equal to that received under such award, not more than 50 percent of which may be waived overhead or in-kind contributions. “(d) Purpose of Awards.—Awards made under this section shall be for the purpose of increasing access by small businesses to on-line data base services that provide technical and business information, 105 STAT. 826and access to technical experts, in a wide range of technologies, through such activities as— “(1) defraying the cost of access by small businesses to the data base services; “(2) training small businesses in the use of the data base services; and “(3) establishing a public point of access to the data base services. Activities described in paragraphs (1) through (3) may be carried out through contract with a private entity. “(e) Renewal of Awards.—Awards previously made under section 21A of this Act may be renewed under this section. “(f) Interim Report.—Two years after the date on which the first award was issued under section 21A of this Act, the General Accounting Office shall submit to the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives and to the Committee on Small Business and the Committee on Commerce, Science, and Transportation of the Senate, an interim report on the implementation of the program under such section and this section, including the judgments of the participating Centers as to its effect on small business productivity and innovation. “(g) Final Report.—Three years after such date, the General Accounting Office shall submit to the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives and to the Committee on Small Business and the Committee on Commerce, Science and Transportation of the Senate, a final report evaluating the effectiveness of the Program under section 21A and this section in improving small business productivity and innovation. “(h) Authorization of Appropriations.—There are authorized to be appropriated to the Small Business Administration $5 million for each of fiscal years 1992 through 1995 to carry out this section, and such amounts may remain available until expended. “(i) Centers are encouraged to seek funding from Federal and non-Federal sources other than those provided for in this section to assist small businesses in the identification of appropriate technologies to fill their needs, the transfer of technologies from Federal laboratories, public and private universities, and other public and private institutions, the analysis of commercial opportunities represented by such technologies, and such other functions as the development, business planning, market research, and financial packaging required for commercialization. Insofar as such Centers pursue these activities, Federal agencies are encouraged to employ these Centers to interface with small businesses for such purposes as facilitating small business participation in Federal procurement and fostering commercialization of Federally-funded research and development”. (e) Notwithstanding any other law, no funds shall be appropriated to carry out section 21A of the Small Business Act after September 30, 1991, and such section is repealed October 1, 1992. (f) Section 232 of the Small Business Administration Reauthorization and Amendments Act of 1990 is repealed. (g) Section 7(b) of the Small Business Computer Security and Education Act of 1984 (15 U.S.C. 633 Note) is amended by striking “March 31, 1991” in the first sentence and inserting in lieu thereof “October 1, 1992”. 105 STAT. 827 (h) Section 7 of the Small Business Act (15 U.S.C. 636) is amended by adding at the end the following new subsection: “(m) Microloan Demonstration Program.— “(1)(A) Purposes.—The purposes of the Microloan Demonstration Program are— “(i) to assist women, low-income, and minority entrepreneurs, business owners, and other individuals possessing the capability to operate successful business concerns; “(ii) to assist small business concerns in those areas suffering from a lack of credit due to economic downturns; and “(iii) to establish a microloan demonstration program to be administered by the Small Business Administration— “(I) to make loans to eligible intermediaries to enable such intermediaries to provide small-scale loans to startup, newly established, or growing small business concerns for working capital or the acquisition of materials, supplies, or equipment; “(II) to make grants to eligible intermediaries that, together with non-Federal matching funds, will enable such intermediaries to provide intensive marketing, management, and technical assistance to microloan borrowers; “(III) to make grants to eligible nonprofit entities that, together with non-Federal matching funds, will enable such entities to provide intensive marketing, management, and technical assistance to assist low-income entrepreneurs and other low-income individuals obtain private sector financing for their businesses, with or without loan guarantees; and “(IV) to report to the Committees on Small Business of the Senate and the House of Representatives on the effectiveness of the microloan program and the advisability and feasibility of implementing such a program nationwide. “(B) Establishment.—There is established a microloan demonstration program, under which the Administration may— “(i) make direct loans to eligible intermediaries, as provided under paragraph (3), for the purpose of making shortterm, fixed interest rate microloans to startup, newly established, and growing small business concerns under paragraph (6); “(ii) in conjunction with such loans and subject to the requirements of paragraph (4), make grants to such intermediaries for the purpose of providing intensive marketing, management, and technical assistance to small business concerns that are borrowers under this subsection; and “(iii) subject to the requirements of paragraph (5), make grants to nonprofit entities for the purpose of providing marketing, management, and technical assistance to low-income individuals seeking to start or enlarge their own businesses, if such assistance includes working with the grant recipient to secure loans in amounts not to exceed $15,000 from private sector lending institutions, with or without a loan guarantee from the nonprofit entity. 