IIB 117TH CONGRESS 1ST SESSION H. R. 1482 IN THE SENATE OF THE UNITED STATES APRIL 19, 2021 Received; read twice and referred to the Committee on Small Business and Entrepreneurship AN ACT 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 relat- ing to environmental obligations of certified development companies, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 23:31 Apr 19, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1482.RFS H1482 pamtmann on DSKBC07HB2PROD with BILLS 2 HR 1482 RFS SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘504 Credit Risk Man- 2 agement Improvement Act of 2021’’. 3 SEC. 2. ENHANCEMENTS TO THE OFFICE OF CREDIT RISK 4 MANAGEMENT. 5 Section 47 of the Small Business Act (15 U.S.C. 6 657t) is amended— 7 (1) by striking subsection (b) and inserting the 8 following: 9 ‘‘(b) DUTIES.—The Office— 10 ‘‘(1) shall be responsible for— 11 ‘‘(A) supervising— 12 ‘‘(i) any lender making loans under 13 section 7(a) (in this section referred to as 14 a ‘7(a) lender’); 15 ‘‘(ii) any Lending Partner or Inter- 16 mediary participant of the Administration 17 in a lending program of the Office of Cap- 18 ital Access of the Administration; 19 ‘‘(iii) any small business lending com- 20 pany or a non-Federally regulated lender 21 without regard to the requirements of sec- 22 tion 23; and 23 ‘‘(iv) any certified development com- 24 pany described under the program estab- 25 lished under title V of the Small Business 26 VerDate Sep 11 2014 23:31 Apr 19, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1482.RFS H1482 pamtmann on DSKBC07HB2PROD with BILLS 3 HR 1482 RFS Investment Act of 1958 (referred to in this 1 section as a ‘certified development com- 2 pany’), as provided in subsection (k); and 3 ‘‘(B) conducting file reviews with respect 4 to loan closings under the program established 5 under title V of the Small Business Investment 6 Act of 1958, as provided in subsection (j); and 7 ‘‘(2) may— 8 ‘‘(A) take formal and informal enforcement 9 actions against a certified development com- 10 pany, as provided in subsection (l); and 11 ‘‘(B) charge a certified development com- 12 pany a fee, as provided in subsection (m).’’; and 13 (2) by adding at the end the following new sub- 14 sections: 15 ‘‘(j) LOAN CLOSING FILE REVIEWS.—With respect 16 to a loan closing under the program established under title 17 V of the Small Business Investment Act of 1958, the Of- 18 fice shall be responsible for the following: 19 ‘‘(1) Conducting a complete file review of a ran- 20 dom selection of all loan closings, the number, fre- 21 quency, and conduct of which shall be at the discre- 22 tion of the Office, to ensure program integrity, in- 23 cluding a review of the items listed on the Checklist 24 VerDate Sep 11 2014 23:31 Apr 19, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1482.RFS H1482 pamtmann on DSKBC07HB2PROD with BILLS 4 HR 1482 RFS for Complete File Review contained in the appro- 1 priate form of the Administration. 2 ‘‘(2) Not later than 60 days after the date on 3 which each complete file review conducted under 4 paragraph (1) is completed, preparing a written re- 5 port documenting the results of that review, which 6 the Office shall send to— 7 ‘‘(A) the applicable certified development 8 company; 9 ‘‘(B) the designated attorney that closed 10 the loan for the certified development company; 11 and 12 ‘‘(C) the Commercial Loan Service Center. 13 ‘‘(3) If a complete file review conducted under 14 paragraph (1) reveals a deficiency that could result 15 in a loss to the Administration, requiring the appli- 16 cable certified development company or the des- 17 ignated attorney to promptly correct the deficiency. 18 ‘‘(k) SUPERVISION OF CERTIFIED DEVELOPMENT 19 COMPANIES.—With respect to the supervision of certified 20 development companies— 21 ‘‘(1) an employee of the Office shall— 22 ‘‘(A) be present for, and supervise, the re- 23 view of any such company that is conducted by 24 VerDate Sep 11 2014 23:31 Apr 19, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1482.RFS H1482 pamtmann on DSKBC07HB2PROD with BILLS 5 HR 1482 RFS a contractor of the Office on the premises of 1 the company; and 2 ‘‘(B) supervise the review of any such com- 3 pany that is conducted by a contractor of the 4 Office that is not conducted on the premises of 5 the company; and 6 ‘‘(2) the Administrator shall— 7 ‘‘(A) develop a timeline for the review by 8 the Office of certified development companies 9 and the submission of reports regarding those 10 reviews, under which the Administrator shall— 11 ‘‘(i) submit to a certified development 12 company a written report of any review of 13 the company not later than 90 days after 14 the date on which the review is concluded; 15 or 16 ‘‘(ii) if the Administrator expects to 17 submit the report after the end of the 90- 18 day period described in clause (i), notify 19 the company of the expected date of sub- 20 mission of the report and the reason for 21 the delay; and 22 ‘‘(B) if a response by a certified develop- 23 ment company is requested in a report sub- 24 mitted under subparagraph (A)(i), require the 25 VerDate Sep 11 2014 23:31 Apr 19, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H1482.RFS H1482 pamtmann on DSKBC07HB2PROD with BILLS 6 HR 1482 RFS company to submit responses to the Adminis- 1 trator not later than 45 business days after the 2 date on which the company receives the report. 