IB 

Union Calendar No. 181 

111TH CONGRESS 

1ST SESSION H. R. 3854 

[Report No. 111–315] 

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. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 20, 2009 

Mr. SCHRADER (for himself, Ms. VELA ́ZQUEZ, Mrs. HALVORSON, and Mrs. 

KIRKPATRICK of Arizona) introduced the following bill; which was referred to the Committee on Small Business 

OCTOBER 26, 2009 

Additional sponsors: Ms. CLARKE and Mr. SKELTON

OCTOBER 26, 2009 

Committed to the Committee of the Whole House on the State of the Union 

and ordered to be printed 

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A BILL 

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. 

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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

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

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

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

7 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. SBA secondary market lending authority made permanent. 

Sec. 120. SBA secondary market lending authority expanded. 

Sec. 121. Increased loan limits. 

Sec. 122. Real estate appraisals. 

Sec. 123. Additional support for Express Loan Program. 

Sec. 124. 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 

Sec. 211. Certified development companies. 

Sec. 212. Certified development company; operational requirements. 

Sec. 213. Accredited lenders program. 

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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. Interest rates and loan size. 

Sec. 307. Reporting requirement. 

Sec. 308. Surplus interest rate subsidy for businesses. 

Sec. 309. 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. Limitations on prepayment. 

Sec. 407. Investment with certain passive entities. 

Sec. 408. Investment in smaller enterprises. 

Sec. 409. Capital impairment. 

Sec. 410. Tangible net worth. 

Sec. 411. Development of agency record. 

Sec. 412. 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. 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. 

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. Authorization of appropriations. 

TITLE IX—REGULATIONS 

Sec. 901. Regulations. 

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 

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1 program to provide support to regional, district, and 

2 branch offices of the Administration to assist small 

3 lenders, who do not participate in the Preferred 

4 Lenders Program, to participate in the programs 

5 under this subsection.’’. 

6 SEC. 102. RURAL LENDING OUTREACH PROGRAM. 

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 ‘‘(35) RURAL LENDING OUTREACH PROGRAM.— 

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

12 shall establish and carry out a rural lending 

13 outreach program (hereinafter referred to in 

14 this paragraph as the ‘program’) to provide 

15 loans under this subsection in accordance with 

16 this paragraph. 

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

18 under the program shall include the maximum 

19 participation levels by the Administrator per20 mitted for loans made under this subsection. 

21 ‘‘(C) MAXIMUM LOAN AMOUNT.—The max22 imum amount of a loan under the program 

23 shall be $250,000. 

24 ‘‘(D) USE OF RURAL LENDERS.—The pro25 gram shall be carried out through lenders lomstockstill on DSKH9S0YB1PROD with BILLS

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1 cated in a rural area (as such term is defined 

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

3 business concern located in a rural area does 

4 not have a lender located within 30 miles of the 

5 principal place of business of such concern, 

6 through any lender chosen by such concern that 

7 provides loans under this subsection. 

8 ‘‘(E) TIME FOR APPROVAL.—The Adminis9 trator shall approve or disapprove a loan under 

10 the program within 36 hours. 

11 ‘‘(F) DOCUMENTATION.—The program 

12 shall use abbreviated application and docu13 mentation requirements. 

14 ‘‘(G) CREDIT STANDARDS.—Minimum 

15 credit standards, as the Administrator considers 

16 necessary to limit the rate of default on loans 

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

18 SEC. 103. COMMUNITY EXPRESS PROGRAM MADE PERMA19 NENT. 

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

21 636(a)), as amended by this Act, is further amended by 

22 adding at the end the following: 

23 ‘‘(36) COMMUNITY EXPRESS PROGRAM.— 

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

25 shall carry out a Community Express Program 

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1 to provide loans under this subsection in ac2 cordance with this paragraph. 

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

4 under the Community Express Program, the 

5 following shall apply: 

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

7 not exceeding $250,000. 

8 ‘‘(ii) The loan shall be made to a 

9 small business concern the majority owner10 ship interest of which is directly held by in11 dividuals the Administrator determines 

12 are, without regard to the geographic loca13 tion of such individuals, women, members 

14 of qualified Indian tribes, socially or eco15 nomically disadvantaged individuals, vet16 erans, or members of the reserve compo17 nents of the Armed Forces. 

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

19 collateral policy of the Administration. 

20 ‘‘(iv) The loan shall include terms re21 quiring the lender to provide, at the ex22 pense of the lender, technical assistance to 

23 the borrower through the lender or a third24 party provider. 

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1 ‘‘(v) The Administrator shall approve 

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

3 SEC. 104. INCREASED VETERAN PARTICIPATION PROGRAM 

4 MADE PERMANENT. 

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

6 636(a)), as amended by this Act, is further amended— 

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

8 as added by section 208 of the Military Reservist 

9 and Veteran Small Business Reauthorization and 

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

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

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

13 paragraph (1) of this section— 

14 (A) by striking ‘‘pilot program’’ each place 

15 it appears and inserting ‘‘program’’; 

16 (B) by striking subparagraphs (C) and 

17 (F); and 

18 (C) by redesignating subparagraphs (D) 

19 and (E) as subparagraphs (C) and (D), respec20 tively. 

21 SEC. 105. LEASING POLICY. 

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

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

24 striking paragraph (28) and inserting the following: 

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1 ‘‘(28) LEASING.—If a loan under this sub2 section is used to acquire or construct a facility, the 

3 assisted small business concern— 

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

5 less than 50 percent of the space in such facil6 ity; and 

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

8 basis, lease to others not more than 50 percent 

9 of the space in such facility.’’. 

10 SEC. 106. NATIONAL LENDER TRAINING PROGRAM. 

11 (a) IN GENERAL.—Section 7(a) of the Small Busi12 ness Act (15 U.S.C. 636(a)), as amended by this Act, is 

13 further amended by adding at the end the following: 

14 ‘‘(37) NATIONAL LENDER TRAINING PRO15 GRAM.— 

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

17 shall establish and carry out, through the re18 gional offices of the Administration, a lender 

19 training program for new and existing lenders 

20 under this subsection with respect to the lend21 ing systems, policies, and procedures of the Ad22 ministration. 

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

24 charge a fee for the program established under 

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1 subparagraph (A) to reduce the cost of such 

2 program to zero. 

3 ‘‘(C) LIMITATION.—The program estab4 lished under subparagraph (A) may not be car5 ried out by contract with a nongovernmental 

6 entity.’’. 

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

8 to participate in any program under the Small Business 

9 Act (15 U.S.C. 631 et seq.) or the Small Business Invest10 ment Act of 1958 (15 U.S.C. 661 et seq.) that is amended 

11 under this Act, as a lending or investment entity or as 

12 an agent of the Small Business Administration, unless 

13 such entity satisfies the following: 

14 (1) The entity has as the primary mission of 

15 the entity the financing or development of small 

16 business concerns. 

17 (2) The entity has a full-time staff dedicated to 

18 loan making activities, investment activities, or en19 trepreneurial development training. 

20 (3) The entity does not significantly participate 

21 in activities unrelated to the primary mission of the 

22 entity. 

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1 SEC. 107. APPLICATIONS FOR REPURCHASE OF LOANS. 

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 ‘‘(38) APPLICATIONS FOR REPURCHASE OF

6 LOANS.— 

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

8 days after the date of the receipt of a claim 

9 from a lender for proper payment of the guar10 anteed portion of a loan under this subsection 

11 due to default, the Administrator shall make a 

12 final determination with respect to the approval 

13 or denial of such claim. 

14 ‘‘(B) LATE DETERMINATIONS.—If the Ad15 ministrator does not make a final determination 

16 under subparagraph (A) in the time period 

17 specified in such subparagraph, the claim shall 

18 be approved and paid promptly.’’. 

19 SEC. 108. ALTERNATIVE SIZE STANDARD. 

20 (a) IN GENERAL.—Section 3(a) of the Small Busi21 ness Act (15 U.S.C. 632(a)) is amended by adding at the 

22 end the following: 

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

24 under this subsection, the Administrator shall estab25 lish and permit a lender making a loan under section 

26 7(a) to use an alternative size standard. The altermstockstill on DSKH9S0YB1PROD with BILLS

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1 native size standard shall be based on factors includ2 ing the maximum tangible net worth and average 

3 net income of a business concern.’’. 

4 (b) APPLICABILITY.—Until the Administrator estab5 lishes under section 3(a)(5) of the Small Business Act, 

6 as added by subsection (a) of this section, an alternative 

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

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

9 section 121.301(b) of title 13, Code of Federal Regula10 tions, shall apply in such a case. 

11 SEC. 109. PILOT PROGRAM AUTHORITY. 

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

13 636(a)), as amended by this Act, is further amended by 

14 striking paragraph (25) and inserting the following: 

15 ‘‘(25) LIMITATION ON CONDUCTING PILOT

16 PROJECTS.— 

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

18 than 10 percent of the total number of loans 

19 guaranteed in any fiscal year under this sub20 section may be awarded as part of a pilot pro21 gram. 

22 ‘‘(B) DOLLAR LIMITATIONS.— 

23 ‘‘(i) IN GENERAL.—With respect to 

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1 ment of the Small Business Financing and 

2 Investment Act of 2009, no loan shall be 

3 made under such program if such loan 

4 would result in the total amount of loans 

5 made during a fiscal year under all such 

6 programs to be in excess of 5 percent of 

7 the total amount of loans guaranteed in 

8 such fiscal year under this subsection. 

9 ‘‘(ii) CERTAIN PRE-EXISTING PRO10 GRAMS.—With respect to any pilot pro11 gram under this subsection established be12 fore the date of the enactment of the Small 

13 Business Financing and Investment Act of 

14 2009, no loan shall be made under such 

15 program if such loan would result in the 

16 total amount of loans made during a fiscal 

17 year under all such programs to be in ex18 cess of 10 percent of the total amount of 

19 loans guaranteed in such fiscal year under 

20 this subsection. 

21 ‘‘(C) EXPIRATION.— 

22 ‘‘(i) IN GENERAL.—Except as pro23 vided in clause (iii), the duration of any 

24 pilot program under this subsection may 

25 not exceed 3 years. 

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1 ‘‘(ii) DESIGNATION AS NEW PRO2 GRAM.—For purposes of this subpara3 graph, a pilot program shall not be treated 

4 as a new pilot program solely on the basis 

5 of a modification or change in the pilot 

6 program, including the change of its name. 

7 ‘‘(iii) EXISTING PROGRAMS.—With re8 spect to any pilot program in existence on 

9 the date of the enactment of the Small 

10 Business Financing and Investment Act of 

11 2009, such program may continue in effect 

12 for a period not exceeding 3 years after 

13 such date without regard to the duration 

14 of such program before such date. 

15 ‘‘(D) REGULATIONS.— 

16 ‘‘(i) IN GENERAL.—With respect to 

17 each pilot program under this subsection, 

18 including each pilot program in existence 

19 on the date of the enactment of the Small 

20 Business Financing and Investment Act of 

21 2009, the Administrator shall— 

22 ‘‘(I) issue regulations for such 

23 program after providing notice in the 

24 Federal Register and an opportunity 

25 for comment; and 

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1 ‘‘(II) ensure that such regula2 tions are published in the Code of 

3 Federal Regulations. 

4 ‘‘(ii) PILOT PROGRAMS ESTABLISHED

5 AFTER DATE OF ENACTMENT.—With re6 spect to any pilot program established 

7 after the date of the enactment of the 

8 Small Business Financing and Investment 

9 Act of 2009, such program shall not take 

10 effect until the requirements under this 

11 subparagraph are satisfied. 

12 ‘‘(E) REPEAL OF AUTHORITY TO WAIVE

13 CERTAIN RULES.— 

14 ‘‘(i) IN GENERAL.—Notwithstanding 

15 section 120.3 of title 13, Code of Federal 

16 Regulations, the Administrator may not 

17 from time to time suspend, modify, or 

18 waive rules for a limited period of time to 

19 test new programs or ideas with respect to 

20 this subsection, unless such suspension, 

21 modification, or waiver is explicitly author22 ized by Act of Congress. 

23 ‘‘(ii) EXISTING PILOT PROGRAMS.— 

24 Nothing under clause (i) may be construed 

25 to affect a pilot program in existence on 

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1 the date of the enactment of the Small 

2 Business Financing and Investment Act of 

3 2009. 

4 ‘‘(F) PILOT PROGRAM.—For purposes of 

5 this paragraph, the term ‘pilot program’ means 

6 any lending program initiative, project, innova7 tion, or other activity not specifically authorized 

8 by Act of Congress.’’. 

9 SEC. 110. LOANS TO COOPERATIVES. 

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 ‘‘(39) COOPERATIVES.—The Administration 

14 may provide loans under this subsection to any coop15 erative that— 

16 ‘‘(A) is not organized as a tax-exempt enti17 ty; 

18 ‘‘(B) is engaged in a legal business activ19 ity; 

20 ‘‘(C) obtains financial benefits for the co21 operative and for the members of such coopera22 tive; and 

23 ‘‘(D) is eligible under applicable size stand24 ards of the Administration, including that any 

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1 erative is eligible under applicable size stand2 ards of the Administration.’’. 

