Small Business Reauthorization – Modified from S.3121 106^th Congress

SEC. 203. NATIONAL  SUMMIT ON SMALL BUSINESS.

(a) SMALL BUSINESS SUMMIT- There shall be a national  Summit on Small Business, to be held prior to July 2011, to carry out the purposes set forth in section 204.

SEC. 204. PURPOSES OF QUADRENNIAL SUMMITS.

The purposes of each Quadrennial Summit shall be--

(1) to increase public awareness of the contribution of small business to the national economy;

(2) to identify the problems of small business;

(3) to examine the status of minorities and women as small business owners;

(4) to assist small business in carrying out its role as the Nation's job creator;

(5) to assemble small businesses to develop such specific and comprehensive recommendations for legislative and regulatory action as may be appropriate for maintaining and encouraging the economic viability of small business and thereby, the Nation; and

(6) to review the status of recommendations adopted at previous Summits on Small Business.

SEC. 205. SUMMIT PARTICIPANTS.

(a) IN GENERAL- To carry out the purposes set forth in section 204, the Summit Commission shall conduct the Summit and to bring together individuals concerned with issues relating to small business.

(b) SUMMIT DELEGATES-

(1) QUALIFICATION- Only individuals who are owners or officers of a small business shall be eligible for appointment or selection as delegates (or alternates) to the Summit, or be eligible to vote  pursuant to this subsection.

(2) APPOINTED DELEGATES- Two months before the date of the first State Summit, there shall be--

(A) 1 delegate (and 1 alternate) appointed by the Governor of each State;

(B) 1 delegate (and 1 alternate) appointed by each Member of the House of Representatives, from the congressional district of that Member;

(C) 1 delegate (and 1 alternate) appointed by each Member of the Senate from the home State of that Member; and

(D) 53 delegates (and 53 alternates) appointed by the President, 1 from each State.

(3) ELECTED DELEGATES- The participants at each State Summit shall elect 3 delegates and 3 alternates to the Quadrennial Summit for each congressional district within the State, or part of the State represented at the Summit, or not fewer than 9 delegates, pursuant to rules developed by the Quadrennial Commission.

(4) POWERS AND DUTIES- Delegates to each Quadrennial Summit shall--

(A) attend the State summits in his or her respective State;

(B) elect a delegation chairperson, vice chairperson, and other leadership as may be necessary;

(C) conduct meetings and other activities at the State level before the date of the Quadrennial Summit, subject to the approval of the Quadrennial Commission; and

(D) direct such State level summits, meetings, and activities toward the consideration of the purposes set forth in section 204, in order to prepare for the next Quadrennial Summit.

(5) ALTERNATES- Alternates shall serve during the absence or unavailability of the delegate.

(c) ROLE OF THE CHIEF COUNSEL- The Chief Counsel shall, after consultation and in coordination with the Quadrennial Commission, assist in carrying out the Quadrennial Summits and State Summits required by this title by--

(1) preparing and providing background information and administrative materials for use by participants in the summits;

(2) distributing issue information and administrative communications, electronically where possible through an Internet web site and e-mail, and in printed form if requested;

(3) maintaining an Internet web site and regular e-mail communications after each Quadrennial Summit to inform delegates and the public of the status of recommendations and related governmental activity; and

(4) maintaining, between summits, an active interim organization of delegate representatives from each region of the Administration, to advise the Chief Counsel on each of the major small business issue areas, and monitor the progress of the Summits' recommendations.

(d) EXPENSES- Each delegate (and alternate) to each Quadrennial Summit and State Summit--

(1) shall be responsible for the expenses of that delegate related to attending the summits; and

(2) shall not be reimbursed either from funds appropriated pursuant to this section or the Small Business Act.

(e) ADVISORY COMMITTEE-

(1) IN GENERAL- The Quadrennial Commission shall appoint a Summit Advisory Committee, which shall be composed of 10 individuals who were participants at the most recently preceding Quadrennial Summit, to advise the Quadrennial Commission on the organization, rules, and processes of the Summits.

(2) PREFERENCE- Preference for appointment under this subsection shall be given to individuals who have been active participants in the implementation process following the most recently preceding Quadrennial Summit.

