111TH CONGRESS 

1ST SESSION H. R. 3854 

AN ACT 

To amend the Small Business Act and the Small Business 

Investment Act of 1958 to improve programs providing 

access to capital under such Acts, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

2 (a) SHORT TITLE.—This Act may be cited as the 

3 ‘‘Small Business Financing and Investment Act of 2009’’. 

4 (b) TABLE OF CONTENTS.—The table of contents for 

5 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—SMALL BUSINESS LENDING ENHANCEMENTS 

Sec. 101. Small lender outreach program. 

Sec. 102. Rural lending outreach program. 

Sec. 103. Community Express Program made permanent. 

Sec. 104. Increased veteran participation program made permanent. 

Sec. 105. Leasing policy. 

Sec. 106. National lender training program. 

Sec. 107. Applications for repurchase of loans. 

Sec. 108. Alternative size standard. 

Sec. 109. Pilot program authority. 

Sec. 110. Loans to cooperatives. 

Sec. 111. Capital backstop program. 

Sec. 112. Loans to finance goodwill. 

Sec. 113. Appellate process and ombudsman. 

Sec. 114. Extension of recovery and relief loan benefits. 

Sec. 115. Reduced documentation for business stabilization loans. 

Sec. 116. Expanded eligibility for business stabilization loans. 

Sec. 117. Increased amount of business stabilization loans. 

Sec. 118. Extension of business stabilization loans. 

Sec. 119. Study and report on business stabilization loans. 

Sec. 120. Delayed repayment for small business concerns in areas with high unemployment. 

Sec. 121. SBA secondary market lending authority made permanent. 

Sec. 122. SBA secondary market lending authority expanded. 

Sec. 123. Increased loan limits. 

Sec. 124. Real estate appraisals. 

Sec. 125. Additional support for Express Loan Program. 

Sec. 126. Loans used to purchase unoccupied manufacturing centers or equipment. 

Sec. 127. 100 percent guarantee for small business concerns owned and controlled by veterans. 

Sec. 128. Deferred repayment for certain small business concerns. 

Sec. 129. Authorization of appropriations. 

TITLE II—CDC ECONOMIC DEVELOPMENT LOAN PROGRAM 

Subtitle A—General Provisions 

Sec. 201. Program levels. 

Sec. 202. Definitions. 

Subtitle B—Certified Development Companies 
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Sec. 211. Certified development companies. 

Sec. 212. Certified development company; operational requirements. 

Sec. 213. Accredited lenders program. 

Sec. 214. Premier certified lender program. 

Sec. 215. Multi-State operations. 

Sec. 216. Guaranty of debentures. 

Sec. 217. Economic development through debentures. 

Sec. 218. Project funding requirements. 

Sec. 219. Private debenture sales and pooling of debentures. 

Sec. 220. Foreclosure and liquidation of loans. 

Sec. 221. Reports and regulations. 

Sec. 222. Program name. 

Subtitle C—Miscellaneous 

Sec. 231. Report on standard operating procedures. 

Sec. 232. Alternative size standard. 

TITLE III—MICROLENDING EXPANSION 

Sec. 301. Microloan credit building initiative. 

Sec. 302. Flexible credit terms. 

Sec. 303. Increased program participation. 

Sec. 304. Increased limit on intermediary borrowing. 

Sec. 305. Expanded borrower education assistance. 

Sec. 306. Young Entrepreneurs program. 

Sec. 307. Interest rates and loan size. 

Sec. 308. Reporting requirement. 

Sec. 309. Surplus interest rate subsidy for businesses. 

Sec. 310. Authorization of appropriations. 

TITLE IV—SMALL BUSINESS INVESTMENT COMPANY 

MODERNIZATION 

Sec. 401. Increased investment from States. 

Sec. 402. Expedited licensing for experienced applicants. 

Sec. 403. Revised leverage limitations for successful SBICs. 

Sec. 404. Consistency for cost control. 

Sec. 405. Investment in veteran-owned small businesses. 

Sec. 406. Tangible net worth. 

Sec. 407. Development of agency record. 

Sec. 408. Program levels. 

TITLE V—INVESTMENT IN SMALL MANUFACTURERS AND 

RENEWABLE ENERGY SMALL BUSINESSES 

Subtitle A—Enhanced New Markets Venture Capital Program 

Sec. 501. Expansion of New Markets Venture Capital Program. 

Sec. 502. Improved nationwide distribution. 

Sec. 503. Increased investment in small business concerns engaged primarily in 

manufacturing. 

Sec. 504. Expanded uses for operational assistance in manufacturing. 

Sec. 505. Updating definition of low-income geographic area. 

Sec. 506. Expanding operational assistance to conditionally approved companies. 

Sec. 507. Limitation on time for final approval. 
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Sec. 508. Streamlined application for New Markets Venture Capital Program. 

Sec. 509. Elimination of matching requirement. 

Sec. 510. Simplified formula for operational assistance grants. 

Sec. 511. Financing with respect to veterans. 

Sec. 512. Authorization of appropriations and enhanced allocation for small 

manufacturing. 

Subtitle B—Expanded Investment in Small Business Renewable Energy 

Sec. 521. Expanded investment in renewable energy. 

Sec. 522. Renewable Energy Capital Investment Program made permanent. 

Sec. 523. Expanded eligibility for small businesses. 

Sec. 524. Expanded uses for operational assistance in manufacturing and small 

businesses. 

Sec. 525. Expansion of Renewable Energy Capital Investment Program. 

Sec. 526. Simplified fee structure to expedite implementation. 

Sec. 527. Increased operational assistance grants. 

Sec. 528. Authorizations of appropriations. 

TITLE VI—SMALL BUSINESS HEALTH INFORMATION 

TECHNOLOGY FINANCING PROGRAM 

Sec. 601. Small business health information technology financing program. 

TITLE VII—SMALL BUSINESS EARLY-STAGE INVESTMENT 

PROGRAM 

Sec. 701. Small business early-stage investment program. 

Sec. 702. Prohibitions on earmarks. 

TITLE VIII—SBA DISASTER PROGRAM REFORM 

Sec. 801. Revised collateral requirements. 

Sec. 802. Increased limits. 

Sec. 803. Revised repayment terms. 

Sec. 804. Revised disbursement process. 

Sec. 805. Grant program. 

Sec. 806. Regional disaster working groups. 

Sec. 807. Outreach grants for loan applicant assistance. 

Sec. 808. Homeowners impacted by toxic drywall. 

Sec. 809. Authorization of appropriations. 

TITLE IX—REGULATIONS 

Sec. 901. Regulations. 

TITLE X—TEMPORARY EMPLOYEE SERVICES FRANCHISES 

Sec. 1001. Temporary employee services franchises. 

TITLE XI—STUDY ON PRIVATE SECTOR LENDING 

Sec. 1101. Study on private sector lending. 

TITLE XII—STUDY ON INCREASES IN CERTAIN CAPS 

Sec. 1201. Study on increases in certain caps. 

TITLE XIII—RURAL OUTREACH 
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Sec. 1301. Rural outreach. 

TITLE XIV—STUDY RELATING TO MEDICAL TECHNOLOGY 

Sec. 1401. Study relating to medical technology. 

TITLE XV—STUDY ON ADDITIONAL CREDIT RISK FACTORS 

Sec. 1501. Study on additional credit risk factors. 

1 TITLE I—SMALL BUSINESS 

2 LENDING ENHANCEMENTS 

3 SEC. 101. SMALL LENDER OUTREACH PROGRAM. 

4 Section 7(a) of the Small Business Act (15 U.S.C. 

5 636(a)) is amended by adding at the end the following: 

6 ‘‘(34) SMALL LENDER OUTREACH PROGRAM.— 

7 The Administrator shall establish and carry out a 

8 program to provide support to regional, district, and 

9 branch offices of the Administration to assist small 

10 lenders, who do not participate in the Preferred 

11 Lenders Program, to participate in the programs 

12 under this subsection.’’. 

13 SEC. 102. RURAL LENDING OUTREACH PROGRAM. 

14 Section 7(a) of the Small Business Act (15 U.S.C. 

15 636(a)), as amended by this Act, is further amended by 

16 adding at the end the following: 

17 ‘‘(35) RURAL LENDING OUTREACH PROGRAM.— 

18 ‘‘(A) IN GENERAL.—The Administrator 

19 shall establish and carry out a rural lending 

20 outreach program (hereinafter referred to in 

21 this paragraph as the ‘program’) to provide 
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1 loans under this subsection in accordance with 

2 this paragraph. 

3 ‘‘(B) MAXIMUM PARTICIPATION.—A loan 

4 under the program shall include the maximum 

5 participation levels by the Administrator per6 mitted for loans made under this subsection. 

7 ‘‘(C) MAXIMUM LOAN AMOUNT.—The max8 imum amount of a loan under the program 

9 shall be $250,000. 

10 ‘‘(D) USE OF RURAL LENDERS.—The pro11 gram shall be carried out through lenders lo12 cated in a rural area (as such term is defined 

13 under subsection (m)(11)(C)) or, if a small 

14 business concern located in a rural area does 

15 not have a lender located within 30 miles of the 

16 principal place of business of such concern, 

17 through any lender chosen by such concern that 

18 provides loans under this subsection. 

19 ‘‘(E) TIME FOR APPROVAL.—The Adminis20 trator shall approve or disapprove a loan under 

21 the program within 36 hours. 

22 ‘‘(F) DOCUMENTATION.—The program 

23 shall use abbreviated application and docu24 mentation requirements. 
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1 ‘‘(G) CREDIT STANDARDS.—Minimum 

2 credit standards, as the Administrator considers 

3 necessary to limit the rate of default on loans 

4 made under the program, shall apply.’’. 

5 SEC. 103. COMMUNITY EXPRESS PROGRAM MADE PERMA6 NENT. 

7 Section 7(a) of the Small Business Act (15 U.S.C. 

8 636(a)), as amended by this Act, is further amended by 

9 adding at the end the following: 

10 ‘‘(36) COMMUNITY EXPRESS PROGRAM.— 

11 ‘‘(A) IN GENERAL.—The Administrator 

12 shall carry out a Community Express Program 

13 to provide loans under this subsection in ac14 cordance with this paragraph. 

15 ‘‘(B) REQUIREMENTS.—For a loan made 

16 under the Community Express Program, the 

17 following shall apply: 

18 ‘‘(i) The loan shall be in an amount 

19 not exceeding $250,000. 

20 ‘‘(ii) The loan shall be made to a 

21 small business concern the majority owner22 ship interest of which is directly held by in23 dividuals the Administrator determines 

24 are, without regard to the geographic loca25 tion of such individuals, women, members 
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1 of qualified Indian tribes, socially or eco2 nomically disadvantaged individuals, vet3 erans, or members of the reserve compo4 nents of the Armed Forces. 

5 ‘‘(iii) The loan shall comply with the 

6 collateral policy of the Administration. 

7 ‘‘(iv) The loan shall include terms re8 quiring the lender to provide, at the ex9 pense of the lender, technical assistance to 

10 the borrower through the lender or a third11 party provider. 

12 ‘‘(v) The Administrator shall approve 

13 or disapprove the loan within 36 hours.’’. 

14 SEC. 104. INCREASED VETERAN PARTICIPATION PROGRAM 

15 MADE PERMANENT. 

16 Section 7(a) of the Small Business Act (15 U.S.C. 

17 636(a)), as amended by this Act, is further amended— 

18 (1) by redesignating the second paragraph (32), 

19 as added by section 208 of the Military Reservist 

20 and Veteran Small Business Reauthorization and 

21 Opportunity Act of 2008 (Public Law 110–186; 122 

22 Stat. 631), as paragraph (33); and 

23 (2) in paragraph (33), as so redesignated by 

24 paragraph (1) of this section— 
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1 (A) by striking ‘‘pilot program’’ each place 

2 it appears and inserting ‘‘program’’; 

3 (B) by striking subparagraphs (C) and 

4 (F); and 

5 (C) by redesignating subparagraphs (D) 

6 and (E) as subparagraphs (C) and (D), respec7 tively. 

8 SEC. 105. LEASING POLICY. 

9 Section 7(a) of the Small Business Act (15 U.S.C. 

10 636(a)), as amended by this Act, is further amended by 

11 striking paragraph (28) and inserting the following: 

12 ‘‘(28) LEASING.—If a loan under this sub13 section is used to acquire or construct a facility, the 

14 assisted small business concern— 

15 ‘‘(A) shall permanently occupy and use not 

16 less than 50 percent of the space in such facil17 ity; and 

18 ‘‘(B) may, on a temporary or permanent 

19 basis, lease to others not more than 50 percent 

20 of the space in such facility.’’. 

21 SEC. 106. NATIONAL LENDER TRAINING PROGRAM. 

22 (a) IN GENERAL.—Section 7(a) of the Small Busi23 ness Act (15 U.S.C. 636(a)), as amended by this Act, is 

24 further amended by adding at the end the following: 
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1 ‘‘(37) NATIONAL LENDER TRAINING PRO2 GRAM.— 

3 ‘‘(A) IN GENERAL.—The Administrator 

4 shall establish and carry out, through the re5 gional offices of the Administration, a lender 

6 training program for new and existing lenders 

7 under this subsection with respect to the lend8 ing systems, policies, and procedures of the Ad9 ministration. 

10 ‘‘(B) FEES.—The Administrator shall 

11 charge a fee for the program established under 

12 subparagraph (A) to reduce the cost of such 

13 program to zero. 

14 ‘‘(C) LIMITATION.—The program estab15 lished under subparagraph (A) may not be car16 ried out by contract with a nongovernmental 

17 entity.’’. 

18 (b) PARTICIPATION.—An entity may not be permitted 

19 to participate in any program under the Small Business 

20 Act (15 U.S.C. 631 et seq.) or the Small Business Invest21 ment Act of 1958 (15 U.S.C. 661 et seq.) that is estab22 lished or amended under this Act, as a lending or invest23 ment entity or as an agent of the Small Business Adminis24 tration, unless such entity satisfies at least one of the fol25 lowing: 
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1 (1) The entity has as the primary mission of 

2 the entity the financing or development of small 

3 business concerns. 

4 (2) The entity is primarily engaged in the busi5 ness of banking, investing, or entrepreneurial devel6 opment and does not engage in activities which are 

7 not incidental to the business of banking, investing, 

8 or entrepreneurial development. 

9 SEC. 107. APPLICATIONS FOR REPURCHASE OF LOANS. 

10 Section 7(a) of the Small Business Act (15 U.S.C. 

11 636(a)), as amended by this Act, is further amended by 

12 adding at the end the following: 

13 ‘‘(38) APPLICATIONS FOR REPURCHASE OF

14 LOANS.— 

15 ‘‘(A) IN GENERAL.—Not later than 45 

16 days after the date of the receipt of a claim 

17 from a lender for proper payment of the guar18 anteed portion of a loan under this subsection 

19 due to default, the Administrator shall make a 

20 final determination with respect to the approval 

21 or denial of such claim. 

22 ‘‘(B) LATE DETERMINATIONS.—If the Ad23 ministrator does not make a final determination 

24 under subparagraph (A) in the time period 
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1 specified in such subparagraph, the claim shall 

2 be approved and paid promptly. 

3 ‘‘(C) If the lender demonstrates, with re4 spect to a claim for payment described in sub5 paragraph (A), that it followed the applicable 

6 requirements of the National Lender Training 

7 Program as established under paragraph (37) 

8 of this section, the Administrator shall pay the 

9 claim unless the Administrator has clear and 

10 convincing evidence demonstrating that the 

11 lender failed to comply with regulatory require12 ments established by the Administrator.’’. 

13 SEC. 108. ALTERNATIVE SIZE STANDARD. 

14 (a) IN GENERAL.—Section 3(a) of the Small Busi15 ness Act (15 U.S.C. 632(a)) is amended by adding at the 

16 end the following: 

17 ‘‘(5) In addition to any other size standard 

18 under this subsection, the Administrator shall estab19 lish and permit a lender making a loan under section 

20 7(a) to use an alternative size standard. The alter21 native size standard shall be based on factors includ22 ing the maximum tangible net worth and average 

23 net income of a business concern.’’. 

24 (b) APPLICABILITY.—Until the Administrator estab25 lishes under section 3(a)(5) of the Small Business Act, 
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1 as added by subsection (a) of this section, an alternative 

2 size standard for use by a lender making a loan under 

3 section 7(a) of such Act, the alternative size standard in 

4 section 121.301(b) of title 13, Code of Federal Regula5 tions, shall apply in such a case. 

6 SEC. 109. PILOT PROGRAM AUTHORITY. 

7 Section 7(a) of the Small Business Act (15 U.S.C. 

8 636(a)), as amended by this Act, is further amended by 

9 striking paragraph (25) and inserting the following: 

10 ‘‘(25) LIMITATION ON CONDUCTING PILOT

11 PROJECTS.— 

12 ‘‘(A) LIMITATION ON NUMBER.—Not more 

13 than 10 percent of the total number of loans 

14 guaranteed in any fiscal year under this sub15 section may be awarded as part of a pilot pro16 gram. 

17 ‘‘(B) DOLLAR LIMITATIONS.— 

18 ‘‘(i) IN GENERAL.—With respect to 

19 any pilot program under this subsection es20 tablished on or after the date of the enact21 ment of the Small Business Financing and 

22 Investment Act of 2009, no loan shall be 

23 made under such program if such loan 

24 would result in the total amount of loans 

25 made during a fiscal year under all such 
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1 programs to be in excess of 5 percent of 

2 the total amount of loans guaranteed in 

3 such fiscal year under this subsection. 

4 ‘‘(ii) CERTAIN PRE-EXISTING PRO5 GRAMS.—With respect to any pilot pro6 gram under this subsection established be7 fore the date of the enactment of the Small 

8 Business Financing and Investment Act of 

9 2009, no loan shall be made under such 

10 program if such loan would result in the 

11 total amount of loans made during a fiscal 

12 year under all such programs to be in ex13 cess of 10 percent of the total amount of 

14 loans guaranteed in such fiscal year under 

15 this subsection. 

16 ‘‘(C) EXPIRATION.— 

17 ‘‘(i) IN GENERAL.—Except as pro18 vided in clause (iii), the duration of any 

19 pilot program under this subsection may 

20 not exceed 3 years. 

21 ‘‘(ii) DESIGNATION AS NEW PRO22 GRAM.—For purposes of this subpara23 graph, a pilot program shall not be treated 

24 as a new pilot program solely on the basis 
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1 of a modification or change in the pilot 

2 program, including the change of its name. 

3 ‘‘(iii) EXISTING PROGRAMS.—With re4 spect to any pilot program in existence on 

5 the date of the enactment of the Small 

6 Business Financing and Investment Act of 

7 2009, such program may continue in effect 

8 for a period not exceeding 3 years after 

9 such date without regard to the duration 

10 of such program before such date. 

11 ‘‘(D) REGULATIONS.— 

12 ‘‘(i) IN GENERAL.—With respect to 

13 each pilot program under this subsection, 

14 including each pilot program in existence 

15 on the date of the enactment of the Small 

16 Business Financing and Investment Act of 

17 2009, the Administrator shall— 

18 ‘‘(I) issue regulations for such 

19 program after providing notice in the 

20 Federal Register and an opportunity 

21 for comment; and 

22 ‘‘(II) ensure that such regula23 tions are published in the Code of 

24 Federal Regulations. 
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1 ‘‘(ii) PILOT PROGRAMS ESTABLISHED

2 AFTER DATE OF ENACTMENT.—With re3 spect to any pilot program established 

4 after the date of the enactment of the 

5 Small Business Financing and Investment 

6 Act of 2009, such program shall not take 

7 effect until the requirements under this 

8 subparagraph are satisfied. 

9 ‘‘(E) REPEAL OF AUTHORITY TO WAIVE

10 CERTAIN RULES.— 

11 ‘‘(i) IN GENERAL.—Notwithstanding 

12 section 120.3 of title 13, Code of Federal 

13 Regulations, the Administrator may not 

14 from time to time suspend, modify, or 

15 waive rules for a limited period of time to 

16 test new programs or ideas with respect to 

17 this subsection, unless such suspension, 

18 modification, or waiver is explicitly author19 ized by Act of Congress. 

20 ‘‘(ii) EXISTING PILOT PROGRAMS.— 

21 Nothing under clause (i) may be construed 

22 to affect a pilot program in existence on 

23 the date of the enactment of the Small 

24 Business Financing and Investment Act of 

25 2009. 
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1 ‘‘(F) PILOT PROGRAM.—For purposes of 

2 this paragraph, the term ‘pilot program’ means 

3 any lending program initiative, project, innova4 tion, or other activity not specifically authorized 

5 by Act of Congress.’’. 

6 SEC. 110. LOANS TO COOPERATIVES. 

7 Section 7(a) of the Small Business Act (15 U.S.C. 

8 636(a)), as amended by this Act, is further amended by 

9 adding at the end the following: 

10 ‘‘(39) COOPERATIVES.—The Administration 

11 may provide loans under this subsection to any coop12 erative that— 

13 ‘‘(A) is not organized as a tax-exempt enti14 ty; 

15 ‘‘(B) is engaged in a legal business activ16 ity; 

17 ‘‘(C) obtains financial benefits for the co18 operative and for the members of such coopera19 tive; and 

20 ‘‘(D) is eligible under applicable size stand21 ards of the Administration, including that any 

22 business entity that is a member of such coop23 erative is eligible under applicable size stand24 ards of the Administration.’’. 
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1 SEC. 111. CAPITAL BACKSTOP PROGRAM. 

2 Section 7(a) of the Small Business Act (15 U.S.C. 

3 636(a)), as amended by this Act, is further amended by 

4 adding at the end the following: 

5 ‘‘(40) CAPITAL BACKSTOP PROGRAM.— 

6 ‘‘(A) IN GENERAL.—The Administrator 

7 shall establish a process under which a small 

8 business concern may submit an application to 

9 the Administrator for the purpose of securing a 

10 loan under this subsection. With respect to such 

11 application, the Administrator shall collect all 

12 information necessary to determine the credit13 worthiness and repayment ability of an appli14 cant and shall determine if such application 

15 meets the eligibility and credit standards that a 

16 lender would be required to apply to approve a 

17 loan under this subsection. 

18 ‘‘(B) PARTICIPATION OF LENDERS.— 

19 ‘‘(i) IN GENERAL.—The Administrator 

20 shall establish a process under which the 

21 Administrator makes available to lenders 

22 each loan application submitted and deter23 mined to meet basic eligibility and credit 

24 standards under subparagraph (A) for the 

25 purpose of such lenders originating, under-
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1 writing, closing, and servicing the loan for 

2 which the applicant applied. 

3 ‘‘(ii) ELIGIBILITY.—Lenders are eligi4 ble to receive a loan application described 

5 in clause (i) if they participate in the pro6 grams established under this subsection. 

7 ‘‘(iii) LOCAL LENDERS.—The Admin8 istrator shall first make available a loan 

9 application described in clause (i) to lend10 ers within 100 miles of the principal office 

11 of the loan applicant. 

12 ‘‘(iv) PREFERRED LENDERS.—If a 

13 lender described in clause (iii) does not 

14 agree to originate, underwrite, close, and 

15 service the loan applied for within 5 busi16 ness days of receiving a loan application 

17 described in clause (i), the Administrator 

18 shall subsequently make available such 

19 loan application to lenders in the Preferred 

20 Lenders Program under paragraph 

21 (2)(C)(ii) of this subsection. 

22 ‘‘(v) AUTHORITY OF ADMINISTRATION

23 TO LEND.—If a lender described in clauses 

24 (iii) or (iv) does not agree to originate, un25 derwrite, close, and service the loan applied 
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1 for within 10 business days of receiving a 

2 loan application described in clause (i), the 

3 Administrator shall originate, underwrite, 

4 close, and service such loan. 

5 ‘‘(C) ASSET SALES.—The Administrator 

6 shall offer to sell loans made by the Adminis7 trator under this paragraph. Such sales shall be 

8 made through the semi-annual public solicita9 tion (in the Federal Register and in other 

10 media) of offers to purchase. The Administrator 

11 may contract with vendors for due diligence, 

12 asset valuation, and other services related to 

13 such sales. The Administrator may not sell any 

14 loan under this subparagraph for less than 90 

15 percent of the net present value of the loan, as 

16 determined and certified by a qualified third 

17 party. 

18 ‘‘(D) LOANS NOT SOLD.—The Adminis19 trator shall maintain and service loans made by 

20 the Administrator under this paragraph that 

21 are not sold through the asset sales under this 

22 paragraph. 

23 ‘‘(E) EFFECTIVE DATES.—This paragraph 

24 shall have effect on each date during the period 

25 beginning on the date of enactment of this 
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1 paragraph and ending on September 30, 2011, 

2 and on any other date after such period if— 

3 ‘‘(i) such date occurs during a period 

4 that— 

5 ‘‘(I) begins on the date the Bu6 reau of Economic Analysis, or any 

7 successor organization, makes a deter8 mination that the gross domestic 

9 product of the United States has de10 creased for three consecutive quarters; 

11 and 

12 ‘‘(II) ends on the date the Bu13 reau of Economic Analysis, or any 

14 successor organization, makes a deter15 mination that the gross domestic 

16 product of the United States has in17 creased for two consecutive quarters; 

18 and 

19 ‘‘(ii) the number of loans provided 

20 under this subsection prior to such date in 

21 the fiscal year including such date is at 

22 least 30 percent less than the number of 

23 such loans provided prior to the same point 

24 in the previous fiscal year. 
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1 ‘‘(F) IMPLEMENTATION.—The Adminis2 trator shall establish a group of at least 250 in3 dividuals available to carry out activities under 

4 this paragraph on any date on which this para5 graph has effect under subparagraph (E). The 

6 Administrator shall provide to such group the 

7 training necessary to carry out activities under 

8 this paragraph. The Administrator shall ensure 

9 that each individual in such group with loan ap10 plication evaluation and underwriting respon11 sibilities has at least 2 years experience with re12 spect to such responsibilities. 

13 ‘‘(G) APPLICATION OF OTHER LAW.— 

14 Nothing in this paragraph shall be construed to 

15 exempt any activity of the Administrator under 

16 this paragraph from the Federal Credit Reform 

17 Act of 1990 (2 U.S.C. 661 et seq.). 

18 ‘‘(H) AUTHORIZATION OF APPROPRIA19 TIONS.— 

20 ‘‘(i) PROGRAM LEVELS.—The Admin21 istrator is authorized to make loans under 

22 this paragraph in an amount that is equal 

23 to half the amount authorized for loans 

24 under this subsection other than loans 

25 under this paragraph. 
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1 ‘‘(ii) AUTHORIZATION OF APPROPRIA2 TIONS.—In addition to amounts made 

3 available to carry out this subsection, there 

4 are authorized to be appropriated such 

5 sums as may be necessary to carry out this 

6 paragraph.’’. 

7 SEC. 112. LOANS TO FINANCE GOODWILL. 

8 Section 7(a) of the Small Business Act (15 U.S.C. 

9 636(a)), as amended by this Act, is further amended by 

10 adding at the end the following: 

11 ‘‘(41) GOODWILL.—The Administrator may not 

12 apply an application, processing, or approval stand13 ard to a loan for the purpose of financing goodwill 

14 under this subsection, unless such standard applies 

15 to all loans under this subsection.’’. 

16 SEC. 113. APPELLATE PROCESS AND OMBUDSMAN. 

17 The Small Business Act (15 U.S.C. 631 et seq.) is 

18 amended— 

19 (1) by redesignating section 44 as section 45; 

20 and 

21 (2) by inserting after section 43 the following: 

22 ‘‘SEC. 44. APPELLATE PROCESS AND OMBUDSMAN. 

23 ‘‘(a) APPELLATE PROCESS.— 

24 ‘‘(1) IN GENERAL.—Not later than 270 days 

25 after the date of the enactment of the Small Busi-
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1 ness Financing and Investment Act of 2009, the Ad2 ministrator shall establish an independent appellate 

3 process within the Administration. The process shall 

4 be available to review material determinations made 

5 by the Administration that affect a lender or invest6 ment company that participates or is applying to 

7 participate in a program administered by the Ad8 ministration. 

9 ‘‘(2) REVIEW PROCESS.—In establishing the 

10 independent appellate process under paragraph (1), 

11 the Administrator shall ensure that— 

12 ‘‘(A) any appeal of a material determina13 tion by the Administration is heard and result14 ing recommendations are provided expedi15 tiously; and 

16 ‘‘(B) appropriate safeguards exist for pro17 tecting the appellant from retaliation by Admin18 istration employees. 