3 SEC. 111. CAPITAL BACKSTOP PROGRAM. 

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

5 636(a)), as amended by this Act, is further amended by 

6 adding at the end the following: 

7 ‘‘(40) CAPITAL BACKSTOP PROGRAM.— 

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

9 shall establish a process under which a small 

10 business concern may submit an application to 

11 the Administrator for the purpose of securing a 

12 loan under this subsection. With respect to such 

13 application, the Administrator shall collect all 

14 information necessary to determine the credit15 worthiness and repayment ability of an appli16 cant and shall determine if such application 

17 meets basic eligibility and credit standards for 

18 a loan under this subsection. 

19 ‘‘(B) PARTICIPATION OF LENDERS.— 

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

21 shall establish a process under which the 

22 Administrator makes available to lenders 

23 each loan application submitted and deter24 mined to meet basic eligibility and credit 

25 standards under subparagraph (A) for the 

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1 purpose of such lenders originating, under2 writing, closing, and servicing the loan for 

3 which the applicant applied. 

4 ‘‘(ii) ELIGIBILITY.—Lenders are eligi5 ble to receive a loan application described 

6 in clause (i) if they participate in the pro7 grams established under this subsection. 

8 ‘‘(iii) LOCAL LENDERS.—The Admin9 istrator shall first make available a loan 

10 application described in clause (i) to lend11 ers within 100 miles of the principal office 

12 of the loan applicant. 

13 ‘‘(iv) PREFERRED LENDERS.—If a 

14 lender described in clause (iii) does not 

15 agree to originate, underwrite, close, and 

16 service the loan applied for within 5 busi17 ness days of receiving a loan application 

18 described in clause (i), the Administrator 

19 shall subsequently make available such 

20 loan application to lenders in the Preferred 

21 Lenders Program under paragraph 

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

23 ‘‘(v) AUTHORITY OF ADMINISTRATION

24 TO LEND.—If a lender described in clauses 

25 (iii) or (iv) does not agree to originate, unmstockstill on DSKH9S0YB1PROD with BILLS

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1 derwrite, close, and service the loan applied 

2 for within 10 business days of receiving a 

3 loan application described in clause (i), the 

4 Administrator shall originate, underwrite, 

5 close, and service such loan. 

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

7 shall offer to sell loans made by the Adminis8 trator under this paragraph. Such sales shall be 

9 made through the semi-annual public solicita10 tion (in the Federal Register and in other 

11 media) of offers to purchase. The Administrator 

12 may contract with vendors for due diligence, 

13 asset valuation, and other services related to 

14 such sales. The Administrator may not sell any 

15 loan under this subparagraph for less than 90 

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

17 determined and certified by a qualified third 

18 party. 

19 ‘‘(D) LOANS NOT SOLD.—The Adminis20 trator shall maintain and service loans made by 

21 the Administrator under this paragraph that 

22 are not sold through the asset sales under this 

23 paragraph. 

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

25 shall have effect on a date if— 

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

2 that— 

3 ‘‘(I) begins on the date the Bu4 reau of Economic Analysis, or any 

5 successor organization, makes a deter6 mination that the gross domestic 

7 product of the United States has de8 creased for three consecutive quarters; 

9 and 

10 ‘‘(II) ends on the date the Bu11 reau of Economic Analysis, or any 

12 successor organization, makes a deter13 mination that the gross domestic 

14 product of the United States has in15 creased for two consecutive quarters; 

16 and 

17 ‘‘(ii) the number of loans provided 

18 under this subsection prior to such date in 

19 the fiscal year including such date is at 

20 least 30 percent less than the number of 

21 such loans provided prior to the same point 

22 in the previous fiscal year. 

23 ‘‘(F) IMPLEMENTATION.—The Adminis24 trator shall establish a group of at least 250 in25 dividuals available to carry out activities under 

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1 this paragraph on any date on which this para2 graph has effect under subparagraph (E). The 

3 Administrator shall provide to such group the 

4 training necessary to carry out activities under 

5 this paragraph. 

6 ‘‘(G) APPLICATION OF OTHER LAW.— 

7 Nothing in this paragraph shall be construed to 

8 exempt any activity of the Administrator under 

9 this paragraph from the Federal Credit Reform 

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

11 ‘‘(H) AUTHORIZATION OF APPROPRIA12 TIONS.— 

13 ‘‘(i) PROGRAM LEVELS.—The Admin14 istrator is authorized to make loans under 

15 this paragraph in an amount that is equal 

16 to half the amount authorized for loans 

17 under this subsection other than loans 

18 under this paragraph. 

19 ‘‘(ii) AUTHORIZATION OF APPROPRIA20 TIONS.—In addition to amounts made 

21 available to carry out this subsection, there 

22 are authorized to be appropriated such 

23 sums as may be necessary to carry out this 

24 paragraph.’’. 

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1 SEC. 112. LOANS TO FINANCE GOODWILL. 

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

6 apply an application, processing, or approval stand7 ard to a loan for the purpose of financing goodwill 

8 under this subsection, unless such standard applies 

9 to all loans under this subsection.’’. 

10 SEC. 113. APPELLATE PROCESS AND OMBUDSMAN. 

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

12 amended— 

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

14 and 

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

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

17 ‘‘(a) APPELLATE PROCESS.— 

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

19 after the date of the enactment of the Small Busi20 ness Financing and Investment Act of 2009, the Ad21 ministrator shall establish an independent appellate 

22 process within the Administration. The process shall 

23 be available to review material determinations made 

24 by the Administration that affect a lender or invest25 ment company that participates or is applying to 

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1 participate in a program administered by the Ad2 ministration. 

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

4 independent appellate process under paragraph (1), 

5 the Administrator shall ensure that— 

6 ‘‘(A) any appeal of a material determina7 tion by the Administration is heard and result8 ing recommendations are provided expedi9 tiously; and 

10 ‘‘(B) appropriate safeguards exist for pro11 tecting the appellant from retaliation by Admin12 istration employees. 

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

14 days after the date of the enactment of the Small 

15 Business Financing and Investment Act of 2009, the 

16 Administrator shall provide an opportunity for no17 tice and comment on proposed guidelines for the es18 tablishment of an independent appellate process 

19 under this section. 

20 ‘‘(b) AGENCY OMBUDSMAN.— 

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

22 days after the date of the enactment of the Small 

23 Business Financing and Investment Act of 2009, the 

24 Administrator shall appoint an ombudsman. 

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

2 accordance with paragraph (1) shall— 

3 ‘‘(A) act as a liaison between the Adminis4 tration and any lender or investment company 

5 that participates or is applying to participate in 

6 a program administered by the Administration 

7 with respect to a problem such entity may have 

8 in dealing with the Administration resulting 

9 from a material determination made by the Ad10 ministration; and 

11 ‘‘(B) ensure that safeguards exist to en12 courage complainants to come forward and pre13 serve confidentiality. 

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

15 out the independent appellate process established under 

16 subsection (a) or the position of ombudsman established 

17 under subsection (b) is authorized to— 

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

19 a matter under review pursuant to such subsections; 

20 and 

21 ‘‘(2) initiate the review of a matter under such 

22 subsections if such individual believes that Adminis23 tration procedures have not been followed as in24 tended with respect to such matter, without regard 

25 to whether an appeal or complaint has been made. 

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1 ‘‘(d) LIMITATIONS.— 

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

3 the independent appellate process established under 

4 subsection (a) or the position of ombudsman estab5 lished under subsection (b) may not, as a result of 

6 the authority provided under this section— 

7 ‘‘(A) make, change, or set aside a law, pol8 icy, or administrative decision; 

9 ‘‘(B) make binding decisions or determine 

10 rights; 

11 ‘‘(C) directly compel an entity to imple12 ment the recommendations of such individual; 

13 or 

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

15 is pending in a legal forum. 

16 ‘‘(2) RULE OF CONSTRUCTION.—Activities car17 ried out under this section may not be construed— 

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

19 hearing, or binding decision; 

20 ‘‘(B) as limiting any remedy or right of ap21 peal; 

22 ‘‘(C) as affecting any procedure concerning 

23 grievances, appeals, or administrative matters 

24 under law; or 

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

2 or judicial proceeding. 

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

4 of the enactment of the Small Business Financing and In5 vestment Act of 2009 and annually thereafter, the Admin6 istrator shall submit to the Committee on Small Business 

7 of the House of Representatives and the Committee on 

8 Small Business and Entrepreneurship of the Senate a re9 port describing and providing the status of appeals made 

10 under subsection (a) and complaints made under sub11 section (b). 

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

13 apply: 

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

15 ‘material determination’ includes determinations re16 lating to— 

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

18 loan guarantee; and 

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

20 in an Administration loan or investing program. 

21 ‘‘(2) INDEPENDENT APPELLATE PROCESS.— 

22 The term ‘independent appellate process’ means a 

23 review by an Administration official who does not di24 rectly or indirectly report to the Administration offimstockstill on DSKH9S0YB1PROD with BILLS

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1 cial who made the material determination under re2 view.’’. 

3 SEC. 114. EXTENSION OF RECOVERY AND RELIEF LOAN 

4 BENEFITS. 

5 (a) FEE REDUCTIONS.—Section 501 of title V of di6 vision A of the American Recovery and Reinvestment Act 

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

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

9 30, 2010’’ and inserting ‘‘September 30, 2011’’; and 

10 (2) in subsection (c) by striking paragraph (2). 

11 (b) ECONOMIC STIMULUS LENDING PROGRAM FOR

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

13 A of the American Recovery and Reinvestment Act of 

14 2009 (Public Law 111–5) is amended by striking ‘‘the 

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

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

17 SEC. 115. REDUCED DOCUMENTATION FOR BUSINESS STA18 BILIZATION LOANS. 

19 Section 506(a) of title V of division A of the Amer20 ican Recovery and Reinvestment Act of 2009 (Public Law 

21 111–5) is amended by adding at the end the following: 

22 ‘‘In carrying out such program, the Administrator shall 

23 establish and utilize a one-page application for loans under 

24 this section and shall authorize lenders to utilize the same 

25 documentation and procedural requirements for loans 

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1 under this section as such lenders utilize for other loans 

2 of a similar size and type.’’. 

3 SEC. 116. EXPANDED ELIGIBILITY FOR BUSINESS STA4 BILIZATION LOANS. 

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

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

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

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

9 SEC. 117. INCREASED AMOUNT OF BUSINESS STABILIZA10 TION LOANS. 

11 Section 506(d) of title V of division A of the Amer12 ican Recovery and Reinvestment Act of 2009 (Public Law 

13 111–5) is amended by striking ‘‘$35,000’’ and inserting 

14 ‘‘$50,000’’. 

15 SEC. 118. EXTENSION OF BUSINESS STABILIZATION LOANS. 

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

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

18 5) is amended by striking ‘‘September 30, 2010’’ and in19 serting ‘‘September 30, 2011’’. 

20 SEC. 119. SBA SECONDARY MARKET LENDING AUTHORITY 

21 MADE PERMANENT. 

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

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

24 5) is amended— 

25 (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. 120. 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 20 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. 121. 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. 122. 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. 123. 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. 124. AUTHORIZATION OF APPROPRIATIONS. 

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

10 note) is amended by inserting after subsection (e) the fol11 lowing: 

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

13 TO SECTION 7(a).— 

14 ‘‘(1) PROGRAM LEVELS.—For the programs au15 thorized by this Act, in each of fiscal years 2010 and 

16 2011 commitments for general business loans au17 thorized under section 7(a) may not exceed 

18 $20,000,000,000. 

19 ‘‘(2) AUTHORIZATION OF APPROPRIATIONS.— 

20 There are authorized to be appropriated such sums 

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

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1 TITLE II—CDC ECONOMIC 

2 DEVELOPMENT LOAN PROGRAM 

3 Subtitle A—General Provisions 

4 SEC. 201. PROGRAM LEVELS. 

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

6 note), as amended by this Act, is further amended by in7 serting after subsection (f) the following: 

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

9 ECONOMIC DEVELOPMENT LOAN PROGRAM.— 

10 ‘‘(1) FISCAL YEAR 2010.—For financings au11 thorized by section 7(a)(13) of this Act and title V 

12 of the Small Business Investment Act of 1958, the 

13 Administrator is authorized to make $9,000,000,000 

14 in guarantees of debentures for fiscal year 2010. 

15 ‘‘(2) FISCAL YEAR 2011.—For financings au16 thorized by section 7(a)(13) of this Act and title V 

17 of the Small Business Investment Act of 1958, the 

18 Administrator is authorized to make 

19 $10,000,000,000 in guarantees of debentures for fis20 cal year 2011.’’. 

21 SEC. 202. DEFINITIONS. 

22 Section 103 of the Small Business Investment Act 

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

24 (1) By amending paragraph (6) to read as fol25 lows: 

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

2 any corporation organized in order to promote eco3 nomic development and the growth of small business 

4 concerns and includes companies chartered under a 

5 special State law authorizing them to operate on a 

6 statewide basis;’’. 