(f) PUBLIC PARTICIPATION- Quadrennial Summits and State Summits shall be open to the public, and no fee or charge may be imposed on any attendee, other than an amount necessary to cover the cost of any meal provided, plus a registration fee to defray the expense of meeting rooms and materials of not to exceed $15 per person.

SEC. 206. QUADRENNIAL COMMISSION ON SMALL BUSINESS.

(a) ESTABLISHMENT- There is established the Quadrennial Commission on Small Business.

(b) MEMBERSHIP-

(1) APPOINTMENT- The Quadrennial Commission shall be composed of 9 members, including--

(A) the Chief Counsel;

(B) 4 members appointed by the President;

(C) 1 member appointed by the Majority Leader of the Senate;

(D) 1 member appointed by the Minority Leader of the Senate;

(E) 1 member appointed by the Majority Leader of the House of Representatives; and

(F) 1 member appointed by the Minority Leader of the House of Representatives.

(2) SELECTION- Members of the Quadrennial Commission described in subparagraphs (B) through (F) of paragraph (1) shall be selected from among distinguished individuals noted for their knowledge and experience in fields relevant to the issue of small business and the purposes set forth in section 204.

(3) TIME OF APPOINTMENT- The appointments required by paragraph (1)--

(A) shall be made not later than 18 months before the opening date of each Quadrennial Summit; and

(B) shall expire 6 months after the date on which each Quadrennial Summit is convened.

(c) ELECTION OF CHAIRPERSON- At the first meeting of the Quadrennial Commission, a majority of the members present and voting shall elect a member of the Quadrennial Commission to serve as the Chairperson.

(d) POWERS AND DUTIES OF COMMISSION- The Quadrennial Commission--

(1) may enter into contracts with public agencies, private organizations, and academic institutions to carry out this title;

(2) shall consult, coordinate, and contract with an independent, nonpartisan organization that--

(A) has both substantive and logistical experience in developing and organizing conferences and forums throughout the Nation with elected officials and other government and business leaders;

(B) has experience in generating private resources from multiple States in the form of event sponsorships; and

(C) can demonstrate evidence of a working relationship with Members of Congress from the majority and minority parties, and at least 1 Federal agency; and

(3) shall prescribe such financial controls and accounting procedures as needed for the handling of funds from fees and charges and the payment of authorized meal, facility, travel, and other related expenses.

(e) PLANNING AND ADMINISTRATION OF SUMMITS- In carrying out the Quadrennial Summits and State Summits, the Quadrennial Commission shall consult with--

(1) the Chief Counsel;

(2) Congress; and

(3) such other Federal agencies as the Quadrennial Commission determines to be appropriate.

(f) REPORTS REQUIRED- Not later than 6 months after the date on which each Quadrennial Summit is convened, the Quadrennial Commission shall submit to the President and to the Chairpersons and Ranking Members of the Committees on Small Business of the Senate and the House of Representatives a final report, which shall--

(1) include the findings and recommendations of the Quadrennial Summit and any proposals for

legislative action necessary to implement those recommendations; and

(2) be made available to the public.

(g) QUORUM- Four voting members of the Quadrennial Commission shall constitute a quorum for purposes of transacting business.

(h) MEETINGS- The Quadrennial Commission shall meet not later than 20 calendar days after the appointment of the initial members of the Quadrennial Commission, and not less frequently than every 30 calendar days thereafter.

(i) VACANCIES- Any vacancy on the Quadrennial Commission shall not affect its powers, but shall be filled in the manner in which the original appointment was made.

(j) EXECUTIVE DIRECTOR AND STAFF- The Quadrennial Commission may appoint and compensate an Executive Director and such other personnel to conduct the Quadrennial Summits and State Summits as the Quadrennial Commission may determine to be advisable, without regard to title 5, United States Code, governing appointments in the competitive service, and without regard to chapter 51 and subchapter III of chapter 53 of such title, relating to classification and General Schedule pay rates, except that the rate of pay for the Executive Director and other personnel may not exceed the rate payable for level V of the Executive Schedule under section 5316 of such title.

