114 STAT. 2763A-682 PUBLIC LAW 106-554—APPENDIX I SEC. 204. 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 loans made on or after October 1, 2000.". SEC. 205. PREPAYMENT OF LOANS. Section 7(a)(4) of the Small Business Act (15 U.S.C. 636(a)(4)) is further 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 amoiuit of prepayment, if the borrower prepays during the second year after disbursement; and "(III) 1 percent of the amount of prepa5anent, if the borrower prepays during the third year after disbursement.". SEC 206. 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 repay- able 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 not more 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.
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