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

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

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

10 end the following new paragraphs: 

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

12 means a development company that the Adminis13 trator has determined meets the criteria set forth in 

14 section 501; 

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

16 means— 

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

18 State; or 

19 ‘‘(B) a combination of political subdivisions 

20 which— 

21 ‘‘(i) has been formed to promote eco22 nomic or community development; 

23 ‘‘(ii) is composed of representatives of 

24 the State or a political subdivision acting 

25 in their official capacity; and 

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

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

3 a rural area, or has a population deter4 mined by the Administrator to be insuffi5 cient to support the formation of a sepa6 rate development company; 

7 such term includes entities meeting the require8 ments of clauses (i) through (iii), such as, but 

9 not limited to, a council of governments, re10 gional development corporation, regional plan11 ning commission, or economic development dis12 trict; 

13 ‘‘(22) the term ‘member’ means any person au14 thorized to vote for a director of a corporation or the 

15 dissolution or merger of a company (for purposes of 

16 this definition, a shareholder of a for-profit corpora17 tion shall be considered a member); 

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

19 have the same meaning as those terms are given in 

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

21 Code; and 

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

23 small business concern— 

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1 ‘‘(A) the primary business of which is clas2 sified in sector 31, 32, or 33 of the North 

3 American Industrial Classification System; and 

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

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

6 Subtitle B—Certified Development 

7 Companies 

8 SEC. 211. CERTIFIED DEVELOPMENT COMPANIES. 

9 Section 501 of the Small Business Investment Act 

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

11 ‘‘SEC. 501. CERTIFIED DEVELOPMENT COMPANIES. 

12 ‘‘(a) CERTIFIED DEVELOPMENT COMPANY DEBEN13 TURE AUTHORITY.—Only development companies cer14 tified by the Administrator shall have the authority to 

15 issue debentures under this Act. 

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

17 company shall be certified for the purposes of issuing de18 bentures if the Administrator determines that it meets 

19 each of the following criteria: 

20 ‘‘(1) SMALL CONCERN.— 

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

22 subparagraph (C) of paragraph (2), the com23 pany, including its affiliates, shall have no more 

24 than 200 employees. 

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

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

3 be under the control of any other concern. 

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

5 company is organized as a not-for-profit cor6 poration. 

7 ‘‘(2) EXCEPTIONS.— 

8 ‘‘(A) FOR PROFIT STATUS.—If a develop9 ment company was chartered as a for-profit 

10 corporation and issued debentures prior to Jan11 uary 1, 1987, the company shall not be re12 quired to change its status to not-for-profit in 

13 order to be certified. 

14 ‘‘(B) AFFILIATION GRANDFATHER.—Any 

15 company that was authorized by the Adminis16 trator to issue debentures before December 31, 

17 2005, shall be eligible for certification without 

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

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

20 local governmental entity unless that not-for21 profit corporation or local governmental entity 

22 is another entity that issues debentures under 

23 this title. 

24 ‘‘(C) AFFILIATION WITH LOCAL GOVERN25 MENTAL ENTITIES.—Any company that was ormstockstill on DSKH9S0YB1PROD with BILLS

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1 ganized after the date of enactment of the 

2 Small Business Financing and Investment Act 

3 of 2009 shall be eligible for certification without 

4 regard to its status as part of or affiliation with 

5 any local governmental entity. 

6 ‘‘(3) GOOD STANDING.—A development com7 pany shall be in good standing and comply with all 

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

9 authorized to conduct business. 

10 ‘‘(4) MEMBERSHIP.— 

11 ‘‘(A) IN GENERAL.—The development com12 pany shall have at least 25 members. 

13 ‘‘(B) VOTING RIGHTS.—No member shall 

14 control more than 10 percent of the total voting 

15 power in the development company. 

16 ‘‘(C) RESIDENCE.—Members must be resi17 dents of the State in which the development 

18 company is chartered or authorized to do busi19 ness. 

20 ‘‘(D) DIVERSITY.—The development com21 pany must have at least one member from each 

22 of the following: 

23 ‘‘(i) A local governmental entity. 

24 ‘‘(ii) A financial institution subject to 

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1 longing to the Federal Financial Institu2 tions Examination Council and that pro3 vides long-term fixed asset financing in the 

4 commercial market. 

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

6 other than a development company, that is 

7 dedicated to promoting economic growth. 

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

9 a financial institution described in clause 

10 (ii). 

11 ‘‘(E) EMPLOYMENT STATUS.—Membership 

12 in a development company shall not be predi13 cated on employment status and an individual 

14 who retired from or was terminated (for rea15 sons other than fraud or the commission of a 

16 crime) from an entity described in subpara17 graph (D) shall be deemed to be from the orga18 nization described in that subparagraph. 

19 ‘‘(5) BOARD OF DIRECTORS.— 

20 ‘‘(A) IN GENERAL.—The development com21 pany’s board consists of members and each di22 rector receives a majority vote of the members 

23 unless the development company is a for-profit 

24 corporation in which case the board need not 

25 consist entirely of members. 

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1 ‘‘(B) BOARD REPRESENTATION.—There 

2 shall be at least one director from not fewer 

3 than 3 of the 4 types of organizations specified 

4 in paragraph (4)(D) but no single type of orga5 nization shall have more than 50 percent rep6 resentation on the board of the development 

7 company. If the development company is a for8 profit corporation, financial institution rep9 resentatives may make up more than 50 per10 cent of the board. 

11 ‘‘(C) AFFILIATED ENTITY REPRESENTA12 TION RESTRICTIONS.—A development company 

13 that is described in paragraph (1)(C) may have 

14 any or all of its board members appointed by 

15 entities affiliated with the company and may in16 clude common members who also serve on the 

17 affiliate’s board of directors if the appointment 

18 of board members was exercised by an affiliate 

19 prior to December 31, 2005. 

20 ‘‘(D) SPECIAL RULE FOR CERTAIN DEVEL21 OPMENT COMPANIES.—The board of directors 

22 for any development company issuing deben23 tures before December 31, 2005, and incor24 porated under a State law requiring, or which 

25 is interpreted by the State’s legal department 

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1 as imposing specific requirements on, the num2 ber and selection of members, board members, 

3 or both, and the rights and privileges conferred 

4 by such State law, may adhere to such provi5 sions. 

6 ‘‘(6) PROFESSIONAL MANAGEMENT AND

7 STAFF.— 

8 ‘‘(A) IN GENERAL.—The development com9 pany shall have full-time independent profes10 sional management, including a chief executive 

11 officer to manage the daily operations and a 

12 full-time professional staff qualified to carry out 

13 the functions authorized under this title. 

14 ‘‘(B) UTILIZATION OF STAFF FROM AF15 FILIATED ENTITIES.—A development company 

16 shall not be denied certification under this sec17 tion if its chief executive or full-time profes18 sional staff is from an affiliated entity as de19 scribed in paragraph (1)(C). 

20 ‘‘(C) STAFF UNDER CONTRACT.—The Ad21 ministrator shall not deny certification to a de22 velopment company that contracts for its full 

23 time staff if one of the following conditions is 

24 met: 

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1 ‘‘(i) The development company is lo2 cated in a rural area, obtains its staff 

3 through contract from another develop4 ment company that is certified by the Ad5 ministrator and that development company 

6 operates in the same or a contiguous 

7 State. 

8 ‘‘(ii) The development company had 

9 issued debentures under this title prior to 

10 December 31, 2005, and had contracted 

11 with a for-profit business concern to pro12 vide staffing and management services. 

13 ‘‘(c) APPLICATIONS.— 

14 ‘‘(1) DEVELOPMENT COMPANIES ISSUING DE15 BENTURES BEFORE SEPTEMBER 30, 2009.— 

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

17 any development company that issued deben18 tures pursuant to this title before September 

19 30, 2009, the Administrator shall develop, after 

20 an opportunity for notice and comment, no 

21 later than 90 days after the date of enactment 

22 of the Small Business Financing and Invest23 ment Act of 2009, a short-form application that 

24 contains sufficient information for the Adminis25 trator to determine that the development commstockstill on DSKH9S0YB1PROD with BILLS

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1 pany currently meets the standards set forth in 

2 subsection (b). In developing such application, 

3 the Administrator shall be required to limit the 

4 amount of paperwork necessary to determine 

5 whether the development company meets the 

6 standards for certification and may limit the 

7 application to the filing of reports previously 

8 submitted to the Administrator. 

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

10 through contracts, the application shall include 

11 a copy of the contract. 

12 ‘‘(B) CERTIFICATION DECISION.—(i) The 

13 Administrator shall certify the development 

14 company if the application demonstrates that 

15 the applicant meets the standards in subsection 

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

17 request for certification shall be made within 7 

18 business days from the date the initial submis19 sion of the application is received by the Ad20 ministrator. If the Administrator takes no ac21 tion to approve or disapprove within 7 business 

22 days, the application for certification is deemed 

23 approved and no further action is required by 

24 the Administrator or the development company 

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1 approves the application, the Administrator 

2 shall provide in writing within 3 business days 

3 the reasons for the disapproval. If such docu4 ment is not provided within the time specified, 

5 the application is deemed approved and no fur6 ther action is required by the Administrator or 

7 the development company to obtain certifi8 cation. 

9 ‘‘(ii) For those development companies 

10 that submit contracts under subparagraph 

11 (A)(ii), the Administrator is limited in rejecting 

12 the application only if the Administrator finds 

13 that the entity servicing the applicant is no 

14 longer able to provide the employees or services 

15 needed by the applicant to perform the func16 tions that would be authorized under this title. 

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

18 Administrator disapproves the application for 

19 certification and provides a written statement 

20 as set forth in subparagraph (B), the develop21 ment company may file a new application lim22 ited solely to addressing the concerns of the Ad23 ministrator and the certification procedures set 

24 forth in subparagraph (B) shall recommence. 

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1 ‘‘(D) APPEALS.—If the Administrator dis2 approves an application in accordance with the 

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

4 applicant may, within 10 calendar days after 

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

7 hearing to determine such appeal pursuant to 

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

9 States Code, and shall issue a decision not later 

10 than 45 days after the appeal is filed. The deci11 sion on appeal shall constitute final agency ac12 tion for purposes of chapter 7 of title 5, United 

13 States Code. 

14 ‘‘(E) GRANDFATHERING.— 

15 ‘‘(i) IN GENERAL.—For the period 2 

16 years after date of enactment of the Small 

17 Business Financing and Investment Act of 

18 2009, any development company that was 

19 issuing debentures on or before the date 

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

21 to be a certified development company. 

22 ‘‘(ii) COMPLETION OF APPLICATION

23 PROCESS.—The procedures set forth in 

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1 pany meeting the qualifications of clause 

2 (i). 

3 ‘‘(iii) EFFECT OF DENIAL.—The de4 nial or rejection of an application for cer5 tification as set forth in this subsection 

6 shall have no effect on the ability of a de7 velopment company meeting the qualifica8 tions in clause (i) from continuing to issue 

9 debentures during the entire two-year pe10 riod established in that clause. 

11 ‘‘(iv) FAILURE TO OBTAIN CERTIFI12 CATION.—Any development company that 

13 fails to obtain certification in accordance 

14 with the procedures set forth in this para15 graph during the period set forth in clause 

16 (i) shall be considered to be a new develop17 ment company and the procedures of para18 graph (2) shall apply. The authority to 

19 issue debentures shall cease for any devel20 opment company covered by this subpara21 graph that has failed to obtain certification 

22 from the Administrator during the time 

23 period set forth in clause (i). 

24 ‘‘(F) AUTOMATIC QUALIFICATION PROVI25 SION.—If the Administrator fails to implement 

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1 the certification process set forth in this para2 graph, any development company that was 

3 issuing debentures before September 30, 2009, 

4 pursuant to this title shall be considered cer5 tified until such time as the Administrator de6 velops the certification procedures set forth in 

7 this paragraph. 

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

9 by a development company or the Administrator 

10 pursuant to this paragraph shall have no im11 pact on any guarantee of a debenture issued 

12 prior to the date of enactment of the Small 

13 Business Financing and Investment Act of 

14 2009. 

15 ‘‘(2) APPLICATION PROCESS FOR NEW DEVEL16 OPMENT COMPANIES.— 

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

18 company that has not issued debentures prior 

19 to September 30, 2009, the Administrator shall 

20 develop no later than 180 days after the date 

21 of enactment of the Small Business Financing 

22 and Investment Act of 2009, after an oppor23 tunity for notice and comment, an application 

24 form for certification that provides the Admin25 istrator with sufficient information to insure 

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1 that the applicant meets the standards set forth 

2 in subsection (b). The Administrator shall cer3 tify such development company or reject the ap4 plication within 60 calendar days from the date 

5 the initial submission was received by the Ad6 ministrator. If the Administrator rejects the ap7 plication, the Administrator shall provide in 

8 writing within 7 business days after the deci9 sion, the reason for rejecting the application. 

10 ‘‘(B) APPEALS.—A development company 

11 shall be able to appeal the disapproval of an ap12 plication under the procedures set forth in 

13 paragraph (1)(D).’’. 

14 SEC. 212. CERTIFIED DEVELOPMENT COMPANY; OPER15 ATIONAL REQUIREMENTS. 

16 (a) OPERATIONAL REQUIREMENTS.—Section 502 of 

17 the Small Business Investment Act of 1958 (15 U.S.C. 

18 696) is amended to read as follows: 

19 ‘‘SEC. 502. OPERATIONAL REQUIREMENTS FOR CERTIFIED 

20 DEVELOPMENT COMPANIES. 

21 ‘‘(a) MAINTENANCE OF STANDARDS FOR CERTIFI22 CATION.—Any company certified pursuant to section 501 

23 shall continue to comply with the requirements of that sec24 tion to remain certified. The Administrator shall develop 

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1 porates other documents and reports already kept by cer2 tified development companies, demonstrating their contin3 ued compliance. The form shall be developed in a manner 

4 that the estimated time for completion shall take no more 

5 than 2 hours. 