105 STAT. 828 “(2) Eligibility for participation.—An intermediary shall be eligible to receive loans and grants under subparagraphs (B)(i) and (B)(ii) of paragraph (1) if it— “(A) meets the definition in paragraph (10); and “(B) has at least 1 year of experience making microloans to startup, newly established, or growing small business concerns and providing, as an integral part of its microloan program, intensive marketing, management, and technical assistance to its borrowers. “(3) Loans to intermediaries.— “(A) Intermediary applications.—As part of its application for a loan, each intermediary shall submit a description to the Administration of— “(i) the type of businesses to be assisted; “(ii) the size and range of loans to be made; “(iii) the geographic area to be served and its economic and unemployment characteristics; “(iv) the status of small business concerns in the area to be served and an analysis of their credit and technical assistance needs; “(v) any marketing, management, and technical assistance to be provided in connection with a loan made under this subsection; “(vi) the local economic credit markets, including the costs associated with obtaining credit locally; “(vii) the qualifications of the applicant to carry out the purpose of this subsection; and “(viii) any plan to involve private sector lenders in assisting selected small business concerns. “(B) Intermediary contribution.—As a condition of any loan made to an intermediary under subparagraph (B)(i) of paragraph (1), the Administration shall require the intermediary to contribute not less than 15 percent of the loan amount in cash from non-Federal sources. “(C) Loan limits.—Notwithstanding subsection (a)(3), no loan shall be made under this subsection if the total amount outstanding and committed to one intermediary (excluding outstanding grants) from the business loan and investment fund established by this Act would, as a result of such loan, exceed $750,000 in the first year of such intermediary’s participation in the program, and $1,250,000 in the remaining years of the intermediary’s participation in the demonstration program. “(D) Loan loss reserve fund.—The Administration shall, by regulation, require each intermediary to establish a loan loss reserve fund, and to maintain such reserve fund until all obligations owed to the Administration under this subsection are repaid. The Administration shall require the loan loss reserve fund to be maintained— “(i) in the first year of the intermediary’s participation in the demonstration program, at a level equal to not more than 15 percent of the outstanding balance of the notes receivable owed to the intermediary; and “(ii) in each year of participation thereafter, at a level reflecting the intermediary’s total losses as a result of participation in the demonstration program, as determined by the Administration on a case-by-case 105 STAT. 829basis, but in no case shall the required level exceed 15 percent of the outstanding balance of the notes receivable owed to the intermediary under the program. “(E) Unavailability of comparable credit.—An intermediary may make a loan under this subsection of more than $15,000 to a small business concern only if such small business concern demonstrates that it is unable to obtain credit elsewhere at comparable interest rates and that it has good prospects for success. In no case shall an intermediary make a loan under this subsection of more than $25,000, or have outstanding or committed to any 1 borrower more than $25,000. “(F) Loan duration.—Loans made by the Administration under this subsection shall be for a term of 10 years and at an interest rate equal to the rate determined by the Secretary of the Treasury for obligations of the United States with a period of maturity of 5 years, adjusted to the nearest one-eighth of 1 percent. “(G) Delayed payments.—The Administration shall not require repayment of interest or principal of a loan made to an intermediary under this subsection during the first year of the loan. “(H) Fees; collateral.—Except as provided in subparagraphs (B) and (D), the Administration shall not charge any fees or require collateral other than an assignment of the notes receivable of the microloans with respect to any loan made to an intermediary under this subsection. “(4) Marketing, management and technical assistance grants to intermediaries.—Grants made in accordance with subparagraph (B)(ii) of paragraph (1) shall be subject to the following requirements: “(A) Grant amounts.—Subject to the requirements of subparagraph (B), each intermediary that receives a loan under subparagraph (B)(i) of paragraph (1) shall be eligible to receive a grant to provide marketing, management, and technical assistance to small business concerns that are borrowers under this subsection. In the first and second years of an intermediary’s program participation, each intermediary meeting the requirement of subparagraph (B) may receive a grant of not more than 20 percent of the total outstanding balance of loans made to it under this subsection. In the third and subsequent years of an intermediary’s program participation, each intermediary meeting the requirements of subparagraph (B) may receive a grant of not more than 10 percent of the total outstanding balance of loans made to it under this subsection. “(B) Contribution.—As a condition of any grant made under subparagraph (A), the Administration shall require the intermediary to contribute an amount equal to one-half of the amount of the grant, obtained solely from non-Federal sources. In addition to cash or other direct funding, the contribution may include indirect costs or in-kind contributions paid for under non-Federal programs. “(5) Private sector borrowing technical assistance grants.—Grants made in accordance with subparagraph (B)(iii) of paragraph (1) shall be subject to the following requirements: 105 STAT. 830 “(A) Grant amounts.