19 ‘‘(3) COMMENT PERIOD.—Not later than 180 

20 days after the date of the enactment of the Small 

21 Business Financing and Investment Act of 2009, the 

22 Administrator shall provide an opportunity for no23 tice and comment on proposed guidelines for the es24 tablishment of an independent appellate process 

25 under this section. 
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1 ‘‘(b) AGENCY OMBUDSMAN.— 

2 ‘‘(1) ESTABLISHMENT.—Not later than 180 

3 days after the date of the enactment of the Small 

4 Business Financing and Investment Act of 2009, the 

5 Administrator shall appoint an ombudsman. 

6 ‘‘(2) DUTIES.—The ombudsman appointed in 

7 accordance with paragraph (1) shall— 

8 ‘‘(A) act as a liaison between the Adminis9 tration and any lender or investment company 

10 that participates or is applying to participate in 

11 a program administered by the Administration 

12 with respect to a problem such entity may have 

13 in dealing with the Administration resulting 

14 from a material determination made by the Ad15 ministration; and 

16 ‘‘(B) ensure that safeguards exist to en17 courage complainants to come forward and pre18 serve confidentiality. 

19 ‘‘(c) OTHER AUTHORITY.—An individual carrying 

20 out the independent appellate process established under 

21 subsection (a) or the position of ombudsman established 

22 under subsection (b) is authorized to— 

23 ‘‘(1) examine records and documents relating to 

24 a matter under review pursuant to such subsections; 

25 and 
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1 ‘‘(2) initiate the review of a matter under such 

2 subsections if such individual believes that Adminis3 tration procedures have not been followed as in4 tended with respect to such matter, without regard 

5 to whether an appeal or complaint has been made. 

6 ‘‘(d) LIMITATIONS.— 

7 ‘‘(1) IN GENERAL.—An individual carrying out 

8 the independent appellate process established under 

9 subsection (a) or the position of ombudsman estab10 lished under subsection (b) may not, as a result of 

11 the authority provided under this section— 

12 ‘‘(A) make, change, or set aside a law, pol13 icy, or administrative decision; 

14 ‘‘(B) make binding decisions or determine 

15 rights; 

16 ‘‘(C) directly compel an entity to imple17 ment the recommendations of such individual; 

18 or 

19 ‘‘(D) accept jurisdiction over an issue that 

20 is pending in a legal forum. 

21 ‘‘(2) RULE OF CONSTRUCTION.—Activities car22 ried out under this section may not be construed— 

23 ‘‘(A) as a formal investigation, formal 

24 hearing, or binding decision; 
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1 ‘‘(B) as limiting any remedy or right of ap2 peal; 

3 ‘‘(C) as affecting any procedure concerning 

4 grievances, appeals, or administrative matters 

5 under law; or 

6 ‘‘(D) as a substitute for an administrative 

7 or judicial proceeding. 

8 ‘‘(e) REPORT.—Not later than one year after the date 

9 of the enactment of the Small Business Financing and In10 vestment Act of 2009 and annually thereafter, the Admin11 istrator shall submit to the Committee on Small Business 

12 of the House of Representatives and the Committee on 

13 Small Business and Entrepreneurship of the Senate a re14 port describing and providing the status of appeals made 

15 under subsection (a) and complaints made under sub16 section (b). 

17 ‘‘(f) DEFINITIONS.—In this section, the following 

18 apply: 

19 ‘‘(1) MATERIAL DETERMINATION.—The term 

20 ‘material determination’ includes determinations re21 lating to— 

22 ‘‘(A) applications for payment relating to a 

23 loan guarantee; and 

24 ‘‘(B) the ability of an entity to participate 

25 in an Administration loan or investing program. 
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1 ‘‘(2) INDEPENDENT APPELLATE PROCESS.— 

2 The term ‘independent appellate process’ means a 

3 review by an Administration official who does not di4 rectly or indirectly report to the Administration offi5 cial who made the material determination under re6 view.’’. 

7 SEC. 114. EXTENSION OF RECOVERY AND RELIEF LOAN 

8 BENEFITS. 

9 (a) FEE REDUCTIONS.—Section 501 of title V of di10 vision A of the American Recovery and Reinvestment Act 

11 of 2009 (Public Law 111–5) is amended— 

12 (1) in subsection (a) by striking ‘‘September 

13 30, 2010’’ and inserting ‘‘September 30, 2011’’; and 

14 (2) in subsection (c) by repealing paragraph 

15 (2). 

16 (b) ECONOMIC STIMULUS LENDING PROGRAM FOR

17 SMALL BUSINESSES.—Section 502(f) of title V of division 

18 A of the American Recovery and Reinvestment Act of 

19 2009 (Public Law 111–5) is amended by striking ‘‘the 

20 date 12 months after the date of enactment of this Act’’ 

21 and inserting ‘‘September 30, 2011’’. 

22 SEC. 115. REDUCED DOCUMENTATION FOR BUSINESS STA23 BILIZATION LOANS. 

24 Section 506(a) of title V of division A of the Amer25 ican Recovery and Reinvestment Act of 2009 (Public Law 
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1 111–5) is amended by adding at the end the following: 

2 ‘‘The Administrator shall give priority under such pro3 gram to small business concerns in a city with an unem4 ployment rate that is at least 125 percent of the unem5 ployment rate of the State that includes such city. In car6 rying out such program, the Administrator shall establish 

7 and utilize a one-page application for loans under this sec8 tion and shall authorize lenders to utilize the same docu9 mentation and procedural requirements for loans under 

10 this section as such lenders utilize for other loans of a 

11 similar size and type.’’. 

12 SEC. 116. EXPANDED ELIGIBILITY FOR BUSINESS STA13 BILIZATION LOANS. 

14 Section 506(c) of title V of division A of the American 

15 Recovery and Reinvestment Act of 2009 (Public Law 111– 

16 5) is amended by striking ‘‘but shall not include’’ and all 

17 that follows through ‘‘enactment of this Act’’. 

18 SEC. 117. INCREASED AMOUNT OF BUSINESS STABILIZA19 TION LOANS. 

20 Section 506(d) of title V of division A of the Amer21 ican Recovery and Reinvestment Act of 2009 (Public Law 

22 111–5) is amended by striking ‘‘$35,000’’ and inserting 

23 ‘‘$50,000 (except as provided under subsection (l))’’. 
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1 SEC. 118. EXTENSION OF BUSINESS STABILIZATION LOANS. 

2 Section 506(j) of title V of division A of the American 

3 Recovery and Reinvestment Act of 2009 (Public Law 111– 

4 5) is amended by striking ‘‘September 30, 2010’’ and in5 serting ‘‘September 30, 2011’’. 

6 SEC. 119. STUDY AND REPORT ON BUSINESS STABILIZA7 TION LOANS. 

8 (a) STUDY.—The Administrator of the Small Busi9 ness Administration shall conduct a study on the business 

10 stabilization program established under section 506 of 

11 title V of division A of the American Recovery and Rein12 vestment Act of 2009 (Public Law 111–5), including— 

13 (1) how the program has been implemented; 

14 (2) the amount of time involved in processing 

15 applications; 

16 (3) the volume of applications received and the 

17 effect on application processing; 

18 (4) impediments to participation in the program 

19 by small business concerns and lenders; 

20 (5) courses of action that might expedite action 

21 by the Administrator on applications; 

22 (6) courses of action that might expand partici23 pation by such concerns and lenders; and 

24 (7) a cost benefit analysis with regard to 

25 changes to the program, including— 

26 (A) increases in loan limits; 
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1 (B) expanding eligibility requirements; 

2 (C) changes to interest rates to lenders; 

3 and 

4 (D) any other change the Administrator 

5 determines appropriate. 

6 (b) REPORT.—Not later than 90 days after the date 

7 of enactment of this Act, the Administrator of the Small 

8 Business Administration shall submit to Congress a report 

9 that includes— 

10 (1) the results of the study under subsection 

11 (a); and 

12 (2) recommendations on how to change the pro13 gram— 

14 (A) to expand participation by small busi15 ness concerns and lenders; and 

16 (B) to decrease the amount of time in17 volved in processing applications. 

18 (c) OUTREACH.—In conducting the study under sub19 section (a) and preparing the report under subsection (b), 

20 the Administrator of the Small Business Administration 

21 shall meet with and solicit the views of relevant stake22 holders, including lenders. 
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1 SEC. 120. DELAYED REPAYMENT FOR SMALL BUSINESS 

2 CONCERNS IN AREAS WITH HIGH UNEMPLOY3 MENT. 

4 Section 506 of title V of division A of the American 

5 Recovery and Reinvestment Act of 2009 (Public Law 111– 

6 5) is amended by adding at the end the following: 

7 ‘‘(l) SMALL BUSINESS CONCERNS IN AREAS WITH

8 HIGH UNEMPLOYMENT.— 

9 ‘‘(1) INCREASE LOAN LIMITS.—Notwithstanding 

10 subsection (d), a loan made under this section to a 

11 small business concern in what the Administrator 

12 determines to be an area with high unemployment 

13 may not exceed $75,000. 

14 ‘‘(2) DELAYED REPAYMENT.—Notwithstanding 

15 subsection (g), repayment for a loan made under 

16 this section after the date of the enactment of the 

17 Small Business Financing and Investment Act of 

18 2009 to a small business concern described in para19 graph (1) shall not begin until 18 months after the 

20 final disbursement of funds is made.’’. 

21 SEC. 121. SBA SECONDARY MARKET LENDING AUTHORITY 

22 MADE PERMANENT. 

23 Section 509 of title V of division A of the American 

24 Recovery and Reinvestment Act of 2009 (Public Law 111– 

25 5) is amended— 

26 (1) by striking subsection (e); and 
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1 (2) by redesignating subsections (f), (h), and (i) 

2 as subsections (e), (f), and (g), respectively. 

3 SEC. 122. SBA SECONDARY MARKET LENDING AUTHORITY 

4 EXPANDED. 

5 Section 509 of title V of division A of the American 

6 Recovery and Reinvestment Act of 2009 (Public Law 111– 

7 5), as amended by this Act, is further amended— 

8 (1) in subsection (c)(1) by adding at the end 

9 the following: ‘‘Such process shall include the des10 ignation of each lender participating in a program 

11 under section 7(a) of the Small Business Act as a 

12 Systematically Important Secondary Market Broker13 Dealer for purposes of this section.’’; and 

14 (2) in subsection (e), as so redesignated by sec15 tion 120 of this Act, by adding at the end the fol16 lowing: ‘‘To the extent that the cost of an elimi17 nation or reduction of fees is offset by appropria18 tions, the Administrator shall in lieu of the fee oth19 erwise applicable under this subsection collect no fee 

20 or reduce fees to the maximum extent possible.’’. 

21 SEC. 123. INCREASED LOAN LIMITS. 

22 Section 7(a) of the Small Business Act (15 U.S.C. 

23 636(a)), as amended by this Act, is further amended— 

24 (1) in paragraph (2)(A)— 

25 (A) in clause (i)— 
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1 (i) by inserting after ‘‘$150,000’’ the 

2 following: ‘‘and is less than or equal to 

3 $2,000,000’’; and 

4 (ii) by striking ‘‘or’’ at the end; 

5 (B) in clause (ii) by striking the period at 

6 the end and inserting ‘‘; or’’; and 

7 (C) by adding at the end the following: 

8 ‘‘(iii) 50 percent of the balance of the 

9 financing outstanding at the time of dis10 bursement of the loan, if such balance ex11 ceeds $2,000,000.’’; and 

12 (2) in paragraph (3)(A) by striking 

13 ‘‘$2,000,000’’ and inserting ‘‘$3,000,000’’. 

14 SEC. 124. REAL ESTATE APPRAISALS. 

15 Section 7(a)(29) of the Small Business Act (15 

16 U.S.C. 636(a)(29)) is amended— 

17 (1) in the matter preceding subparagraph (A) 

18 by striking ‘‘a State licensed or certified appraiser’’ 

19 and inserting ‘‘an appraiser licensed or certified by 

20 the State in which such property is located’’; 

21 (2) in subparagraph (A) by striking 

22 ‘‘$250,000’’ and inserting ‘‘$400,000’’; and 

23 (3) in subparagraph (B) by striking 

24 ‘‘$250,000’’ and inserting ‘‘$400,000’’. 
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1 SEC. 125. ADDITIONAL SUPPORT FOR EXPRESS LOAN PRO2 GRAM. 

3 Section 7(a)(18)(B) of the Small Business Act (15 

4 U.S.C. 636(a)(18)(B)) is amended by adding after ‘‘under 

5 subparagraph (A)(i)’’ the following: ‘‘, except that a lender 

6 making a loan under paragraph (31) may not retain any 

7 percentage of a fee collected under such subparagraph’’. 

8 SEC. 126. LOANS USED TO PURCHASE UNOCCUPIED MANU9 FACTURING CENTERS OR EQUIPMENT. 

10 Section 7(a) of the Small Business Act (15 U.S.C. 

11 636(a)), as amended by this Act, is further amended by 

12 adding at the end the following: 

13 ‘‘(42) LOANS USED TO PURCHASE UNOCCUPIED

14 MANUFACTURING CENTERS OR EQUIPMENT.—The 

15 Administration may provide loans under this sub16 section for the purchase of what the Administrator 

17 determines to be unoccupied manufacturing centers 

18 or equipment.’’. 

19 SEC. 127. 100 PERCENT GUARANTEE FOR SMALL BUSINESS 

20 CONCERNS OWNED AND CONTROLLED BY 

21 VETERANS. 

22 Section 7(a) of the Small Business Act (15 U.S.C. 

23 636(a)), as amended by this Act, is further amended— 

24 (1) in paragraph (3)(A) by striking the semi25 colon at the end and inserting the following: ‘‘or in 

26 paragraph (42);’’; and 
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1 (2) by adding at the end the following: 

2 ‘‘(42) 100 PERCENT GUARANTEE FOR SMALL

3 BUSINESS CONCERNS OWNED AND CONTROLLED BY

4 VETERANS.—Notwithstanding paragraph (2), in an 

5 agreement to participate in a loan on a deferred 

6 basis under this subsection with respect to a small 

7 business concern owned and controlled by veterans, 

8 participation by the Administrator may be equal to 

9 100 percent. The total amount outstanding and 

10 committed (by participation or otherwise) with re11 spect to a loan to such a small business concern 

12 from the business loan and investment fund estab13 lished by this Act may not exceed $3,000,000.’’. 

14 SEC. 128. DEFERRED REPAYMENT FOR CERTAIN SMALL 

15 BUSINESS CONCERNS. 

16 Section 7(a)(7) of the Small Business Act (15 U.S.C. 

17 636(a)(7)) is amended by adding at the end the following: 

18 ‘‘If a small business concern classified in sector 23 of the 

19 North American Industry Classification System receives a 

20 loan under this subsection after the date of the enactment 

21 of the Small Business Financing and Investment Act of 

22 2009, such concern may defer repayment on such loan for 

23 a period of not more than 12 months beginning on the 

24 date that such concern receives the final disbursement of 

25 such loan.’’. 
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1 SEC. 129. AUTHORIZATION OF APPROPRIATIONS. 

2 Section 20 of the Small Business Act (15 U.S.C. 631 

3 note) is amended by inserting after subsection (e) the fol4 lowing: 

5 ‘‘(f) FISCAL YEARS 2010 AND 2011 WITH RESPECT

6 TO SECTION 7(a).— 

7 ‘‘(1) PROGRAM LEVELS.—For the programs au8 thorized by this Act, in each of fiscal years 2010 and 

9 2011 commitments for general business loans au10 thorized under section 7(a) may not exceed 

11 $20,000,000,000. 

12 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.— 

13 There are authorized to be appropriated such sums 

14 as may be necessary to carry out paragraph (1).’’. 

15 TITLE II—CDC ECONOMIC 

16 DEVELOPMENT LOAN PROGRAM 

17 Subtitle A—General Provisions 

18 SEC. 201. PROGRAM LEVELS. 

19 Section 20 of the Small Business Act (15 U.S.C. 631 

20 note), as amended by this Act, is further amended by in21 serting after subsection (f) the following: 

22 ‘‘(g) PROGRAM LEVELS WITH RESPECT TO CDC 

23 ECONOMIC DEVELOPMENT LOAN PROGRAM.— 

24 ‘‘(1) FISCAL YEAR 2010.—For financings au25 thorized by section 7(a)(13) of this Act and title V 

26 of the Small Business Investment Act of 1958, the 
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1 Administrator is authorized to make $9,000,000,000 

2 in guarantees of debentures for fiscal year 2010. 

3 ‘‘(2) FISCAL YEAR 2011.—For financings au4 thorized by section 7(a)(13) of this Act and title V 

5 of the Small Business Investment Act of 1958, the 

6 Administrator is authorized to make 

7 $10,000,000,000 in guarantees of debentures for fis8 cal year 2011.’’. 

9 SEC. 202. DEFINITIONS. 

10 Section 103 of the Small Business Investment Act 

11 of 1958 (5 U.S.C. 662) is amended as follows: 

12 (1) By amending paragraph (6) to read as fol13 lows: 

14 ‘‘(6) the term ‘development company’ means 

15 any corporation organized in order to promote eco16 nomic development and the growth of small business 

17 concerns and includes companies chartered under a 

18 special State law authorizing them to operate on a 

19 statewide basis;’’. 

20 (2) By striking ‘‘and’’ at the end of paragraph 

21 (18), by striking the period at the end of paragraph 

22 (19) and inserting a semicolon, and by adding at the 

23 end the following new paragraphs: 

24 ‘‘(20) the term ‘certified development company’ 

25 means a development company that the Adminis-
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1 trator has determined meets the criteria set forth in 

2 section 501; 

3 ‘‘(21) the term ‘local governmental entity’ 

4 means— 

5 ‘‘(A) a State or a political subdivision of a 

6 State; or 

7 ‘‘(B) a combination of political subdivisions 

8 which— 

9 ‘‘(i) has been formed to promote eco10 nomic or community development; 

11 ‘‘(ii) is composed of representatives of 

12 the State or a political subdivision acting 

13 in their official capacity; and 

14 ‘‘(iii) includes an area in an adjacent 

15 State if it is part of a local economic area, 

16 a rural area, or has a population deter17 mined by the Administrator to be insuffi18 cient to support the formation of a sepa19 rate development company; 

20 such term includes entities meeting the require21 ments of clauses (i) through (iii), such as, but 

22 not limited to, a council of governments, re23 gional development corporation, regional plan24 ning commission, or economic development dis25 trict; 
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1 ‘‘(22) the term ‘member’ means any person au2 thorized to vote for a director of a corporation or the 

3 dissolution or merger of a company (for purposes of 

4 this definition, a shareholder of a for-profit corpora5 tion shall be considered a member); 

6 ‘‘(23) the terms ‘rural’ and ‘rural area’ shall 

7 have the same meaning as those terms are given in 

8 section 1991(a)(13)(A) of title 7, United States 

9 Code; and 

10 ‘‘(24) the term ‘small manufacturer’ means a 

11 small business concern— 

12 ‘‘(A) the primary business of which is clas13 sified in sector 31, 32, or 33 of the North 

14 American Industrial Classification System; and 

15 ‘‘(B) all of the production facilities of 

16 which are located in the United States.’’. 

17 Subtitle B—Certified Development 

18 Companies 

19 SEC. 211. CERTIFIED DEVELOPMENT COMPANIES. 

20 Section 501 of the Small Business Investment Act 

21 of 1958 (15 U.S.C. 695) is amended to read as follows: 

22 ‘‘SEC. 501. CERTIFIED DEVELOPMENT COMPANIES. 

23 ‘‘(a) CERTIFIED DEVELOPMENT COMPANY DEBEN24 TURE AUTHORITY.—Only development companies cer-
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1 tified by the Administrator shall have the authority to 

2 issue debentures under this Act. 

3 ‘‘(b) CERTIFICATION STANDARDS.—A development 

4 company shall be certified for the purposes of issuing de5 bentures if the Administrator determines that it meets 

6 each of the following criteria: 

7 ‘‘(1) SMALL CONCERN.— 

8 ‘‘(A) IN GENERAL.—Except as provided in 

9 subparagraph (C) of paragraph (2), the com10 pany, including its affiliates, shall have no more 

11 than 200 employees. 

12 ‘‘(B) CONTROL.—Except as provided in 

13 paragraph (2) (B) or (C) the company shall not 

14 be under the control of any other concern. 

15 ‘‘(C) NOT FOR PROFIT.—The development 

16 company is organized as a not-for-profit cor17 poration. 

18 ‘‘(2) EXCEPTIONS.— 

19 ‘‘(A) FOR PROFIT STATUS.—If a develop20 ment company was chartered as a for-profit 

21 corporation and issued debentures prior to Jan22 uary 1, 1987, the company shall not be re23 quired to change its status to not-for-profit in 

24 order to be certified. 
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1 ‘‘(B) AFFILIATION GRANDFATHER.—Any 

2 company that was authorized by the Adminis3 trator to issue debentures before December 31, 

4 2005, shall be eligible for certification without 

5 regard to its status as part of, or its affiliation 

6 with, any other not-for-profit corporation or 

7 local governmental entity unless that not-for8 profit corporation or local governmental entity 

9 is another entity that issues debentures under 

10 this title. 

11 ‘‘(C) AFFILIATION WITH LOCAL GOVERN12 MENTAL ENTITIES.—Any company that was or13 ganized after the date of enactment of the 

14 Small Business Financing and Investment Act 

15 of 2009 shall be eligible for certification without 

16 regard to its status as part of or affiliation with 

17 any local governmental entity. 

18 ‘‘(3) GOOD STANDING.—A development com19 pany shall be in good standing and comply with all 

20 laws, in every State in which it is incorporated or 

21 authorized to conduct business. 

22 ‘‘(4) MEMBERSHIP.— 

23 ‘‘(A) IN GENERAL.—The development com24 pany shall have at least 25 members. 
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1 ‘‘(B) VOTING RIGHTS.—No member shall 

2 control more than 10 percent of the total voting 

3 power in the development company. 

4 ‘‘(C) RESIDENCE.—Members must be resi5 dents of the State in which the development 

6 company is chartered or authorized to do busi7 ness. 

8 ‘‘(D) DIVERSITY.—The development com9 pany must have at least one member from each 

10 of the following: 

11 ‘‘(i) A local governmental entity. 

12 ‘‘(ii) A financial institution subject to 

13 regulation by a Federal organization be14 longing to the Federal Financial Institu15 tions Examination Council and that pro16 vides long-term fixed asset financing in the 

17 commercial market. 

18 ‘‘(iii) A not-for-profit organization, 

19 other than a development company, that is 

20 dedicated to promoting economic growth. 

21 ‘‘(iv) A for-profit business, other than 

22 a financial institution described in clause 

23 (ii). 

24 ‘‘(E) EMPLOYMENT STATUS.—Membership 

25 in a development company shall not be predi-
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1 cated on employment status and an individual 

2 who retired from or was terminated (for rea3 sons other than fraud or the commission of a 

4 crime) from an entity described in subpara5 graph (D) shall be deemed to be from the orga6 nization described in that subparagraph. 

7 ‘‘(5) BOARD OF DIRECTORS.— 

8 ‘‘(A) IN GENERAL.—The development com9 pany’s board consists of members and each di10 rector receives a majority vote of the members 

11 unless the development company is a for-profit 

12 corporation in which case the board need not 

13 consist entirely of members. 

14 ‘‘(B) BOARD REPRESENTATION.—There 

15 shall be at least one director from not fewer 

16 than 3 of the 4 types of organizations specified 

17 in paragraph (4)(D) but no single type of orga18 nization shall have more than 50 percent rep19 resentation on the board of the development 

20 company. If the development company is a for21 profit corporation, financial institution rep22 resentatives may make up more than 50 per23 cent of the board. 

24 ‘‘(C) AFFILIATED ENTITY REPRESENTA25 TION RESTRICTIONS.—A development company 
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1 that is described in paragraph (1)(C) may have 

2 any or all of its board members appointed by 

3 entities affiliated with the company and may in4 clude common members who also serve on the 

5 affiliate’s board of directors if the appointment 

6 of board members was exercised by an affiliate 

7 prior to December 31, 2005. 

8 ‘‘(D) SPECIAL RULE FOR CERTAIN DEVEL9 OPMENT COMPANIES.—The board of directors 

10 for any development company issuing deben11 tures before December 31, 2005, and incor12 porated under a State law requiring, or which 

13 is interpreted by the State’s legal department 

14 as imposing specific requirements on, the num15 ber and selection of members, board members, 

16 or both, and the rights and privileges conferred 

17 by such State law, may adhere to such provi18 sions. 

19 ‘‘(6) PROFESSIONAL MANAGEMENT AND

20 STAFF.— 

21 ‘‘(A) IN GENERAL.—The development com22 pany shall have full-time independent profes23 sional management, including a chief executive 

24 officer to manage the daily operations and a 
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1 full-time professional staff qualified to carry out 

2 the functions authorized under this title. 

3 ‘‘(B) UTILIZATION OF STAFF FROM AF4 FILIATED ENTITIES.—A development company 

5 shall not be denied certification under this sec6 tion if its chief executive or full-time profes7 sional staff is from an affiliated entity as de8 scribed in paragraph (1)(C). 

9 ‘‘(C) STAFF UNDER CONTRACT.—The Ad10 ministrator shall not deny certification to a de11 velopment company that contracts for its full 

12 time staff if one of the following conditions is 

13 met: 

14 ‘‘(i) The development company is lo15 cated in a rural area, obtains its staff 

16 through contract from another develop17 ment company that is certified by the Ad18 ministrator and that development company 

19 operates in the same or a contiguous 

20 State. 

21 ‘‘(ii) The development company had 

22 issued debentures under this title prior to 

23 December 31, 2005, and had contracted 

24 with a for-profit business concern to pro25 vide staffing and management services. 
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1 ‘‘(c) APPLICATIONS.— 

2 ‘‘(1) DEVELOPMENT COMPANIES ISSUING DE3 BENTURES BEFORE SEPTEMBER 30, 2009.— 

4 ‘‘(A) SHORT FORM APPLICATION.—(i) For 

5 any development company that issued deben6 tures pursuant to this title before September 

7 30, 2009, the Administrator shall develop, after 

8 an opportunity for notice and comment, no 

9 later than 90 days after the date of enactment 

10 of the Small Business Financing and Invest11 ment Act of 2009, a short-form application that 

12 contains sufficient information for the Adminis13 trator to determine that the development com14 pany currently meets the standards set forth in 

15 subsection (b). In developing such application, 

16 the Administrator shall be required to limit the 

17 amount of paperwork necessary to determine 

18 whether the development company meets the 

19 standards for certification and may limit the 

20 application to the filing of reports previously 

21 submitted to the Administrator. 

22 ‘‘(ii) For those companies that obtain staff 

23 through contracts, the application shall include 

24 a copy of the contract. 
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1 ‘‘(B) CERTIFICATION DECISION.—(i) The 

2 Administrator shall certify the development 

3 company if the application demonstrates that 

4 the applicant meets the standards in subsection 

5 (b). The decision to certify or not approve the 

6 request for certification shall be made within 7 

7 business days from the date the initial submis8 sion of the application is received by the Ad9 ministrator. If the Administrator takes no ac10 tion to approve or disapprove within 7 business 

11 days, the application for certification is deemed 

12 approved and no further action is required by 

13 the Administrator or the development company 

14 to obtain certification. If the Administrator dis15 approves the application, the Administrator 

16 shall provide in writing within 3 business days 

17 the reasons for the disapproval. If such docu18 ment is not provided within the time specified, 

19 the application is deemed approved and no fur20 ther action is required by the Administrator or 

21 the development company to obtain certifi22 cation. 

23 ‘‘(ii) For those development companies 

24 that submit contracts under subparagraph 

25 (A)(ii), the Administrator is limited in rejecting 
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1 the application only if the Administrator finds 

2 that the entity servicing the applicant is no 

3 longer able to provide the employees or services 

4 needed by the applicant to perform the func5 tions that would be authorized under this title. 

6 ‘‘(C) APPLICATION RESUBMITTAL.—If the 

7 Administrator disapproves the application for 

8 certification and provides a written statement 

9 as set forth in subparagraph (B), the develop10 ment company may file a new application lim11 ited solely to addressing the concerns of the Ad12 ministrator and the certification procedures set 

13 forth in subparagraph (B) shall recommence. 

14 ‘‘(D) APPEALS.—If the Administrator dis15 approves an application in accordance with the 

16 procedures of subparagraphs (B) or (C), the 

17 applicant may, within 10 calendar days after 

18 receipt of the disapproval, appeal such dis19 approval. The Administrator shall conduct a 

20 hearing to determine such appeal pursuant to 

21 sections 554, 556, and 557 of title 5, United 

22 States Code, and shall issue a decision not later 

23 than 45 days after the appeal is filed. The deci24 sion on appeal shall constitute final agency ac-
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1 tion for purposes of chapter 7 of title 5, United 

2 States Code. 

3 ‘‘(E) GRANDFATHERING.— 

4 ‘‘(i) IN GENERAL.—For the period 2 

5 years after date of enactment of the Small 

6 Business Financing and Investment Act of 

7 2009, any development company that was 

8 issuing debentures on or before the date 

9 set forth in this clause (i) shall be deemed 

10 to be a certified development company. 