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

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

8 company, its officers, employees, and contractors 

9 shall act ethically and avoid activities which con10 stitute a conflict of interest or appear to constitute 

11 a conflict of interest. For purposes of this sub12 section, conduct that is unethical includes, but is not 

13 limited to, the actions specified in section 120.140 of 

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

15 January 1, 2009. 

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

17 an officer, director, or manager of more than 1 cer18 tified development company. The term ‘associate’ 

19 shall have the same meaning given the term ‘Asso20 ciate of a CDC’ in section 120.10 of title 13, Code 

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

22 2009. For the purposes of this subsection, 10 per23 cent shall be substituted wherever section 120.10 of 

24 title 13, Code of Federal Regulation uses 20 per25 cent. 

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1 ‘‘(3) BY ENTITIES.—Except as provided in sec2 tions 501(b)(5) and 501(b)(6), no person, sole pro3 prietorship, partnership, or corporation shall control 

4 or have managerial control of more than one cer5 tified development company. Control means any of 

6 the following: 

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

8 member of the company or member of its board 

9 of directors. 

10 ‘‘(B) The ability to modify or approve rate 

11 or fee changes affecting revenues of the cer12 tified development company. 

13 ‘‘(C) The ability to veto, overrule, or mod14 ify decisions of the certified development com15 pany’s body. 

16 ‘‘(D) The ability, either directly or contrac17 tually, to appoint, hire, reassign, or dismiss 

18 those managers and employees responsible for 

19 the daily operations of the certified development 

20 company. 

21 ‘‘(E) The ability to access the certified de22 velopment company’s resources or amend its 

23 budget. 

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1 ‘‘(F) The ability to control another cer2 tified development company pursuant to provi3 sions in a contract. 

4 ‘‘(c) MEETINGS.—The board of directors of the cer5 tified development company shall meet on a regular basis 

6 to make policy decisions for the company. 

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

8 a certified development company may use a loan com9 mittee to process loans in the State in which it operates 

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

11 loan committee shall be residents of the certified develop12 ment company’s State of operation or the adjacent local 

13 economic area. Such loan committees shall meet on a peri14 odic basis as set forth by the board of directors. 

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

16 ‘‘(1) IN GENERAL.—Certified development com17 panies shall not recommend or approve a guarantee 

18 of a debenture that will be collateralized by property 

19 being constructed or acquired on which an institu20 tion, as provided in section 508(c)(1)(A), will have 

21 a first lien position. 

22 ‘‘(2) EXCEPTION.—The prohibition in para23 graph (1) shall not apply to any certified develop24 ment company that was affiliated with or part of 

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1 any entity that took a first lien position between Oc2 tober 1, 2003, and September 30, 2005. 

3 ‘‘(f) AFFILIATION WITH LENDERS OPERATING

4 UNDER SECTION 7 OF THE SMALL BUSINESS ACT.— 

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

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

7 who participates in the loan programs authorized in 

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

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

10 ‘‘(2) EXCEPTION.—The prohibition in para11 graph (1) shall not apply to any certified develop12 ment company that is affiliated with an entity au13 thorized by the Administrator to operate under sec14 tion 7(a) of the Small Business Act if such affili15 ation occurred on or before November 6, 2003. 

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

17 development company shall not lose its status due to 

18 an affiliation with an institution regulated by the 

19 National Credit Union Administration if the develop20 ment company was affiliated with such an institu21 tion prior to January 1, 2007. 

22 ‘‘(g) SERVICING AND PACKAGING GUARANTEED

23 LOANS.—A certified development company is authorized 

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

25 7(c) of the Small Business Act (15 U.S.C. 636(a) or (c)), 

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

2 servicing such loans. 

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

4 by a certified development company from the issuance of 

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

6 private secondary market, or fees described in subsection 

7 (g) that remain unexpended after payment of staff, oper8 ating, and overhead expenses shall be used by the certified 

9 development company for— 

10 ‘‘(1) operating reserves; 

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

12 development company operates through the methods 

13 authorized in section 505 (relating to multi-State 

14 operation); 

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

16 economic development activity or community devel17 opment primarily in the State from which such 

18 funds were generated; or 

19 ‘‘(4) investment in small business investment 

20 companies subject to the limitations in subsection 

21 (i). 

22 ‘‘(i) LIMITATIONS WITH RESPECT TO SMALL BUSI23 NESS INVESTMENT COMPANIES.—A certified development 

24 company shall not— 

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1 ‘‘(1) invest excess funds in a small business in2 vestment company that the Administrator deter3 mines to be capitally impaired as set forth in section 

4 107.1830 of title 13, Code of Federal Regulations, 

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

6 regulation to that regulation, but may maintain its 

7 investment in such company if such investment was 

8 made prior to the determination of capital impair9 ment; and 

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

11 small business concern that has financing with a 

12 small business investment company in which the cer13 tified development company has invested excess 

14 funds. 

15 ‘‘(j) ECONOMIC DEVELOPMENT ACTIVITIES.—A com16 pany certified pursuant to this section shall carry out each 

17 of the following economic development activities that cre18 ate or preserve jobs in urban and rural areas: 

19 ‘‘(1) The company shall provide long-term fi20 nancing to small business concerns through deben21 tures described in section 506. 

22 ‘‘(2) The company shall operate any other pro23 gram to assist small business concerns or commu24 nities that promote local economic development and 

25 job creation or preservation. 

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1 ‘‘(k) RESTRICTIONS ON ASSISTANCE.— 

2 ‘‘(1) IN GENERAL.—After the date of enact3 ment of the Small Business Financing and Invest4 ment Act of 2009, no certified development company 

5 may accept funding from any source, including any 

6 Federal agency (as that term is defined in section 

7 551 of title 5, United States Code) if the source im8 poses— 

9 ‘‘(A) conditions on the types of small busi10 ness concerns that a certified development com11 pany may provide assistance to under this title; 

12 or 

13 ‘‘(B) conditions or requirements, directly 

14 or indirectly, upon any small business concern 

15 receiving assistance under this title. 

16 ‘‘(2) EXCEPTION.—The conditions of subpara17 graphs (A) and (B) of paragraph (1) shall not apply 

18 if the source provides all of the financing that will 

19 be provided by the certified development company to 

20 the small business concern, provided further that 

21 any conditions or restrictions are limited solely to 

22 the financing provided by the source of funding. 

23 ‘‘(l) REVOCATION AND SUSPENSION.—The Adminis24 trator may suspend or revoke a certified development com25 pany’s status if the Administrator determines, after a 

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

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

3 development company no longer— 

4 ‘‘(1) meets the eligibility criteria established 

5 under section 501 of this title; 

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

7 section; or 

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

9 regulations, or provisions of law. 

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

11 suspension or revocation under subsection (l) shall not af12 fect any outstanding debenture guarantee.’’. 

13 SEC. 213. ACCREDITED LENDERS PROGRAM. 

14 Section 503 of the Small Business Investment of 

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

16 ‘‘SEC. 503. ACCREDITED LENDERS PROGRAM. 

17 ‘‘(a) ESTABLISHMENT.— 

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

19 company may apply for status to become an accred20 ited certified development company if it meets the 

21 operational standards of section 502 and the criteria 

22 in subsection (b). 

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

24 after opportunity for notice and comment, develop 

25 an application for certified development companies 

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1 seeking to become accredited certified development 

2 companies. 

3 ‘‘(3) PROCESSING OF APPLICATION.—The Ad4 ministrator shall make a determination within 30 

5 days after a complete application has been filed by 

6 the certified development company. 

7 ‘‘(4) REAPPLICATION.—If the Administrator re8 jects the application, the Administrator shall provide 

9 in writing the reasons for the rejection. Any certified 

10 development company may reapply which will recom11 mence the processing time limits set forth in para12 graph (3), and such reapplication shall be limited to 

13 addressing the reasons for rejection. If the Adminis14 trator rejects a second application, that shall be con15 sidered final agency action for purposes of chapter 

16 7 of title 5, United States Code. 

17 ‘‘(b) STANDARDS FOR ACCREDITED CERTIFIED DE18 VELOPMENT COMPANY PROGRAM.—The Administrator 

19 shall designate a certified development company as accred20 ited if it meets the following standards: 

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

22 for not less than the preceding 12 months and has 

23 issued debentures as authorized under this title dur24 ing that time period. 

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

2 are knowledgeable in the lending policies and proce3 dures for certified development companies. 

4 ‘‘(3) Has the ability to process, close, and serv5 ice the loan issued under this title. 

6 ‘‘(4) Has a loss rate on the company’s deben7 tures that is reasonable and acceptable to the Ad8 ministrator. 

9 ‘‘(5) Has a history of submitting to the Admin10 istrator complete and accurate debenture guaranty 

11 application packages. 

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

13 credit needs for financing plant and equipment as a 

14 certified development company. 

15 ‘‘(c) EXPEDITED PROCESSING OF GUARANTEE AP16 PLICATIONS.—The Administrator shall develop an expe17 dited procedure for processing a guarantee application or 

18 servicing action submitted by an accredited certified devel19 opment company. For purposes of this subsection, an ex20 pedited procedure is one that takes at least two business 

21 days less than the processing performed for certified devel22 opment companies that have not been accredited. 

23 ‘‘(d) SUSPENSION OR REVOCATION OF ACCREDITED

24 STATUS.—The Administrator may suspend or revoke a 

25 certified development company’s accredited status if the 

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1 Administrator determines, after a hearing on the record 

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

3 United States Code, that the certified development com4 pany no longer meets the eligibility criteria established 

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

6 on the term of the certified development company’s ac7 credited status) or failed to adhere to the Administrator’s 

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

9 law. Such suspension or revocation shall have no effect 

10 on the development company’s status as certified. 

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

12 EXISTING GUARANTEES.—A suspension or revocation of 

13 accredited status shall not affect any outstanding deben14 ture guarantee. 

15 ‘‘(f) GRANDFATHER PROVISION.—Any certified de16 velopment company that was accredited by the date of en17 actment of the Small Business Financing and Investment 

18 Act of 2009 shall remain accredited for 24 months after 

19 that date. If the certified development company does not 

20 have an application for accreditation approved by the Ad21 ministrator within the 24 months, its accreditation stand22 ard shall lapse. 

23 ‘‘(g) AUTOMATIC QUALIFICATION.— 

24 ‘‘(1) IN GENERAL.—Until the Administrator de25 velops procedures for granting accredited status, any 

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1 certified development company that was accredited 

2 as of the date of enactment of the Small Business 

3 Financing and Investment Act of 2009 shall be 

4 deemed to be accredited. 

5 ‘‘(2) APPLICATIONS.—Any certified develop6 ment company that satisfies the provision of para7 graph (1) shall have 24 months in which to submit 

8 the application established by this section for accred9 ited status. 

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

11 The denial or rejection of an application for accred12 ited status as set forth in this section shall have no 

13 effect on the ability of a development company that 

14 meets the standard set forth in paragraph (1) from 

15 maintaining its status during the 24 months speci16 fied in this subsection. 

17 ‘‘(h) PROMULGATION OF ACCREDITING STAND18 ARDS.—The Administrator shall develop standards for ac19 crediting, suspension, and revocation under the program 

20 established by this section only after notice and an oppor21 tunity for comment as set forth in section 553(b) of title 

22 5, United States Code. After the development of such 

23 standards, the Administrator shall publish such standards 

24 in the Code of Federal Regulations. 

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

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

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

4 Small Business Financing and Investment Act of 2009 

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

6 certified development company’.’’. 

7 SEC. 214. PREMIER CERTIFIED LENDER PROGRAM. 

8 Section 504 of the Small Business Investment Act 

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

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

11 ‘‘(a) ESTABLISHMENT.— 

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

13 company accredited under section 503 may apply for 

14 status to become a premier certified development 

15 company. 

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

17 after opportunity for notice and comment, develop 

18 an application for accredited certified development 

19 companies seeking to become premier certified devel20 opment companies. 

21 ‘‘(3) PROCESSING OF APPLICATION.—The Ad22 ministrator shall make a determination within 60 

23 days after a complete application has been filed by 

24 an accredited certified development company. 

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1 ‘‘(4) REAPPLICATION.—If the Administrator re2 jects the application, the Administrator shall provide 

3 in writing the reasons for the rejection. Any accred4 ited certified development company may reapply 

5 which will recommence the processing time limits set 

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

7 be limited to addressing the reasons for rejection. If 

8 the Administrator rejects a second application, that 

9 shall be considered final agency action for purposes 

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

11 ‘‘(b) STANDARDS FOR OBTAINING PREMIER CER12 TIFIED DEVELOPMENT COMPANY STATUS.—The Admin13 istrator shall designate an accredited certified develop14 ment company as a premier certified development com15 pany if the application submitted pursuant to subsection 

16 (a) demonstrates that the accredited certified development 

17 company meets the following standards: 

18 ‘‘(1) Has been an accredited certified develop19 ment company for at least 12 months. 

20 ‘‘(2) Has submitted to the Administrator ade21 quately analyzed debenture guarantee applications. 

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

23 the Administrator regulations, loans under this title. 