(k) FUNDING- Members of the Quadrennial Commission shall be allowed travel expenses, including per diem in lieu of subsistence at rates authorized for employees of agencies under subchapter I of chapter 57 of title 5, United States Code, while away from their homes or regular places of business in the performance of services for the Quadrennial Commission.

SEC. 207. AUTHORIZATION OF APPROPRIATIONS; AVAILABILITY OF FUNDS.

(a) AUTHORIZATION OF APPROPRIATIONS- There is authorized to be appropriated to carry out each Quadrennial Summit and the State Summits required by this title, $5,000,000, which shall remain available until expended. New spending authority or authority to enter contracts as provided in this title shall be effective only to such extent and in such amounts as are provided in advance in appropriations Acts.

(b) SPECIFIC EARMARK- No amount made available to the Small Business Administration may be made available to carry out this title, other than amounts made available specifically for the purpose of conducting the Quadrennial Summits and State Summits.

TITLE III--SMALL BUSINESS INVOLVEMENT IN GOVERNMENT REGULATION

SEC. 301. SHORT TITLE.

This title may be cited as the `Small Business Advocacy Review Panel Technical Amendments Act of 2000'.

SEC. 302. FINDINGS AND PURPOSES.

(a) FINDINGS- Congress finds that--

(1) a vibrant and growing small business sector is critical to creating jobs in a dynamic economy;

(2) small businesses bear a disproportionate share of regulatory costs and burdens;

(3) Federal agencies must consider the impact of their regulations on small businesses early in the rulemaking process; and

(4) the Small Business Advocacy Review Panel process established by the Small Business Regulatory Enforcement Fairness Act of 1996 has been effective in allowing small businesses to participate in rules that are being developed by the Environmental Protection Agency and the Occupational Safety and Health Administration.

(b) PURPOSES- The purposes of this title are--

(1) to provide a forum for the effective participation of small businesses in the Federal regulatory process;

(2) to clarify and strengthen the Small Business Advocacy Review Panel process; and

(3) to expand the number of Federal agencies that are required to convene Small Business Advocacy Review Panels.

SEC. 303. ENSURING FULL ANALYSIS OF POTENTIAL IMPACTS ON SMALL ENTITIES OF RULES PROPOSED BY CERTAIN AGENCIES.

Section 609(b) of title 5, United States Code, is amended to read as follows:

`(b)(1) Before the publication of an initial regulatory flexibility analysis that a covered agency is required to conduct under this chapter, the head of the covered agency shall--

`(A) notify the Chief Counsel for Advocacy of the Small Business Administration (referred to in this subsection as the `Chief Counsel') in writing;

`(B) provide the Chief Counsel with information on the potential impacts of the proposed rule on small entities and the type of small entities that might be affected; and

`(C) not later than 30 days after complying with subparagraphs (A) and (B)--

`(i) in consultation with the Chief Counsel, identify affected small entity representatives; and

`(ii) transmit to the identified small entity representatives a detailed summary of the information referred to in subparagraph (B) or the information in full, if so requested by the small entity representative, for the purposes of obtaining advice and recommendations about the potential impacts of the draft proposed rule.

`(2)(A) Not earlier than 30 days after the covered agency transmits information under paragraph (1)(C)(ii), the head of the covered agency shall convene a review panel for the draft proposed rule. The review panel shall consist solely of full-time Federal employees of the office within the covered agency that will be responsible for carrying out the proposed rule, the Office of Information and Regulatory Affairs of the Office of Management and Budget, and the Chief Counsel.

`(B) The review panel shall--

`(i) review any material that the covered agency has prepared in connection with this chapter, including any draft proposed rule;

`(ii) collect advice and recommendations from the small entity representatives identified under paragraph (1)(C)(i) on issues related to paragraphs (3), (4), and (5) of section 603(b) and section 603(c); and

`(iii) allow any small entity representative identified under paragraph (1)(C)(i) to make an oral presentation to the review panel, if requested.

`(C) Not later than 60 days after the date a covered agency convenes a review panel under this paragraph, the review panel shall report to the head of the covered agency on--

`(i) the comments received from the small entity representatives identified under paragraph (1)(C)(i); and

`(ii) the findings of the review panel regarding issues related to paragraphs (3), (4), and (5) of section 603(b) and section 603(c).