11 ‘‘(ii) COMPLETION OF APPLICATION

12 PROCESS.—The procedures set forth in 

13 this paragraph for determining certifi14 cation shall apply to any development com15 pany meeting the qualifications of clause 

16 (i). 

17 ‘‘(iii) EFFECT OF DENIAL.—The de18 nial or rejection of an application for cer19 tification as set forth in this subsection 

20 shall have no effect on the ability of a de21 velopment company meeting the qualifica22 tions in clause (i) from continuing to issue 

23 debentures during the entire two-year pe24 riod established in that clause. 
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1 ‘‘(iv) FAILURE TO OBTAIN CERTIFI2 CATION.—Any development company that 

3 fails to obtain certification in accordance 

4 with the procedures set forth in this para5 graph during the period set forth in clause 

6 (i) shall be considered to be a new develop7 ment company and the procedures of para8 graph (2) shall apply. The authority to 

9 issue debentures shall cease for any devel10 opment company covered by this subpara11 graph that has failed to obtain certification 

12 from the Administrator during the time 

13 period set forth in clause (i). 

14 ‘‘(F) AUTOMATIC QUALIFICATION PROVI15 SION.—If the Administrator fails to implement 

16 the certification process set forth in this para17 graph, any development company that was 

18 issuing debentures before September 30, 2009, 

19 pursuant to this title shall be considered cer20 tified until such time as the Administrator de21 velops the certification procedures set forth in 

22 this paragraph. 

23 ‘‘(G) SAVINGS CLAUSE.—Any action taken 

24 by a development company or the Administrator 

25 pursuant to this paragraph shall have no im-
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1 pact on any guarantee of a debenture issued 

2 prior to the date of enactment of the Small 

3 Business Financing and Investment Act of 

4 2009. 

5 ‘‘(2) APPLICATION PROCESS FOR NEW DEVEL6 OPMENT COMPANIES.— 

7 ‘‘(A) IN GENERAL.—For any development 

8 company that has not issued debentures prior 

9 to September 30, 2009, the Administrator shall 

10 develop no later than 180 days after the date 

11 of enactment of the Small Business Financing 

12 and Investment Act of 2009, after an oppor13 tunity for notice and comment, an application 

14 form for certification that provides the Admin15 istrator with sufficient information to insure 

16 that the applicant meets the standards set forth 

17 in subsection (b). The Administrator shall cer18 tify such development company or reject the ap19 plication within 60 calendar days from the date 

20 the initial submission was received by the Ad21 ministrator. If the Administrator rejects the ap22 plication, the Administrator shall provide in 

23 writing within 7 business days after the deci24 sion, the reason for rejecting the application. 
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1 ‘‘(B) APPEALS.—A development company 

2 shall be able to appeal the disapproval of an ap3 plication under the procedures set forth in 

4 paragraph (1)(D).’’. 

5 SEC. 212. CERTIFIED DEVELOPMENT COMPANY; OPER6 ATIONAL REQUIREMENTS. 

7 Section 502 of the Small Business Investment Act 

8 of 1958 (15 U.S.C. 696) is amended to read as follows: 

9 ‘‘SEC. 502. OPERATIONAL REQUIREMENTS FOR CERTIFIED 

10 DEVELOPMENT COMPANIES. 

11 ‘‘(a) MAINTENANCE OF STANDARDS FOR CERTIFI12 CATION.—Any company certified pursuant to section 501 

13 shall continue to comply with the requirements of that sec14 tion to remain certified. The Administrator shall develop 

15 a reporting form, which to the extent possible, incor16 porates other documents and reports already kept by cer17 tified development companies, demonstrating their contin18 ued compliance. The form shall be developed in a manner 

19 that the estimated time for completion shall take no more 

20 than 2 hours. 

21 ‘‘(b) ETHICS AND CONFLICT OF INTERESTS.— 

22 ‘‘(1) IN GENERAL.—A certified development 

23 company, its officers, employees, and contractors 

24 shall act ethically and avoid activities which con25 stitute a conflict of interest or appear to constitute 
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1 a conflict of interest. For purposes of this sub2 section, conduct that is unethical includes, but is not 

3 limited to, the actions specified in section 120.140 of 

4 title 13, Code of Federal Regulations, as in effect on 

5 January 1, 2009. 

6 ‘‘(2) BY ASSOCIATES.—An associate may not be 

7 an officer, director, or manager of more than 1 cer8 tified development company. The term ‘associate’ 

9 shall have the same meaning given the term ‘Asso10 ciate of a CDC’ in section 120.10 of title 13, Code 

11 of Federal Regulations, as in effect on January 1, 

12 2009. For the purposes of this subsection, 10 per13 cent shall be substituted wherever section 120.10 of 

14 title 13, Code of Federal Regulation uses 20 per15 cent. 

16 ‘‘(3) BY ENTITIES.—Except as provided in sec17 tions 501(b)(5) and 501(b)(6), no person, sole pro18 prietorship, partnership, or corporation shall control 

19 or have managerial control of more than one cer20 tified development company. Control means any of 

21 the following: 

22 ‘‘(A) The ability to appoint or remove a 

23 member of the company or member of its board 

24 of directors. 
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1 ‘‘(B) The ability to modify or approve rate 

2 or fee changes affecting revenues of the cer3 tified development company. 

4 ‘‘(C) The ability to veto, overrule, or mod5 ify decisions of the certified development com6 pany’s body. 

7 ‘‘(D) The ability, either directly or contrac8 tually, to appoint, hire, reassign, or dismiss 

9 those managers and employees responsible for 

10 the daily operations of the certified development 

11 company. 

12 ‘‘(E) The ability to access the certified de13 velopment company’s resources or amend its 

14 budget. 

15 ‘‘(F) The ability to control another cer16 tified development company pursuant to provi17 sions in a contract. 

18 ‘‘(c) MEETINGS.—The board of directors of the cer19 tified development company shall meet on a regular basis 

20 to make policy decisions for the company. 

21 ‘‘(d) LOAN COMMITTEES.—The board of directors of 

22 a certified development company may use a loan com23 mittee to process loans in the State in which it operates 

24 as well as adjacent local economic areas. Members of the 

25 loan committee shall be residents of the certified develop-
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1 ment company’s State of operation or the adjacent local 

2 economic area. Such loan committees shall meet on a peri3 odic basis as set forth by the board of directors. 

4 ‘‘(e) PROHIBITED CONFLICT IN PROJECT LOANS.— 

5 ‘‘(1) IN GENERAL.—Certified development com6 panies shall not recommend or approve a guarantee 

7 of a debenture that will be collateralized by property 

8 being constructed or acquired on which an institu9 tion, as provided in section 508(c)(1)(A), will have 

10 a first lien position. 

11 ‘‘(2) EXCEPTION.—The prohibition in para12 graph (1) shall not apply to any certified develop13 ment company that was affiliated with or part of 

14 any entity that took a first lien position between Oc15 tober 1, 2003, and September 30, 2005. 

16 ‘‘(f) AFFILIATION WITH LENDERS OPERATING

17 UNDER SECTION 7 OF THE SMALL BUSINESS ACT.— 

18 ‘‘(1) PROHIBITION.—No certified development 

19 company may invest in, or be an affiliate of, a lender 

20 who participates in the loan programs authorized in 

21 sections 7(a) and 7(c) of the Small Business Act (15 

22 U.S.C. 636(a) and (c)). 

23 ‘‘(2) EXCEPTION.—The prohibition in para24 graph (1) shall not apply to any certified develop25 ment company that is affiliated with an entity au-
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1 thorized by the Administrator to operate under sec2 tion 7(a) of the Small Business Act if such affili3 ation occurred on or before November 6, 2003. 

4 ‘‘(3) CREDIT UNION AFFILIATION.—A certified 

5 development company shall not lose its status due to 

6 an affiliation with an institution regulated by the 

7 National Credit Union Administration if the develop8 ment company was affiliated with such an institu9 tion prior to January 1, 2007. 

10 ‘‘(g) SERVICING AND PACKAGING GUARANTEED

11 LOANS.—A certified development company is authorized 

12 to prepare applications for loans under sections 7(a) or 

13 7(c) of the Small Business Act (15 U.S.C. 636(a) or (c)), 

14 to service such loans, and to charge a reasonable fee for 

15 servicing such loans. 

16 ‘‘(h) USE OF EXCESS FUNDS.—Any funds generated 

17 by a certified development company from the issuance of 

18 debentures under this title, the sale of debentures in the 

19 private secondary market, or fees described in subsection 

20 (g) that remain unexpended after payment of staff, oper21 ating, and overhead expenses shall be used by the certified 

22 development company for— 

23 ‘‘(1) operating reserves; 

24 ‘‘(2) expanding the area in which the certified 

25 development company operates through the methods 
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1 authorized in section 505 (relating to multi-State 

2 operation); 

3 ‘‘(3) investment in other community and local 

4 economic development activity or community devel5 opment primarily in the State from which such 

6 funds were generated; or 

7 ‘‘(4) investment in small business investment 

8 companies subject to the limitations in subsection 

9 (i). 

10 ‘‘(i) LIMITATIONS WITH RESPECT TO SMALL BUSI11 NESS INVESTMENT COMPANIES.—A certified development 

12 company shall not— 

13 ‘‘(1) invest excess funds in a small business in14 vestment company that the Administrator deter15 mines to be capitally impaired as set forth in section 

16 107.1830 of title 13, Code of Federal Regulations, 

17 as in effect on January 1, 2009, or any successor 

18 regulation to that regulation, but may maintain its 

19 investment in such company if such investment was 

20 made prior to the determination of capital impair21 ment; and 

22 ‘‘(2) provide a debenture under this title to a 

23 small business concern that has financing with a 

24 small business investment company in which the cer-
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1 tified development company has invested excess 

2 funds. 

3 ‘‘(j) ECONOMIC DEVELOPMENT ACTIVITIES.—A com4 pany certified pursuant to this section shall carry out each 

5 of the following economic development activities that cre6 ate or preserve jobs in urban and rural areas: 

7 ‘‘(1) The company shall provide long-term fi8 nancing to small business concerns through deben9 tures described in section 506. 

10 ‘‘(2) The company shall operate any other pro11 gram to assist small business concerns or commu12 nities that promote local economic development and 

13 job creation or preservation. 

14 ‘‘(k) RESTRICTIONS ON ASSISTANCE.— 

15 ‘‘(1) IN GENERAL.—After the date of enact16 ment of the Small Business Financing and Invest17 ment Act of 2009, no certified development company 

18 may accept funding from any source, including any 

19 Federal agency (as that term is defined in section 

20 551 of title 5, United States Code) if the source im21 poses— 

22 ‘‘(A) conditions on the types of small busi23 ness concerns that a certified development com24 pany may provide assistance to under this title; 

25 or 
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1 ‘‘(B) conditions or requirements, directly 

2 or indirectly, upon any small business concern 

3 receiving assistance under this title. 

4 ‘‘(2) EXCEPTION.—The conditions of subpara5 graphs (A) and (B) of paragraph (1) shall not apply 

6 if the source provides all of the financing that will 

7 be provided by the certified development company to 

8 the small business concern, provided further that 

9 any conditions or restrictions are limited solely to 

10 the financing provided by the source of funding. 

11 ‘‘(l) REVOCATION AND SUSPENSION.—The Adminis12 trator may suspend or revoke a certified development com13 pany’s status if the Administrator determines, after a 

14 hearing on the record as set forth in sections 554, 556, 

15 and 557 of title 5, United States Code, that the certified 

16 development company no longer— 

17 ‘‘(1) meets the eligibility criteria established 

18 under section 501 of this title; 

19 ‘‘(2) satisfies the operational standards in this 

20 section; or 

21 ‘‘(3) complies with the Administrator’s rules, 

22 regulations, or provisions of law. 

23 ‘‘(m) EFFECT OF SUSPENSION OR REVOCATION.—A 

24 suspension or revocation under subsection (l) shall not af25 fect any outstanding debenture guarantee.’’. 
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1 SEC. 213. ACCREDITED LENDERS PROGRAM. 

2 Section 503 of the Small Business Investment of 

3 1958 (15 U.S.C. 697) is amended to read as follows: 

4 ‘‘SEC. 503. ACCREDITED LENDERS PROGRAM. 

5 ‘‘(a) ESTABLISHMENT.— 

6 ‘‘(1) IN GENERAL.—A certified development 

7 company may apply for status to become an accred8 ited certified development company if it meets the 

9 operational standards of section 502 and the criteria 

10 in subsection (b). 

11 ‘‘(2) APPLICATION.—The Administrator shall, 

12 after opportunity for notice and comment, develop 

13 an application for certified development companies 

14 seeking to become accredited certified development 

15 companies. 

16 ‘‘(3) PROCESSING OF APPLICATION.—The Ad17 ministrator shall make a determination within 30 

18 days after a complete application has been filed by 

19 the certified development company. 

20 ‘‘(4) REAPPLICATION.—If the Administrator re21 jects the application, the Administrator shall provide 

22 in writing the reasons for the rejection. Any certified 

23 development company may reapply which will recom24 mence the processing time limits set forth in para25 graph (3), and such reapplication shall be limited to 

26 addressing the reasons for rejection. If the Adminis-
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1 trator rejects a second application, that shall be con2 sidered final agency action for purposes of chapter 

3 7 of title 5, United States Code. 

4 ‘‘(b) STANDARDS FOR ACCREDITED CERTIFIED DE5 VELOPMENT COMPANY PROGRAM.—The Administrator 

6 shall designate a certified development company as accred7 ited if it meets the following standards: 

8 ‘‘(1) Has been a certified development company 

9 for not less than the preceding 12 months and has 

10 issued debentures as authorized under this title dur11 ing that time period. 

12 ‘‘(2) Has well-trained, qualified personnel who 

13 are knowledgeable in the lending policies and proce14 dures for certified development companies. 

15 ‘‘(3) Has the ability to process, close, and serv16 ice the loan issued under this title. 

17 ‘‘(4) Has a loss rate on the company’s deben18 tures that is reasonable and acceptable to the Ad19 ministrator. 

20 ‘‘(5) Has a history of submitting to the Admin21 istrator complete and accurate debenture guaranty 

22 application packages. 

23 ‘‘(6) Has the ability to serve small business 

24 credit needs for financing plant and equipment as a 

25 certified development company. 
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1 ‘‘(c) EXPEDITED PROCESSING OF GUARANTEE AP2 PLICATIONS.—The Administrator shall develop an expe3 dited procedure for processing a guarantee application or 

4 servicing action submitted by an accredited certified devel5 opment company. For purposes of this subsection, an ex6 pedited procedure is one that takes at least two business 

7 days less than the processing performed for certified devel8 opment companies that have not been accredited. 

9 ‘‘(d) SUSPENSION OR REVOCATION OF ACCREDITED

10 STATUS.—The Administrator may suspend or revoke a 

11 certified development company’s accredited status if the 

12 Administrator determines, after a hearing on the record 

13 as set forth in sections 554, 556, and 557 of title 5, 

14 United States Code, that the certified development com15 pany no longer meets the eligibility criteria established 

16 under this section (which shall not include a time limit 

17 on the term of the certified development company’s ac18 credited status) or failed to adhere to the Administrator’s 

19 rules, regulations, or is violating some other provision of 

20 law. Such suspension or revocation shall have no effect 

21 on the development company’s status as certified. 

22 ‘‘(e) EFFECT OF SUSPENSION OR REVOCATION ON

23 EXISTING GUARANTEES.—A suspension or revocation of 

24 accredited status shall not affect any outstanding deben25 ture guarantee. 
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1 ‘‘(f) GRANDFATHER PROVISION.—Any certified de2 velopment company that was accredited by the date of en3 actment of the Small Business Financing and Investment 

4 Act of 2009 shall remain accredited for 24 months after 

5 that date. If the certified development company does not 

6 have an application for accreditation approved by the Ad7 ministrator within the 24 months, its accreditation stand8 ard shall lapse. 

9 ‘‘(g) AUTOMATIC QUALIFICATION.— 

10 ‘‘(1) IN GENERAL.—Until the Administrator de11 velops procedures for granting accredited status, any 

12 certified development company that was accredited 

13 as of the date of enactment of the Small Business 

14 Financing and Investment Act of 2009 shall be 

15 deemed to be accredited. 

16 ‘‘(2) APPLICATIONS.—Any certified develop17 ment company that satisfies the provision of para18 graph (1) shall have 24 months in which to submit 

19 the application established by this section for accred20 ited status. 

21 ‘‘(3) EFFECT WHILE APPLICATION PENDING.— 

22 The denial or rejection of an application for accred23 ited status as set forth in this section shall have no 

24 effect on the ability of a development company that 

25 meets the standard set forth in paragraph (1) from 
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1 maintaining its status during the 24 months speci2 fied in this subsection. 

3 ‘‘(h) PROMULGATION OF ACCREDITING STAND4 ARDS.—The Administrator shall develop standards for ac5 crediting, suspension, and revocation under the program 

6 established by this section only after notice and an oppor7 tunity for comment as set forth in section 553(b) of title 

8 5, United States Code. After the development of such 

9 standards, the Administrator shall publish such standards 

10 in the Code of Federal Regulations. 

11 ‘‘(i) RULE OF CONSTRUCTION.—Any reference to the 

12 term ‘accredited lender’ in any provision of law enacted, 

13 or any regulation adopted, prior to the enactment of the 

14 Small Business Financing and Investment Act of 2009 

15 shall be deemed to be a reference to the term ‘accredited 

16 certified development company’.’’. 

17 SEC. 214. PREMIER CERTIFIED LENDER PROGRAM. 

18 Section 504 of the Small Business Investment Act 

19 of 1958 (15 U.S.C. 697a) is amended to read as follows: 

20 ‘‘SEC. 504. PREMIER CERTIFIED LENDER PROGRAM. 

21 ‘‘(a) ESTABLISHMENT.— 

22 ‘‘(1) IN GENERAL.—A certified development 

23 company accredited under section 503 may apply for 

24 status to become a premier certified development 

25 company. 
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1 ‘‘(2) APPLICATION.—The Administrator shall, 

2 after opportunity for notice and comment, develop 

3 an application for accredited certified development 

4 companies seeking to become premier certified devel5 opment companies. 

6 ‘‘(3) PROCESSING OF APPLICATION.—The Ad7 ministrator shall make a determination within 60 

8 days after a complete application has been filed by 

9 an accredited certified development company. 

10 ‘‘(4) REAPPLICATION.—If the Administrator re11 jects the application, the Administrator shall provide 

12 in writing the reasons for the rejection. Any accred13 ited certified development company may reapply 

14 which will recommence the processing time limits set 

15 forth in paragraph (3), and such reapplication shall 

16 be limited to addressing the reasons for rejection. If 

17 the Administrator rejects a second application, that 

18 shall be considered final agency action for purposes 

19 of chapter 7 of title 5, United States Code. 

20 ‘‘(b) STANDARDS FOR OBTAINING PREMIER CER21 TIFIED DEVELOPMENT COMPANY STATUS.—The Admin22 istrator shall designate an accredited certified develop23 ment company as a premier certified development com24 pany if the application submitted pursuant to subsection 
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1 (a) demonstrates that the accredited certified development 

2 company meets the following standards: 

3 ‘‘(1) Has been an accredited certified develop4 ment company for at least 12 months. 

5 ‘‘(2) Has submitted to the Administrator ade6 quately analyzed debenture guarantee applications. 

7 ‘‘(3) Has closed, in a proper manner following 

8 the Administrator regulations, loans under this title. 

9 ‘‘(4) Has serviced its loan portfolio in accord10 ance with the standards set by the Administrator. 

11 ‘‘(5) Has established a loan loss reserve estab12 lished in accordance with this section that the Ad13 ministrator determines is sufficient to meet its obli14 gations to protect the Federal Government from the 

15 risk of loss on each debenture guaranteed under this 

16 section. 

17 ‘‘(6) Has agreed, as part of the application and 

18 in order to protect the Federal Government against 

19 the risk of loss, to the following— 

20 ‘‘(A) on account of a debenture, the pro21 ceeds of which were used to fund a loan ap22 proved prior to the date of enactment of the 

23 Small Business Financing and Investment Act 

24 of 2009, agrees to reimburse the Administrator 

25 for 10 percent of any loss sustained by the Ad-
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1 ministrator as a result of a default by the com2 pany in the payment of principal or interest on 

3 a debenture issued by such company and guar4 anteed by the Administrator; 

5 ‘‘(B) on account of a debenture, the pro6 ceeds of which were used to fund a loan ap7 proved prior to the date of enactment of the 

8 Small Business Financing and Investment Act 

9 of 2009 and which were issued during the pe10 riod in which the company had made a selection 

11 pursuant to section 508(c)(7) of the Small 

12 Business Investment Act of 1958, as in effect 

13 on the day before such date of enactment, 

14 agrees to reimburse the Administrator for 15 

15 percent of any loss sustained by the Adminis16 trator as a result of a default by the company 

17 in the payment of principal or interest on a de18 benture issued by such company and guaran19 teed by the Administrator; or 

20 ‘‘(C) on account of a debenture, the pro21 ceeds of which are used to fund a loan approved 

22 on or after the date of enactment of the Small 

23 Business Financing and Investment Act of 

24 2009, upon closing, pay to the Administrator a 
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1 one-time participation fee in the amount equal 

2 to the higher of the following: 

3 ‘‘(i) 0.25 percent of the amount of the 

4 debenture. 

5 ‘‘(ii) A percent of the amount of the 

6 debenture equal to 10 percent of the 

7 amount of the company’s historic loss rate 

8 on debentures guaranteed under this sec9 tion as determined by the Administrator. 

10 The rate specified by this clause shall be 

11 determined annually based upon the com12 pany’s loan losses as of close of business 

13 on June 30 and notice of the determina14 tion shall be provided to each company not 

15 later than August 31. Such rate shall be 

16 applicable to loans approved during the fis17 cal year commencing after the determina18 tion is made and shall expire and have no 

19 further application after the end of such 

20 fiscal year. If no timely determination has 

21 been made prior to the commencement of 

22 a fiscal year, including the year of enact23 ment of the Small Business Financing and 

24 Investment Act of 2009, one may be made 

25 after the commencement and it shall be 
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1 applicable to loans approved during the 

2 balance of such fiscal year commencing 30 

3 days after notification to the development 

4 company involved. 

5 ‘‘(c) SUSPENSION OR REVOCATION OF PREMIER STA6 TUS.—The Administrator may suspend or revoke an ac7 credited certified development company’s premier status 

8 if the Administrator determines, after a hearing on the 

9 record as set forth in sections 554, 556, and 557 of title 

10 5, United States Code, that the accredited certified devel11 opment company no longer meets the eligibility criteria for 

12 premier status as established under this section or failed 

13 to adhere to the Administrator’s rules, regulations, or is 

14 violating some other provision of law. Such revocation or 

15 suspension shall have no effect on its status as an accred16 ited certified development company. 

17 ‘‘(d) LOAN LOSS RESERVE.— 

18 ‘‘(1) ASSETS.—Each loan loss reserve main19 tained by the premier certified development company 

20 for loans made pursuant to the authority in sub21 section (g)(1) shall be comprised of— 

22 ‘‘(A) segregated funds on deposit in an ac23 count or accounts with a federally insured de24 pository institution or institutions selected by 

25 the company, subject to a collateral assignment 
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1 in favor of, and in a format acceptable to, the 

2 Administrator that shall amount to 10 percent 

3 of the company’s exposure as determined pursu4 ant to subsection (b)(6); 

5 ‘‘(B) irrevocable letter or letters of credit, 

6 with a collateral assignment in favor of, and a 

7 commercially reasonable format acceptable to, 

8 the Administrator; or 

9 ‘‘(C) any combination of the assets de10 scribed in subparagraphs (A) and (B). 

11 ‘‘(2) CONTRIBUTIONS.—The company shall 

12 make contributions to the loss reserve, either cash or 

13 letters of credit as provided above, in the following 

14 amounts and at the following intervals: 

15 ‘‘(A) 50 percent when a debenture is 

16 closed. 

17 ‘‘(B) 25 percent additional not later than 

18 1 year after a debenture is closed. 

19 ‘‘(C) 25 percent additional not later than 

20 2 years after a debenture is closed. 

21 ‘‘(3) REPLENISHMENT.—If a loss has been sus22 tained by the Administrator, any portion of the loss 

23 reserve, and other funds provided by the premier 

24 certified development company as necessary, may be 

25 used to reimburse the Administrator for the premier 
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1 certified development company’s share of the loss as 

2 provided for in subsection (b)(6). If the premier cer3 tified development company utilizes the reserve, it 

4 shall, within 30 calendar days, replace an equivalent 

5 amount of funds. 

6 ‘‘(4) DISBURSEMENTS.— 

7 ‘‘(A) IN GENERAL.—The Administrator 

8 shall allow the premier certified development 

9 company to withdraw from the loss reserve 

10 amounts attributable to any debenture that has 

11 been repaid. 

12 ‘‘(B) REDUCTION.—The Administrator 

13 shall allow the premier certified development 

14 company to withdraw from the loss reserve such 

15 amounts as are in excess of 1 percent of the ag16 gregate outstanding balances of debentures to 

17 which such loss reserve relates. The reduction 

18 authorized by this subparagraph shall not apply 

19 with respect to any debenture before 100 per20 cent of the contribution described in paragraph 

21 (2) with respect to such debenture has been 

22 made. 

23 ‘‘(5) APPLICABILITY.—This subsection shall 

24 apply only to a premier certified development com25 pany designated as a premier certified development 
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1 company by the Administrator under this section on 

2 or after the date of the enactment of the Small 

3 Business Financing and Investment Act of 2009. 

4 The loan loss reserve requirements relating to any 

5 premier certified development company certified 

6 prior to the date of the enactment of such Act shall 

7 continue to be governed by regulations in effect on 

8 the date of the enactment of such Act. 

9 ‘‘(e) BUREAU OF PREMIER CERTIFIED DEVELOP10 MENT COMPANY LENDER OVERSIGHT.— 

11 ‘‘(1) IN GENERAL.—There is hereby established 

12 a Bureau of Premier Certified Development Com13 pany Lender Oversight in the Office of Lender Over14 sight at the Administration which shall have respon15 sibility and capability for carrying out oversight of 

16 premier certified development companies and such 

17 other responsibilities as the Administrator des18 ignates. 

19 ‘‘(2) ANNUAL REVIEW.—The Bureau estab20 lished in paragraph (1) annually shall review the fi21 nancing made by each premier certified development 

22 company. Such review shall include the premier cer23 tified development company’s credit decisions and 

24 general compliance with the eligibility requirements 
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1 for each financing approved as a result of its status 

2 as a premier certified development company. 

3 ‘‘(3) RANDOM AUDITS.—The Bureau shall de4 velop and implement a method for sampling the de5 bentures issued by premier certified development 

6 companies. Such sampling shall be similar to the 

7 random file audits of development companies that 

8 utilize the Abridged Submission Method described in 

9 chapter 4 of subpart C of Standard Operating Pro10 cedure 50 10 (5)(A) as was in effect on March 2, 

11 2009. 

12 ‘‘(4) REVIEW OF LENDERS PROVIDING SENIOR

13 FINANCING.— 

14 ‘‘(A) CALCULATION OF LOAN LOSS

15 RATE.—The Bureau shall periodically calculate 

16 the loss rate of all debentures approved under 

17 this section and shall calculate a loss rate on 

18 the basis of the total debentures attributable to 

19 projects approved by premier certified develop20 ment companies in which each lender is a par21 ticipating lender. 

22 ‘‘(B) NOTIFICATION.—If the Bureau deter23 mines that the loss rate on debentures involving 

24 an individual lender exceeds the average for all 
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1 debentures approved under this section, it shall 

2 advise the Administrator. 

3 ‘‘(5) USE OF REVIEWS AND AUDITS.—The Ad4 ministrator shall consider the findings under para5 graphs (2), (3), and (4) in carrying out the respon6 sibilities under subsection (h). 