24 ‘‘(4) Has serviced its loan portfolio in accord25 ance with the standards set by the Administrator. 

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1 ‘‘(5) Has established a loan loss reserve estab2 lished in accordance with this section that the Ad3 ministrator determines is sufficient to meet its obli4 gations to protect the Federal Government from the 

5 risk of loss on each debenture guaranteed under this 

6 section. 

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

8 in order to protect the Federal Government against 

9 the risk of loss, to the following— 

10 ‘‘(A) on account of a debenture, the pro11 ceeds of which were used to fund a loan ap12 proved prior to the date of enactment of the 

13 Small Business Financing and Investment Act 

14 of 2009, agrees to reimburse the Administrator 

15 for 10 percent of any loss sustained by the Ad16 ministrator as a result of a default by the com17 pany in the payment of principal or interest on 

18 a debenture issued by such company and guar19 anteed by the Administrator; 

20 ‘‘(B) 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 and which were issued during the pe25 riod in which the company had made a selection 

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

2 Business Investment Act of 1958, as in effect 

3 on the day before such date of enactment, 

4 agrees to reimburse the Administrator for 15 

5 percent of any loss sustained by the Adminis6 trator as a result of a default by the company 

7 in the payment of principal or interest on a de8 benture issued by such company and guaran9 teed by the Administrator; or 

10 ‘‘(C) on account of a debenture, the pro11 ceeds of which are used to fund a loan approved 

12 on or after the date of enactment of the Small 

13 Business Financing and Investment Act of 

14 2009, upon closing, pay to the Administrator a 

15 one-time participation fee in the amount equal 

16 to the higher of the following: 

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

18 debenture. 

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

20 debenture equal to 10 percent of the 

21 amount of the company’s historic loss rate 

22 on debentures guaranteed under this sec23 tion as determined by the Administrator. 

24 The rate specified by this clause shall be 

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1 pany’s loan losses as of close of business 

2 on June 30 and notice of the determina3 tion shall be provided to each company not 

4 later than August 31. Such rate shall be 

5 applicable to loans approved during the fis6 cal year commencing after the determina7 tion is made and shall expire and have no 

8 further application after the end of such 

9 fiscal year. If no timely determination has 

10 been made prior to the commencement of 

11 a fiscal year, including the year of enact12 ment of the Small Business Financing and 

13 Investment Act of 2009, one may be made 

14 after the commencement and it shall be 

15 applicable to loans approved during the 

16 balance of such fiscal year commencing 30 

17 days after notification to the development 

18 company involved. 

19 ‘‘(c) SUSPENSION OR REVOCATION OF PREMIER STA20 TUS.—The Administrator may suspend or revoke an ac21 credited certified development company’s premier status 

22 if the Administrator determines, after a hearing on the 

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

24 5, United States Code, that the accredited certified devel25 opment company no longer meets the eligibility criteria for 

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1 premier status as established under this section or failed 

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

3 violating some other provision of law. Such revocation or 

4 suspension shall have no effect on its status as an accred5 ited certified development company. 

6 ‘‘(d) LOAN LOSS RESERVE.— 

7 ‘‘(1) ASSETS.—Each loan loss reserve main8 tained by the premier certified development company 

9 for loans made pursuant to the authority in sub10 section (g)(1) shall be comprised of— 

11 ‘‘(A) segregated funds on deposit in an ac12 count or accounts with a federally insured de13 pository institution or institutions selected by 

14 the company, subject to a collateral assignment 

15 in favor of, and in a format acceptable to, the 

16 Administrator that shall amount to 10 percent 

17 of the company’s exposure as determined pursu18 ant to subsection (b)(6); 

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

20 with a collateral assignment in favor of, and a 

21 commercially reasonable format acceptable to, 

22 the Administrator; or 

23 ‘‘(C) any combination of the assets de24 scribed in subparagraphs (A) and (B). 

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

2 make contributions to the loss reserve, either cash or 

3 letters of credit as provided above, in the following 

4 amounts and at the following intervals: 

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

6 closed. 

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

8 1 year after a debenture is closed. 

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

10 2 years after a debenture is closed. 

11 ‘‘(3) REPLENISHMENT.—If a loss has been sus12 tained by the Administrator, any portion of the loss 

13 reserve, and other funds provided by the premier 

14 certified development company as necessary, may be 

15 used to reimburse the Administrator for the premier 

16 certified development company’s share of the loss as 

17 provided for in subsection (b)(6). If the premier cer18 tified development company utilizes the reserve, it 

19 shall, within 30 calendar days, replace an equivalent 

20 amount of funds. 

21 ‘‘(4) DISBURSEMENTS.— 

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

23 shall allow the premier certified development 

24 company to withdraw from the loss reserve 

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1 amounts attributable to any debenture that has 

2 been repaid. 

3 ‘‘(B) REDUCTION.—The Administrator 

4 shall allow the premier certified development 

5 company to withdraw from the loss reserve such 

6 amounts as are in excess of 1 percent of the ag7 gregate outstanding balances of debentures to 

8 which such loss reserve relates. The reduction 

9 authorized by this subparagraph shall not apply 

10 with respect to any debenture before 100 per11 cent of the contribution described in paragraph 

12 (2) with respect to such debenture has been 

13 made. 

14 ‘‘(C) RULE OF CONSTRUCTION.—The pro15 vision contained in subparagraph (B) shall be 

16 read as if enacted prior to a date 2 years and 

17 90 days after the date of enactment of the 

18 Small Business Financing and Investment Act 

19 of 2009. 

20 ‘‘(e) BUREAU OF PREMIER CERTIFIED DEVELOP21 MENT COMPANY LENDER OVERSIGHT.— 

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

23 a Bureau of Premier Certified Development Com24 pany Lender Oversight in the Office of Lender Over25 sight at the Administration which shall have responmstockstill on DSKH9S0YB1PROD with BILLS

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1 sibility and capability for carrying out oversight of 

2 premier certified development companies and such 

3 other responsibilities as the Administrator des4 ignates. 

5 ‘‘(2) ANNUAL REVIEW.—The Bureau estab6 lished in paragraph (1) annually shall review the fi7 nancing made by each premier certified development 

8 company. Such review shall include the premier cer9 tified development company’s credit decisions and 

10 general compliance with the eligibility requirements 

11 for each financing approved as a result of its status 

12 as a premier certified development company. 

13 ‘‘(3) RANDOM AUDITS.—The Bureau shall de14 velop and implement a method for sampling the de15 bentures issued by premier certified development 

16 companies. Such sampling shall be similar to the 

17 random file audits of development companies that 

18 utilize the Abridged Submission Method described in 

19 chapter 4 of subpart C of Standard Operating Pro20 cedure 50 10 (5)(A) as was in effect on March 2, 

21 2009. 

22 ‘‘(4) REVIEW OF LENDERS PROVIDING SENIOR

23 FINANCING.— 

24 ‘‘(A) CALCULATION OF LOAN LOSS

25 RATE.—The Bureau shall periodically calculate 

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1 the loss rate of all debentures approved under 

2 this section and shall calculate a loss rate on 

3 the basis of the total debentures attributable to 

4 projects approved by premier certified develop5 ment companies in which each lender is a par6 ticipating lender. 

7 ‘‘(B) NOTIFICATION.—If the Bureau deter8 mines that the loss rate on debentures involving 

9 an individual lender exceeds the average for all 

10 debentures approved under this section, it shall 

11 advise the Administrator. 

12 ‘‘(5) USE OF REVIEWS AND AUDITS.—The Ad13 ministrator shall consider the findings under para14 graphs (2), (3), and (4) in carrying out the respon15 sibilities under subsection (h). 

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

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

18 the Administrator acquires a debenture issued by a 

19 premier certified development company and identi20 fies such loan for inclusion in a bulk asset sale of 

21 defaulted or repurchased loans or other financing, 

22 the Administrator shall give prior notice thereof to 

23 any premier certified development company which 

24 has a contingent liability under this section. The no25 tice shall be given to the premier certified developmstockstill on DSKH9S0YB1PROD with BILLS

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1 ment company as soon as possible after the financ2 ing is identified, but not less than 90 days before 

3 the date the Administrator first makes any records 

4 on such financing available for examination by pro5 spective purchasers prior to its offering in a package 

6 of loans for bulk sale. 

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

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

9 part of a bulk sale unless the Administrator— 

10 ‘‘(A) provides prospective purchasers with 

11 the opportunity to examine the Administration’s 

12 records with respect to such loan; and 

13 ‘‘(B) provides the notice required by para14 graph (1). 

15 ‘‘(g) LOAN APPROVAL AUTHORITY.— 

16 ‘‘(1) IN GENERAL.—A premier certified develop17 ment company may, under conditions determined by 

18 the Administrator in regulations published in the 

19 Code of Federal Regulations, issue guarantees on 

20 debentures, approve, authorize, close, service, fore21 close, litigate (except that the Administrator may 

22 monitor conduct of any such litigation), and liq23 uidate loans that are funded with proceeds of a de24 benture issued by a premier certified development 

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1 pany that loans involving a specific institutional 

2 lender are to be submitted to the Administrator for 

3 further consideration, and approval by the Adminis4 trator. 

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

6 development company shall establish a goal of proc7 essing no less than 50 percent of the applications for 

8 assistance under this title that the premier certified 

9 development company receives. Failure to meet this 

10 goal shall have no affect on the company’s status as 

11 a premier certified development company under this 

12 section. 

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

14 loan and guarantee of a debenture by a premier cer15 tified development company shall be subject to final 

16 approval as to the eligibility of any guarantee by the 

17 Administrator as set forth in section 506, but such 

18 final approval shall not include review of decisions 

19 by the premier certified development company in20 volving creditworthiness, loan closing, or compliance 

21 with legal requirements imposed by law or regula22 tion. 

23 ‘‘(h) SUSPENSION OR REVOCATION.—The Adminis24 trator may suspend or revoke an accredited certified devel25 opment company’s premier status if the Administrator demstockstill on DSKH9S0YB1PROD with BILLS

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1 termines, after a hearing on the record as set forth in sec2 tions 554, 556, and 557 of title 5, United States Code, 

3 that the accredited certified development company no 

4 longer meets the eligibility criteria established under this 

5 section, fails to maintain adequate loan loss reserves man6 dated in this section even if it meets the other eligibility 

7 requirements for premier status, or violates the Adminis8 trator’s rules, regulations, or some other provision of law. 

9 The Administrator shall consider the review of the premier 

10 certified development company conducted pursuant to sub11 section (e) in determining whether to suspend or revoke 

12 an accredited development company’s premier status. 

13 Such suspension or revocation shall have no effect on the 

14 development company’s status as an accredited certified 

15 development company. 

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

17 suspension or revocation of premier status shall not affect 

18 any outstanding debenture guarantee. 

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

20 term ‘premier certified lender’ or ‘PCL’ in legislation en21 acted, or regulations adopted, prior to the enactment of 

22 the Small Business Financing and Investment Act of 2009 

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

24 certified development company’.’’. 

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1 SEC. 215. MULTI-STATE OPERATIONS. 

2 Section 505 of the Small Business Investment Act 

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

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

5 ‘‘(a) AUTHORIZATION.—The Administrator shall per6 mit an accredited or premier certified development com7 pany to make loans or issue debentures in any State that 

8 is contiguous to the State of incorporation of that com9 pany only if the company— 

10 ‘‘(1) has members, from each of the States in 

11 which it operates with not fewer than 25 members 

12 who reside in such States; 

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

14 fewer than 2 members from each State in which the 

15 company makes loans and issues debentures and are 

16 residents of that State; 

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

18 process loans in each expansion State and the mem19 bers of the loan committee are solely residents of the 

20 expansion State; and 

21 ‘‘(4) files an application developed by the Ad22 ministrator which provides— 

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

24 in multiple States; 

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

26 the company intends to make loans; 

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

2 State; and 

3 ‘‘(D) a detailed statement on how the com4 pany will comply with the requirements of this 

5 subsection. 

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

7 paragraph (3) of subsection (a) shall not require a devel8 opment company to establish a loan committee in its State 

9 of incorporation or in a local economic area outside the 

10 State of incorporation unless such area is part of an ex11 pansion State. 

12 ‘‘(c) REVIEW.— 

13 ‘‘(1) IN GENERAL.—The Administrator shall re14 view each application for expansion under subsection 

15 (a), but such review shall be limited to that informa16 tion needed to determine whether the company will 

17 comply with the requirements of subsection (a). 

18 ‘‘(2) DEADLINE FOR DECISION.—The Adminis19 trator shall make a decision on each application 

20 under subsection (a) within 15 calendar days after 

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

22 granted, the application is deemed to be approved 

23 and no further action is required by the applicant or 

24 the Administrator for the company to expand into 

25 the States specified in the application. 

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1 ‘‘(3) APPLICATION RESUBMITTAL.—If the Ad2 ministrator rejects the application for expansion, the 

3 Administrator shall provide in writing the reasons 

4 for denial within 10 calendar days of the decision. 

5 The applicant then may resubmit the application but 

6 the review of such resubmitted applications will be 

7 limited only to the areas in which the Administrator 

8 found the original application deficient. The dead9 lines in paragraph (2) shall apply to resubmitted ap10 plications. 