—Subject to the requirements of subparagraph (B), in each of the 5 years of the demonstration program established under this subsection, the Administration may make not more than 2 grants, each in amounts not to exceed $125,000 for the purposes specified in subparagraph (B)(iii) of paragraph (1). “(B) Contribution.—As a condition of any grant made under subparagraph (A), the Administration shall require the grant recipient to contribute an amount equal to 20 percent of the amount of the grant, obtained solely from non-Federal sources. In addition to cash or other direct funding, the contribution may include indirect costs or inkind contributions paid for under non-Federal programs. “(6) Loans to small business concerns from eligible intermediaries.— “(A) In general.—An eligible intermediary shall make short-term, fixed rate loans to startup, newly established, and growing small business concerns from the funds made available to it under subparagraph (B)(i) of paragraph (1) for working capital and the acquisition of materials, supplies, furniture, fixtures, and equipment. “(B) Portfolio requirement.—To the extent practicable, each intermediary that operates a microloan program under this subsection shall maintain a microloan portfolio with an average loan size of not more than $10,000. “(C) Interest limit.—Notwithstanding any provision of the laws of any State or the constitution of any State pertaining to the rate or amount of interest that may be charged, taken, received or reserved on a loan, the maximum rate of interest to be charged on a microloan funded under this subsection shall be not more than 4 percentage points above the prime lending rate, as identified by the Administration and published in the Federal Register on a quarterly basis. “(D) Review restriction.—The Administration shall not review individual microloans made by intermediaries prior to approval. “(7) Program funding.— “(A) First year programs.—In the first year of the demonstration program, the Administration is authorized to fund, on a competitive basis, not more than 35 microloan programs, including not less than 1 program to be located in each of the following States: Arkansas, Illinois, Iowa, Kentucky, Maine, Minnesota, New Hampshire, New York, North Carolina, Pennsylvania, South Carolina, and Wisconsin. “(B) Expanded programs.—In the second year of the demonstration program, the Administration is authorized to fund up to 25 additional microloan programs. “(C) State limitations.—In no case shall a State— “(i) be awarded more than 2 microloan programs in any year of the demonstration program; “(ii) receive more than $1,000,000 to fund such pro grams in such State’s first year of participation; or “(iii) receive more than $1,500,000 to fund such programs in any succeeding year of such State’s participation. 105 STAT. 831 “(8) Rural assistance.—In funding microloan programs, the Administration shall ensure that at least one-half of the programs funded under this subsection will provide microloans to small business concerns located in rural areas. “(9) Report to congress.—On November 1, 1995, the Administration shall submit to the Committees on Small Business of the Senate and the House of Representatives a report, including the Administration’s evaluation of the effectiveness of the first 3½ years of the microloan demonstration program and the following: “(A) the numbers and locations of the intermediaries funded to conduct microloan programs; “(B) the amounts of each loan and each grant to intermediaries; “(C) a description of the matching contributions of each intermediary; “(D) the numbers and amounts of microloans made by the intermediaries to small business concern borrowers; “(E) the repayment history of each intermediary; “(F) a description of the loan portfolio of each intermediary including the extent to which it provides microloans to small business concerns in rural areas; and “(G) any recommendations for legislative changes that would improve program operations. “(10) Definitions.—For purposes of this subsection— “(A) the term ‘intermediary’ means a private, nonprofit entity or a nonprofit community development corporation that seeks to borrow or has borrowed funds from the Small Business Administration to make microloans to small business concerns under this subsection; “(B) the term ‘microloan’ means a short-term, fixed rate loan of not more than $25,000, made by an intermediary to a startup, newly established, or growing small business concern; “(C) the term ‘rural area’ means any political subdivision or unincorporated area— “(i) in a nonmetropolitan county (as defined by the Secretary of Agriculture) or its equivalent thereof; or “(ii) in a metropolitan county or its equivalent that has a resident population of less than 20,000 if the Small Business Administration has determined such political subdivision or area to be rural.”. (i) Regulations.—Not later than 90 days after the date of the enactment of this Act, the Small Business Administration shall promulgate interim final regulations to implement the microloan demonstration program. (j) Program Termination.—The demonstration program established by subsection (h) shall terminate 5 years after the date of enactment of this Act. (k) Program Funding and Repayment of Loans.—Section 4(c) of the Small Business Act (15 U.S.C. 633(c)) is amended— (1) in paragraph (1), by striking “and 7(c)(2)” and inserting “7(c)(2), and 7(m)”; and (2) in paragraph (2), by striking “and 8(a)” and inserting “7(m), and 8(a)”. (l) Authorization of Appropriations.—To carry out the demonstration program established under section 7(m) of the Small 105 STAT. 832Business Act (as added by subsection (h)), there are authorized to be appropriated to the Small Business Administration— (1) for fiscal year 1992— (A) $15,000,000 to be used for the provision of loans; and (B) $3,000,000 to be used for the provision of grants; and (2) for fiscal year 1993— (A) $25,000,000 to be used for the provision of loans; and (B) $5,000,000 to be used for the provision of grants.