3 ‘‘(l) ENFORCEMENT AUTHORITY AGAINST CER- 4 TIFIED DEVELOPMENT COMPANIES.— 5 ‘‘(1) INFORMAL ENFORCEMENT AUTHORITY.— 6 The Director may take an informal enforcement ac- 7 tion against a certified development company if the 8 Director finds that the company has violated a stat- 9 utory or regulatory requirement or any requirement 10 in a Standard Operating Procedures Manual or Pol- 11 icy Notice relating to a program or function of the 12 Office of Capital Access. 13 ‘‘(2) FORMAL ENFORCEMENT AUTHORITY.— 14 ‘‘(A) IN GENERAL.—With the approval of 15 the Lender Oversight Committee established 16 under section 48, the Director may take a for- 17 mal enforcement action against any certified de- 18 velopment company if the Director finds that 19 the company has violated— 20 ‘‘(i) a statutory or regulatory require- 21 ment, including a requirement relating to 22 the necessary funds for making loans when 23 those funds are not made available to the 24 VerDate Sep 11 2014 23:31 Apr 19, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1482.RFS H1482 pamtmann on DSKBC07HB2PROD with BILLS 7 HR 1482 RFS company from private sources on reason- 1 able terms; or 2 ‘‘(ii) any requirement described in a 3 Standard Operating Procedures Manual or 4 Policy Notice relating to a program or 5 function of the Office of Capital Access. 6 ‘‘(B) ENFORCEMENT ACTIONS.—The deci- 7 sion to take an enforcement action against a 8 certified development company under subpara- 9 graph (A) shall be based on the severity or fre- 10 quency of the violation and may include assess- 11 ing a civil monetary penalty against the com- 12 pany in an amount that is not greater than 13 $250,000. 14 ‘‘(3) FAILURE TO SUBMIT ANNUAL REPORT.— 15 With respect to a certified development company 16 that, as of the date that is 30 days after the date 17 on which the company is required to submit any re- 18 port, fails to submit that report, the Director may— 19 ‘‘(A) suspend the company from partici- 20 pating in the program established under title V 21 of the Small Business Investment Act of 1958 22 for a period that is not longer than 30 days; or 23 ‘‘(B) impose a penalty on the company in 24 an amount to be determined by the Director, 25 VerDate Sep 11 2014 23:31 Apr 19, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H1482.RFS H1482 pamtmann on DSKBC07HB2PROD with BILLS 8 HR 1482 RFS except that the amount of the penalty shall be 1 not more than $10,000. 2 ‘‘(m) FEE AUTHORITY REGARDING CERTIFIED DE- 3 VELOPMENT COMPANIES.— 4 ‘‘(1) IN GENERAL.—Effective one year after the 5 date of the enactment of this subsection, the Office 6 may collect from each certified development com- 7 pany a fee, the amount of which— 8 ‘‘(A) shall be determined on a graduated 9 scale according to the size of the portfolio of 10 the certified development company with respect 11 to the program carried out under title V of the 12 Small Business Investment Act of 1958; and 13 ‘‘(B) shall not exceed the amount that is 1 14 basis point with respect to the value of the 15 portfolio described in subparagraph (A). 16 ‘‘(2) PAYMENT.—A certified development com- 17 pany on which a fee is imposed under paragraph (1) 18 shall pay the fee from the servicing fees collected by 19 the development company pursuant to regulation.’’. 20 SEC. 3. RULES RELATING TO OBLIGATIONS OF CERTIFIED 21 DEVELOPMENT COMPANIES UNDER THE NA- 22 TIONAL ENVIRONMENTAL POLICY ACT. 23 (a) IN GENERAL.—Not later than 180 days after the 24 date of the enactment of this Act, the Administrator of 25 VerDate Sep 11 2014 23:31 Apr 19, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H1482.RFS H1482 pamtmann on DSKBC07HB2PROD with BILLS 9 HR 1482 RFS the Small Business Administration shall issue rules to 1 clarify the procedures necessary for an eligible certified 2 development company to comply with the applicable re- 3 quirements under National Environmental Policy Act of 4 1969 (42 U.S.C. 4321 et seq.). 5 (b) RULE OF CONSTRUCTION.—Nothing in this sec- 6 tion shall be construed to modify the requirements of the 7 National Environmental Policy Act of 1969 (42 U.S.C. 8 4321 et seq.). 9 (c) ELIGIBLE CERTIFIED DEVELOPMENT COMPANY 10 DEFINED.—In this section, the term ‘‘eligible certified de- 11 velopment company’’ means a certified development com- 12 pany defined under title V of the Small Business Invest- 13 ment Act of 1958 (15 U.S.C. 695 et seq.) that receives 14 assistance pursuant to such title. 15 Passed the House of Representatives April 16, 2021. Attest: CHERYL L. JOHNSON, Clerk. VerDate Sep 11 2014 23:31 Apr 19, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H1482.RFS H1482 pamtmann on DSKBC07HB2PROD with BILLS