7 ‘‘(f) SALE OF CERTAIN DEFAULTED LOANS.— 

8 ‘‘(1) NOTICE.—If, upon default in repayment, 

9 the Administrator acquires a debenture issued by a 

10 premier certified development company and identi11 fies such loan for inclusion in a bulk asset sale of 

12 defaulted or repurchased loans or other financing, 

13 the Administrator shall give prior notice thereof to 

14 any premier certified development company which 

15 has a contingent liability under this section. The no16 tice shall be given to the premier certified develop17 ment company as soon as possible after the financ18 ing is identified, but not less than 90 days before 

19 the date the Administrator first makes any records 

20 on such financing available for examination by pro21 spective purchasers prior to its offering in a package 

22 of loans for bulk sale. 

23 ‘‘(2) LIMITATIONS.—The Administrator shall 

24 not offer any loan described in paragraph (1) as 

25 part of a bulk sale unless the Administrator— 
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1 ‘‘(A) provides prospective purchasers with 

2 the opportunity to examine the Administration’s 

3 records with respect to such loan; and 

4 ‘‘(B) provides the notice required by para5 graph (1). 

6 ‘‘(g) LOAN APPROVAL AUTHORITY.— 

7 ‘‘(1) IN GENERAL.—A premier certified develop8 ment company may, under conditions determined by 

9 the Administrator in regulations published in the 

10 Code of Federal Regulations, issue guarantees on 

11 debentures, approve, authorize, close, service, fore12 close, litigate (except that the Administrator may 

13 monitor conduct of any such litigation), and liq14 uidate loans that are funded with proceeds of a de15 benture issued by a premier certified development 

16 company unless the Administrator advises the com17 pany that loans involving a specific institutional 

18 lender are to be submitted to the Administrator for 

19 further consideration, and approval by the Adminis20 trator. 

21 ‘‘(2) PROGRAM GOALS.—Each premier certified 

22 development company shall establish a goal of proc23 essing no less than 50 percent of the applications for 

24 assistance under this title that the premier certified 

25 development company receives. Failure to meet this 
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1 goal shall have no affect on the company’s status as 

2 a premier certified development company under this 

3 section. 

4 ‘‘(3) SCOPE OF REVIEW.—The approval of a 

5 loan and guarantee of a debenture by a premier cer6 tified development company shall be subject to final 

7 approval as to the eligibility of any guarantee by the 

8 Administrator as set forth in section 506, but such 

9 final approval shall not include review of decisions 

10 by the premier certified development company in11 volving creditworthiness, loan closing, or compliance 

12 with legal requirements imposed by law or regula13 tion. 

14 ‘‘(h) SUSPENSION OR REVOCATION.—The Adminis15 trator may suspend or revoke an accredited certified devel16 opment company’s premier status if the Administrator de17 termines, after a hearing on the record as set forth in sec18 tions 554, 556, and 557 of title 5, United States Code, 

19 that the accredited certified development company no 

20 longer meets the eligibility criteria established under this 

21 section, fails to maintain adequate loan loss reserves man22 dated in this section even if it meets the other eligibility 

23 requirements for premier status, or violates the Adminis24 trator’s rules, regulations, or some other provision of law. 

25 The Administrator shall consider the review of the premier 
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1 certified development company conducted pursuant to sub2 section (e) in determining whether to suspend or revoke 

3 an accredited development company’s premier status. 

4 Such suspension or revocation shall have no effect on the 

5 development company’s status as an accredited certified 

6 development company. 

7 ‘‘(i) EFFECT OF SUSPENSION OR REVOCATION.—A 

8 suspension or revocation of premier status shall not affect 

9 any outstanding debenture guarantee. 

10 ‘‘(j) RULE OF CONSTRUCTION.—Any reference to the 

11 term ‘premier certified lender’ or ‘PCL’ in legislation en12 acted, or regulations adopted, prior to the enactment of 

13 the Small Business Financing and Investment Act of 2009 

14 shall be deemed to be a reference to the term ‘premier 

15 certified development company’.’’. 

16 SEC. 215. MULTI-STATE OPERATIONS. 

17 Section 505 of the Small Business Investment Act 

18 of 1958 (15 U.S.C. 697b) is amended to read as follows: 

19 ‘‘SEC. 505. MULTI-STATE OPERATIONS. 

20 ‘‘(a) AUTHORIZATION.—The Administrator shall per21 mit an accredited or premier certified development com22 pany to make loans or issue debentures in any State that 

23 is contiguous to the State of incorporation of that com24 pany only if the company— 
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1 ‘‘(1) has members, from each of the States in 

2 which it operates with not fewer than 25 members 

3 who reside in such States; 

4 ‘‘(2) has a board of directors that contains not 

5 fewer than 2 members from each State in which the 

6 company makes loans and issues debentures and are 

7 residents of that State; 

8 ‘‘(3) maintains a separate loan committee to 

9 process loans in each expansion State and the mem10 bers of the loan committee are solely residents of the 

11 expansion State; and 

12 ‘‘(4) files an application developed by the Ad13 ministrator which provides— 

14 ‘‘(A) notice of the intention to make loans 

15 in multiple States; 

16 ‘‘(B) a specification of the States in which 

17 the company intends to make loans; 

18 ‘‘(C) a list of members in each expansion 

19 State; and 

20 ‘‘(D) a detailed statement on how the com21 pany will comply with the requirements of this 

22 subsection. 

23 ‘‘(b) LOAN COMMITTEES.—The requirements of 

24 paragraph (3) of subsection (a) shall not require a devel25 opment company to establish a loan committee in its State 
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1 of incorporation or in a local economic area outside the 

2 State of incorporation unless such area is part of an ex3 pansion State. 

4 ‘‘(c) REVIEW.— 

5 ‘‘(1) IN GENERAL.—The Administrator shall re6 view each application for expansion under subsection 

7 (a), but such review shall be limited to that informa8 tion needed to determine whether the company will 

9 comply with the requirements of subsection (a). 

10 ‘‘(2) DEADLINE FOR DECISION.—The Adminis11 trator shall make a decision on each application 

12 under subsection (a) within 15 calendar days after 

13 the receipt of the application. If no such decision is 

14 granted, the application is deemed to be approved 

15 and no further action is required by the applicant or 

16 the Administrator for the company to expand into 

17 the States specified in the application. 

18 ‘‘(3) APPLICATION RESUBMITTAL.—If the Ad19 ministrator rejects the application for expansion, the 

20 Administrator shall provide in writing the reasons 

21 for denial within 10 calendar days of the decision. 

22 The applicant then may resubmit the application but 

23 the review of such resubmitted applications will be 

24 limited only to the areas in which the Administrator 

25 found the original application deficient. The dead-
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1 lines in paragraph (2) shall apply to resubmitted ap2 plications. 

3 ‘‘(4) APPEAL.—If a resubmitted application is 

4 denied, the applicant may, within 10 calendar days 

5 after receipt of the disapproval, appeal such dis6 approval. The Administrator shall conduct a hearing 

7 to determine such appeal pursuant to sections 554, 

8 556, and 557 of title 5, United States Code, and 

9 shall issue a decision not later than 45 days after 

10 the appeal is filed. The decision on appeal shall con11 stitute final agency action for purposes of chapter 7 

12 of title 5, United States Code. 

13 ‘‘(d) FAILURE TO DEVELOP APPLICATION.—If the 

14 Administrator fails to develop an application as required 

15 in subsection (a)(4) within 60 days of the enactment of 

16 the Small Business Financing and Investment Act of 

17 2009, an accredited or premier certified development com18 pany only need submit the information required in sub19 section (a) to the Administrator to be deemed eligible to 

20 commence operations authorized by this section. Such eli21 gibility shall not be terminated if the Administrator devel22 ops an application after the 60-day period set forth in this 

23 subsection. 

24 ‘‘(e) AGGREGATE ACCOUNTING.—An accredited or 

25 premier certified development company authorized to op-
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1 erate in multiple States pursuant to this section may 

2 maintain an aggregate accounting of all revenue and ex3 penses of the company for purposes of this title. 

4 ‘‘(f) LOCAL JOB CREATION REQUIREMENTS.— 

5 ‘‘(1) IN GENERAL.—Any company making loans 

6 in multiple States as authorized in this section shall 

7 not count jobs created or retained in one State to8 wards any applicable job creation or retention re9 quirements mandated by this title in another State. 

10 ‘‘(2) APPLICABILITY.—Any company operating 

11 under the authority of this section shall be required 

12 to meet any job creation or retention requirement of 

13 this title on the date that is 2 years after the cer14 tified development company closed its first loan in 

15 its new State of operation. 

16 ‘‘(g) CONTIGUOUS STATES.—For the purposes of this 

17 section, the States of Alaska and Hawaii shall be deemed 

18 to be contiguous to any State abutting the Pacific Ocean. 

19 Territories of the United States located in the Pacific 

20 Ocean shall be deemed to be contiguous to any State abut21 ting the Pacific Ocean, including Alaska and Hawaii, and 

22 territories of the United States located in the Caribbean 

23 Sea shall be deemed contiguous to any State abutting the 

24 Gulf of Mexico. 
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1 ‘‘(h) EXEMPTION FOR LOCAL ECONOMIC AREAS.— 

2 Except as provided in subsection (a)(3) with respect to 

3 loan committees, any certified, accredited, or premier de4 velopment company or applicant operating in a local eco5 nomic development area that crosses the border of another 

6 State shall not be considered to be operating under the 

7 provisions of this section and shall not be required to com8 ply with the requirements of this section for multi-State 

9 operation.’’. 

10 SEC. 216. GUARANTY OF DEBENTURES. 

11 Section 506 of the Small Business Investment Act 

12 of 1958 (15 U.S.C. 697c) is amended to read as follows: 

13 ‘‘SEC. 506. GUARANTY OF DEBENTURES. 

14 ‘‘(a) AUTHORITY TO GUARANTEE.—Except as pro15 vided in subsection (c), the Administrator may guarantee 

16 the timely payment of all principal and interest as sched17 uled on any debenture issued by a certified development 

18 company. 

19 ‘‘(b) TERMS AND CONDITIONS OF THE GUAR20 ANTEE.—Such guarantees may be made on such terms 

21 and conditions as the Administrator may by regulation, 

22 published in the Code of Federal Regulations, determine 

23 to be appropriate, except that the Administrator shall not 

24 decline to issue such guarantee when the ownership inter25 ests of the small business concern and the ownership inter-
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1 ests of the property to be financed with the proceeds of 

2 the loan made pursuant to subsection (e)(1) are not iden3 tical because one or more of the following classes of rel4 atives have an ownership interest in either the small busi5 ness concern or the property: father, mother, son, daugh6 ter, wife, husband, brother, or sister, if the Administrator 

7 or his designee has determined on a case-by-case basis 

8 that such ownership interest, such guarantee, and the pro9 ceeds of such loan, will substantially benefit the small 

10 business concern. 

11 ‘‘(c) FULL FAITH AND CREDIT.—The full faith and 

12 credit of the United States is pledged to the payment of 

13 all amounts guaranteed under this section. 

14 ‘‘(d) SUBORDINATION.—Any debenture issued by a 

15 certified development company with respect to which a 

16 guarantee is made under this section may be subordinated 

17 by the Administrator to any other debenture, promissory 

18 note, or other debt or obligation of such company. 

19 ‘‘(e) STANDARDS FOR ADMINISTRATOR GUARAN20 TEES.—No guarantee may be made with respect to any 

21 debenture under this section unless— 

22 ‘‘(1) the debenture is issued for the purpose of 

23 making one or more loans to small business concerns 

24 the proceeds of which shall be used for the purposes 

25 set forth in section 507; 
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1 ‘‘(2) the interest rate on such debentures is not 

2 less than the rate of interest determined by the Sec3 retary of the Treasury for purposes of section 

4 303(b); 

5 ‘‘(3) the aggregate amount of such debenture 

6 does not exceed the amount of the loans to be made 

7 from the proceeds of such debenture plus, at the 

8 election of the borrower, other amounts attributable 

9 to the administrative and closing costs of such loans, 

10 except for the attorney fees of the borrower; 

11 ‘‘(4) the amount of any loan to be made from 

12 such proceeds does not exceed an amount equal to 

13 50 percent of the cost of the project with respect to 

14 which such loan is made; 

15 ‘‘(5) the Administrator, except to the extent 

16 provided in section 504 with respect to premier cer17 tified development companies, approves each loan to 

18 be made from such proceeds; and 

19 ‘‘(6) with respect to each loan made from the 

20 proceeds of such debenture, the Administrator— 

21 ‘‘(A) assesses and collects a fee, which 

22 shall be payable by the borrower, in an amount 

23 established annually by the Administration, 

24 which amount shall not exceed— 

25 ‘‘(i) the lesser of— 
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1 ‘‘(I) 0.9375 percent per year of 

2 the outstanding balance of the loan; 

3 or 

4 ‘‘(II) the minimum amount nec5 essary to reduce the cost (as defined 

6 in section 502 of the Federal Credit 

7 Reform Act of 1990) to the Adminis8 trator of purchasing and guaranteeing 

9 debentures under this title to zero; 

10 and 

11 ‘‘(ii) 50 percent of the amount estab12 lished under clause (i) in the case of a loan 

13 made during the 2-year period beginning 

14 on October 1, 2002, for the life of the 

15 loan; and 

16 ‘‘(B) uses the proceeds of such fee to offset 

17 the cost (as such term is defined in section 502 

18 of the Federal Credit Reform Act of 1990) to 

19 the Administrator of making guarantees under 

20 this section. 

21 ‘‘(f) INTEREST RATES ON COMMERCIAL LOANS.— 

22 Notwithstanding the provisions of the constitution or laws 

23 of any State limiting the rate or amount of interest which 

24 may be charged, taken, received, or reserved, the max25 imum legal rate of interest on any commercial loan which 
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1 funds any portion of the cost of the project financed pur2 suant to this title which is not funded by a debenture 

3 guaranteed under this section shall be a rate which is es4 tablished by the Administrator who shall publish such rate 

5 quarterly in, at a minimum, the Federal Register and on 

6 the Administration’s website. 

7 ‘‘(g) DEBENTURE REPAYMENT.—Any debenture that 

8 is issued under this section shall provide for the payment 

9 of principal and interest on a semiannual basis. 

10 ‘‘(h) CHARGES FOR ADMINISTRATOR’S EXPENSES.— 

11 The Administrator may impose an additional charge for 

12 administrative expenses with respect to each debenture for 

13 which payment of principal and interest is guaranteed 

14 under this section. Such administrative expenses may in15 clude— 

16 ‘‘(1) development company fees for processing, 

17 closing, servicing, late payment, or loan assumption; 

18 ‘‘(2) agent or trustee fees for central servicing, 

19 underwriters, or debenture funding; and 

20 ‘‘(3) fees charged by the Administrator for the 

21 debenture guaranty and from the certified develop22 ment company to reduce the subsidy cost. 

23 ‘‘(i) PARTICIPATION FEE.—The Administrator shall 

24 collect a one-time fee in an amount equal to 50 basis 

25 points on the total participation in any project of any 
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1 State or local government, bank, other financial institu2 tion, or foundation or not-for-profit institution. Such fee 

3 shall be imposed only when the participation of the entity 

4 described in the previous sentence will occupy a senior 

5 credit position to that of the development company. All 

6 proceeds of the fee shall be used to offset the cost (as 

7 that term is defined in section 502 of the Credit Reform 

8 Act of 1990) to the Administrator of making guarantees 

9 under this section. 

10 ‘‘(j) CERTIFIED DEVELOPMENT COMPANY FEE.— 

11 The Administrator shall collect annually from each devel12 opment company a fee of 0.125 percent of the outstanding 

13 principal balance of any guaranteed debenture authorized 

14 by the Administrator after September 30, 1996. Such fee 

15 shall be derived from the servicing fees collected by the 

16 certified development company pursuant to regulation, 

17 and shall not be derived from any additional fees imposed 

18 on small business concerns. All proceeds of the fee shall 

19 be used to offset the cost (as that term is defined in sec20 tion 502 of the Credit Reform Act of 1990) to the Admin21 istrator of making guarantees under this section. 

22 ‘‘(k) EFFECTIVE DATE.—The fees authorized by this 

23 section shall apply to any financing approved under this 

24 title on or after October 1, 1996. 
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1 ‘‘(l) CALCULATION OF SUBSIDY RATE.—All fees, in2 terest, and profits received and retained by the Adminis3 trator under this section shall be included in the calcula4 tions made by the Director of the Office of Management 

5 and Budget to offset the cost (as that term is defined in 

6 section 502 of the Federal Credit Reform Act of 1990) 

7 to the Administrator of purchasing and guaranteeing de8 bentures under this title. 

9 ‘‘(m) ACTIONS UPON DEFAULT.— 

10 ‘‘(1) INITIAL ACTIONS.—Not later than the 

11 45th day after the date on which a payment on a 

12 loan funded through a debenture guaranteed under 

13 this section is due and not received, the Adminis14 trator shall— 

15 ‘‘(A) take all necessary steps to bring such 

16 loan current; or 

17 ‘‘(B) implement a formal written deferral 

18 agreement. 

19 ‘‘(2) PURCHASE OR ACCELERATION OF DEBEN20 TURE.—Not later than the 65th day after the date 

21 on which a payment on a loan described in para22 graph (1) is due and not received, and absent a for23 mal written deferral agreement, the Administrator 

24 shall take all necessary steps to purchase or accel25 erate the debenture. 
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1 ‘‘(3) PREPAYMENT PENALTIES.—With respect 

2 to the portion of any project derived from funds not 

3 provided by a debenture issued by a certified devel4 opment company or borrower, the Administrator— 

5 ‘‘(A) shall negotiate the elimination of any 

6 prepayment penalties or late fees on defaulted 

7 loans made prior to September 30, 1996; 

8 ‘‘(B) shall not pay any prepayment penalty 

9 or late fee on the default based purchase of 

10 loans issued after September 30, 1996; and 

11 ‘‘(C) shall not pay a default interest rate 

12 higher than the interest rate on the note prior 

13 to the date of default for any project financed 

14 after September 30, 1996. 

15 ‘‘(4) COLLECTION AND SERVICING.— 

16 ‘‘(A) IN GENERAL.—In the event of the de17 fault of any loan and the repurchase of a de18 benture guaranteed by the Administrator under 

19 this title, the Administrator shall continue to 

20 delegate to the central servicing agent that was 

21 contracted for that service as of January 1, 

22 2009, or successor contractor the authority to 

23 collect and disburse all funds or payments re24 ceived on such defaulted loans, including pay25 ments from guarantors or on notes in com-
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1 promise of the original note. The central serv2 icing agent shall continue to provide an ac3 counting of income and expenses for any such 

4 loan on the same basis it does for any other 

5 loan issued under this title. The central serv6 icing agent shall make the accounting of income 

7 and expenses and reports thereon available as 

8 requested by the certified development company 

9 that issued the debenture or the Administrator. 

10 ‘‘(B) EFFECTIVE DATE.—The require11 ments of subparagraph (A) shall become effec12 tive 180 days after the date of enactment of the 

13 Small Business Financing and Investment Act 

14 of 2009.’’. 

15 SEC. 217. ECONOMIC DEVELOPMENT THROUGH DEBEN16 TURES. 

17 Section 507 of the Small Business Investment Act 

18 of 1958 (15 U.S.C. 697d) is amended to read as follows: 

19 ‘‘SEC. 507 ECONOMIC DEVELOPMENT AND DEBENTURES. 

20 ‘‘(a) IN GENERAL.—A certified development company 

21 shall be prohibited from issuing a debenture under this 

22 title unless the project funded with the debenture meets 

23 one of the following economic development objectives: 

24 ‘‘(1) The creation of job opportunities within 

25 two years of the completion of the project or the 
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1 preservation or retention of jobs attributable to the 

2 project. 

3 ‘‘(2) Improving the economy of the locality, 

4 such as stimulating other business development in 

5 the community, bringing new income into the area, 

6 or assisting the community in diversifying and stabi7 lizing its economy. 

8 ‘‘(3) The achievement of one or more of the fol9 lowing public policy goals: 

10 ‘‘(A) Business district revitalization or ex11 pansion of businesses in low-income commu12 nities which would be eligible for a new markets 

13 tax credit under section 45D(a) of the Internal 

14 Revenue Code of 1986, or implementing regula15 tions issued under that section. 

16 ‘‘(B) Expansion of exports. 

17 ‘‘(C) Expansion of minority business devel18 opment or women-owned business development. 

19 ‘‘(D) Rural development. 

20 ‘‘(E) Expansion of small business concerns 

21 owned and controlled by veterans, as defined in 

22 section 3(q) of the Small Business Act (15 

23 U.S.C. 632(q)), especially service-disabled vet24 erans, as defined in such section. 
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1 ‘‘(F) Enhanced economic competition, in2 cluding the advancement of technology, plan re3 tooling, conversion to robotics, or competition 

4 with imports. 

5 ‘‘(G) Changes necessitated by Federal 

6 budget cutbacks, including defense related in7 dustries. 

8 ‘‘(H) Business restructuring arising from 

9 federally mandated standards or policies affect10 ing the environment or the safety and health of 

11 employees. 

12 ‘‘(I) Reduction of energy consumption by 

13 at least 10 percent. 

14 ‘‘(J) Increased use of sustainable design, 

15 including designs that reduce the use of green16 house gas emitting fossil fuels, or low-impact 

17 design to produce buildings that reduce the use 

18 of nonrenewable resources and minimize envi19 ronmental impact. 

20 ‘‘(K) Plant, equipment, and process up21 grades of renewable energy sources such as the 

22 small-scale production of energy for individual 

23 buildings or communities consumption, com24 monly known as micropower, or renewable fuels 
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1 producers including biodiesel and ethanol pro2 ducers. 

3 ‘‘(4) Debt refinancing to the extent permitted 

4 by subsection (d). 

5 ‘‘(b) JOB CREATION AND RETENTION REQUIRE6 MENTS.— 

7 ‘‘(1) IN GENERAL.—A project meets the job 

8 creation or retention objective set forth in subsection 

9 (a)(1) if the project creates or retains one job for 

10 every $65,000 guaranteed by the Administrator, ex11 cept that the amount shall be $100,000 in the case 

12 of a project of a small manufacturer. 

13 ‘‘(2) EXCEPTIONS.— 

14 ‘‘(A) Paragraph (1) shall not apply to a 

15 project for which eligibility is based on the ob16 jectives set forth in subsection (a)(2) or (a)(3) 

17 if the certified development company’s portfolio 

18 of outstanding debentures creates or retains one 

19 job for every $65,000 guaranteed by the Ad20 ministrator. 

21 ‘‘(B) For projects in Alaska, Hawaii, 

22 State-designated enterprise zones, empower23 ment zones, enterprise communities, or labor 

24 surplus areas designated by the Administrator, 

25 the certified development company’s portfolio 
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1 may average not more than $75,000 per job 

2 created or retained. 

3 ‘‘(C) Loans for projects of small manufac4 turers shall be excluded from the calculations in 

5 subparagraphs (A) and (B). 

6 ‘‘(c) COMBINATION OF CERTAIN GOALS.—A small 

7 business concern that is unconditionally owned by more 

8 than 1 individual, or a corporation, the stock of which is 

9 owned by more than 1 individual, shall be deemed to have 

10 achieved a goal under subsection (a)(3) if a combined own11 ership share of not less than 51 percent is held by individ12 uals who are in 1 of, or a combination of, the groups de13 scribed in subparagraphs (C) or (E) of subsection (a)(1). 

14 ‘‘(d) COMPOSITION OF THE PROJECT.— 

15 ‘‘(1) IN GENERAL.—The projects described in 

16 this section shall include, but not be limited to, plant 

17 acquisition, construction, conversion, expansion (in18 cluding the acquisition of land), equipment and re19 lated project costs, or to acquire the stock of a cor20 poration (as long as the value of the loan for the ac21 quisition of the stock does not exceed the fixed asset 

22 value attributable to such assets as would be eligible 

23 for financing under subsection (a)). 

24 ‘‘(2) DEBT REFINANCING.—Any financing ap25 proved under this title may include a limited amount 
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1 of debt refinancing if the project involves the expan2 sion of a small business concern. 

3 ‘‘(3) LIMITATION.—The amount of the existing 

4 indebtedness may be refinanced and added to the ex5 pansion cost if— 

6 ‘‘(A) the existing indebtedness does not ex7 ceed 50 percent of the project cost of the ex8 pansion; 

9 ‘‘(B) the proceeds of the indebtedness were 

10 used to acquire land, including a building situ11 ated thereon, to construct a building thereon, or 

12 to purchase equipment; 

13 ‘‘(C) the existing indebtedness is 

14 collateralized by fixed assets; 

15 ‘‘(D) the existing indebtedness was in16 curred for the benefit of the small business con17 cern; 

18 ‘‘(E) the financing under this title will be 

19 used only for refinancing existing indebtedness 

20 or costs relating to the project financed under 

21 this title; 

22 ‘‘(F) the financing under this title will pro23 vide a substantial benefit to the borrower when 

24 prepayment penalties, financing fees, and other 

25 financing costs are accounted for; 
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1 ‘‘(G) the borrower has been current on all 

2 payments due on the existing debt for not less 

3 than 1 year preceding the date of refinancing; 

4 and 

5 ‘‘(H) the financing under this title will 

6 provide better terms or rate of interest than the 

7 existing indebtedness at the time of refinancing. 

8 ‘‘(e) DEFINITION.—For purposes of subparagraphs 

9 (J) and (K) of subsection (a)(3), the terms included have 

10 the meanings given those terms under the Leadership in 

11 Energy and Environmental Design (more generally re12 ferred to as LEED) standard for green building certifi13 cation, as determined by the Administrator through regu14 lation to be published in the Code of Federal Regula15 tions.’’. 

16 SEC. 218. PROJECT FUNDING REQUIREMENTS. 

17 Section 508 of the Small Business Investment Act 

18 of 1958 (15 U.S.C. 697e) is amended to read as follows: 

19 ‘‘SEC. 508. PROJECT FUNDING REQUIREMENTS. 

20 ‘‘(a) IN GENERAL.—Any project described in section 

21 507 must meet the funding standards set forth in this sec22 tion. 

23 ‘‘(b) SIZE OF DEBENTURE.—The Administrator shall 

24 only be permitted to guarantee debenture issued by a cer25 tified development company up to the following amounts: 
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1 ‘‘(1) $3,000,000 for any project of a small busi2 ness concern. 

3 ‘‘(2) $4,000,000 for any project that meets the 

4 public policy goals set forth in section 507(a)(3). 

5 ‘‘(3) $4,000,000 for any project to be located in 

6 a low-income community as that term is described in 

7 section 507(a)(3)(A). 

8 ‘‘(4) $8,000,000 for each project of a small 

9 manufacturer. 

10 ‘‘(5) $8,000,000 for each project that reduces 

11 the borrower’s energy consumption by at least 10 

12 percent. 

13 ‘‘(6) $8,000,000 for each project that generates 

14 renewable energy or renewable fuels, such as, but 

15 not limited to, biodiesel or ethanol production. 

16 ‘‘(7) $10,000,000 for each project for a small 

17 business concern that constitutes a major source of 

18 employment as that term is used in section 

19 7(b)(3)(E) of the Small Business Act (15 U.S.C. 

20 636(b)(3)(E)). 

21 ‘‘(c) FUNDING FROM SOURCES OTHER THAN DE22 BENTURES ISSUED BY CERTIFIED DEVELOPMENT COM23 PANIES.— 

24 ‘‘(1) IN GENERAL.—Any project financed pur25 suant to this title must have the following contribu-
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1 tions from parties other than the debenture issued 

2 by the certified development company: 

3 ‘‘(A) FUNDING FROM INSTITUTIONS.—If a 

4 small business concern provides— 

5 ‘‘(i) the minimum contribution re6 quired by subparagraph (B), not less than 

7 50 percent of the total cost of any project 

8 financed shall come from State or local 

9 governments, banks or other financial in10 stitutions, or foundations or other not-for11 profit institutions; and 

12 ‘‘(ii) more than the minimum con13 tribution required under subparagraph 

14 (B), any excess contribution may be used 

15 to reduce the amount required from insti16 tutions described in clause (i), except that 

17 the amount provided by such institution 

18 may not be reduced to an amount that is 

19 less than the amount of the loan made by 

20 the Administrator. 

21 ‘‘(B) FUNDING FROM SMALL BUSINESS

22 CONCERNS.—The small business concern (or its 

23 owners, stockholders, or affiliates) that will 

24 have a project financed pursuant to this title 

25 shall provide— 
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1 ‘‘(i) at least 15 percent of the total 

2 cost of the project financed if the small 

3 business concern has been in operation for 

4 a period of 2 years or less; 

5 ‘‘(ii) at least 15 percent of the total 

6 cost of the project financed if the project 

7 involves construction of a limited or single 

8 purposed building or structure; 

9 ‘‘(iii) at least 20 percent of the total 

10 cost of the project financed if the project 

11 involves both of the conditions in clauses 

12 (i) and (ii); or 

13 ‘‘(iv) at least 10 percent of the total 

14 cost of the project financed and not cov15 ered by clauses (i), (ii), or (iii), at the dis16 cretion of the certified development com17 pany. 