`(3)(A) Except as provided in subparagraph (B), the head of the covered agency shall print in the Federal Register the report of the review panel under paragraph (2)(C), including any written comments submitted by the small entity representatives and any appendices cited in the report, as soon as practicable, but not later than--

`(i) 180 days after the date on which the head of the covered agency receives the report; or

`(ii) the date of the publication of the notice of proposed rulemaking for the proposed rule.

`(B) The report of the review panel printed in the Federal Register shall not include any confidential business information submitted by any small entity representative.

`(4) If appropriate, the covered agency shall modify the draft proposed rule, the initial regulatory flexibility analysis for the draft proposed rule, or the decision on whether an initial regulatory flexibility analysis is required for the draft proposed rule.'.

SEC. 304. DEFINITIONS.

Section 609(d) of title 5, United States Code, is amended to read as follows:

`(d) In this section--

`(1) the term `covered agency' means the Environmental Protection Agency, the Occupational Safety and Health Administration of the Department of Labor, and the Internal Revenue Service of the Department of the Treasury; and

`(2) the term `small entity representative' means a small entity, or an individual or organization that primarily represents the interests of 1 or more small entities.'.

SEC. 305. COLLECTION OF INFORMATION REQUIREMENT.

(a) DEFINITION- Section 601 of title 5, United States Code, is amended--

(1) in paragraph (5) by inserting `and' after the semicolon;

(2) in paragraph (6) by striking `; and' and inserting a period; and

(3) by striking paragraphs (7) and (8).

(b) INITIAL REGULATORY FLEXIBILITY ANALYSIS- The fifth sentence of section 603 of title 5, United States Code, is amended to read as follows: `In the case of an interpretative rule involving the internal revenue laws of the United States, this chapter applies to interpretative rules (including proposed, temporary, and final regulations) published in the Federal Register for codification in the Code of Federal Regulations.'.

SEC. 306. EFFECTIVE DATE.

This title and the amendments made by this title shall take effect 90 days after the date of enactment of this Act.

TITLE IV--OFFICE OF ADVOCACY OF THE SMALL BUSINESS ADMINISTRATION

SEC. 401. SHORT TITLE.

This title may be cited as the `Independent Office of Advocacy Act'.

SEC. 402. FINDINGS.

Congress finds that--

(1) excessive regulations continue to burden the Nation's small businesses;

(2) Federal agencies are reluctant to comply with the requirements of chapter 6 of title 5, United States Code, and continue to propose regulations that impose disproportionate burdens on small businesses;

(3) the Office of Advocacy of the Small Business Administration (referred to in this title as the `Office') is an effective advocate for small businesses that can help to ensure that agencies are responsive to small businesses and that agencies comply with their statutory obligations under chapter 6 of title 5, United States Code, and under the Small Business Regulatory Enforcement Fairness Act of 1996 (Public Law 104-121; 106 Stat. 4249 et seq.);

(4) the independence of the Office is essential to ensure that it can serve as an effective advocate for small businesses, without being restricted by the views or policies of the Small Business Administration or any other executive branch agency;

(5) the Office needs sufficient resources to conduct the research required to assess effectively the impact of regulations on small businesses; and

(6) the research, information, and expertise of the Office make it a valuable adviser to Congress, as well as the executive branch agencies with which the Office works on behalf of small businesses.

SEC. 403. PURPOSES.

The purposes of this title are--

(1) to ensure that the Office has the statutory independence and adequate financial resources to advocate for and on behalf of small businesses;

(2) to require that the Office report to the Chairmen and Ranking Members of the Committees on Small Business of the Senate and the House of Representatives and the Administrator of the Small Business Administration in order to keep them fully and currently informed about issues and regulations affecting small businesses and the necessity for corrective action by the regulatory agency or Congress;

(3) to provide a separate authorization for appropriations for the Office;

(4) to authorize the Office to report to the President and to Congress regarding agency compliance with chapter 6 of title 5, United States Code; and

(5) to enhance the role of the Office pursuant to chapter 6 of title 5, United States Code.