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

12 denied, the applicant may, within 10 calendar days 

13 after receipt of the disapproval, appeal such dis14 approval. The Administrator shall conduct a hearing 

15 to determine such appeal pursuant to sections 554, 

16 556, and 557 of title 5, United States Code, and 

17 shall issue a decision not later than 45 days after 

18 the appeal is filed. The decision on appeal shall con19 stitute final agency action for purposes of chapter 7 

20 of title 5, United States Code. 

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

22 Administrator fails to develop an application as required 

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

24 the Small Business Financing and Investment Act of 

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1 pany only need submit the information required in sub2 section (a) to the Administrator to be deemed eligible to 

3 commence operations authorized by this section. Such eli4 gibility shall not be terminated if the Administrator devel5 ops an application after the 60-day period set forth in this 

6 subsection. 

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

8 premier certified development company authorized to op9 erate in multiple States pursuant to this section may 

10 maintain an aggregate accounting of all revenue and ex11 penses of the company for purposes of this title. 

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

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

14 in multiple States as authorized in this section shall 

15 not count jobs created or retained in one State to16 wards any applicable job creation or retention re17 quirements mandated by this title in another State. 

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

19 under the authority of this section shall be required 

20 to meet any job creation or retention requirement of 

21 this title on the date that is 2 years after the cer22 tified development company closed its first loan in 

23 its new State of operation. 

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

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

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

2 Territories of the United States located in the Pacific 

3 Ocean shall be deemed to be contiguous to any State abut4 ting the Pacific Ocean, including Alaska and Hawaii, and 

5 territories of the United States located in the Caribbean 

6 Sea shall be deemed contiguous to any State abutting the 

7 Gulf of Mexico. 

8 ‘‘(h) EXEMPTION FOR LOCAL ECONOMIC AREAS.— 

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

10 loan committees, any certified, accredited, or premier de11 velopment company or applicant operating in a local eco12 nomic development area that crosses the border of another 

13 State shall not be considered to be operating under the 

14 provisions of this section and shall not be required to com15 ply with the requirements of this section for multi-State 

16 operation.’’. 

17 SEC. 216. GUARANTY OF DEBENTURES. 

18 Section 506 of the Small Business Investment Act 

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

20 ‘‘SEC. 506. GUARANTY OF DEBENTURES. 

21 ‘‘(a) AUTHORITY TO GUARANTEE.—Except as pro22 vided in subsection (c), the Administrator may guarantee 

23 the timely payment of all principal and interest as sched24 uled on any debenture issued by a certified development 

25 company. 

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1 ‘‘(b) TERMS AND CONDITIONS OF THE GUAR2 ANTEE.—Such guarantees may be made on such terms 

3 and conditions as the Administrator may by regulation, 

4 published in the Code of Federal Regulations, determine 

5 to be appropriate, except that the Administrator shall not 

6 decline to issue such guarantee when the ownership inter7 ests of the small business concern and the ownership inter8 ests of the property to be financed with the proceeds of 

9 the loan made pursuant to subsection (e)(1) are not iden10 tical because one or more of the following classes of rel11 atives have an ownership interest in either the small busi12 ness concern or the property: father, mother, son, daugh13 ter, wife, husband, brother, or sister, if the Administrator 

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

15 that such ownership interest, such guarantee, and the pro16 ceeds of such loan, will substantially benefit the small 

17 business concern. 

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

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

20 all amounts guaranteed under this section. 

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

22 certified development company with respect to which a 

23 guarantee is made under this section may be subordinated 

24 by the Administrator to any other debenture, promissory 

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

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1 ‘‘(e) STANDARDS FOR ADMINISTRATOR GUARAN2 TEES.—No guarantee may be made with respect to any 

3 debenture under this section unless— 

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

5 making one or more loans to small business concerns 

6 the proceeds of which shall be used for the purposes 

7 set forth in section 507; 

8 ‘‘(2) the interest rate on such debentures is not 

9 less than the rate of interest determined by the Sec10 retary of the Treasury for purposes of section 

11 303(b); 

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

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

14 from the proceeds of such debenture plus, at the 

15 election of the borrower, other amounts attributable 

16 to the administrative and closing costs of such loans, 

17 except for the attorney fees of the borrower; 

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

19 such proceeds does not exceed an amount equal to 

20 50 percent of the cost of the project with respect to 

21 which such loan is made; 

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

23 provided in section 504 with respect to premier cer24 tified development companies, approves each loan to 

25 be made from such proceeds; and 

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

2 proceeds of such debenture, the Administrator— 

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

4 shall be payable by the borrower, in an amount 

5 established annually by the Administration, 

6 which amount shall not exceed— 

7 ‘‘(i) the lesser of— 

8 ‘‘(I) 0.9375 percent per year of 

9 the outstanding balance of the loan; 

10 or 

11 ‘‘(II) the minimum amount nec12 essary to reduce the cost (as defined 

13 in section 502 of the Federal Credit 

14 Reform Act of 1990) to the Adminis15 trator of purchasing and guaranteeing 

16 debentures under this title to zero; 

17 and 

18 ‘‘(ii) 50 percent of the amount estab19 lished under clause (i) in the case of a loan 

20 made during the 2-year period beginning 

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

22 loan; and 

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

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

25 of the Federal Credit Reform Act of 1990) to 

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1 the Administrator of making guarantees under 

2 this section. 

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

4 Notwithstanding the provisions of the constitution or laws 

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

6 may be charged, taken, received, or reserved, the max7 imum legal rate of interest on any commercial loan which 

8 funds any portion of the cost of the project financed pur9 suant to this title which is not funded by a debenture 

10 guaranteed under this section shall be a rate which is es11 tablished by the Administrator who shall publish such rate 

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

13 the Administration’s website. 

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

15 is issued under this section shall provide for the payment 

16 of principal and interest on a semiannual basis. 

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

18 The Administrator may impose an additional charge for 

19 administrative expenses with respect to each debenture for 

20 which payment of principal and interest is guaranteed 

21 under this section. Such administrative expenses may in22 clude— 

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

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

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

2 underwriters, or debenture funding; and 

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

4 debenture guaranty and from the certified develop5 ment company to reduce the subsidy cost. 

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

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

8 points on the total participation in any project of any 

9 State or local government, bank, other financial institu10 tion, or foundation or not-for-profit institution. Such fee 

11 shall be imposed only when the participation of the entity 

12 described in the previous sentence will occupy a senior 

13 credit position to that of the development company. All 

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

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

16 Act of 1990) to the Administrator of making guarantees 

17 under this section. 

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

19 The Administrator shall collect annually from each devel20 opment company a fee of 0.125 percent of the outstanding 

21 principal balance of any guaranteed debenture authorized 

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

23 shall be derived from the servicing fees collected by the 

24 certified development company pursuant to regulation, 

25 and shall not be derived from any additional fees imposed 

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

2 be used to offset the cost (as that term is defined in sec3 tion 502 of the Credit Reform Act of 1990) to the Admin4 istrator of making guarantees under this section. 

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

6 section shall apply to any financing approved under this 

7 title on or after October 1, 1996. 

8 ‘‘(l) CALCULATION OF SUBSIDY RATE.—All fees, in9 terest, and profits received and retained by the Adminis10 trator under this section shall be included in the calcula11 tions made by the Director of the Office of Management 

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

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

14 to the Administrator of purchasing and guaranteeing de15 bentures under this title. 

16 ‘‘(m) ACTIONS UPON DEFAULT.— 

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

18 45th day after the date on which a payment on a 

19 loan funded through a debenture guaranteed under 

20 this section is due and not received, the Adminis21 trator shall— 

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

23 loan current; or 

24 ‘‘(B) implement a formal written deferral 

25 agreement. 

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1 ‘‘(2) PURCHASE OR ACCELERATION OF DEBEN2 TURE.—Not later than the 65th day after the date 

3 on which a payment on a loan described in para4 graph (1) is due and not received, and absent a for5 mal written deferral agreement, the Administrator 

6 shall take all necessary steps to purchase or accel7 erate the debenture. 

8 ‘‘(3) PREPAYMENT PENALTIES.—With respect 

9 to the portion of any project derived from funds not 

10 provided by a debenture issued by a certified devel11 opment company or borrower, the Administrator— 

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

13 prepayment penalties or late fees on defaulted 

14 loans made prior to September 30, 1996; 

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

16 or late fee on the default based purchase of 

17 loans issued after September 30, 1996; and 

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

19 higher than the interest rate on the note prior 

20 to the date of default for any project financed 

21 after September 30, 1996. 

22 ‘‘(4) COLLECTION AND SERVICING.— 

23 ‘‘(A) IN GENERAL.—In the event of the de24 fault of any loan and the repurchase of a de25 benture guaranteed by the Administrator under 

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1 this title, the Administrator shall continue to 

2 delegate to the central servicing agent that was 

3 contracted for that service as of January 1, 

4 2009, or successor contractor the authority to 

5 collect and disburse all funds or payments re6 ceived on such defaulted loans, including pay7 ments from guarantors or on notes in com8 promise of the original note. The central serv9 icing agent shall continue to provide an ac10 counting of income and expenses for any such 

11 loan on the same basis it does for any other 

12 loan issued under this title. The central serv13 icing agent shall make the accounting of income 

14 and expenses and reports thereon available as 

15 requested by the certified development company 

16 that issued the debenture or the Administrator. 

17 ‘‘(B) EFFECTIVE DATE.—The require18 ments of subparagraph (A) shall become effec19 tive 180 days after the date of enactment of the 

20 Small Business Financing and Investment Act 

21 of 2009.’’. 

22 SEC. 217. ECONOMIC DEVELOPMENT THROUGH DEBEN23 TURES. 

24 Section 507 of the Small Business Investment Act 

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

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1 ‘‘SEC. 507 ECONOMIC DEVELOPMENT AND DEBENTURES. 

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

3 shall be prohibited from issuing a debenture under this 

4 title unless the project funded with the debenture meets 

5 one of the following economic development objectives: 

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

7 two years of the completion of the project or the 

8 preservation or retention of jobs attributable to the 

9 project. 

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

11 such as stimulating other business development in 

12 the community, bringing new income into the area, 

13 or assisting the community in diversifying and stabi14 lizing its economy. 

15 ‘‘(3) The achievement of one or more of the fol16 lowing public policy goals: 

17 ‘‘(A) Business district revitalization or ex18 pansion of businesses in low-income commu19 nities which would be eligible for a new markets 

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

21 Revenue Code of 1986, or implementing regula22 tions issued under that section. 

23 ‘‘(B) Expansion of exports. 

24 ‘‘(C) Expansion of minority business devel25 opment or women-owned business development. 

26 ‘‘(D) Rural development. 

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1 ‘‘(E) Expansion of small business concerns 

2 owned and controlled by veterans, as defined in 

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

4 U.S.C. 632(q)), especially service-disabled vet5 erans, as defined in such section. 

6 ‘‘(F) Enhanced economic competition, in7 cluding the advancement of technology, plan re8 tooling, conversion to robotics, or competition 

9 with imports. 

10 ‘‘(G) Changes necessitated by Federal 

11 budget cutbacks, including defense related in12 dustries. 

13 ‘‘(H) Business restructuring arising from 

14 federally mandated standards or policies affect15 ing the environment or the safety and health of 

16 employees. 

17 ‘‘(I) Reduction of energy consumption by 

18 at least 10 percent. 

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

20 including designs that reduce the use of green21 house gas emitting fossil fuels, or low-impact 

22 design to produce buildings that reduce the use 

23 of nonrenewable resources and minimize envi24 ronmental impact. 

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1 ‘‘(K) Plant, equipment, and process up2 grades of renewable energy sources such as the 

3 small-scale production of energy for individual 

4 buildings or communities consumption, com5 monly known as micropower, or renewable fuels 

6 producers including biodiesel and ethanol pro7 ducers. 

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

9 by subsection (d). 

10 ‘‘(b) JOB CREATION AND RETENTION REQUIRE11 MENTS.— 

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

13 creation or retention objective set forth in subsection 

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

15 every $65,000 guaranteed by the Administrator, ex16 cept that the amount shall be $100,000 in the case 

17 of a project of a small manufacturer. 

18 ‘‘(2) EXCEPTIONS.— 

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

20 project for which eligibility is based on the ob21 jectives set forth in subsection (a)(2) or (a)(3) 

22 if the certified development company’s portfolio 

23 of outstanding debentures creates or retains one 

24 job for every $65,000 guaranteed by the Ad25 ministrator. 

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

2 State-designated enterprise zones, empower3 ment zones, enterprise communities, or labor 

4 surplus areas designated by the Administrator, 

5 the certified development company’s portfolio 

6 may average not more than $75,000 per job 

7 created or retained. 

8 ‘‘(C) Loans for projects of small manufac9 turers shall be excluded from the calculations in 

10 subparagraphs (A) and (B). 

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

12 business concern that is unconditionally owned by more 

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

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

15 achieved a goal under subsection (a)(3) if a combined own16 ership share of not less than 51 percent is held by individ17 uals who are in 1 of, or a combination of, the groups de18 scribed in subparagraphs (C) or (E) of subsection (a)(1). 

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

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

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

22 acquisition, construction, conversion, expansion (in23 cluding the acquisition of land), equipment and re24 lated project costs, or to acquire the stock of a cor25 poration (as long as the value of the loan for the acmstockstill on DSKH9S0YB1PROD with BILLS

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1 quisition of the stock does not exceed the fixed asset 

2 value attributable to such assets as would be eligible 

3 for financing under subsection (a)). 