18 ‘‘(2) SELLER FINANCING.—Seller-provided fi19 nancing may be used to meet the requirements of 

20 paragraph (1)(B), if the seller subordinates the in21 terest of the seller in the property to the debenture 

22 guaranteed by the Administrator. 

23 ‘‘(3) COLLATERALIZATION.— 

24 ‘‘(A) IN GENERAL.—The collateral pro25 vided by the small business concern shall gen-
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1 erally include a subordinate lien position on the 

2 property being financed under this title, and is 

3 only one of the factors to be evaluated in the 

4 credit determination. Additional collateral shall 

5 be required only if the Administrator deter6 mines, on a case-by-case basis, that additional 

7 security is necessary to protect the interest of 

8 the Government. 

9 ‘‘(B) APPRAISALS.—With respect to com10 mercial real property provided by the small 

11 business concern as collateral, an appraisal of 

12 the property by a State licensed or certified ap13 praiser— 

14 ‘‘(i) shall be required by the Adminis15 trator before disbursement of the loan if 

16 the estimated value of that property is 

17 more than $400,000; or 

18 ‘‘(ii) may be required by the Adminis19 trator or the lender before disbursement of 

20 the loan if the estimated value of that 

21 property is $400,000 or less, and such ap22 praisal is necessary for appropriate evalua23 tion of creditworthiness. 

24 ‘‘(C) ADJUSTMENT.—The Administrator 

25 shall periodically adjust the amount under sub-
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1 paragraph (B) to account for the effects of in2 flation, provided that no such adjustment shall 

3 be less than $50,000. 

4 ‘‘(4) LIMITATION ON LEASING.— 

5 ‘‘(A) If the project funded under this sec6 tion includes the acquisition of a facility or the 

7 construction of a new facility, the small busi8 ness concern— 

9 ‘‘(i) shall permanently occupy and use 

10 not less than 50 percent of the project 

11 property; and 

12 ‘‘(ii) may, on a temporary or perma13 nent basis, lease to others not more than 

14 50 percent of the project property. 

15 ‘‘(B) For purposes of this paragraph, the 

16 term ‘project property’ means— 

17 ‘‘(i) the building and any exterior 

18 areas used in connection with the building 

19 or a part thereof and includes all of the 

20 parcels of real property included in the 

21 project in the aggregate; and 

22 ‘‘(ii) occupancy and use of the project 

23 property by the operating company shall be 

24 deemed to be occupancy and use by the 
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1 small business concern that received fund2 ing under this section. 

3 ‘‘(d) REGULATIONS.—(1) The Administrator shall 

4 promulgate regulations, after notice and comment, to im5 plement the provisions of this section within 60 days after 

6 enactment of the Small Business Financing and Invest7 ment Act of 2009. The Administrator may limit the com8 ment period to 15 days to meet this deadline. 

9 ‘‘(2) If the Administrator fails to promulgate the reg10 ulations as provided in paragraph (1), all leases entered 

11 into, absent clear and convincing evidence of fraud, shall 

12 be deemed to be in compliance with the limitations on leas13 ing in this subparagraph for purposes of honoring the 

14 guarantee on the debenture issued by the certified develop15 ment company. 

16 ‘‘(3) Any regulation of the Administrator or interpre17 tation of any regulation by the Administrator or the Office 

18 of Hearings and Appeals that restricts the use of proceeds 

19 for leased projects that was in effect on the date of enact20 ment of the Small Business Financing and Investment Act 

21 of 2009 shall hereby cease to apply. 

22 ‘‘(4) Any interpretation of the leasing provisions 

23 issued by the Administrator prior to the issuance of regu24 lations required by paragraph (1) shall be considered null 

25 and void and may be not be used in any court of com-
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1 petent jurisdiction, be it Federal or State court, to dis2 honor any guarantee of a debenture issued by a certified 

3 development company for a project funded pursuant to 

4 this section. 

5 ‘‘(e) OWNERSHIP CALCULATION.—Ownership re6 quirements to determine the eligibility of a small business 

7 concern that applies for funding under this title shall be 

8 determined without regard to any ownership interest of 

9 a spouse arising solely from the application of the commu10 nity property laws of a State for purposes of determining 

11 marital interests. 

12 ‘‘(f) COMBINATION FINANCING.—Financing under 

13 this title may be provided to a borrower in the maximum 

14 amount provided in this section, and a loan guarantee 

15 under section 7(a) of the Small Business Act (15 U.S.C. 

16 636(a)) may be provided to the same borrower in the max17 imum amount provided in section 7(a)(3)(A) of such Act, 

18 to the extent that the borrower otherwise qualifies for such 

19 assistance. 

20 ‘‘(g) RULES FOR DEBENTURES FUNDING PROJECTS

21 IN LOW-INCOME AREAS.— 

22 ‘‘(1) SIZE STANDARDS.—For purposes of deter23 mining the size of a small business concern seeking 

24 funds for a project described in subsection (b)(3), 

25 the size standard promulgated by the Administrator 
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1 in section 121.201 of title 13, Code of Federal Reg2 ulations, as in effect on January, 1, 2009, or any 

3 successor regulation, shall be increased by 25 per4 cent. 

5 ‘‘(2) PERSONAL LIQUIDITY.— 

6 ‘‘(A) IN GENERAL.—The amount of per7 sonal resources of an owner for a project de8 scribed in subsection (b)(3) that are excluded 

9 from the amount required to reduce the portion 

10 of the project funded by the Administrator shall 

11 be not less than 25 percent more than that re12 quired for funding of any other project de13 scribed in subsection (b). 

14 ‘‘(B) DEFINITION.—For purposes of sub15 paragraph (A), the term ‘owner’ means any 

16 person that owns not less than 20 percent of 

17 the equity or has not less than 20 percent of 

18 the voting rights (in the case of a small busi19 ness organized as a partnership) of a small 

20 business concern seeking funds under this sec21 tion. 

22 ‘‘(h) APPLICABILITY OF CREDIT ELSEWHERE AND

23 PERSONAL RESOURCES REGULATIONS.—Except as pro24 vided in subsection (c)(1)(B) with respect to project fund25 ing, the Administrator shall be prohibited from applying 
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1 the regulations set forth in sections 120.101 and 120.102 

2 of title 13, Code of Federal Regulations, as in effect on 

3 January 1, 2009, or any successor regulation that applies 

4 a credit elsewhere or personal resources test to any appli5 cation for a loan under this title pending or filed after 

6 the date of enactment of the Small Business Financing 

7 and Investment Act of 2009.’’. 

8 SEC. 219. PRIVATE DEBENTURE SALES AND POOLING OF 

9 DEBENTURES. 

10 Section 509 of the Small Business Investment Act 

11 of 1958 (15 U.S.C. 697f) is amended to read as follows: 

12 ‘‘SEC. 509. PRIVATE DEBENTURE SALES AND POOLING OF 

13 DEBENTURES. 

14 ‘‘(a) PRIVATE DEBENTURE SALES.—Notwith15 standing any other law, rule, or regulation, the Adminis16 trator shall sell to investors, either publicly or by private 

17 placement, debentures issued by certified development 

18 companies pursuant to this title for the full amount of the 

19 program levels authorized in each fiscal year and if there 

20 is not authorization of a level, the amount of debentures 

21 actually issued. 

22 ‘‘(b) FEDERAL FINANCING BANK.—Nothing in any 

23 provision of law shall be construed to authorize the Fed24 eral Financing Bank to acquire— 
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1 ‘‘(1) any obligation the payment of principal or 

2 interest on which at any time has been guaranteed 

3 in whole or in part under this title and which is 

4 being sold pursuant to the provisions of this section; 

5 ‘‘(2) any obligation which is an interest in any 

6 obligation which is an interest in any obligation de7 scribed in paragraph (1); or 

8 ‘‘(3) any obligation which is secured by, or sub9 stantially all of the value of which is attributable to, 

10 any obligation described in paragraph (1) or (2). 

11 ‘‘(c) POOLING OF DEBENTURES.— 

12 ‘‘(1) IN GENERAL.—The Administrator is au13 thorized to issue trust certificates representing own14 ership of all or a fractional part of debentures issued 

15 by certified development companies and guaranteed 

16 under this title if such trust certificates are based on 

17 and backed by a trust or pool approved by the Ad18 ministrator and composed solely of guaranteed de19 bentures. 

20 ‘‘(2) GUARANTEE OF TRUST CERTIFICATES.— 

21 The Administrator is authorized, upon such terms 

22 and conditions as are deemed appropriate, to guar23 antee the timely payment of the principal of and in24 terest on trust certificates issued by the Adminis25 trator or its agent for purposes of this section. Such 
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1 guarantee shall be limited to the extent of principal 

2 and interest on the guaranteed debentures which 

3 compose the trust or pool. In the event that a deben4 ture in such trust or pool is prepaid, either volun5 tarily or in the event of default, the guarantee of 

6 timely payment of principal and interest on the trust 

7 certificates shall be reduced in proportion to the 

8 amount of principal and interest such prepaid deben9 ture represents in the trust or pool. Interest on pre10 paid or defaulted debentures shall accrue and be 

11 guaranteed by the Administrator only through the 

12 date of payment on the guarantee. During the term 

13 of the trust certificate, it may be called for redemp14 tion due to prepayment or default of all debentures 

15 constituting the pool. 

16 ‘‘(3) FULL FAITH AND CREDIT.—The full faith 

17 and credit of the United States is pledged to the 

18 payment of all amounts which may be required to be 

19 paid under any guarantee of such trust certificates 

20 issued by the Administrator or its agent pursuant to 

21 this section. 

22 ‘‘(4) PROHIBITION ON GUARANTEE FEE FOR

23 POOLS.—The Administrator shall not collect any fee 

24 for any guarantee under this section, provided that 

25 nothing herein shall preclude any agent of the Ad-
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1 ministrator from collecting a fee approved by the 

2 Administrator for the functions performed in para3 graph (6)(F). 

4 ‘‘(5) SUBROGATION.— 

5 ‘‘(A) IN GENERAL.—In the event the Ad6 ministrator pays a claim under a guarantee 

7 issued under this section, it shall be subrogated 

8 fully to the rights satisfied by such payment. 

9 ‘‘(B) ADMINISTRATOR EXERCISE OF

10 RIGHTS.—No Federal, State, or local law shall 

11 preclude or limit the exercise by the Adminis12 trator of its ownership rights in the debentures 

13 constituting the trust or pool against which the 

14 trust certificates are issued. 

15 ‘‘(6) CENTRAL REGISTRATION.— 

16 ‘‘(A) IN GENERAL.—The Administrator 

17 shall provide for a central registration of all 

18 trust certificates sold pursuant to this section. 

19 ‘‘(B) CONTRACT.—The Administrator shall 

20 contract with an agent to carry out on behalf 

21 of the Administrator the central registration 

22 functions of this section and the issuance of 

23 trust certificates to facilitate pooling. 

24 ‘‘(C) BOND.—The Administrator shall re25 quire the contractor to provide a fidelity bond 
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1 or insurance in such amounts as is deemed nec2 essary to fully protect the interests of the Gov3 ernment. 

4 ‘‘(D) DISCLOSURE REQUIREMENTS.—The 

5 Administrator shall, prior to any sale, require 

6 the seller to disclose to a purchaser of a trust 

7 certificate issued pursuant to this section, infor8 mation on terms, conditions, and yield of such 

9 instruments. 

10 ‘‘(E) AUTHORITY TO REGULATE.—The Ad11 ministrator shall have the authority to regulate 

12 brokers and dealers in trust certificates sold 

13 pursuant to this section. 

14 ‘‘(F) BOOK ENTRY PERMITTED.—Nothing 

15 in this paragraph shall prohibit the utilization 

16 of a book-entry or other electronic form of reg17 istration for trust certificates.’’. 

18 SEC. 220. FORECLOSURE AND LIQUIDATION OF LOANS. 

19 Section 510 of the Small Business Investment Act 

20 of 1958 (15 U.S.C. 697g) is amended to read as follows: 

21 ‘‘SEC. 510. FORECLOSURE AND LIQUIDATION OF LOANS. 

22 ‘‘(a) DELEGATION OF AUTHORITY.—In accordance 

23 with this section, the Administrator shall delegate to any 

24 certified development company that meets the eligibility 

25 requirements of subsection (b)(1), the authority to fore-
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1 close and liquidate, or to otherwise treat in accordance 

2 with this section, defaulted loans in its portfolio that are 

3 funded with the proceeds of debentures guaranteed by the 

4 Administrator pursuant to this title. 

5 ‘‘(b) ELIGIBILITY FOR DELEGATION.— 

6 ‘‘(1) REQUIREMENTS.—A certified development 

7 company shall be eligible for a delegation of author8 ity under subsection (a) if— 

9 ‘‘(A) the certified development company— 

10 ‘‘(i) has participated in the loan liq11 uidation pilot program established by the 

12 Small Business Programs Improvement 

13 Act of 1996 (15 U.S.C. 695 note), before 

14 the enactment of the Small Business Fi15 nancing and Investment Act of 2009; 

16 ‘‘(ii) is an accredited or premier cer17 tified development company; or 

18 ‘‘(iii) during the 3 fiscal years imme19 diately prior to seeking such a delegation, 

20 has made an average of not less than 10 

21 loans per year that are funded with the 

22 proceeds of debentures guaranteed under 

23 this title; and 

24 ‘‘(B) the certified development company— 

25 ‘‘(i) has one or more employees— 
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1 ‘‘(I) with not less than 2 years of 

2 substantive, decisionmaking experi3 ence in administering the liquidation 

4 and workout of problem loans secured 

5 in a manner substantially similar to 

6 loans funded with the proceeds of de7 bentures guaranteed under this title; 

8 and 

9 ‘‘(II) who have completed a train10 ing program on loan liquidation devel11 oped by the Administrator in conjunc12 tion with a certified development com13 pany that meet the requirements of 

14 this paragraph; or 

15 ‘‘(ii) submits to the Administrator 

16 documentation demonstrating that the 

17 company has contracted with a qualified 

18 third party to perform any liquidation ac19 tivities and secures the approval of the 

20 contract by the Administrator with respect 

21 to the qualifications of the contractor and 

22 the terms and conditions of liquidation ac23 tivities. 

24 ‘‘(2) CONFIRMATION.—On the request, the Ad25 ministrator shall examine the qualifications of any 
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1 certified development company described in sub2 section (a) to determine if such company is eligible 

3 for the delegation of authority under this section. If 

4 the Administrator determines that a company is not 

5 eligible, the Administrator shall provide the com6 pany, in writing, with the reasons for such ineligi7 bility. The certified development company shall be 

8 entitled to request delegated authority and the Ad9 ministrator shall review the request only to address 

10 whether the certified development company has rec11 tified the reasons for the Administrator’s original 

12 determination of ineligibility. 

13 ‘‘(c) SCOPE OF DELEGATED AUTHORITY.— 

14 ‘‘(1) IN GENERAL.—Each certified development 

15 company to which the Administrator delegates au16 thority under subsection (a) may with respect to any 

17 loan described in subsection (a)— 

18 ‘‘(A) perform all liquidation and fore19 closure functions, including the purchase in ac20 cordance with this subsection of any other in21 debtedness secured by the property securing the 

22 loan, in a reasonable and sound manner accord23 ing to commercially accepted practices, pursu24 ant to a liquidation plan approved in advance 

25 by the Administrator under paragraph (2)(A); 
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1 ‘‘(B) litigate any matter relating to the 

2 performance of the functions described in sub3 paragraph (A), except that the Administrator 

4 may— 

5 ‘‘(i) defend or bring any claim if— 

6 ‘‘(I) the outcome of the litigation 

7 may adversely affect the Administra8 tor’s management of the program es9 tablished under this title; or 

10 ‘‘(II) the Administrator is enti11 tled to legal remedies not available to 

12 a certified development company and 

13 such remedies will benefit either the 

14 Administrator or the certified develop15 ment company; and 

16 ‘‘(ii) oversee the conduct of any such 

17 litigation; and 

18 ‘‘(C) take other appropriate actions to 

19 mitigate loan losses in lieu of total liquidation 

20 or foreclosures, including the restructuring of a 

21 loan in accordance with prudent loan servicing 

22 practices and pursuant to a workout plan ap23 proved in advance by the Administrator under 

24 paragraph (2). 

25 ‘‘(2) ADMINISTRATOR APPROVAL OF PLANS.— 
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1 ‘‘(A) CERTIFIED DEVELOPMENT COMPANY

2 SUBMISSION OF PLANS.—Before carrying out 

3 functions described in paragraph (1)(A) or 

4 (1)(C), the certified development company shall 

5 submit to the Administrator a proposed liquida6 tion plan, any proposal for the Administrator to 

7 the purchase of any other indebtedness secured 

8 by the property securing a defaulted loan, or a 

9 workout plan or any combination thereof. 

10 ‘‘(B) ADMINISTRATOR APPROVAL PROCE11 DURES.— 

12 ‘‘(i) TIMING.—Not later than 15 busi13 ness days after the plans described in sub14 paragraph (A) are received by the Admin15 istrator, the Administrator shall approve or 

16 reject the plan. 

17 ‘‘(ii) NOTICE OF NO DECISION.—With 

18 respect to any plan that cannot be ap19 proved or denied within the 15-day period 

20 required by clause (i), the Administrator 

21 shall within such period provide in accord22 ance with subparagraph (E) notice to the 

23 company that submitted the plan. 

24 ‘‘(C) ROUTINE ACTIONS.—In carrying out 

25 the functions described in paragraph (1)(A), a 
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1 certified development company may undertake 

2 routine actions not addressed in a liquidation or 

3 workout plan without obtaining additional ap4 proval from the Administrator. 

5 ‘‘(D) COMPROMISE OF INDEBTEDNESS.— 

6 In carrying out functions described in para7 graph (1)(A), a certified development company 

8 may— 

9 ‘‘(i) consider an offer made by an obli10 gor to compromise the debt for less than 

11 the full amount owing; and 

12 ‘‘(ii) pursuant to such offer, release 

13 any obligor or other party contingently lia14 ble, if the company secures the written ap15 proval of the Administrator. 

16 ‘‘(E) CONTENTS OF NOTICE OF NO DECI17 SION.—Any notice provided by the Adminis18 trator pursuant to subparagraph (B)(ii) shall— 

19 ‘‘(i) be in writing stating the specific 

20 reasons for which the Administrator was 

21 unable to act on the request submitted 

22 pursuant to subparagraph (A); 

23 ‘‘(ii) provide an estimate of the addi24 tional time needed for the Administrator to 

25 reach a decision on the request; and 
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1 ‘‘(iii) specify any additional informa2 tion or documentation that the Adminis3 trator needs to make a decision but was 

4 not provided in the plan submitted by the 

5 certified development company. 

6 ‘‘(3) CONFLICT OF INTEREST.—In carrying out 

7 functions described in paragraph (1), a certified de8 velopment company shall take no action that would 

9 result in an actual or apparent conflict of interest 

10 between the company (or any employee of the com11 pany) and any third-party lender, associate of a 

12 third-party lender, or any other person participating 

13 in a liquidation, foreclosure, or loss mitigation ac14 tion. 

15 ‘‘(d) SUSPENSION OR REVOCATION OF AUTHOR16 ITY.— 

17 ‘‘(1) IN GENERAL.—The Administrator may re18 voke or suspend a delegation of authority under this 

19 section to a certified development company if the 

20 Administrator determines that the company— 

21 ‘‘(A) does not meet the requirements of 

22 subsection (b)(1); 

23 ‘‘(B) violated any applicable law or rule or 

24 regulation of the Administrator that in the esti-
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1 mation of the Administrator requires revoca2 tion; or 

3 ‘‘(C) fails to comply with any reporting 

4 that may be established by the Administrator 

5 relating to the establishment of eligibility in 

6 subsection (b)(1) or carrying out the functions 

7 described in subsection (c)(1). 

8 ‘‘(2) WRITTEN NOTICE.—The Administrator 

9 shall provide in writing detailed reason why the dele10 gation of authority was suspended or revoked. 

11 ‘‘(e) PARTICIPATION IN LIQUIDATION.— 

12 ‘‘(1) IN GENERAL.— 

13 ‘‘(A) CONTRACT WITH QUALIFIED THIRD

14 PARTY.—A certified development company 

15 which elects not to apply for authority to fore16 close and liquidate defaulted loans under this 

17 section, or which the Administrator determines 

18 to be ineligible for such authority, shall contract 

19 with a qualified third party to perform fore20 closure and liquidation of defaulted loans in its 

21 portfolio. 

22 ‘‘(B) CONTRACT APPROVAL.—The contract 

23 entered into by the certified development com24 pany specified in subparagraph (A) shall be 

25 contingent upon approval by the Administrator 
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1 with respect to the qualifications of the con2 tractor and the terms and conditions of liquida3 tion activities. The Administrator shall not un4 reasonably withhold such approval. 

5 ‘‘(C) NOTIFICATION OF REJECTION.—If 

6 the Administrator rejects the contract, the Ad7 ministrator shall provide a notice to the cer8 tified development company, in writing, explain9 ing the reasons for such rejection within ten 

10 business days after submission of the contract. 

11 ‘‘(D) RESUBMITTAL.—The certified devel12 opment company shall be permitted to resubmit 

13 the contract and the Administrator’s review of 

14 any such resubmittal shall be limited to 

15 insufficiencies described in the notification of 

16 rejection. 

17 ‘‘(E) REGULATIONS.—The Administrator 

18 shall promulgate regulations, after notice and 

19 opportunity for comment, adopting standards 

20 for the approval of qualified third-party con21 tractors within 90 days after the date of enact22 ment of the Small Business Financing and In23 vestment Act of 2009. 

24 ‘‘(F) FAILURE TO PROMULGATE REGULA25 TIONS.—If the Administrator fails to promul-
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1 gate such regulations, any contract for liquida2 tion entered into by a certified development 

3 company under this subsection shall be consid4 ered valid for the purposes of this subsection 

5 and subsection (f). 

6 ‘‘(G) EFFECT OF ADMINISTRATOR’S PRO7 MULGATION OF REGULATIONS.—If the Adminis8 trator promulgates regulations after the dead9 line specified in subparagraph (E), those regu10 lations shall not have any retroactive applica11 tion with respect to contracts that are described 

12 in subparagraph (F). 

13 ‘‘(2) COMMENCEMENT.—This subsection shall 

14 not require any certified development company to 

15 liquidate defaulted loans until the Administrator im16 plements a system to compensate and reimburse cer17 tified development companies for liquidation of any 

18 defaulted loans. 

19 ‘‘(f) COMPENSATION AND REIMBURSEMENT.— 

20 ‘‘(1) REIMBURSEMENT OF EXPENSES.—The 

21 Administrator shall reimburse each certified develop22 ment company for all expenses paid by such com23 pany as part of the foreclosure and liquidation ac24 tivities taken to carry out this section, if the ex25 penses— 
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1 ‘‘(A) were— 

2 ‘‘(i) approved in advance by the Ad3 ministrator, either specifically in a plan 

4 submitted pursuant to subsection (c) or 

5 generally, such as, but not limited to, ac6 tions approved by the Administrator in 

7 regulations or other interpretative 

8 issuances; or 

9 ‘‘(ii) incurred by the development 

10 company on an emergency basis without 

11 prior approval from the Administrator, if 

12 the Administrator determines that the ex13 penses were reasonable and appropriate; 

14 and 

15 ‘‘(B) are submitted by the certified devel16 opment company to the Administrator not later 

17 than 3 years after the date the expense was in18 curred or the bill therefore is submitted to the 

19 certified development company, whichever is 

20 later. 

21 ‘‘(2) ALTERNATIVE REIMBURSEMENT.—As an 

22 alternative to the procedure in paragraph (1), a cer23 tified development company may elect to obtain re24 imbursement for all such expenses from the proceeds 

25 of any collateral provided by the borrower that was 
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1 liquidated by the certified development company if 

2 the expenses comply with the requirements of para3 graph (1). Within 6 months of the reimbursement, 

4 the certified development company shall provide the 

5 Administrator with the same information and docu6 mentation it would be required to submit to obtain 

7 payment from the Administrator. 

8 ‘‘(3) REGULATIONS.—The Administrator shall 

9 promulgate regulations, after notice and comment to 

10 carry out the provisions of paragraphs (1) and (2). 

11 If the Administrator does not promulgate such regu12 lations within one year, certified development compa13 nies shall be authorized, notwithstanding the re14 quirements of subsection (e)(2), to liquidate de15 faulted loans and such costs and expenses incurred, 

16 absent clear and convincing evidence of fraud, shall 

17 be deemed to be approved. 

18 ‘‘(4) COMPENSATION FOR RESULTS.— 

19 ‘‘(A) DEVELOPMENT.—In regulations pro20 mulgated pursuant to paragraph (3), the Ad21 ministrator also shall develop a schedule of 

22 compensation that provides monetary incentives 

23 for certified development companies in order to 

24 increase recoveries on defaulted loans. 

25 ‘‘(B) CRITERIA.—The schedule shall— 
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1 ‘‘(i) be based on a percentage of the 

2 net amount recovered, but shall not exceed 

3 a maximum amount; and 

4 ‘‘(ii) not apply to any foreclosure 

5 which is conducted under a contract be6 tween a certified development company and 

7 a qualified third party to perform the fore8 closure and liquidation. 

9 ‘‘(C) PAYMENT.—The Administrator shall 

10 transmit the compensation provided herein to 

11 the development company from the proceeds of 

12 liquidated collateral, unless the Administrator 

13 utilizes another source for funds, within 30 

14 days from the date when the liquidation case 

15 has been closed and documentation received.’’. 

16 SEC. 221. REPORTS AND REGULATIONS. 

17 Title V of the Small Business Investment Act of 1958 

18 (15 U.S.C. 695 et seq.) is amended by adding at the end 

19 the following: 

20 ‘‘SEC. 511. REPORTS. 

21 ‘‘(a) PREMIER CERTIFIED DEVELOPMENT COMPA22 NIES.—The Administrator shall report annually to the 

23 Committee on Small Business of the House of Representa24 tives and the Committee on Small Business and Entrepre-
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1 neurship of the Senate on the implementation of section 

2 504. Each report shall include— 

3 ‘‘(1) the number of premier certified develop4 ment companies; 

5 ‘‘(2) the debenture volume of each premier cer6 tified development company; 

7 ‘‘(3) a comparison of the loss rate for premier 

8 certified development companies to the loss rate for 

9 accredited or certified development companies; and 

10 ‘‘(4) such other information as the Adminis11 trator deems appropriate. 

12 ‘‘(b) REPORTS ON LIQUIDATION AND FORE13 CLOSURES.— 

14 ‘‘(1) IN GENERAL.—Based on information pro15 vided by certified development companies and the 

16 Administrator, the Administrator shall submit annu17 ally to the Committee on Small Business and Entre18 preneurship of the Senate and the Committee on 

19 Small Business of the House of Representatives a 

20 report on the results of delegation of authority under 

21 section 510. 

22 ‘‘(2) CONTENTS.—Each report submitted under 

23 paragraph (1) shall include the following informa24 tion: 
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1 ‘‘(A) With respect to each loan foreclosed 

2 or liquidated by a certified development com3 pany, or for which losses were otherwise miti4 gated by pursuant to a workout plan— 

5 ‘‘(i) the total cost of the project fi6 nanced with the loan; 

7 ‘‘(ii) the total original dollar amount 

8 guaranteed by the Administration; 

9 ‘‘(iii) the total dollar amount of the 

10 loan at the time of liquidation, foreclosure, 

11 or mitigation of loss; 

12 ‘‘(iv) the total dollar losses resulting 

13 from the liquidation, foreclosure, or mitiga14 tion of loss; and 

15 ‘‘(v) the total recoveries resulting 

16 from the liquidation, foreclosure, or mitiga17 tion of loss, both as a percentage of the 

18 amount guaranteed and the total cost of 

19 the project financed. 

20 ‘‘(B) With respect to each certified devel21 opment company to which authority is dele22 gated under section 510, the totals of each of 

23 the amounts described in clauses (i) through (v) 

24 of subparagraph (A). 
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1 ‘‘(C) With respect to each certified devel2 opment company that contracts with a qualified 

3 third-party contractor pursuant to section 

4 510(e), the total of each of the amounts de5 scribed in clauses (i) through (v) of subpara6 graph (A). 

7 ‘‘(D) With respect to all loans subject to 

8 foreclosure, liquidation, or mitigation under sec9 tion 510, the totals of each of the amounts de10 scribed in clauses (i) through (v) of subpara11 graph (A). 