SEC. 404. OFFICE OF ADVOCACY.

(a) IN GENERAL- The Small Business Act (15 U.S.C. 631 et seq.) is amended--

(1) by redesignating sections 32 through 34 as sections 33 through 35, respectively; and

(2) by inserting after section 31 the following:

`SEC. 32. OFFICE OF ADVOCACY.

`(a) DEFINITIONS- In this section--

`(1) the term `Chief Counsel' means the Chief Counsel for Advocacy appointed under subsection (b); and

`(2) the term `Office' means the Office of Advocacy established under subsection (b).

`(b) ESTABLISHMENT-

`(1) IN GENERAL- There is established in the Administration an Office of Advocacy.

`(2) CHIEF COUNSEL FOR ADVOCACY-

`(A) IN GENERAL- The management of the Office shall be vested in a Chief Counsel for Advocacy, who shall be appointed from civilian life by the President, by and with the advice and consent of the Senate, without regard to political affiliation and solely on the ground of fitness to perform the duties of the office.

`(B) EMPLOYMENT RESTRICTION- The individual appointed to the office of Chief Counsel may not serve as an officer or employee of the Administration during the 5-year period preceding the date of appointment.

`(C) REMOVAL- The Chief Counsel may be removed from office by the President, and the President shall notify Congress of any such intent to remove the Chief Counsel not later than 30 days before the removal.

`(3) APPROPRIATION REQUEST- Each appropriation request prepared and submitted by the Administration under section 1108 of title 31, United States Code, shall include a separate request relating to the Office.

`(c) PRIMARY FUNCTIONS- The Office shall--

`(1) examine the role of small business concerns in the economy of the United States and the contribution that small business concerns can make in improving competition, encouraging economic and social mobility for all citizens, restraining inflation, spurring production, expanding employment opportunities, increasing productivity, promoting exports, stimulating innovation and entrepreneurship, and providing the means by which new and untested products and services can be brought to the marketplace;

`(2) assess the effectiveness of Federal subsidy and assistance programs for small business concerns and the desirability of reducing the emphasis on those programs and increasing the emphasis on general assistance programs designed to benefit all small business concerns;

`(3) measure the direct costs and other effects of government regulation of small business concerns, and make legislative, regulatory, and nonlegislative proposals for eliminating the excessive or unnecessary regulation of small business concerns;

`(4) determine the impact of the tax structure on small business concerns and make legislative, regulatory, and other proposals for altering the tax structure to enable all small business concerns to realize their potential for contributing to the improvement of the Nation's economic well-being;

`(5) study the ability of financial markets and institutions to meet small business concerns credit needs and determine the impact of government demands on credit for small business concerns;

`(6) determine financial resource availability and recommend methods for--

`(A) delivery of financial assistance to minority and women-owned small business concerns, including methods for securing equity capital;

`(B) generating markets for goods and services;

`(C) providing effective business education, more effective management and technical assistance, and training; and

`(D) assistance in complying with Federal, State, and local laws;

`(7) evaluate the efforts of Federal agencies and the private sector to assist minority and women-owned small business concerns;

`(8) make such recommendations as may be appropriate to assist the development and strengthening of minority, women-owned, and other small business concerns;

`(9) recommend specific measures for creating an environment in which all businesses will have the opportunity to--

`(A) compete effectively and expand to their full potential; and

`(B) ascertain any common reasons for small business successes and failures;

`(10) determine the desirability of developing a set of rational, objective criteria to be used to define small business, and to develop such criteria, if appropriate; and

`(11) make recommendations and submit reports to the Chairmen and Ranking Members of the Committees on Small Business of the Senate and the House of Representatives and the Administrator with respect to issues and regulations affecting small business concerns and the necessity for corrective action by the Administrator, any Federal department or agency, or Congress.