4 ‘‘(2) DEBT REFINANCING.—Any financing ap5 proved under this title may include a limited amount 

6 of debt refinancing if the project involves the expan7 sion of a small business concern. 

8 ‘‘(3) LIMITATION.—The amount of the existing 

9 indebtedness may be refinanced and added to the ex10 pansion cost if— 

11 ‘‘(A) the existing indebtedness does not ex12 ceed 50 percent of the project cost of the ex13 pansion; 

14 ‘‘(B) the proceeds of the indebtedness were 

15 used to acquire land, including a building situ16 ated thereon, to construct a building thereon, or 

17 to purchase equipment; 

18 ‘‘(C) the existing indebtedness is 

19 collateralized by fixed assets; 

20 ‘‘(D) the existing indebtedness was in21 curred for the benefit of the small business con22 cern; 

23 ‘‘(E) the financing under this title will be 

24 used only for refinancing existing indebtedness 

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1 or costs relating to the project financed under 

2 this title; 

3 ‘‘(F) the financing under this title will pro4 vide a substantial benefit to the borrower when 

5 prepayment penalties, financing fees, and other 

6 financing costs are accounted for; 

7 ‘‘(G) the borrower has been current on all 

8 payments due on the existing debt for not less 

9 than 1 year preceding the date of refinancing; 

10 and 

11 ‘‘(H) the financing under this title will 

12 provide better terms or rate of interest than the 

13 existing indebtedness at the time of refinancing. 

14 ‘‘(e) DEFINITION.—For purposes of subparagraphs 

15 (J) and (K) of subsection (a)(3), the terms included have 

16 the meanings given those terms under the Leadership in 

17 Energy and Environmental Design (more generally re18 ferred to as LEED) standard for green building certifi19 cation, as determined by the Administrator through regu20 lation to be published in the Code of Federal Regula21 tions.’’. 

22 SEC. 218. PROJECT FUNDING REQUIREMENTS. 

23 Section 508 of the Small Business Investment Act 

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

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1 ‘‘SEC. 508. PROJECT FUNDING REQUIREMENTS. 

2 ‘‘(a) IN GENERAL.—Any project described in section 

3 507 must meet the funding standards set forth in this sec4 tion. 

5 ‘‘(b) SIZE OF DEBENTURE.—The Administrator shall 

6 only be permitted to guarantee debenture issued by a cer7 tified development company up to the following amounts: 

8 ‘‘(1) $3,000,000 for any project of a small busi9 ness concern. 

10 ‘‘(2) $4,000,000 for any project that meets the 

11 public policy goals set forth in section 507(a)(3). 

12 ‘‘(3) $4,000,000 for any project to be located in 

13 a low-income community as that term is described in 

14 section 507(a)(3)(A). 

15 ‘‘(4) $8,000,000 for each project of a small 

16 manufacturer. 

17 ‘‘(5) $8,000,000 for each project that reduces 

18 the borrower’s energy consumption by at least 10 

19 percent. 

20 ‘‘(6) $8,000,000 for each project that generates 

21 renewable energy or renewable fuels, such as, but 

22 not limited to, biodiesel or ethanol production. 

23 ‘‘(7) $10,000,000 for each project for a small 

24 business concern that constitutes a major source of 

25 employment as that term is used in section 

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1 7(b)(3)(E) of the Small Business Act (15 U.S.C. 

2 636(b)(3)(E)). 

3 ‘‘(c) FUNDING FROM SOURCES OTHER THAN DE4 BENTURES ISSUED BY CERTIFIED DEVELOPMENT COM5 PANIES.— 

6 ‘‘(1) IN GENERAL.—Any project financed pur7 suant to this title must have the following contribu8 tions from parties other than the debenture issued 

9 by the certified development company: 

10 ‘‘(A) FUNDING FROM INSTITUTIONS.— 

11 ‘‘(i) If a small business concern pro12 vides— 

13 ‘‘(I) the minimum contribution 

14 required by subparagraph (B), not 

15 less than 50 percent of the total cost 

16 of any project financed shall come 

17 from State or local governments, 

18 banks or other financial institutions, 

19 or foundations or other not-for-profit 

20 institutions; and 

21 ‘‘(II) more than the minimum 

22 contribution required under subpara23 graph (B), any excess contribution 

24 may be used to reduce the amount re25 quired from institutions described in 

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1 subclause (I), except that the amount 

2 provided by such institution may not 

3 be reduced to an amount that is less 

4 than the amount of the loan made by 

5 the Administrator. 

6 ‘‘(B) FUNDING FROM SMALL BUSINESS

7 CONCERNS.—The small business concern (or its 

8 owners, stockholders, or affiliates) that will 

9 have a project financed pursuant to this title 

10 shall provide— 

11 ‘‘(i) at least 15 percent of the total 

12 cost of the project financed if the small 

13 business concern has been in operation for 

14 a period of 2 years or less; 

15 ‘‘(ii) at least 15 percent of the total 

16 cost of the project financed if the project 

17 involves construction of a limited or single 

18 purposed building or structure; 

19 ‘‘(iii) at least 20 percent of the total 

20 cost of the project financed if the project 

21 involves both of the conditions in clauses 

22 (i) and (ii); or 

23 ‘‘(iv) at least 10 percent of the total 

24 cost of the project financed and not cov25 ered by clauses (i), (ii), or (iii), at the dismstockstill on DSKH9S0YB1PROD with BILLS

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1 cretion of the certified development com2 pany. 

3 ‘‘(2) SELLER FINANCING.—Seller-provided fi4 nancing may be used to meet the requirements of 

5 paragraph (1)(B), if the seller subordinates the in6 terest of the seller in the property to the debenture 

7 guaranteed by the Administrator. 

8 ‘‘(3) COLLATERALIZATION.— 

9 ‘‘(A) IN GENERAL.—The collateral pro10 vided by the small business concern shall gen11 erally include a subordinate lien position on the 

12 property being financed under this title, and is 

13 only one of the factors to be evaluated in the 

14 credit determination. Additional collateral shall 

15 be required only if the Administrator deter16 mines, on a case-by-case basis, that additional 

17 security is necessary to protect the interest of 

18 the Government. 

19 ‘‘(B) APPRAISALS.—With respect to com20 mercial real property provided by the small 

21 business concern as collateral, an appraisal of 

22 the property by a State licensed or certified ap23 praiser— 

24 ‘‘(i) shall be required by the Adminis25 trator before disbursement of the loan if 

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1 the estimated value of that property is 

2 more than $400,000; or 

3 ‘‘(ii) may be required by the Adminis4 trator or the lender before disbursement of 

5 the loan if the estimated value of that 

6 property is $400,000 or less, and such ap7 praisal is necessary for appropriate evalua8 tion of creditworthiness. 

9 ‘‘(C) ADJUSTMENT.—The Administrator 

10 shall periodically adjust the amount under sub11 paragraph (B) to account for the effects of in12 flation, provided that no such adjustment shall 

13 be less than $50,000. 

14 ‘‘(4) LIMITATION ON LEASING.— 

15 ‘‘(A) If the project funded under this sec16 tion includes the acquisition of a facility or the 

17 construction of a new facility, the small busi18 ness concern— 

19 ‘‘(i) shall permanently occupy and use 

20 not less than 50 percent of the project 

21 property; and 

22 ‘‘(ii) may, on a temporary or perma23 nent basis, lease to others not more than 

24 50 percent of the project property. 

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1 ‘‘(B) For purposes of this paragraph, the 

2 term ‘project property’ means— 

3 ‘‘(i) the building and any exterior 

4 areas used in connection with the building 

5 or a part thereof and includes all of the 

6 parcels of real property included in the 

7 project in the aggregate; and 

8 ‘‘(ii) occupancy and use of the project 

9 property by the operating company shall be 

10 deemed to be occupancy and use by the 

11 small business concern that received fund12 ing under this section. 

13 ‘‘(d) REGULATIONS.—(1) The Administrator shall 

14 promulgate regulations, after notice and comment, to im15 plement the provisions of this section within 60 days after 

16 enactment of the Small Business Financing and Invest17 ment Act of 2009. The Administrator may limit the com18 ment period to 15 days to meet this deadline. 

19 ‘‘(2) If the Administrator fails to promulgate the reg20 ulations as provided in paragraph (1), all leases entered 

21 into, absent clear and convincing evidence of fraud, shall 

22 be deemed to be in compliance with the limitations on leas23 ing in this subparagraph for purposes of honoring the 

24 guarantee on the debenture issued by the certified develop25 ment company. 

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1 ‘‘(3) Any regulation of the Administrator or interpre2 tation of any regulation by the Administrator or the Office 

3 of Hearings and Appeals that restricts the use of proceeds 

4 for leased projects that was in effect on the date of enact5 ment of the Small Business Financing and Investment Act 

6 of 2009 shall hereby cease to apply. 

7 ‘‘(4) Any interpretation of the leasing provisions 

8 issued by the Administrator prior to the issuance of regu9 lations required by paragraph (1) shall be considered null 

10 and void and may be not be used in any court of com11 petent jurisdiction, be it Federal or State court, to dis12 honor any guarantee of a debenture issued by a certified 

13 development company for a project funded pursuant to 

14 this section. 

15 ‘‘(e) OWNERSHIP CALCULATION.—Ownership re16 quirements to determine the eligibility of a small business 

17 concern that applies for funding under this title shall be 

18 determined without regard to any ownership interest of 

19 a spouse arising solely from the application of the commu20 nity property laws of a State for purposes of determining 

21 marital interests. 

22 ‘‘(f) COMBINATION FINANCING.—Financing under 

23 this title may be provided to a borrower in the maximum 

24 amount provided in this section, and a loan guarantee 

25 under section 7(a) of the Small Business Act (15 U.S.C. 

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1 636(a)) may be provided to the same borrower in the max2 imum amount provided in section 7(a)(3)(A) of such Act, 

3 to the extent that the borrower otherwise qualifies for such 

4 assistance. 

5 ‘‘(g) RULES FOR DEBENTURES FUNDING PROJECTS

6 IN LOW-INCOME AREAS.— 

7 ‘‘(1) SIZE STANDARDS.—For purposes of deter8 mining the size of a small business concern seeking 

9 funds for a project described in subsection (b)(3), 

10 the size standard promulgated by the Administrator 

11 in section 121.201 of title 13, Code of Federal Reg12 ulations, as in effect on January, 1, 2009, or any 

13 successor regulation, shall be increased by 25 per14 cent. 

15 ‘‘(2) PERSONAL LIQUIDITY.— 

16 ‘‘(A) IN GENERAL.—The amount of per17 sonal resources of an owner for a project de18 scribed in subsection (b)(3) that are excluded 

19 from the amount required to reduce the portion 

20 of the project funded by the Administrator shall 

21 be not less than 25 percent more than that re22 quired for funding of any other project de23 scribed in subsection (b). 

24 ‘‘(B) DEFINITION.—For purposes of sub25 paragraph (A), the term ‘owner’ means any 

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1 person that owns not less than 20 percent of 

2 the equity or has not less than 20 percent of 

3 the voting rights (in the case of a small busi4 ness organized as a partnership) of a small 

5 business concern seeking funds under this sec6 tion. 

7 ‘‘(h) APPLICABILITY OF CREDIT ELSEWHERE AND

8 PERSONAL RESOURCES REGULATIONS.—Except as pro9 vided in subsection (c)(1)(B) with respect to project fund10 ing, the Administrator shall be prohibited from applying 

11 the regulations set forth in sections 120.101 and 120.102 

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

13 January 1, 2009, or any successor regulation that applies 

14 a credit elsewhere or personal resources test to any appli15 cation for a loan under this title pending or filed after 

16 the date of enactment of the Small Business Financing 

17 and Investment Act of 2009.’’. 

18 SEC. 219. PRIVATE DEBENTURE SALES AND POOLING OF 

19 DEBENTURES. 

20 Section 509 of the Small Business Investment Act 

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

22 ‘‘SEC. 509. PRIVATE DEBENTURE SALES AND POOLING OF 

23 DEBENTURES. 

24 ‘‘(a) PRIVATE DEBENTURE SALES.—Notwith25 standing any other law, rule, or regulation, the Adminismstockstill on DSKH9S0YB1PROD with BILLS

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1 trator shall sell to investors, either publicly or by private 

2 placement, debentures issued by certified development 

3 companies pursuant to this title for the full amount of the 

4 program levels authorized in each fiscal year and if there 

5 is not authorization of a level, the amount of debentures 

6 actually issued. 

7 ‘‘(b) FEDERAL FINANCING BANK.—Nothing in any 

8 provision of law shall be construed to authorize the Fed9 eral Financing Bank to acquire— 

10 ‘‘(1) any obligation the payment of principal or 

11 interest on which at any time has been guaranteed 

12 in whole or in part under this title and which is 

13 being sold pursuant to the provisions of this section; 

14 ‘‘(2) any obligation which is an interest in any 

15 obligation which is an interest in any obligation de16 scribed in paragraph (1); or 

17 ‘‘(3) any obligation which is secured by, or sub18 stantially all of the value of which is attributable to, 

19 any obligation described in paragraph (1) or (2). 