12 ‘‘(E) A comparison between— 

13 ‘‘(i) the information provided under 

14 subparagraph (D) with respect to the 12- 

15 month period preceding the date on which 

16 the report is submitted; and 

17 ‘‘(ii) the same information with re18 spect to loans foreclosed and liquidated, or 

19 otherwise treated, by the Administrator 

20 during the same period. 

21 ‘‘(F) The number of times that the Admin22 istrator has failed to approve or reject a liq23 uidation plan, workout plan, request to pur24 chase indebtedness, or failed to approve a third25 party contractor under section 510, including 
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1 specific information regarding the reasons for 

2 the Administrator’s failure and any delays that 

3 resulted. 

4 ‘‘(c) REPORTS ON COMBINATION FINANCING.—Not 

5 later than 90 days after the date of enactment of the 

6 Small Business Financing and Investment Act of 2009, 

7 and annually thereafter, the Administrator shall submit 

8 a report to the Committee on Small Business and Entre9 preneurship of the Senate and the Committee on Small 

10 Business of the House of Representatives that— 

11 ‘‘(1) includes the number of small business con12 cerns that have financing under both section 7(a) of 

13 the Small Business Act (15 U.S.C. 636(a)) and title 

14 V of the Small Business Investment Act of 1958 (15 

15 U.S.C. 695 et seq.) during the year before the year 

16 of that report; and 

17 ‘‘(2) describes the total amount and general 

18 performance of the financing described in paragraph 

19 (1). 

20 ‘‘(d) REPORT ON OTHER ECONOMIC DEVELOPMENT

21 ACTIVITY.—The Administrator shall compile and submit 

22 to the Committee on Small Business of the House of Rep23 resentatives and the Committee on Small Business and 

24 Entrepreneurship of the Senate on an annual basis, com25 mencing in the year that the Small Business Financing 
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1 and Investment Act of 2009 is enacted, a report that de2 scribes the economic and community development activi3 ties, other than loan making under this title, of each cer4 tified development company during the prior fiscal year. 

5 The Administrator may contract with another party, in6 cluding non-governmental entities, to collect information 

7 or otherwise assist in the preparation of the report re8 quired by this subsection. 

9 ‘‘SEC. 512. PROMULGATION OF REGULATIONS UNDER THIS 

10 TITLE. 

11 ‘‘(a) DEADLINES FOR IMPLEMENTING REGULA12 TIONS.—Except as expressly provided elsewhere in the 

13 Small Business Financing and Investment Act of 2009, 

14 the Administrator shall promulgate regulations under this 

15 title, after providing notice and the opportunity for com16 ment, within 180 days after the date of enactment of that 

17 Act. 

18 ‘‘(b) NOTICE AND COMMENT REQUIREMENTS IN

19 GENERAL.—Except as otherwise provided elsewhere in 

20 this title, the Administrator shall provide, after the date 

21 of enactment of the Small Business Financing and Invest22 ment Act of 2009, notice of any proposed change to a reg23 ulation implementing this title (whether in existence on 

24 the date of enactment of the Small Business Financing 

25 and Investment Act of 2009 or subsequently adopted), 
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1 publish such notification in the Federal Register, and pro2 vide a comment period of not less than 60 days.’’. 

3 SEC. 222. PROGRAM NAME. 

4 Title V of the Small Business Investment Act of 1958 

5 (15 U.S.C. 695 et seq.), as amended by this Act, is further 

6 amended by adding at the end the following: 

7 ‘‘SEC. 513 PROGRAM NAME. 

8 ‘‘(a) IN GENERAL.—The program created by this 

9 title shall be referred to as the CDC Economic Develop10 ment Loan Program. 

11 ‘‘(b) MODIFICATION OF MATERIALS USED.—Not 

12 later than 60 days after the date of enactment of the 

13 Small Business Financing and Investment Act of 2009, 

14 the Administrator shall modify all documents and websites 

15 to conform to the name change made by this section.’’. 

16 Subtitle C—Miscellaneous 

17 SEC. 231. REPORT ON STANDARD OPERATING PROCE18 DURES. 

19 (a) REPORT.—The Administrator of the Small Busi20 ness Administration shall submit to the Committee on 

21 Small Business of the House of Representatives and the 

22 Committee on Small Business and Entrepreneurship of 

23 the Senate a report within 180 days after enactment of 

24 this Act identifying each Standard Operating Procedure 

25 issued after January 1, 1996, that relates to the operation 
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1 of a development company (in any manner) under title V 

2 of the Small Business Investment Act of 1958, that is still 

3 in effect on the date of enactment of this Act, and the 

4 regulation codified in title 13 of the Code of Federal Regu5 lations that authorizes the issuance of the Standard Oper6 ating Procedure and separately identifies the regulation 

7 that the Standard Operating Procedure purports to inter8 pret. 

9 (b) INAPPLICABILITY.—If the Administrator fails to 

10 complete the report by the time specified in subsection (a), 

11 the Administrator shall, unless there is clear and con12 vincing evidence of fraud, honor the terms and conditions 

13 of any debenture to the entity that issued the debenture 

14 pursuant to title V of the Small Business Investment Act 

15 of 1958 without regard to whether the entity complied 

16 with any of the Standard Operating Procedures described 

17 in subsection (a) until such time as the Administrator sub18 mits the report required under subsection (a). 

19 (c) DEFINITION.—For purposes of this section, the 

20 term ‘‘Standard Operating Procedure’’ has the meaning 

21 given that term in section 120.10 of title 13, Code of Fed22 eral Regulations, as in effect on January 1, 2009, and 

23 includes any reference to the acronym ‘‘SOP’’. 

24 SEC. 232. ALTERNATIVE SIZE STANDARD. 

25 (a) REVIEW AND STUDY.— 
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1 (1) IN GENERAL.—The Administrator of the 

2 Small Business Administration shall study and re3 view the optional size standard set forth in section 

4 121.301(b) of title 13, Code of Federal Regulations, 

5 as in effect on January 1, 2009, for eligibility of a 

6 small business concern for financing under title V of 

7 the Small Business Investment Act of 1958. 

8 (2) CONTENTS.—The review shall analyze 

9 whether the alternative size standard includes the 

10 business concerns defined in section 3(a)(1) of the 

11 Small Business Act and what, if any, regulatory 

12 changes are needed in the alternative size standard. 

13 (3) SUBMISSION TO CONGRESS.—The Adminis14 trator shall submit its study and conclusions within 

15 180 days after the date of enactment of the Small 

16 Business Financing and Investment Act of 2009 to 

17 the Committee on Small Business and Entrepre18 neurship of the Senate and the Committee on Small 

19 Business of the House of Representatives. 

20 (b) ISSUANCE OF REGULATIONS.—Any changes in 

21 the optional size standard described in subsection (a)(1) 

22 shall be promulgated within 180 days of the submission 

23 of the report to committees referred to in paragraph (3) 

24 of subsection (a). 
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1 (c) INTERIM ALTERNATIVE SIZE STANDARD.—Until 

2 the Administrator promulgates regulations either re3 adopting the size standard referred to in subsection (a)(1) 

4 or adopts a new alternative size standard, the alternative 

5 size standard shall be a maximum tangible net worth of 

6 not more than $15,000,000 and an average net income 

7 after the payment of Federal taxes (but excluding any car8 ryover losses) for the preceding two fiscal years not more 

9 than $5,000,000. 

10 TITLE III—MICROLENDING 

11 EXPANSION 

12 SEC. 301. MICROLOAN CREDIT BUILDING INITIATIVE. 

13 Section 7(m) of the Small Business Act (15 U.S.C. 

14 636(m)) is amended by adding at the end the following: 

15 ‘‘(14) CREDIT REPORTING INFORMATION.—The 

16 Administrator shall establish a process, for use by 

17 an intermediary making a loan to a borrower under 

18 this subsection, under which the intermediary shall 

19 provide to the major credit reporting agencies the in20 formation about the borrower, both positive and neg21 ative, that is relevant to credit reporting, such as the 

22 payment activity of the borrower on the loan. Such 

23 process shall allow an intermediary the option of 

24 providing information to the major credit reporting 
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1 agencies through the Administration or independ2 ently.’’. 

3 SEC. 302. FLEXIBLE CREDIT TERMS. 

4 Section 7(m) of the Small Business Act (15 U.S.C. 

5 636(m)), as amended by this Act, is further amended— 

6 (1) in paragraph (1)(B)(i) by striking ‘‘short7 term,’’; 

8 (2) in paragraph (6)(A) by striking ‘‘short9 term,’’; and 

10 (3) in paragraph (11)(B) by striking ‘‘short11 term,’’. 

12 SEC. 303. INCREASED PROGRAM PARTICIPATION. 

13 Section 7(m)(2) of the Small Business Act (15 

14 U.S.C. 636(m)(2)) is amended— 

15 (1) in subparagraph (A) by striking ‘‘paragraph 

16 (10)’’ and inserting ‘‘paragraph (11)’’; and 

17 (2) by amending subparagraph (B) to read as 

18 follows: 

19 ‘‘(B) has— 

20 ‘‘(i) at least— 

21 ‘‘(I) 1 year of experience making 

22 microloans to startup, newly estab23 lished, or growing small business con24 cerns; or 
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1 ‘‘(II) 1 full-time employee who 

2 has not less than 3 years of experi3 ence making microloans to startup, 

4 newly established, or growing small 

5 business concerns; and 

6 ‘‘(ii) at least— 

7 ‘‘(I) 1 year of experience pro8 viding, as an integral part of its 

9 microloan program, intensive mar10 keting, management, and technical as11 sistance to its borrowers; or 

12 ‘‘(II) 1 full-time employee who 

13 has not less than 1 year of experience 

14 providing intensive marketing, man15 agement, and technical assistance to 

16 borrowers.’’. 

17 SEC. 304. INCREASED LIMIT ON INTERMEDIARY BOR18 ROWING. 

19 Section 7(m)(3)(C) of the Small Business Act (15 

20 U.S.C. 636(m)(3)(C)) is amended— 

21 (1) by striking ‘‘$750,000’’ and inserting 

22 ‘‘$1,000,000’’; 

23 (2) by striking ‘‘$3,500,000’’ and inserting 

24 ‘‘$7,000,000’’; and 
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1 (3) by adding at the end the following: ‘‘The 

2 Administrator may treat the amount of $7,000,000 

3 in this subparagraph as if such amount is 

4 $10,000,000 if the Administrator determines, with 

5 respect to an intermediary, that such treatment is 

6 appropriate.’’. 

7 SEC. 305. EXPANDED BORROWER EDUCATION ASSISTANCE. 

8 Section 7(m)(4)(E) of the Small Business Act (15 

9 U.S.C. 636(m)(4)(E)) is amended— 

10 (1) in clause (i) by striking ‘‘25 percent’’ and 

11 inserting ‘‘35 percent’’; and 

12 (2) in clause (ii) by striking ‘‘25 percent’’ and 

13 inserting ‘‘35 percent’’. 

14 SEC. 306. YOUNG ENTREPRENEURS PROGRAM. 

15 Section 7(m)(4) of the Small Business Act (15 

16 U.S.C. 636(m)(4)) is amended by adding at the end the 

17 following: 

18 ‘‘(G) YOUNG ENTREPRENEURS PRO19 GRAM.— 

20 ‘‘(i) IN GENERAL.—An intermediary 

21 that receives a grant under paragraph 

22 (1)(B)(ii) may establish a program for the 

23 geographic area served by such inter24 mediary that provides to young entre-
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1 preneurs technical assistance regarding the 

2 following: 

3 ‘‘(I) Establishing or operating a 

4 small business concern in the geo5 graphic area served by the inter6 mediary. 

7 ‘‘(II) Acquiring or securing fi8 nancing to carry out the activities de9 scribed in subclause (I). 

10 ‘‘(ii) YOUNG ENTREPRENEUR DE11 FINED.—For purposes of this subpara12 graph, a young entrepreneur is an indi13 vidual who— 

14 ‘‘(I) is 25 years of age or young15 er; and 

16 ‘‘(II) has resided in the geo17 graphic area served by the inter18 mediary for not less than 2 years. 

19 ‘‘(iii) GOOD FAITH EFFORT REQUIRE20 MENT.—If a young entrepreneur who re21 ceives technical assistance under this sub22 paragraph from an intermediary estab23 lishes or operates a small business concern, 

24 the young entrepreneur shall make a good 

25 faith effort to establish or operate such 
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1 concern in the geographic area served by 

2 the intermediary. 

3 ‘‘(iv) DEFERRED REPAYMENT.—If a 

4 small business concern established or oper5 ated by a young entrepreneur receives a 

6 loan under this subsection, such concern 

7 may defer repayment on such loan for a 

8 period of not more than 6 months begin9 ning on the date that such concern receives 

10 the final disbursement of such loan.’’. 

11 SEC. 307. INTEREST RATES AND LOAN SIZE. 

12 Section 7(m) of the Small Business Act (15 U.S.C. 

13 636(m)), as amended by this Act, is further amended— 

14 (1) in paragraph (3)(F)(iii) by striking 

15 ‘‘$7,500’’ and inserting ‘‘$10,000’’; 

16 (2) in paragraph (6)(C)(i) by striking ‘‘$7,500’’ 

17 and inserting ‘‘$10,000’’; and 

18 (3) in paragraph (6)(C)(ii) by striking 

19 ‘‘$7,500’’ and inserting ‘‘$10,000’’. 

20 SEC. 308. REPORTING REQUIREMENT. 

21 Section 7(m) of the Small Business Act (15 U.S.C. 

22 636(m)), as amended by this Act, is further amended by 

23 adding at the end the following: 

24 ‘‘(15) REPORTING REQUIREMENT.—Not later 

25 than 90 days after the end of each fiscal year, the 
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1 Administrator shall submit to the Committee on 

2 Small Business of the House of Representatives and 

3 the Committee on Small Business and Entrepre4 neurship of the Senate a report that includes, with 

5 respect to such fiscal year of the microloan program, 

6 the following: 

7 ‘‘(A) The names and locations of each 

8 intermediary that received funds to make 

9 microloans or provide marketing, management, 

10 and technical assistance. 

11 ‘‘(B) The amounts of each loan and each 

12 grant provided to each such intermediary in 

13 such fiscal year and in prior fiscal years. 

14 ‘‘(C) A description of the contributions 

15 from non-Federal sources of each such inter16 mediary. 

17 ‘‘(D) The number and amounts of 

18 microloans made by each such intermediary to 

19 all borrowers and to each of the following: 

20 ‘‘(i) Women entrepreneurs and busi21 ness owners. 

22 ‘‘(ii) Low-income entrepreneurs and 

23 business owners. 

24 ‘‘(iii) Veteran entrepreneurs and busi25 ness owners. 
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1 ‘‘(iv) Disabled entrepreneurs and busi2 ness owners. 

3 ‘‘(v) Minority entrepreneurs and busi4 ness owners. 

5 ‘‘(E) A description of the marketing, man6 agement, and technical assistance provided by 

7 each such intermediary to all borrowers and to 

8 each of the following: 

9 ‘‘(i) Women entrepreneurs and busi10 ness owners. 

11 ‘‘(ii) Low-income entrepreneurs and 

12 business owners. 

13 ‘‘(iii) Veteran entrepreneurs and busi14 ness owners. 

15 ‘‘(iv) Disabled entrepreneurs and busi16 ness owners. 

17 ‘‘(v) Minority entrepreneurs and busi18 ness owners. 

19 ‘‘(F) The number of jobs created and re20 tained as a result of microloans and marketing, 

21 management, and technical assistance provided 

22 by each such intermediary. 

23 ‘‘(G) The repayment history of each such 

24 intermediary. 
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1 ‘‘(H) The number of businesses that 

2 achieved success after receipt of a microloan.’’. 

3 SEC. 309. SURPLUS INTEREST RATE SUBSIDY FOR BUSI4 NESSES. 

5 Section 7(m) of the Small Business Act (15 U.S.C. 

6 636(m)), as amended by this Act, is further amended by 

7 adding at the end the following: 

8 ‘‘(16) INTEREST ASSISTANCE.—The Adminis9 trator is authorized to make grants to intermediaries 

10 for the purposes of reducing interest rates charged 

11 to borrowers that receive financing under this sub12 section.’’. 

13 SEC. 310. AUTHORIZATION OF APPROPRIATIONS. 

14 Section 20 of the Small Business Act (15 U.S.C. 631 

15 note), as amended by this Act, is further amended by in16 serting after subsection (g) the following: 

17 ‘‘(h) FISCAL YEARS 2010 AND 2011 WITH RESPECT

18 TO SECTION 7(m).— 

19 ‘‘(1) PROGRAM LEVELS.—For the programs au20 thorized by this Act, the Administration is author21 ized to make during each of fiscal years 2010 and 

22 2011— 

23 ‘‘(A) $80,000,000 in technical assistance 

24 grants, as provided in section 7(m); and 
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1 ‘‘(B) $110,000,000 in direct loans, as pro2 vided in section 7(m). 

3 ‘‘(C) $10,000,000 in interest assistance 

4 grants, as provided in section 7(m)(16). 

5 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.— 

6 There is authorized to be appropriated such sums as 

7 may be necessary to carry out paragraph (1).’’. 

8 TITLE IV—SMALL BUSINESS IN9 VESTMENT COMPANY MOD10 ERNIZATION 

11 SEC. 401. INCREASED INVESTMENT FROM STATES. 

12 Section 103(13)(C) of the Small Business Investment 

13 Act of 1958 (15 U.S.C. 662(13)(C)) is amended by strik14 ing ‘‘33 percent’’ and inserting ‘‘45 percent’’. 

15 SEC. 402. EXPEDITED LICENSING FOR EXPERIENCED AP16 PLICANTS. 

17 Section 301 of the Small Business Investment Act 

18 of 1958 (15 U.S.C. 681) is amended by inserting after 

19 subsection (c) the following: 

20 ‘‘(d) LICENSES FOR EXPERIENCED APPLICANTS.— 

21 ‘‘(1) IN GENERAL.—Notwithstanding any other 

22 provision of this section, not later than 60 days after 

23 the initial receipt by the Administrator of any re24 quest (which shall be deemed to be the application) 

25 for a license to operate as a small business invest-
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1 ment company under this Act, the Administrator 

2 shall approve the request and issue such license if 

3 each of the following requirements is satisfied: 

4 ‘‘(A) At least 50 percent of the principal 

5 managers of the applicant consist of at least 

6 two-thirds of the principal managers of a small 

7 business investment company that has been li8 censed under this Act. 

9 ‘‘(B) The licensed small business invest10 ment company specified under subparagraph 

11 (A) has operated under such license for at least 

12 3 years prior to the receipt of the request speci13 fied in this paragraph. 

14 ‘‘(C) The licensed small business invest15 ment company specified under subparagraph 

16 (A)— 

17 ‘‘(i) either has invested at least 70 

18 percent of its private capital and drawn at 

19 least 50 percent of its projected leverage at 

20 the time of the receipt of the request speci21 fied in this paragraph or reserved for in22 vestment and expenses or some combina23 tion of both at least 70 percent of its pri24 vate capital in the one-year period prior to 

25 the date on which the application referred 
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1 to in this paragraph was received by the 

2 Administrator; 

3 ‘‘(ii) has maintained 6 consecutive 

4 quarters of profitable net investment in5 come; and 

6 ‘‘(iii) has made at least 3 exits from 

7 investments in small businesses that have 

8 realized profits from those respective in9 vestments. 

10 ‘‘(D) The applicant submits to the Admin11 istrator, in writing, an application consisting of 

12 all of the following: 

13 ‘‘(i) A certification, in the form pre14 scribed by the Administrator, that such ap15 plicant satisfies the requirements of this 

16 subsection and that all information con17 tained in the application is true and com18 plete. 

19 ‘‘(ii) A copy of the organizational doc20 uments of the applicant. 

21 ‘‘(iii) A copy of the operating plan of 

22 the applicant demonstrating that at least 

23 50 percent of the amount of the planned 

24 investments of the applicant will be in the 

25 same or substantially similar investment 
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1 stage and use the same or substantially 

2 similar type of investment instruments as 

3 the investments of the licensed small busi4 ness investment company specified under 

5 subparagraph (A). 

6 ‘‘(iv) A certification, in a form pre7 scribed by the Administrator, that the ap8 plicant satisfies the requirements of sub9 sections (a) and (c) of section 302 of this 

10 Act. 

11 ‘‘(E) The applicant is in good standing as 

12 set forth in paragraph (2). 

13 ‘‘(F) The applicant pays all fees prescribed 

14 by the Administrator under subsection (e). 

15 ‘‘(2) GOOD STANDING.—For purposes of this 

16 subsection, an applicant is in good standing if— 

17 ‘‘(A) a licensed leveraged or non-leveraged 

18 small business investment company specified 

19 under paragraph (1)(A) is actively operating 

20 under this Act on the date of the initial receipt 

21 of the application by the Administrator to 

22 which this subsection applies; 

23 ‘‘(B) no principal manager of the applicant 

24 has been found liable in a civil action for fraud 

25 if the Administrator makes a reasonable deter-
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1 mination based on evidence in the agency 

2 record that such liability has a material adverse 

3 effect on the ability of the applicant to perform 

4 obligations required by a license issued pursu5 ant to this Act; and 

6 ‘‘(C) no principal manager is under inves7 tigation by a governmental agency or authority 

8 for, is under indictment for, or has been con9 victed of a felony for a violation of Federal or 

10 State securities laws, fraud, or another criminal 

11 violation if such investigation, indictment, or 

12 conviction has a material adverse effect on the 

13 ability of the applicant to perform obligations 

14 under a license issued under this Act. 

15 ‘‘(3) LIMITATION.— 

16 ‘‘(A) IN GENERAL.—The Administrator 

17 may remove an application from the approval 

18 process under this subsection if the Adminis19 trator determines based on evidence in the 

20 agency record that the approval of the license 

21 would present an unacceptable risk to the Fed22 eral Government. 

23 ‘‘(B) IN WRITING.—Such determination 

24 shall be made in writing and provided to the 

25 applicant no later than 10 calendar days after 
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1 such determination is made. Failure to provide 

2 this determination to the applicant shall be 

3 deemed to be a permanent waiver of the Admin4 istrator’s authority to remove an application 

5 pursuant to this subsection. 

6 ‘‘(C) NON-DELEGABILITY.—The Adminis7 trator may rely on agency personnel to collect 

8 data or other material relevant to establishing 

9 a record, but the decision to remove the appli10 cation may not be delegated by the Adminis11 trator to any subordinate personnel in the agen12 cy. 

13 ‘‘(4) NOTICE AND OPPORTUNITY TO CURE NON14 CONFORMANCE.— 

15 ‘‘(A) NOTICE OF NON-CONFORMANCE.— 

16 Except for a determination made pursuant to 

17 paragraph (3), the Administrator shall provide 

18 an applicant described in paragraph (1) within 

19 60 days after receipt of the application a writ20 ten notice and description of any nonconform21 ance with any requirement of this subsection 

22 based on evidence in the agency record. 

23 ‘‘(B) OPPORTUNITY TO CURE.—The appli24 cant shall have 30 days following the receipt of 

25 notice of nonconformance or the receipt of re-
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1 moval as set forth in paragraph (3) to cure 

2 such nonconformance. 

3 ‘‘(C) FAILURE TO PROVIDE NOTICE.—Fail4 ure to provide the notice within the time limit 

5 set forth in subparagraph (A) shall be deemed 

6 to be acceptance by the Administrator of the 

7 applicant’s conformance with the requirements 

8 of this subsection. 

9 ‘‘(5) BACKGROUND REVIEWS.—The Adminis10 trator shall ensure that a timely background check 

11 of the principal managers of each applicant is com12 pleted with respect to paragraphs (2)(B) and (2)(C). 

13 ‘‘(6) FEES.—The Administrator may charge an 

14 applicant additional fees for carrying out the back15 ground reviews mandated by paragraph (5). Such 

16 fees shall not exceed $10,000. 

17 ‘‘(7) EFFECT OF NON-QUALIFICATION.—The 

18 failure of an applicant to qualify for expedited licen19 sure under this subsection shall have no effect on an 

20 existing license or the ability for the applicant or 

21 any of its individual managers to apply for or receive 

22 a license to operate a small business investment 

23 company under the procedures established elsewhere 

24 in this Act or its implementing regulations. 
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1 ‘‘(8) REGULATIONS.—The Administrator shall 

2 develop forms and promulgate regulations to imple3 ment this subsection after providing an opportunity 

4 for notice and comment. Regulations promulgated 

5 pursuant to this paragraph shall be published in the 

6 Code of Federal Regulations.’’. 

7 SEC. 403. REVISED LEVERAGE LIMITATIONS FOR SUCCESS8 FUL SBICS. 

9 (a) MAXIMUM LEVERAGE.—Section 303(b)(2) of the 

10 Small Business Investment Act of 1958 (15 U.S.C. 

11 683(b)(2)) is amended by striking so much of paragraph 

12 (2) as precedes subparagraph (C) and inserting the fol13 lowing: 

14 ‘‘(2) MAXIMUM LEVERAGE.— 

15 ‘‘(A) IN GENERAL.—(i) The maximum 

16 amount of outstanding leverage made available 

17 to any one company licensed under section 

18 301(c) of this Act may not exceed the lesser 

19 of— 

20 ‘‘(I) 300 percent of such com21 pany’s private capital; or 

22 ‘‘(II) $150,000,000. 

23 ‘‘(ii) In applying clause (i)(I) in the case of 

24 a debenture licensee which is in good standing 

25 without the imposition of additional regulatory 
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1 standards and whose financings at cost are 

2 comprised of at least 50 percent of loans and 

3 debt securities, such licensee may be leveraged 

4 as follows: 

5 ‘‘(I) The first one-third of private cap6 ital to 300 percent. 

7 ‘‘(II) The second one-third of private 

8 capital to 200 percent. 

9 ‘‘(III) The last third of private capital 

10 to 100 percent. 

11 ‘‘(iii) Notwithstanding clause (i), in the 

12 case of any company operating as a business 

13 development company (as such term is defined 

14 under section 2(a)(48) of the Investment Com15 pany Act of 1940) or a majority-owned sub16 sidiary of such a company that is in good 

17 standing without the imposition of additional 

18 regulatory requirements, the maximum amount 

19 of outstanding leverage made available to such 

20 company shall be $250,000,000. 

21 ‘‘(B) MULTIPLE LICENSEES UNDER COM22 MON CONTROL.—The maximum amount of out23 standing leverage made available to two or more 

24 debenture companies licensed under section 

25 301(c) of this Act that are commonly controlled 
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1 (as determined by the Administrator) and not 

2 under capital impairment may not exceed 

3 $350,000,000.’’. 

4 (b) REGULATIONS.—Section 303(b)(2) of the Small 

5 Business Investment Act of 1958 (15 U.S.C. 683(b)(2)), 

6 as amended by this Act, is further amended by adding 

7 at the end the following: 

8 ‘‘(E) REGULATIONS.—The Administrator 

9 shall promulgate regulations, after notice and 

10 opportunity for comment, establishing quantifi11 able objective criteria under which a licensee’s 

12 private capital in its entirety may be leveraged 

13 up to 300 percent. Such regulations shall be 

14 published in the Code of Federal Regulations.’’. 

15 (c) INVESTMENTS IN LOW-INCOME GEOGRAPHIC

16 AREAS.—Section 303(b)(2)(C)(ii) of the Small Business 

17 Investment Act of 1958 (15 U.S.C. 683(b)(2)(C)(ii)) is 

18 amended by striking ‘‘$250,000,000’’ in subclause (II) 

19 and inserting ‘‘$400,000,000’’. 

20 SEC. 404. CONSISTENCY FOR COST CONTROL. 

21 Section 305(c) of the Small Business Investment Act 

22 of 1958 (15 U.S.C. 685(c)) is amended by adding at the 

23 end the following: 

24 ‘‘In addition to the foregoing, with respect to a loan 

25 made, or debt with equity features acquired, under this 
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1 section, the minimum coupon rate of interest (cost of 

2 money ceiling) imposed by the Administrator shall not be 

3 less than 19 percent per annum for a loan or a debt secu4 rity, except that nothing herein shall alter or affect provi5 sions permitting higher coupon rates of interest (cost of 

6 money ceilings) and a company may charge up to an addi7 tional 7 percent more than the interest rate set forth in 

8 the loan or debt security in the event of a default. For 

9 purposes of this subsection a default means the occurrence 

10 of any of the following: 

11 ‘‘(1) Failure to pay an amount when due. 

12 ‘‘(2) Failure to provide in a timely manner ma13 terial information required under the applicable fi14 nancing documents. 

15 ‘‘(3) Failure to observe any material term, cov16 enant, or other agreement contained in the applica17 ble financing documents. 