`(d) ADDITIONAL FUNCTIONS- The Office shall, on a continuing basis--

`(1) serve as a focal point for the receipt of complaints, criticisms, and suggestions concerning

the policies and activities of the Administration and any other department or agency of the Federal Government that affects small business concerns;

`(2) counsel small business concerns on the means by which to resolve questions and problems concerning the relationship between small business concerns and the Federal Government;

`(3) develop proposals for changes in the policies and activities of departments and agencies of the Federal Government that, in the determination of the Office, will better fulfill the purposes of this section and communicate such proposals to the appropriate departments and agencies of the Federal Government;

`(4) represent the views and interests of small business concerns before other departments and agencies of the Federal Government, the policies and activities of which may affect small business;

`(5) enlist the cooperation and assistance of public and private agencies, business concerns, and other organizations in disseminating information about the programs and services provided by the Federal Government that are of benefit to small business concerns, and information on the means by which small business concerns can participate in or make use of those programs and services; and

`(6) carry out the responsibilities of the Office under chapter 6 of title 5, United States Code.

`(e) STAFF AND POWERS-

`(1) STAFF-

`(A) IN GENERAL- The Chief Counsel may, without regard to the civil service laws and regulations, appoint and terminate such additional personnel as may be necessary to enable the Chief Counsel to perform the duties of the Chief Counsel under this section.

`(B) COMPENSATION- The Chief Counsel may fix the compensation of personnel appointed under this paragraph without regard to the provisions of chapter 51 and subchapter III of chapter 53 of title 5, United States Code, relating to classification of positions and General Schedule pay rates, but at rates not to exceed the minimum rate payable for a position at GS-15 of the General Schedule, except that not more than 14 employees of the Office at any one time may be compensated at a rate not to exceed the maximum rate payable for a position at GS-15 of the General Schedule.

`(2) POWERS- In carrying out this section, the Chief Counsel may--

`(A) procure temporary and intermittent services to the same extent as is authorized by section 3109 of title 5, United States Code;

`(B) consult with--

`(i) experts and authorities in the fields of small business investment, venture capital, investment and commercial banking, and other comparable financial institutions involved in the financing of business; and

`(ii) individuals with regulatory, legal, economic, or financial expertise, including members of the academic community, and individuals who generally represent the public interest;

`(C) use the services of the National Advisory Council established under section 8(b) and, in accordance with that section, appoint such other advisory boards or committees as the Chief Counsel determines to be reasonably necessary and appropriate to carry out this section; and

`(D) hold hearings and sit and act at such times and places as the Chief Counsel determines to be appropriate.

`(f) OVERHEAD AND ADMINISTRATIVE SUPPORT- The Administrator shall--

`(1) provide the Office with appropriate and adequate office space at central and field office locations of the Administration, together with such equipment, office supplies, and communications facilities and services as may be necessary for the operation of such offices; and

`(2) provide necessary maintenance services for those offices, equipment, and facilities.

`(g) INFORMATION FROM FEDERAL AGENCIES- The Chief Counsel may secure directly from any department or agency of the Federal Government such information as the Chief Counsel considers to be necessary to carry out this section. Upon request of the Chief Counsel, the head of such department or agency shall furnish such information to the Office.

`(h) REPORTS-

`(1) ANNUAL REPORTS- Not less than annually, the Chief Counsel shall submit to the President and to the Committees on Small Business of the Senate and the House of Representatives, the Committee on Governmental Affairs of the Senate, the Committee on Government Reform of the House of Representatives, and the Committees on the Judiciary of the Senate and the House of Representatives, a report on agency compliance with chapter 6 of title 5, United States Code.

`(2) ADDITIONAL REPORTS- In addition to the reports required under paragraph (1) of this subsection and subsection (c)(11), the Chief Counsel may prepare and publish such reports as the Chief Counsel determines to be appropriate.

`(3) PROHIBITION- No report under this section shall be submitted to the Office of Management and Budget or to any other department or agency of the Federal Government for any purpose before submission of the report to the President and to Congress.

`(i) AUTHORIZATION OF APPROPRIATIONS-

`(1) IN GENERAL- There are authorized to be appropriated to the Office to carry out this section such sums as may be necessary for each fiscal year.

`(2) AVAILABILITY- Any sums appropriated under paragraph (1) shall remain available, without fiscal year limitation, until expended.'.

(b) REPEAL- Title II of Public Law 94-305 (15 U.S.C. 634a et seq.) is repealed.