18 ‘‘(4) A representation, warranty, certification, 

19 or statement of fact made by or on behalf of a bor20 rower in any applicable financing document or in 

21 any document delivered in connection therewith, that 

22 was materially incorrect or misleading when made. 

23 ‘‘(5) Any material event of default specified in 

24 the applicable financing documents.’’. 
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1 SEC. 405. INVESTMENT IN VETERAN-OWNED SMALL BUSI2 NESSES. 

3 Section 303(b)(2)(C) of the Small Business Invest4 ment Act of 1958 (15 U.S.C. 683(b)(2)(C)) is amended 

5 as follows: 

6 (1) In the heading, by inserting after ‘‘AREAS’’ 

7 the following: ‘‘AND VETERANS’’. 

8 (2) In clause (i), by inserting after ‘‘351)’’ the 

9 following: ‘‘or in a small business concern owned and 

10 controlled by veterans (as such term is defined in 

11 section 3(q)(3) of the Small Business Act)’’. 

12 (3) In clause (iii), by inserting after ‘‘351)’’ the 

13 following: ‘‘or in small business concerns owned and 

14 controlled by veterans (as such term is defined in 

15 section 3(q)(3) of the Small Business Act)’’. 

16 SEC. 406. TANGIBLE NET WORTH. 

17 Section 103 of the Small Business Investment Act 

18 of 1958 (15 U.S.C. 662), as amended by this Act, is fur19 ther amended by striking ‘‘and’’ at the end of paragraph 

20 (23), by striking the period at the end of paragraph (24) 

21 and inserting ‘‘; and’’, and by adding at the end the fol22 lowing: 

23 ‘‘(25) for purposes of the terms ‘small-business 

24 concern’ in paragraph (5) and ‘smaller enterprise’ in 

25 paragraph (12), tangible net worth shall, to the ex26 tent used, mean the total net worth of the small 
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1 business, in accordance with General Accepted Ac2 counting Principles, minus all intangibles in accord3 ance with General Accepted Accounting Principles.’’. 

4 SEC. 407. DEVELOPMENT OF AGENCY RECORD. 

5 Part A of title III of the Small Business Investment 

6 Act of 1958 (15 U.S.C. 681 et seq.), as amended by this 

7 Act, is further amended by adding at the end the fol8 lowing: 

9 ‘‘SEC. 321. AGENCY RECORD FOR LICENSING OF SMALL 

10 BUSINESS INVESTMENT COMPANIES. 

11 ‘‘(a) RECORD.—The Associate Administrator for In12 vestment shall establish an agency record of evidence re13 ferring or relating to each application for a license to be14 come a small business investment company. 

15 ‘‘(b) WRITTEN NOTIFICATION.—The Administrator 

16 shall provide a written explanation of any denial of a li17 cense application based upon evidence in the agency 

18 record. Absent an order by a Federal or State court of 

19 general jurisdiction, access to applications and the agency 

20 record shall be limited to the applicant and to the Admin21 istrator and subordinate personnel of the Administrator.’’. 

22 SEC. 408. PROGRAM LEVELS. 

23 Section 20 of the Small Business Act (15 U.S.C. 631 

24 note), as amended by this Act, is further amended by in25 serting after subsection (h) the following: 
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1 ‘‘(i) PART A OF TITLE III OF THE SMALL BUSINESS

2 INVESTMENT ACT OF 1958.— 

3 ‘‘(1) PROGRAM LEVELS 2010.—For fiscal year 

4 2010, in carrying out the program authorized by 

5 part A of title III of the Small Business Investment 

6 Act of 1958, the Administrator is authorized to 

7 make $5,000,000,000 in guarantees of debentures. 

8 ‘‘(2) PROGRAM LEVELS 2011.—For fiscal year 

9 2011, in carrying out the program authorized by 

10 part A of title III of the Small Business Investment 

11 Act of 1958, the Administrator is authorized to 

12 make $5,5000,000,000 in guarantees of deben13 tures.’’. 

14 TITLE V—INVESTMENT IN 

15 SMALL MANUFACTURERS 

16 AND RENEWABLE ENERGY 

17 SMALL BUSINESSES 

18 Subtitle A—Enhanced New 

19 Markets Venture Capital Program 

20 SEC. 501. EXPANSION OF NEW MARKETS VENTURE CAPITAL 

21 PROGRAM. 

22 (a) ADMINISTRATION PARTICIPATION REQUIRED.— 

23 Section 353 of the Small Business Investment Act of 1958 

24 (15 U.S.C. 689b) is amended by striking ‘‘under which 
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1 the Administrator may’’ and inserting ‘‘under which the 

2 Administrator shall’’. 

3 (b) REPORT TO CONGRESS.—Not later than 1 year 

4 after the date of the enactment of this Act, the Adminis5 trator of the Small Business Administration shall submit 

6 to Congress a report describing any expansion of the New 

7 Markets Venture Capital Program as a result of this sec8 tion. 

9 SEC. 502. IMPROVED NATIONWIDE DISTRIBUTION. 

10 Section 354 of the Small Business Investment Act 

11 of 1958 (15 U.S.C. 689c) is amended by adding at the 

12 end the following: 

13 ‘‘(f) GEOGRAPHIC EXPANSION.—From among com14 panies submitting applications under subsection (b), the 

15 Administrator shall consider the selection criteria and pro16 motion of nationwide distribution under subsection (c) and 

17 shall, to the extent practicable, approve at least one com18 pany from each geographic region of the Small Business 

19 Administration.’’. 

20 SEC. 503. INCREASED INVESTMENT IN SMALL BUSINESS 

21 CONCERNS ENGAGED PRIMARILY IN MANU22 FACTURING. 

23 (a) DEVELOPMENTAL VENTURE CAPITAL AND PAR24 TICIPATION AGREEMENTS.—Section 351 of the Small 
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1 Business Investment Act of 1958 (15 U.S.C. 689) is 

2 amended— 

3 (1) in paragraph (1) by inserting after ‘‘geo4 graphic areas’’ the following: ‘‘or encouraging the 

5 growth or continuation of small business concerns 

6 located in low-income geographic areas and engaged 

7 primarily in manufacturing’’; and 

8 (2) in paragraph (6)(B) by inserting after ‘‘geo9 graphic areas’’ the following: ‘‘or in small business 

10 concerns located in low-income geographic areas at 

11 least 80 percent of which are engaged primarily in 

12 manufacturing’’. 

13 (b) PURPOSES.—Section 352(2) of the Small Busi14 ness Investment Act of 1958 (15 U.S.C. 689a(2)) is 

15 amended— 

16 (1) in the matter preceding subparagraph (A) 

17 by inserting after ‘‘geographic areas’’ the following: 

18 ‘‘and small business concerns located in low-income 

19 geographic areas and engaged primarily in manufac20 turing’’; 

21 (2) in subparagraph (B) by inserting after ‘‘ge22 ographic areas’’ the following: ‘‘or in small business 

23 concerns located in low-income geographic areas and 

24 engaged primarily in manufacturing’’; and 
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1 (3) in subparagraph (C) by inserting after 

2 ‘‘smaller enterprises’’ the following: ‘‘and small busi3 ness concerns’’. 

4 (c) ELIGIBILITY, APPLICATIONS, AND REQUIRE5 MENTS FOR FINAL APPROVAL.—Section 354 of the Small 

6 Business Investment Act of 1958 (15 U.S.C. 689c), as 

7 amended by this Act, is further amended— 

8 (1) in subsection (a)(3) by inserting after ‘‘geo9 graphic areas’’ the following: ‘‘or investing in small 

10 business concerns located in low-income geographic 

11 areas and engaged primarily in manufacturing’’; 

12 (2) in subsection (b)— 

13 (A) in paragraph (1) by inserting after 

14 ‘‘geographic areas’’ the following: ‘‘or in small 

15 business concerns located in low-income geo16 graphic areas and engaged primarily in manu17 facturing’’; and 

18 (B) in paragraph (4) by inserting after 

19 ‘‘smaller enterprises’’ the following: ‘‘or small 

20 business concerns’’; and 

21 (3) in subsection (d)— 

22 (A) in paragraph (1)— 

23 (i) by striking ‘‘Each’’ and inserting 

24 the following: 
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1 ‘‘(A) IN GENERAL.—Except as provided in 

2 subparagraph (B), each’’; and 

3 (ii) by adding at the end the fol4 lowing: 

5 ‘‘(B) SMALL BUSINESS CONCERNS EN6 GAGED PRIMARILY IN MANUFACTURING.—Each 

7 conditionally approved company engaged pri8 marily in development of and investment in 

9 small business concerns located in low-income 

10 geographic areas and engaged primarily in 

11 manufacturing shall raise not less than 

12 $3,000,000 of private capital or binding capital 

13 commitments from one or more investors (other 

14 than agencies or departments of the Federal 

15 Government) who met criteria established by 

16 the Administrator.’’; and 

17 (B) in paragraph (2)(A) by inserting after 

18 ‘‘smaller enterprises’’ the following: ‘‘or small 

19 business concerns’’. 

20 (d) OPERATIONAL ASSISTANCE GRANTS.—Section 

21 358 of the Small Business Investment Act of 1958 (15 

22 U.S.C. 689g) is amended— 

23 (1) in subsection (a)(1) by inserting after 

24 ‘‘smaller enterprises’’ the following: ‘‘and small busi25 ness concerns’’; and 
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1 (2) in subsection (b)(1) by inserting after 

2 ‘‘smaller enterprises’’ the following: ‘‘and small busi3 ness concerns’’. 

4 SEC. 504. EXPANDED USES FOR OPERATIONAL ASSISTANCE 

5 IN MANUFACTURING. 

6 Section 351 of the Small Business Investment Act 

7 of 1958 (15 U.S.C. 689), as amended by this Act, is fur8 ther amended in paragraph (5) by inserting after ‘‘busi9 ness development’’ the following: ‘‘or assistance that as10 sists a small business concern located in a low-income geo11 graphic area and engaged primarily in manufacturing with 

12 retooling, updating, or replacing machinery or equip13 ment’’. 

14 SEC. 505. UPDATING DEFINITION OF LOW-INCOME GEO15 GRAPHIC AREA. 

16 Section 351 of the Small Business Investment Act 

17 of 1958 (15 U.S.C. 689), as amended by this Act, is fur18 ther amended— 

19 (1) by striking paragraphs (2) and (3); 

20 (2) by inserting after paragraph (1) the fol21 lowing: 

22 ‘‘(2) LOW-INCOME GEOGRAPHIC AREA.—The 

23 term ‘low-income geographic area’ has the meaning 

24 given the term ‘low-income community’ in section 

25 45D(e) of the Internal Revenue Code of 1986, ex-
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1 cept that, without regard to such meaning, such 

2 term includes an area that the Administrator deter3 mines to be an area with high unemployment.’’; and 

4 (3) by redesignating paragraphs (4) through 

5 (8) as paragraphs (3) through (7), respectively. 

6 SEC. 506. EXPANDING OPERATIONAL ASSISTANCE TO CON7 DITIONALLY APPROVED COMPANIES. 

8 Section 358(a) of the Small Business Investment Act 

9 of 1958 (15 U.S.C. 689g(a)) is amended by adding at the 

10 end the following: 

11 ‘‘(6) GRANTS TO CONDITIONALLY APPROVED

12 COMPANIES.— 

13 ‘‘(A) IN GENERAL.—Subject to the provi14 sions of this paragraph, upon the request of a 

15 company conditionally approved under section 

16 354(c), the Administrator shall make a grant to 

17 the company under this subsection. 

18 ‘‘(B) REPAYMENT BY COMPANIES NOT AP19 PROVED.—If a company receives a grant under 

20 this paragraph and does not receive final ap21 proval under section 354(e), the company shall 

22 repay the amount of the grant to the Adminis23 trator. 

24 ‘‘(C) DEDUCTION FROM GRANT TO AP25 PROVED COMPANY.—If a company receives a 
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1 grant under this paragraph and receives final 

2 approval under section 354(e), the Adminis3 trator shall deduct the amount of such grant 

4 from the amount of any immediately succeeding 

5 grant the company receives for operational as6 sistance. 

7 ‘‘(D) AMOUNT OF GRANT.—No company 

8 may receive a grant of more than $50,000 

9 under this paragraph.’’. 

10 SEC. 507. LIMITATION ON TIME FOR FINAL APPROVAL. 

11 Section 354(d) of the Small Business Investment Act 

12 of 1958 (15 U.S.C. 689c(d)) is amended in the matter 

13 preceding paragraph (1) by striking ‘‘a period of time, not 

14 to exceed 2 years,’’ and inserting ‘‘2 years’’. 

15 SEC. 508. STREAMLINED APPLICATION FOR NEW MARKETS 

16 VENTURE CAPITAL PROGRAM. 

17 Not later than 60 days after the date of the enact18 ment of this Act, the Administrator of the Small Business 

19 Administration shall prescribe standard documents for a 

20 New Markets Venture Capital company final approval ap21 plication under section 354(e) of the Small Business In22 vestment Act of 1958 (15 U.S.C. 689c(e)). The Adminis23 trator shall ensure that the standard documents are de24 signed to substantially reduce the cost burden of the appli25 cation process for companies. 
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1 SEC. 509. ELIMINATION OF MATCHING REQUIREMENT. 

2 Section 354(d)(2)(A)(i) of the Small Business Invest3 ment Act of 1958 (15 U.S.C. 689c(d)(2)(A)(i)) is amend4 ed— 

5 (1) in subclause (I) by adding ‘‘and’’ at the 

6 end; 

7 (2) in subclause (II) by striking ‘‘and’’ at the 

8 end; and 

9 (3) by striking subclause (III). 

10 SEC. 510. SIMPLIFIED FORMULA FOR OPERATIONAL AS11 SISTANCE GRANTS. 

12 Section 358(a)(4)(A) of the Small Business Invest13 ment Act of 1958 (15 U.S.C. 689g(a)(4)(A)) is amend14 ed— 

15 (1) by striking ‘‘shall be equal to’’ and all that 

16 follows through the period at the end and inserting 

17 ‘‘shall be equal to the lesser of—’’; and 

18 (2) by adding at the end the following: 

19 ‘‘(i) 10 percent of the resources (in 

20 cash or in-kind) raised by the company 

21 under section 354(d)(2); or 

22 ‘‘(ii) $1,000,000.’’. 

23 SEC. 511. FINANCING WITH RESPECT TO VETERANS. 

24 Section 354 of the Small Business Investment Act 

25 of 1958 (15 U.S.C. 689c), as amended by this Act, is fur26 ther amended by adding at the end the following: 
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1 ‘‘(g) FINANCING WITH RESPECT TO VETERANS.—A 

2 New Markets Venture Capital company shall, to the extent 

3 practicable, provide financing to small business concerns 

4 owned and controlled by veterans, as defined in section 

5 3(q) of the Small Business Act (15 U.S.C. 632(q)), lo6 cated in low-income geographic areas.’’. 

7 SEC. 512. AUTHORIZATION OF APPROPRIATIONS AND EN8 HANCED ALLOCATION FOR SMALL MANUFAC9 TURING. 

10 Section 368(a) of the Small Business Investment Act 

11 of 1958 (15 U.S.C. 689q(a)) is amended— 

12 (1) in the matter preceding paragraph (1) by 

13 striking ‘‘fiscal years 2001 through 2006’’ and in14 serting ‘‘fiscal years 2010 and 2011’’; 

15 (2) in paragraph (1)— 

16 (A) by striking ‘‘$150,000,000’’ and in17 serting ‘‘$100,000,000’’; and 

18 (B) by inserting before the period at the 

19 end the following: ‘‘, of which not less than 50 

20 percent shall be used to guarantee debentures 

21 of companies engaged primarily in development 

22 of and investment in small business concerns lo23 cated in low-income geographic areas and en24 gaged primarily in manufacturing’’; and 

25 (3) in paragraph (2)— 
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1 (A) by striking ‘‘$30,000,000’’ and insert2 ing ‘‘$20,000,000’’; and 

3 (B) by inserting before the period at the 

4 end the following: ‘‘, of which not less than 50 

5 percent shall be used to make grants to compa6 nies engaged primarily in development of and 

7 investment in small business concerns located in 

8 low-income geographic areas and engaged pri9 marily in manufacturing’’. 

10 Subtitle B—Expanded Investment 

11 in Small Business Renewable 

12 Energy 

13 SEC. 521. EXPANDED INVESTMENT IN RENEWABLE EN14 ERGY. 

15 Part C of title III of the Small Business Investment 

16 Act of 1958 (15 U.S.C. 690 et seq.) is amended— 

17 (1) in the heading by striking ‘‘RENEWABLE

18 FUEL CAPITAL INVESTMENT’’ and inserting ‘‘RE19 NEWABLE ENERGY CAPITAL INVESTMENT’’; 

20 (2) in the heading of paragraph (4) of section 

21 381 by striking ‘‘RENEWABLE FUEL CAPITAL IN22 VESTMENT’’ and inserting ‘‘RENEWABLE ENERGY

23 CAPITAL INVESTMENT’’; 

24 (3) in the heading of section 384 by striking 

25 ‘‘RENEWABLE FUEL CAPITAL INVESTMENT’’ and 
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1 inserting ‘‘RENEWABLE ENERGY CAPITAL IN2 VESTMENT’’; and 

3 (4) by striking ‘‘Renewable Fuel Capital Invest4 ment’’ each place it appears and inserting ‘‘Renew5 able Energy Capital Investment’’. 

6 SEC. 522. RENEWABLE ENERGY CAPITAL INVESTMENT PRO7 GRAM MADE PERMANENT. 

8 Part C of title III of the Small Business Investment 

9 Act of 1958 (15 U.S.C. 690 et seq.), as amended by this 

10 Act, is further amended— 

11 (1) in the heading by striking ‘‘PILOT’’; and 

12 (2) by striking section 398. 

13 SEC. 523. EXPANDED ELIGIBILITY FOR SMALL BUSINESSES. 

14 Part C of title III of the Small Business Investment 

15 Act of 1958 (15 U.S.C. 690 et seq.), as amended by this 

16 Act, is further amended by striking ‘‘smaller enterprises’’ 

17 each place it appears and inserting ‘‘small business con18 cerns’’. 

19 SEC. 524. EXPANDED USES FOR OPERATIONAL ASSISTANCE 

20 IN MANUFACTURING AND SMALL BUSI21 NESSES. 

22 Section 381(1) of the Small Business Investment Act 

23 of 1958 (15 U.S.C. 690(1)) is amended by inserting after 

24 ‘‘business development’’ the following: ‘‘, assistance that 

25 assists a small business concern to reduce energy con-
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1 sumption, or assistance that assists a small business con2 cern engaged primarily in manufacturing with retooling, 

3 updating, or replacing machinery or equipment’’. 

4 SEC. 525. EXPANSION OF RENEWABLE ENERGY CAPITAL IN5 VESTMENT PROGRAM. 

6 (a) ADMINISTRATION PARTICIPATION REQUIRED.— 

7 Section 383 of the Small Business Investment Act of 1958 

8 (15 U.S.C. 690b) is amended by striking ‘‘under which 

9 the Administrator may’’ and inserting ‘‘under which the 

10 Administrator shall’’. 

11 (b) REPORTS TO CONGRESS.—At quarterly intervals 

12 after the date of the enactment of this Act, the Adminis13 trator of the Small Business Administration shall submit 

14 to Congress a report describing the Administrator’s 

15 progress towards the expansion of the Renewable Energy 

16 Capital Investment Program as a result of amendments 

17 made by this title. 

18 (c) REGULATIONS.—The Administrator of the Small 

19 Business Administration shall promulgate such regula20 tions as are necessary to carry out the Renewable Energy 

21 Capital Investment Program established pursuant to this 

22 title within 180 days after the enactment of this Act. 
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1 SEC. 526. SIMPLIFIED FEE STRUCTURE TO EXPEDITE IM2 PLEMENTATION. 

3 Section 387(a) of the Small Business Investment Act 

4 of 1958 (15 U.S.C. 690f(a)) is amended by striking ‘‘or 

5 grant’’. 

6 SEC. 527. INCREASED OPERATIONAL ASSISTANCE GRANTS. 

7 Section 397(a) of the Small Business Investment Act 

8 of 1958 (15 U.S.C. 690p(a)) is amended by inserting after 

9 ‘‘and 2009’’ the following: ‘‘and $30,000,000 in such 

10 grants for each of fiscal years 2010 and 2011’’. 

11 SEC. 528. AUTHORIZATIONS OF APPROPRIATIONS. 

12 Section 397 of the Small Business Investment Act 

13 of 1958 (15 U.S.C. 690p) is amended— 

14 (1) in the heading by inserting after ‘‘APPRO15 PRIATIONS’’ the following: ‘‘AND PROGRAM LEV16 ELS’’; and 

17 (2) by adding at the end the following: 

18 ‘‘(c) PROGRAM LEVELS.—For the programs author19 ized by this part, the Administration is authorized to make 

20 $1,000,000,000 in guarantees of debentures for each of 

21 fiscal years 2010 and 2011.’’. 
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1 TITLE VI—SMALL BUSINESS 

2 HEALTH INFORMATION TECH3 NOLOGY FINANCING PRO4 GRAM 

5 SEC. 601. SMALL BUSINESS HEALTH INFORMATION TECH6 NOLOGY FINANCING PROGRAM. 

7 The Small Business Act (15 U.S.C. 631 et seq.), as 

8 amended by this Act, is further amended by redesignating 

9 section 45 as section 46 and by inserting the following 

10 new section after section 44: 

11 ‘‘SEC. 45. LOAN GUARANTEES FOR HEALTH INFORMATION 

12 TECHNOLOGY. 

13 ‘‘(a) DEFINITIONS.—As used in this section: 

14 ‘‘(1) The term ‘health information technology’ 

15 means computer hardware, software, and related 

16 technology that supports the meaningful EHR use 

17 requirements set forth in section 1848(o)(2)(A) of 

18 the Social Security Act (42 U.S.C. 1395w– 

19 4(o)(2)(A)) and is purchased by an eligible profes20 sional to aid in the provision of health care in a 

21 health care setting, including, but not limited to, 

22 electronic medical records, and that provides for— 

23 ‘‘(A) enhancement of continuity of care for 

24 patients through electronic storage, trans25 mission, and exchange of relevant personal 
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1 health data and information, such that this in2 formation is accessible at the times and places 

3 where clinical decisions will be or are likely to 

4 be made; 

5 ‘‘(B) enhancement of communication be6 tween patients and health care providers; 

7 ‘‘(C) improvement of quality measurement 

8 by eligible professionals enabling them to col9 lect, store, measure, and report on the proc10 esses and outcomes of individual and population 

11 performance and quality of care; 

12 ‘‘(D) improvement of evidence-based deci13 sion support; or 

14 ‘‘(E) enhancement of consumer and pa15 tient empowerment. 

16 Such term shall not include information technology 

17 whose sole use is financial management, mainte18 nance of inventory of basic supplies, or appointment 

19 scheduling. 

20 ‘‘(2) The term ‘eligible professional’ means any 

21 of the following: 

22 ‘‘(A) A physician (as defined in section 

23 1861(r) of the Social Security Act (42 U.S.C. 

24 1395x(r))). 
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1 ‘‘(B) A practitioner described in section 

2 1842(b)(18)(C) of that Act. 

3 ‘‘(C) A physical or occupational therapist 

4 or a qualified speech-language pathologist. 

5 ‘‘(D) A qualified audiologist (as defined in 

6 section 1861(ll)(3)(B)) of that Act. 

7 ‘‘(E) A qualified medical transcriptionist 

8 who is either certified by or registered with the 

9 Association for Healthcare Documentation In10 tegrity, or a successor association thereto. 

11 ‘‘(F) A State-licensed pharmacist. 

12 ‘‘(G) A State-licensed supplier of durable 

13 medical equipment, prosthetics, orthotics, or 

14 supplies. 

15 ‘‘(H) A State-licensed, a State-certified, or 

16 a nationally accredited home health care pro17 vider. 

18 ‘‘(3) The term ‘qualified eligible professional’ 

19 means an eligible professional whose office can be 

20 classified as a small business concern by the Admin21 istrator for purposes of this Act under size stand22 ards established under section 3 of this Act. 

23 ‘‘(4) The term ‘qualified medical 

24 transcriptionist’ means a specialist in medical lan25 guage and the healthcare documentation process 
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1 who interprets and transcribes dictation by physi2 cians and other healthcare professionals to ensure 

3 accurate, complete, and consistent documentation of 

4 healthcare encounters. 

5 ‘‘(b) LOAN GUARANTEES FOR QUALIFIED ELIGIBLE

6 PROFESSIONALS.— 

7 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

8 the Administrator may guarantee up to 90 percent 

9 of the amount of a loan made to a qualified eligible 

10 professional to be used for the acquisition of health 

11 information technology for use in such eligible pro12 fessional’s medical practice and for the costs associ13 ated with the installation of such technology. Except 

14 as otherwise provided in this section, the terms and 

15 conditions that apply to loans made under section 

16 7(a) of this Act shall apply to loan guarantees made 

17 under this section. 

18 ‘‘(2) LIMITATIONS ON GUARANTEE AMOUNTS.— 

19 The maximum amount of loan principal guaranteed 

20 under this subsection may not exceed— 

21 ‘‘(A) $350,000 with respect to any single 

22 qualified eligible professional; and 

23 ‘‘(B) $2,000,000 with respect to a single 

24 group of affiliated qualified eligible profes25 sionals. 
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1 ‘‘(c) FEES.—(1) The Administrator may impose a 

2 guarantee fee on the borrower for the purpose of reducing 

3 the cost (as defined in section 502(5) of the Federal Credit 

4 Reform Act of 1990) of the guarantee to zero in an 

5 amount not to exceed 2 percent of the total guaranteed 

6 portion of any loan guaranteed under this section. The Ad7 ministrator may also impose annual servicing fees on lend8 ers not to exceed 0.5 percent of the outstanding balance 

9 of the guarantees on lenders’ books. 

10 ‘‘(2) No service fees, processing fees, origination fees, 

11 application fees, points, brokerage fees, bonus points, or 

12 other fees may be charged to a loan applicant or recipient 

13 by a lender in the case of a loan guaranteed under this 

14 section. 

15 ‘‘(d) DEFERRAL PERIOD.—Loans guaranteed under 

16 this section shall carry a deferral period of not less than 

17 1 year and not more than 3 years. The Administrator shall 

18 have the authority to subsidize interest during the deferral 

19 period. 

20 ‘‘(e) EFFECTIVE DATE.—No loan may be guaranteed 

21 under this section until the meaningful EHR use require22 ments have been determined by the Secretary of Health 

23 and Human Services. 

24 ‘‘(f) SUNSET.—No loan may be guaranteed under 

25 this section after the date that is 7 years after meaningful 
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1 EHR use requirements have been determined by the Sec2 retary of Health and Human Services. 

3 ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There 

4 are authorized to be appropriated such sums as are nec5 essary for the cost (as defined in section 502(5) of the 

6 Federal Credit Reform Act of 1990) of guaranteeing 

7 $10,000,000,000 in loans under this section. The Admin8 istrator shall determine such program cost separately and 

9 distinctly from other programs operated by the Adminis10 trator.’’. 

11 TITLE VII—SMALL BUSINESS 

12 EARLY-STAGE INVESTMENT 

13 PROGRAM 

14 SEC. 701. SMALL BUSINESS EARLY-STAGE INVESTMENT 

15 PROGRAM. 

16 Title III of the Small Business Investment Act of 

17 1958 (15 U.S.C. 681 et seq.) is amended by adding at 

18 the end the following: 

19 ‘‘PART D—SMALL BUSINESS EARLY-STAGE 

20 INVESTMENT PROGRAM 

21 ‘‘SEC. 399A. ESTABLISHMENT OF PROGRAM. 

22 ‘‘The Administrator shall establish and carry out an 

23 early-stage investment program (hereinafter referred to in 

24 this part as the ‘program’) to provide equity investment 
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1 financing to support early-stage small businesses in tar2 geted industries in accordance with this part. 

3 ‘‘SEC. 399B. ADMINISTRATION OF PROGRAM. 

4 ‘‘The program shall be administered by the Adminis5 trator acting through the Associate Administrator de6 scribed under section 201. 

7 ‘‘SEC. 399C. APPLICATIONS. 

8 ‘‘(a) IN GENERAL.—Any incorporated body, limited 

9 liability company, or limited partnership organized and 

10 chartered or otherwise existing under Federal or State law 

11 for the purpose of performing the functions and con12 ducting the activities contemplated under the program and 

13 any small business investment company may submit to the 

14 Administrator an application to participate in the pro15 gram. 

16 ‘‘(b) REQUIREMENTS FOR APPLICATION.—An appli17 cation to participate in the program shall include the fol18 lowing: 

19 ‘‘(1) A business plan describing how the appli20 cant intends to make successful venture capital in21 vestments in early-stage small businesses in targeted 

22 industries. 