(c) INCUMBENT CHIEF COUNSEL FOR ADVOCACY- The individual serving as the Chief Counsel for Advocacy of the Small Business Administration on the date of enactment of this Act shall continue to serve in that position after such date in accordance with section 32 of the Small Business Act, as amended by this section.

TITLE V--CREDIT PROGRAMS

SEC. 501. SECTION 7(a) PROGRAM.

(a) LEVELS OF PARTICIPATION- Section 7(a)(2)(A) of the Small Business Act (15 U.S.C. 636(a)(2)(A)) is amended by striking clauses (i) and (ii) and inserting the following:

`(i) 75 percent of the balance of the financing outstanding at the time of disbursement of the loan, if the balance is equal to more than $150,000; or

`(ii) 85 percent of the balance of the financing outstanding at the time of disbursement of the loan, if the balance is not more than $150,000.'.

(b) LOAN AMOUNTS- Section 7(a)(3)(A) of the Small Business Act (15 U.S.C. 636(a)(3)(A)) is amended by striking `$750,000,' and inserting, `$1,000,000 (or if the gross loan amount would exceed $2,000,000),'.

(c) INTEREST ON DEFAULTED LOANS- Section 7(a)(4)(B) of the Small Business Act (15 U.S.C. 636(a)(4)(B)) is amended by adding at the end the following:

`(iii) APPLICABILITY- Clauses (i) and (ii) shall not apply to any loan made on or after October 1, 2000.'.

(d) PREPAYMENT OF LOANS- Section 7(a)(4) of the Small Business Act (15 U.S.C. 636(a)(4)) is amended--

(1) by striking `(4) INTEREST RATES AND FEES- ' and inserting `(4) INTEREST RATES AND PREPAYMENT CHARGES- '; and

(2) by adding at the end the following:

`(C) PREPAYMENT CHARGES-

`(i) IN GENERAL- A borrower who prepays any loan guaranteed under this subsection shall remit to the Administration a subsidy recoupment fee calculated in accordance with clause (ii), if--

`(I) the loan is for a term of not less than 15 years;

`(II) the prepayment is voluntary;

`(III) the amount of prepayment in any calendar year is more than 25 percent of the outstanding balance of the loan; and

`(IV) the prepayment is made within the first 3 years after disbursement of the loan proceeds.

`(ii) SUBSIDY RECOUPMENT FEE- The subsidy recoupment fee charged under clause (i) shall be--

`(I) 5 percent of the amount of prepayment, if the borrower prepays during the first year after disbursement;

`(II) 3 percent of the amount of prepayment, if the borrower prepays during the second year after disbursement; and

`(III) 1 percent of the amount of prepayment, if the borrower prepays during the third year after disbursement.'.

(e) GUARANTEE FEES- Section 7(a)(18) of the Small Business Act (15 U.S.C. 636(a)(18)) is amended to read as follows:

`(18) GUARANTEE FEES-

`(A) IN GENERAL- With respect to each loan guaranteed under this subsection (other than a loan that is repayable in 1 year or less), the Administration shall collect a guarantee fee, which shall be payable by the participating lender, and may be charged to the borrower, as follows:

`(i) A guarantee fee equal to 2 percent of the deferred participation share of a total loan amount that is not more than $150,000.

`(ii) A guarantee fee equal to 3 percent of the deferred participation share of a total loan amount that is more than $150,000, but less than $700,000.

`(iii) A guarantee fee equal to 3.5 percent of the deferred participation share of a total loan amount that is more than $700,000.

`(B) RETENTION OF CERTAIN FEES- Lenders participating in the programs established under this subsection may retain not more than 25 percent of a fee collected under subparagraph (A)(i).'.

(f) LEASE TERMS- Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is amended by adding at the end the following:

`(28) LEASING- In addition to such other lease arrangements as may be authorized by the Administration, a borrower may permanently lease to 1 or more tenants not more than 20 percent of any property constructed with the proceeds of a loan guaranteed under this subsection, if the borrower permanently occupies and uses not less than 60 percent of the total business space in the property.'.

(g) BACKGROUND CHECKS- Section 7(a)(1)(B) of the Small Business Act (15 U.S.C.

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