23 ‘‘(2) Information regarding the relevant venture 

24 capital investment qualifications and backgrounds of 
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1 the individuals responsible for the management of 

2 the applicant. 

3 ‘‘(3) A description of the extent to which the 

4 applicant meets the selection criteria under section 

5 399D. 

6 ‘‘(c) APPLICATIONS FROM SMALL BUSINESS INVEST7 MENT COMPANIES.—The Administrator shall establish an 

8 abbreviated application process for small business invest9 ment companies that have received a license under section 

10 301 and that are applying to participate in the program. 

11 Such abbreviated process shall incorporate a presumption 

12 that such small business investment companies satisfac13 torily meet the selection criteria under paragraphs (3) and 

14 (5) of section 399D(b). 

15 ‘‘SEC. 399D. SELECTION OF PARTICIPATING INVESTMENT 

16 COMPANIES. 

17 ‘‘(a) IN GENERAL.—Not later than 90 days after the 

18 date on which the Administrator receives an application 

19 from an applicant under section 399C, the Administrator 

20 shall make a final determination to approve or disapprove 

21 such applicant to participate in the program and shall 

22 transmit such determination to the applicant in writing. 

23 ‘‘(b) SELECTION CRITERIA.—In making a determina24 tion under subsection (a), the Administrator shall consider 

25 each of the following: 
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1 ‘‘(1) The likelihood that the applicant will meet 

2 the goals specified in the business plan of the appli3 cant. 

4 ‘‘(2) The likelihood that the investments of the 

5 applicant will create or preserve jobs, both directly 

6 and indirectly. 

7 ‘‘(3) The character and fitness of the manage8 ment of the applicant. 

9 ‘‘(4) The experience and background of the 

10 management of the applicant. 

11 ‘‘(5) The extent to which the applicant will con12 centrate investment activities on early-stage small 

13 businesses in targeted industries. 

14 ‘‘(6) The likelihood that the applicant will 

15 achieve profitability. 

16 ‘‘(7) The experience of the management of the 

17 applicant with respect to establishing a profitable in18 vestment track record. 

19 ‘‘SEC. 399E. GRANTS. 

20 ‘‘(a) IN GENERAL.—The Administrator may make 

21 one or more grants to a participating investment company. 

22 ‘‘(b) GRANT AMOUNTS.— 

23 ‘‘(1) NON-FEDERAL CAPITAL.—A grant made 

24 to a participating investment company under the 

25 program may not be in an amount that exceeds the 
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1 amount of the capital of such company that is not 

2 from a Federal source and that is available for in3 vestment on or before the date on which a grant is 

4 drawn upon. Such capital may include legally bind5 ing commitments with respect to capital for invest6 ment. 

7 ‘‘(2) LIMITATION ON AGGREGATE AMOUNT.— 

8 The aggregate amount of all grants made to a par9 ticipating investment company under the program 

10 may not exceed $100,000,000. 

11 ‘‘(c) GRANT PROCESS.—In making a grant under the 

12 program, the Administrator shall commit a grant amount 

13 to a participating investment company and the amount of 

14 each such commitment shall remain available to be drawn 

15 upon by such company— 

16 ‘‘(1) for new-named investments during the 5- 

17 year period beginning on the date on which each 

18 such commitment is first drawn upon; and 

19 ‘‘(2) for follow-on investments and management 

20 fees during the 10-year period beginning on the date 

21 on which each such commitment is first drawn upon, 

22 with not more than 2 additional 1-year periods avail23 able at the discretion of the Administrator. 
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1 ‘‘SEC. 399F. INVESTMENTS IN EARLY-STAGE SMALL BUSI2 NESSES IN TARGETED INDUSTRIES. 

3 ‘‘(a) IN GENERAL.—As a condition of receiving a 

4 grant under the program, a participating investment com5 pany shall make all of the investments of such company 

6 in small business concerns, of which at least 50 percent 

7 shall be early-stage small businesses in targeted indus8 tries. 

9 ‘‘(b) EVALUATION OF COMPLIANCE.—With respect to 

10 a grant amount committed to a participating investment 

11 company under section 399E, the Administrator shall 

12 evaluate the compliance of such company with the require13 ments under this section if such company has drawn upon 

14 50 percent of such commitment. 

15 ‘‘SEC. 399G. PRO RATA INVESTMENT SHARES. 

16 ‘‘Each investment made by a participating invest17 ment company under the program shall be treated as com18 prised of capital from grants under the program according 

19 to the ratio that capital from grants under the program 

20 bears to all capital available to such company for invest21 ment. 

22 ‘‘SEC. 399H. GRANT INTEREST. 

23 ‘‘(a) GRANT INTEREST.— 

24 ‘‘(1) IN GENERAL.—As a condition of receiving 

25 a grant under the program, a participating invest-
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1 ment company shall convey a grant interest to the 

2 Administrator in accordance with paragraph (2). 

3 ‘‘(2) EFFECT OF CONVEYANCE.—The grant in4 terest conveyed under paragraph (1) shall have all 

5 the rights and attributes of other investors attrib6 utable to their interests in the participating invest7 ment company, but shall not denote control or vot8 ing rights to the Administrator. The grant interest 

9 shall entitle the Administrator to a pro rata portion 

10 of any distributions made by the participating in11 vestment company equal to the percentage of capital 

12 in the participating investment company that the 

13 grant comprises. The Administrator shall receive dis14 tributions from the participating investment com15 pany at the same times and in the same amounts as 

16 any other investor in the company with a similar in17 terest. The investment company shall make alloca18 tions of income, gain, loss, deduction, and credit to 

19 the Administrator with respect to the grant interest 

20 as if the Administrator were an investor. 

21 ‘‘(b) MANAGER PROFITS.—As a condition of receiv22 ing a grant under the program, the manager profits inter23 est payable to the managers of a participating investment 

24 company under the program shall not exceed 20 percent 

25 of profits, exclusive of any profits that may accrue as a 
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1 result of the capital contributions of any such managers 

2 with respect to such company. Any excess of this amount, 

3 less taxes payable thereon, shall be returned by the man4 agers and paid to the investors and the Administrator in 

5 proportion to the capital contributions and grants paid in. 

6 No manager profits interest (other than a tax distribution) 

7 shall be paid prior to the repayment to the investors and 

8 the Administrator of all contributed capital and grants 

9 made. 

10 ‘‘(c) DISTRIBUTION REQUIREMENTS.—As a condition 

11 of receiving a grant under the program, a participating 

12 investment company shall make all distributions to all in13 vestors in cash and shall make distributions within a rea14 sonable time after exiting investments, including following 

15 a public offering or market sale of underlying investments. 

16 ‘‘SEC. 399I. FUND. 

17 ‘‘There is hereby created within the Treasury a sepa18 rate fund for grants which shall be available to the Admin19 istrator subject to annual appropriations as a revolving 

20 fund to be used for the purposes of the program. All 

21 amounts received by the Administrator, including any 

22 moneys, property, or assets derived by the Administrator 

23 from operations in connection with the program, shall be 

24 deposited in the fund. All expenses and payments, exclud25 ing administrative expenses, pursuant to the operations of 
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1 the Administrator under the program shall be paid from 

2 the fund. 

3 ‘‘SEC. 399J. APPLICATION OF OTHER SECTIONS. 

4 ‘‘To the extent not inconsistent with requirements 

5 under this part, the Administrator may apply sections 

6 309, 311, 312, 313, and 314 to activities under this part 

7 and an officer, director, employee, agent, or other partici8 pant in a participating investment company shall be sub9 ject to the requirements under such sections. 

10 ‘‘SEC. 399K. DEFINITIONS. 

11 ‘‘In this part, the following definitions apply: 

12 ‘‘(1) EARLY-STAGE SMALL BUSINESS IN A TAR13 GETED INDUSTRY.—The term ‘early-stage small 

14 business in a targeted industry’ means a small busi15 ness concern that— 

16 ‘‘(A) is domiciled in a State; 

17 ‘‘(B) has not generated gross annual sales 

18 revenues exceeding $15,000,000 in any of the 

19 previous 3 years; and 

20 ‘‘(C) is engaged primarily in researching, 

21 developing, manufacturing, producing, or bring22 ing to market goods, products, or services with 

23 respect to any of the following business sectors: 

24 ‘‘(i) Agricultural technology. 

25 ‘‘(ii) Energy technology. 
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1 ‘‘(iii) Environmental technology. 

2 ‘‘(iv) Life science. 

3 ‘‘(v) Information technology. 

4 ‘‘(vi) Digital media. 

5 ‘‘(vii) Clean technology. 

6 ‘‘(viii) Defense technology. 

7 ‘‘(ix) Photonics technology. 

8 ‘‘(2) PARTICIPATING INVESTMENT COMPANY.— 

9 The term ‘participating investment company’ means 

10 an applicant approved under section 399D to par11 ticipate in the program. 

12 ‘‘(3) SMALL BUSINESS CONCERN.—The term 

13 ‘small business concern’ has the same meaning given 

14 such term under section 3(a) of the Small Business 

15 Act (15 U.S.C. 632(a)). 

16 ‘‘SEC. 399L. AUTHORIZATION OF APPROPRIATIONS. 

17 ‘‘There is authorized to be appropriated to carry out 

18 the program $200,000,000 for the first full fiscal year be19 ginning after the date of the enactment of this part.’’. 

20 SEC. 702. PROHIBITIONS ON EARMARKS. 

21 None of the funds appropriated for the program es22 tablished under part D of title III of the Small Business 

23 Investment Act of 1958, as added by this title, may be 

24 used for a Congressional earmark as defined in clause 9(d) 

25 of rule XXI of the Rules of the House of Representatives. 
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1 TITLE VIII—SBA DISASTER 

2 PROGRAM REFORM 

3 SEC. 801. REVISED COLLATERAL REQUIREMENTS. 

4 Section 7 of the Small Business Act (15 U.S.C. 636) 

5 is amended— 

6 (1) by striking ‘‘(e) [RESERVED].’’ and ‘‘(f) 

7 [RESERVED].’’; and 

8 (2) in subsection (f), as added by section 

9 12068(a)(2) of the Small Business Disaster Re10 sponse and Loan Improvements Act of 2008 (sub11 title B of title XII of the Food, Conservation, and 

12 Energy Act of 2008; Public Law 110–246), by add13 ing at the end the following: 

14 ‘‘(2) REVISED COLLATERAL REQUIREMENTS.— 

15 In making a loan with respect to a business under 

16 subsection (b), if the total approved amount of such 

17 loan is less than or equal to $250,000, the Adminis18 trator may not require the borrower to use the bor19 rower’s home as collateral.’’. 

20 SEC. 802. INCREASED LIMITS. 

21 Section 7(b) of the Small Business Act (15 U.S.C. 

22 636(b)) is amended— 

23 (1) in paragraph (3)(E) by striking 

24 ‘‘$1,500,000’’ each place it appears and inserting 

25 ‘‘$3,000,000’’; and 
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1 (2) in paragraph (8)(A) by striking 

2 ‘‘$2,000,000’’ and inserting ‘‘$3,000,000’’. 

3 SEC. 803. REVISED REPAYMENT TERMS. 

4 Section 7(f) of the Small Business Act (15 U.S.C. 

5 636(f)) is amended by adding at the end the following: 

6 ‘‘(3) REVISED REPAYMENT TERMS.—In making 

7 loans under subsection (b), the Administrator— 

8 ‘‘(A) may not require repayment to begin 

9 until the date that is 12 months after the date 

10 on which the final disbursement of approved 

11 amounts is made; and 

12 ‘‘(B) shall calculate the amount of repay13 ment based solely on the amounts disbursed.’’. 

14 SEC. 804. REVISED DISBURSEMENT PROCESS. 

15 Section 7(f) of the Small Business Act (15 U.S.C. 

16 636(f)), as amended by this Act, is further amended by 

17 adding at the end the following: 

18 ‘‘(4) REVISED DISBURSEMENT PROCESS.—In 

19 making a loan under subsection (b), the Adminis20 trator shall disburse loan amounts in accordance 

21 with the following: 

22 ‘‘(A) If the total amount approved with re23 spect to such loan is less than or equal to 

24 $150,000— 
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1 ‘‘(i) the first disbursement with re2 spect to such loan shall consist of 40 per3 cent of the total loan amount, or a lesser 

4 percentage of the total loan amount if the 

5 Administrator and the borrower agree on 

6 such a lesser percentage; 

7 ‘‘(ii) the second disbursement shall 

8 consist of 50 percent of the loan amounts 

9 that remain after the first disbursement, 

10 and shall be made when the borrower has 

11 produced satisfactory receipts to dem12 onstrate the proper use of 50 percent of 

13 the first disbursement; and 

14 ‘‘(iii) the third disbursement shall 

15 consist of the loan amounts that remain 

16 after the preceding disbursements, and 

17 shall be made when the borrower has pro18 duced satisfactory receipts to demonstrate 

19 the proper use of the first disbursement 

20 and 50 percent of the second disburse21 ment. 

22 ‘‘(B) If the total amount approved with re23 spect to such loan is more than $150,000 but 

24 less than or equal to $500,000— 
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1 ‘‘(i) the first disbursement with re2 spect to such loan shall consist of 20 per3 cent of the total loan amount, or a lesser 

4 percentage of the total loan amount if the 

5 Administrator and the borrower agree on 

6 such a lesser percentage; 

7 ‘‘(ii) the second disbursement shall 

8 consist of 30 percent of the loan amounts 

9 that remain after the first disbursement, 

10 and shall be made when the borrower has 

11 produced satisfactory receipts to dem12 onstrate the proper use of 50 percent of 

13 the first disbursement; 

14 ‘‘(iii) the third disbursement shall 

15 consist of 25 percent of the loan amounts 

16 that remain after the first and second dis17 bursements, and shall be made when the 

18 borrower has produced satisfactory receipts 

19 to demonstrate the proper use of the first 

20 disbursement and 50 percent of the second 

21 disbursement; and 

22 ‘‘(iv) the fourth disbursement shall 

23 consist of the loan amounts that remain 

24 after the preceding disbursements, and 

25 shall be made when the borrower has pro-
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1 duced satisfactory receipts to demonstrate 

2 the proper use of the first and second dis3 bursements and 50 percent of the third 

4 disbursement. 

5 ‘‘(C) If the total amount approved with re6 spect to such loan is more than $500,000— 

7 ‘‘(i) the first disbursement with re8 spect to such loan shall consist of at least 

9 $100,000, or a lesser amount if the Ad10 ministrator and the borrower agree on 

11 such a lesser amount; and 

12 ‘‘(ii) the number of disbursements 

13 after the first, and the amount of each 

14 such disbursement, shall be in the discre15 tion of the Administrator, but the amount 

16 of each such disbursement shall be at least 

17 $100,000.’’. 

18 SEC. 805. GRANT PROGRAM. 

19 Section 7(b) of the Small Business Act (15 U.S.C. 

20 636(b)), as amended by this Act, is further amended by 

21 inserting after paragraph (9) the following: 

22 ‘‘(10) GRANTS TO DISASTER-AFFECTED SMALL

23 BUSINESSES.— 

24 ‘‘(A) IN GENERAL.—If the Administrator 

25 declares eligibility for additional disaster assist-
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1 ance under paragraph (9), the Administrator 

2 may make a grant, in an amount not exceeding 

3 $100,000, to a small business concern that— 

4 ‘‘(i) is located in an area affected by 

5 the applicable major disaster; 

6 ‘‘(ii) submits to the Administrator a 

7 certification by the owner of the concern 

8 that such owner intends to reestablish the 

9 concern in the same county in which the 

10 concern was originally located; 

11 ‘‘(iii) has applied for, and was rejected 

12 for, a conventional disaster assistance loan 

13 under this subsection; and 

14 ‘‘(iv) was in existence for at least 2 

15 years before the date on which the applica16 ble disaster declaration was made. 

17 ‘‘(B) PRIORITY.—In making grants under 

18 this paragraph, the Administrator shall give 

19 priority to a small business concern that the 

20 Administrator determines is economically viable 

21 but unable to meet short-term financial obliga22 tions. 

23 ‘‘(C) PROGRAM LEVEL AND AUTHORIZA24 TION OF APPROPRIATIONS.— 
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1 ‘‘(i) PROGRAM LEVEL.—The Adminis2 trator is authorized to make $100,000,000 

3 in grants under this paragraph for each of 

4 fiscal years 2010 and 2011. 

5 ‘‘(ii) AUTHORIZATION OF APPROPRIA6 TIONS.—There are authorized to be appro7 priated to the Administrator such sums as 

8 may be necessary to carry out this para9 graph.’’. 

10 SEC. 806. REGIONAL DISASTER WORKING GROUPS. 

11 Section 40 of the Small Business Act (15 U.S.C. 

12 657l) is amended— 

13 (1) in subsection (a), in the matter preceding 

14 paragraph (1), by striking ‘‘or’’ and inserting ‘‘and’’; 

15 (2) by redesignating subsection (d) as sub16 section (e); and 

17 (3) by inserting after subsection (c) the fol18 lowing: 

19 ‘‘(d) REGIONAL DISASTER WORKING GROUPS.—In 

20 carrying out the responsibilities pertaining to loan making 

21 activities under subsection (a), the Administrator, acting 

22 through the regional administrators of the regional offices 

23 of the Administration, shall develop a disaster prepared24 ness and response plan for each region of the Administra25 tion. Each such plan shall be developed in cooperation 
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1 with Federal, State, and local emergency response authori2 ties and representatives of businesses located in the region 

3 to which such plan applies. Each such plan shall identify 

4 and include a plan relating to the 3 disasters, natural or 

5 manmade, most likely to occur in the region to which such 

6 plan applies.’’. 

7 SEC. 807. OUTREACH GRANTS FOR LOAN APPLICANT AS8 SISTANCE. 

9 Section 7(b) of the Small Business Act (15 U.S.C. 

10 636(b)), as amended by this Act, is further amended by 

11 inserting after paragraph (10) the following: 

12 ‘‘(11) OUTREACH GRANTS FOR LOAN APPLI13 CANT ASSISTANCE.— 

14 ‘‘(A) IN GENERAL.—From amounts made 

15 available for administrative expenses relating to 

16 activities under this subsection, the Adminis17 trator is authorized to make grants to the fol18 lowing: 

19 ‘‘(i) A women’s business center in an 

20 area affected by a disaster. 

21 ‘‘(ii) A small business development 

22 center in an area affected by a disaster. 

23 ‘‘(iii) A Veteran Business Outreach 

24 Center in an area affected by a disaster. 
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1 ‘‘(iv) A chamber of commerce in an 

2 area affected by a disaster. 

3 ‘‘(B) USE OF GRANT.—An entity specified 

4 under subparagraph (A) shall use a grant re5 ceived under this paragraph to provide applica6 tion preparation assistance to applicants for a 

7 loan under this subsection. 

8 ‘‘(C) PROGRAM LEVEL.—The Adminis9 trator is authorized to make $50,000,000 in 

10 grants under this paragraph for each of fiscal 

11 years 2010 and 2011.’’. 

12 SEC. 808. HOMEOWNERS IMPACTED BY TOXIC DRYWALL. 

13 Section 7(b) of the Small Business Act (15 U.S.C. 

14 636(b)), as amended by this Act, is further amended by 

15 inserting after paragraph (11) the following: 

16 ‘‘(12) HOMEOWNERS IMPACTED BY TOXIC

17 DRYWALL.—The Administrator may make a loan 

18 under this subsection to any homeowner if the pri19 mary residence of such homeowner has been ad20 versely impacted by the installation of toxic drywall 

21 manufactured in China. A loan under this paragraph 

22 may be used only for the repair or replacement of 

23 such toxic drywall.’’. 
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1 SEC. 809. AUTHORIZATION OF APPROPRIATIONS. 

2 Section 20 of the Small Business Act (15 U.S.C. 631 

3 note), as amended by this Act, is further amended— 

4 (1) by redesignating subsection (j) as sub5 section (k); and 

6 (2) by inserting after subsection (i) the fol7 lowing: 

8 ‘‘(j) FISCAL YEARS 2010 AND 2011 WITH RESPECT

9 TO SECTION 7(b).—There is authorized to be appropriated 

10 such sums as may be necessary for administrative ex11 penses and loans under section 7(b).’’. 

12 TITLE IX—REGULATIONS 

13 SEC. 901. REGULATIONS. 

14 Except as otherwise provided in this Act or in amend15 ments made by this Act, after an opportunity for notice 

16 and comment, but not later than 180 days after the date 

17 of the enactment of this Act, the Administrator shall issue 

18 regulations to carry out this Act and the amendments 

19 made by this Act. 

20 TITLE X—TEMPORARY EM21 PLOYEE SERVICES FRAN22 CHISES 

23 SEC. 1001. TEMPORARY EMPLOYEE SERVICES FRANCHISES. 

24 In determining whether a franchisee is affiliated with 

25 a franchiser in the temporary employee services industry 

26 for the purposes of Small Business Administration lending 
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1 programs, the Administrator of the Small Business Ad2 ministration shall— 

3 (1) continue to apply its historically-considered 

4 affiliation factors in determining whether a business 

5 is affiliated with another business or the franchiser 

6 in the temporary staffing industry; 

7 (2) promulgate such other rules and regulations 

8 as necessary to determine affiliation within the tem9 porary employee services industry as the Adminis10 trator determines consistent with the Small Business 

11 Act; and 

12 (3) consider the processing of payroll and bill13 ing by a franchiser as customary and common prac14 tice in the temporary employee services industry that 

15 does not provide probative weight on affiliation, to 

16 the extent that the temporary staffing personnel are 

17 interviewed, hired, trained, assigned, and subject to 

18 discharge by the franchisee. 

19 TITLE XI—STUDY ON PRIVATE 

20 SECTOR LENDING 

21 SEC. 1101. STUDY ON PRIVATE SECTOR LENDING. 

22 (a) IN GENERAL.—Not later than 90 days after the 

23 date of the enactment of this Act, the Administrator of 

24 the Small Business Administration shall submit to the 

25 Committee on Small Business of the House of Representa-
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1 tives and the Committee on Small Business and Entrepre2 neurship of the Senate a report that describes lending to 

3 small business concerns by the private sector, including 

4 the following: 

5 (1) The total amount of lending to small busi6 ness concerns by private sector financial institutions 

7 during each of fiscal years 2006 through 2009. 

8 (2) The total amount of lending to small busi9 ness concerns by the 10 largest private sector finan10 cial institutions (as determined by the Administrator 

11 in terms of amounts lent during fiscal year 2006) 

12 during each of fiscal years 2006 through 2009. 

13 (b) COORDINATION.—The Administrator of the Small 

14 Business Administration shall, if necessary, coordinate 

15 with the heads of other Federal departments and agencies 

16 to complete the report under subsection (a). 

17 (c) SMALL BUSINESS CONCERNS DEFINED.—In this 

18 section, the term ‘‘small business concern’’ has the mean19 ing given such term under section 3(a) of the Small Busi20 ness Act (15 U.S.C. 632(a)). 

21 TITLE XII—STUDY ON 

22 INCREASES IN CERTAIN CAPS 

23 SEC. 1201. STUDY ON INCREASES IN CERTAIN CAPS. 

24 Not later than 90 days after the date of enactment 

25 of this Act, the Administrator of the Small Business Ad-
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1 ministration shall submit to Congress a report that de2 scribes the anticipated effects of the following potential 

3 changes to programs, including whether such changes ade4 quately meet the financing needs of small businesses: 

5 (1) Increasing— 

6 (A) the maximum amount of a loan that 

7 may be guaranteed under section 7(a) of the 

8 Small Business Act (15 U.S.C. 636(a)) to 

9 $3,000,000; and 

10 (B) participation by the Administrator 

11 with regard to such a loan. 

12 (2) Increasing— 

13 (A) the maximum amount of a debenture 

14 that may be guaranteed under title V of the 

15 Small Business Investment Act of 1958 (15 

16 U.S.C. 695 et seq.); and 

17 (B) the maximum amount of a loan that 

18 may be made with the proceeds of such deben19 ture. 

20 (3) Increasing the maximum amount of a 

21 microloan that may be made under section 7(m) of 

22 the Small Business Act (15 U.S.C. 636(m)). 
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1 TITLE XIII—RURAL OUTREACH 

2 SEC. 1301. RURAL OUTREACH. 

3 The Small Business Act (15 U.S.C. 631 et seq.), as 

4 amended by this Act, is further amended— 

5 (1) by redesignating section 46 as section 47; 

6 and 

7 (2) by inserting after section 45 the following: 

8 ‘‘SEC. 46. RURAL OUTREACH. 

9 ‘‘The Administrator shall ensure that each district of10 fice of the Administration that includes a rural area— 

11 ‘‘(1) establishes a plan to provide small busi12 ness concerns in rural areas with information on the 

13 financing and investment programs of the Adminis14 tration of use to such concerns; 

15 ‘‘(2) designates an employee of the office as a 

16 rural business financing outreach specialist, who is 

17 responsible for providing advice concerning the lend18 ing and investment programs of the Administration 

19 to small business concerns; and 

20 ‘‘(3) hosts at least one outreach seminar in a 

21 rural area each year to provide information de22 scribed under paragraph (1) to small business con23 cerns in rural areas.’’. 
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1 TITLE XIV—STUDY RELATING TO 

2 MEDICAL TECHNOLOGY 

3 SEC. 1401. STUDY RELATING TO MEDICAL TECHNOLOGY. 

4 Not later than one year after the date of the enact5 ment of this Act, the Administrator of the Small Business 

6 Administration shall submit to Congress a report describ7 ing recommendations for and the feasibility of a pro8 gram— 

9 (1) to increase investment in the research, de10 velopment, and commercialization of medical tech11 nology by small business concerns; and 

12 (2) that is administered in a manner similar to 

13 the program under part C of title III of the Small 

14 Business Investment Act of 1958 (15 U.S.C. 690 et 

15 seq.). 

16 TITLE XV—STUDY ON ADDI17 TIONAL CREDIT RISK FAC18 TORS 

19 SEC. 1501. STUDY ON ADDITIONAL CREDIT RISK FACTORS. 

20 (a) IN GENERAL.—With respect to loans made under 

21 programs established or amended under this Act, the Ad22 ministrator of the Small Business Administration shall 

23 conduct a study on whether the failure of such loans to 

24 achieve one or more of the public policy goals specified 

25 in subsection (b) negatively impacts the ability of busi-
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1 nesses receiving such loans to make timely repayment of 

2 such loans. 

3 (b) PUBLIC POLICY GOALS.—The public policy goals 

4 referred to in subsection (a) are the provision of adequate 

5 access to capital to assist small business concerns with one 

6 or more of the following: 

7 (1) Offsetting the costs to such concerns result8 ing from the imposition of a surtax on the income 

9 of small business owners. 

10 (2) Offsetting the costs to such concerns result11 ing from the enactment of a requirement that such 

12 concerns offer health care of a minimum acceptable 

13 coverage level. 

14 (3) Offsetting the costs to such concerns result15 ing from an increase in the marginal tax rates of 

16 small business owners. 

17 (4) Offsetting the reduction in capital available 

18 for such concerns resulting from an increase in the 

19 tax on capital gains. 

20 (5) Offsetting the reduction in capital available 

21 for such concerns resulting from an increase in the 

22 taxes on carried interest. 

23 (6) Offsetting the increased energy costs for 

24 such concerns resulting from the enactment of a cap 

25 on carbon dioxide emissions. 
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1 (7) Offsetting the increased costs to such con2 cerns resulting from a change in Federal law that 

3 allows unions to be organized through a card check 

4 process. 

5 (8) Offsetting the reduction in capital available 

6 for such concerns resulting from new regulations on 

7 financial products. 

8 (9) Offsetting the increased costs to such con9 cerns resulting from the imposition of net neutrality 

10 rules on the Internet. 

11 (c) USE OF STUDY.—Not later than 180 days after 

12 the date of the enactment of this Act, the Administrator 

13 of the Small Business Administration shall submit to Con14 gress a report on the results of the study conducted under 

15 subsection (a) and shall use such results to evaluate and 

16 adjust, as appropriate, the potential credit risk to the Gov17 ernment through the provision of loans under programs 

18 established or amended under this Act. 

Passed the House of Representatives October 29, 

2009. 

Attest: 

Clerk. 
111TH CONGRESS 

1ST SESSION H. R. 3854 

AN ACT 

To amend the Small Business Act and the Small 

Acts, and for other purposes. grams providing access to capital under such Business Investment Act of 1958 to improve pro-