20 ‘‘(c) POOLING OF DEBENTURES.— 

21 ‘‘(1) IN GENERAL.—The Administrator is au22 thorized to issue trust certificates representing own23 ership of all or a fractional part of debentures issued 

24 by certified development companies and guaranteed 

25 under this title if such trust certificates are based on 

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1 and backed by a trust or pool approved by the Ad2 ministrator and composed solely of guaranteed de3 bentures. 

4 ‘‘(2) GUARANTEE OF TRUST CERTIFICATES.— 

5 The Administrator is authorized, upon such terms 

6 and conditions as are deemed appropriate, to guar7 antee the timely payment of the principal of and in8 terest on trust certificates issued by the Adminis9 trator or its agent for purposes of this section. Such 

10 guarantee shall be limited to the extent of principal 

11 and interest on the guaranteed debentures which 

12 compose the trust or pool. In the event that a deben13 ture in such trust or pool is prepaid, either volun14 tarily or in the event of default, the guarantee of 

15 timely payment of principal and interest on the trust 

16 certificates shall be reduced in proportion to the 

17 amount of principal and interest such prepaid deben18 ture represents in the trust or pool. Interest on pre19 paid or defaulted debentures shall accrue and be 

20 guaranteed by the Administrator only through the 

21 date of payment on the guarantee. During the term 

22 of the trust certificate, it may be called for redemp23 tion due to prepayment or default of all debentures 

24 constituting the pool. 

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1 ‘‘(3) FULL FAITH AND CREDIT.—The full faith 

2 and credit of the United States is pledged to the 

3 payment of all amounts which may be required to be 

4 paid under any guarantee of such trust certificates 

5 issued by the Administrator or its agent pursuant to 

6 this section. 

7 ‘‘(4) PROHIBITION ON GUARANTEE FEE FOR

8 POOLS.—The Administrator shall not collect any fee 

9 for any guarantee under this section, provided that 

10 nothing herein shall preclude any agent of the Ad11 ministrator from collecting a fee approved by the 

12 Administrator for the functions performed in para13 graph (6)(F). 

14 ‘‘(5) SUBROGATION.— 

15 ‘‘(A) IN GENERAL.—In the event the Ad16 ministrator pays a claim under a guarantee 

17 issued under this section, it shall be subrogated 

18 fully to the rights satisfied by such payment. 

19 ‘‘(B) ADMINISTRATOR EXERCISE OF

20 RIGHTS.—No Federal, State, or local law shall 

21 preclude or limit the exercise by the Adminis22 trator of its ownership rights in the debentures 

23 constituting the trust or pool against which the 

24 trust certificates are issued. 

25 ‘‘(6) CENTRAL REGISTRATION.— 

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

2 shall provide for a central registration of all 

3 trust certificates sold pursuant to this section. 

4 ‘‘(B) CONTRACT.—The Administrator shall 

5 contract with an agent to carry out on behalf 

6 of the Administrator the central registration 

7 functions of this section and the issuance of 

8 trust certificates to facilitate pooling. 

9 ‘‘(C) BOND.—The Administrator shall re10 quire the contractor to provide a fidelity bond 

11 or insurance in such amounts as is deemed nec12 essary to fully protect the interests of the Gov13 ernment. 

14 ‘‘(D) DISCLOSURE REQUIREMENTS.—The 

15 Administrator shall, prior to any sale, require 

16 the seller to disclose to a purchaser of a trust 

17 certificate issued pursuant to this section, infor18 mation on terms, conditions, and yield of such 

19 instruments. 

20 ‘‘(E) AUTHORITY TO REGULATE.—The Ad21 ministrator shall have the authority to regulate 

22 brokers and dealers in trust certificates sold 

23 pursuant to this section. 

24 ‘‘(F) BOOK ENTRY PERMITTED.—Nothing 

25 in this paragraph shall prohibit the utilization 

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1 of a book-entry or other electronic form of reg2 istration for trust certificates.’’. 

3 SEC. 220. FORECLOSURE AND LIQUIDATION OF LOANS. 

4 Section 510 of the Small Business Investment Act 

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

6 ‘‘SEC. 510. FORECLOSURE AND LIQUIDATION OF LOANS. 

7 ‘‘(a) DELEGATION OF AUTHORITY.—In accordance 

8 with this section, the Administrator shall delegate to any 

9 certified development company that meets the eligibility 

10 requirements of subsection (b)(1), the authority to fore11 close and liquidate, or to otherwise treat in accordance 

12 with this section, defaulted loans in its portfolio that are 

13 funded with the proceeds of debentures guaranteed by the 

14 Administrator pursuant to this title. 

15 ‘‘(b) ELIGIBILITY FOR DELEGATION.— 

16 ‘‘(1) REQUIREMENTS.—A certified development 

17 company shall be eligible for a delegation of author18 ity under subsection (a) if— 

19 ‘‘(A) the certified development company— 

20 ‘‘(i) has participated in the loan liq21 uidation pilot program established by the 

22 Small Business Programs Improvement 

23 Act of 1996 (15 U.S.C. 695 note), before 

24 the enactment of the Small Business Fi25 nancing and Investment Act of 2009; 

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1 ‘‘(ii) is an accredited or premier cer2 tified development company; or 

3 ‘‘(iii) during the 3 fiscal years imme4 diately prior to seeking such a delegation, 

5 has made an average of not less than 10 

6 loans per year that are funded with the 

7 proceeds of debentures guaranteed under 

8 this title; and 

9 ‘‘(B) the certified development company— 

10 ‘‘(i) has one or more employees— 

11 ‘‘(I) with not less than 2 years of 

12 substantive, decisionmaking experi13 ence in administering the liquidation 

14 and workout of problem loans secured 

15 in a manner substantially similar to 

16 loans funded with the proceeds of de17 bentures guaranteed under this title; 

18 and 

19 ‘‘(II) who have completed a train20 ing program on loan liquidation devel21 oped by the Administrator in conjunc22 tion with a certified development com23 pany that meet the requirements of 

24 this paragraph; or 

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1 ‘‘(ii) submits to the Administrator 

2 documentation demonstrating that the 

3 company has contracted with a qualified 

4 third party to perform any liquidation ac5 tivities and secures the approval of the 

6 contract by the Administrator with respect 

7 to the qualifications of the contractor and 

8 the terms and conditions of liquidation ac9 tivities. 

10 ‘‘(2) CONFIRMATION.—On the request, the Ad11 ministrator shall examine the qualifications of any 

12 certified development company described in sub13 section (a) to determine if such company is eligible 

14 for the delegation of authority under this section. If 

15 the Administrator determines that a company is not 

16 eligible, the Administrator shall provide the com17 pany, in writing, with the reasons for such ineligi18 bility. The certified development company shall be 

19 entitled to request delegated authority and the Ad20 ministrator shall review the request only to address 

21 whether the certified development company has rec22 tified the reasons for the Administrator’s original 

23 determination of ineligibility. 

24 ‘‘(c) SCOPE OF DELEGATED AUTHORITY.— 

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1 ‘‘(1) IN GENERAL.—Each certified development 

2 company to which the Administrator delegates au3 thority under subsection (a) may with respect to any 

4 loan described in subsection (a)— 

5 ‘‘(A) perform all liquidation and fore6 closure functions, including the purchase in ac7 cordance with this subsection of any other in8 debtedness secured by the property securing the 

9 loan, in a reasonable and sound manner accord10 ing to commercially accepted practices, pursu11 ant to a liquidation plan approved in advance 

12 by the Administrator under paragraph (2)(A); 

13 ‘‘(B) litigate any matter relating to the 

14 performance of the functions described in sub15 paragraph (A), except that the Administrator 

16 may— 

17 ‘‘(i) defend or bring any claim if— 

18 ‘‘(I) the outcome of the litigation 

19 may adversely affect the Administra20 tor’s management of the program es21 tablished under this title; or 

22 ‘‘(II) the Administrator is enti23 tled to legal remedies not available to 

24 a certified development company and 

25 such remedies will benefit either the 

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1 Administrator or the certified develop2 ment company; and 

3 ‘‘(ii) oversee the conduct of any such 

4 litigation; and 

5 ‘‘(C) take other appropriate actions to 

6 mitigate loan losses in lieu of total liquidation 

7 or foreclosures, including the restructuring of a 

8 loan in accordance with prudent loan servicing 

9 practices and pursuant to a workout plan ap10 proved in advance by the Administrator under 

11 paragraph (2). 

12 ‘‘(2) ADMINISTRATOR APPROVAL OF PLANS.— 

13 ‘‘(A) CERTIFIED DEVELOPMENT COMPANY

14 SUBMISSION OF PLANS.—Before carrying out 

15 functions described in paragraph (1)(A) or 

16 (1)(C), the certified development company shall 

17 submit to the Administrator a proposed liquida18 tion plan, any proposal for the Administrator to 

19 the purchase of any other indebtedness secured 

20 by the property securing a defaulted loan, or a 

21 workout plan or any combination thereof. 

22 ‘‘(B) ADMINISTRATOR APPROVAL PROCE23 DURES.— 

24 ‘‘(i) TIMING.—Not later than 15 busi25 ness days after the plans described in submstockstill on DSKH9S0YB1PROD with BILLS

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1 paragraph (A) are received by the Admin2 istrator, the Administrator shall approve or 

3 reject the plan. 

4 ‘‘(ii) NOTICE OF NO DECISION.—With 

5 respect to any plan that cannot be ap6 proved or denied within the 15-day period 

7 required by clause (i), the Administrator 

8 shall within such period provide in accord9 ance with subparagraph (E) notice to the 

10 company that submitted the plan. 

11 ‘‘(C) ROUTINE ACTIONS.—In carrying out 

12 the functions described in paragraph (1)(A), a 

13 certified development company may undertake 

14 routine actions not addressed in a liquidation or 

15 workout plan without obtaining additional ap16 proval from the Administrator. 

17 ‘‘(D) COMPROMISE OF INDEBTEDNESS.— 

18 In carrying out functions described in para19 graph (1)(A), a certified development company 

20 may— 

21 ‘‘(i) consider an offer made by an obli22 gor to compromise the debt for less than 

23 the full amount owing; and 

24 ‘‘(ii) pursuant to such offer, release 

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1 ble, if the company secures the written ap2 proval of the Administrator. 

3 ‘‘(E) CONTENTS OF NOTICE OF NO DECI4 SION.—Any notice provided by the Adminis5 trator pursuant to subparagraph (B)(ii) shall— 

6 ‘‘(i) be in writing stating the specific 

7 reasons for which the Administrator was 

8 unable to act on the request submitted 

9 pursuant to subparagraph (A); 

10 ‘‘(ii) provide an estimate of the addi11 tional time needed for the Administrator to 

12 reach a decision on the request; and 

13 ‘‘(iii) specify any additional informa14 tion or documentation that the Adminis15 trator needs to make a decision but was 

16 not provided in the plan submitted by the 

17 certified development company. 

18 ‘‘(3) CONFLICT OF INTEREST.—In carrying out 

19 functions described in paragraph (1), a certified de20 velopment company shall take no action that would 

21 result in an actual or apparent conflict of interest 

22 between the company (or any employee of the com23 pany) and any third-party lender, associate of a 

24 third-party lender, or any other person participating 

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1 in a liquidation, foreclosure, or loss mitigation ac2 tion. 

3 ‘‘(d) SUSPENSION OR REVOCATION OF AUTHOR4 ITY.— 

5 ‘‘(1) IN GENERAL.—The Administrator may re6 voke or suspend a delegation of authority under this 

7 section to a certified development company if the 

8 Administrator determines that the company— 

9 ‘‘(A) does not meet the requirements of 

10 subsection (b)(1); 

11 ‘‘(B) violated any applicable law or rule or 

12 regulation of the Administrator that in the esti13 mation of the Administrator requires revoca14 tion; or 

15 ‘‘(C) fails to comply with any reporting 

16 that may be established by the Administrator 

17 relating to the establishment of eligibility in 

18 subsection (b)(1) or carrying out the functions 

19 described in subsection (c)(1). 

20 ‘‘(2) WRITTEN NOTICE.—The Administrator 

21 shall provide in writing detailed reason why the dele22 gation of authority was suspended or revoked. 

23 ‘‘(e) PARTICIPATION IN LIQUIDATION.— 

24 ‘‘(1) IN GENERAL.— 

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1 ‘‘(A) CONTRACT WITH QUALIFIED THIRD

2 PARTY.—A certified development company 

3 which elects not to apply for authority to fore4 close and liquidate defaulted loans under this 

5 section, or which the Administrator determines 

6 to be ineligible for such authority, shall contract 

7 with a qualified third party to perform fore8 closure and liquidation of defaulted loans in its 

9 portfolio. 

10 ‘‘(B) CONTRACT APPROVAL.—The contract 

11 entered into by the certified development com12 pany specified in subparagraph (A) shall be 

13 contingent upon approval by the Administrator 

14 with respect to the qualifications of the con15 tractor and the terms and conditions of liquida16 tion activities. The Administrator shall not un17 reasonably withhold such approval. 

18 ‘‘(C) NOTIFICATION OF REJECTION.—If 

19 the Administrator rejects the contract, the Ad20 ministrator shall provide a notice to the cer21 tified development company, in writing, explain22 ing the reasons for such rejection within ten 

23 business days after submission of the contract. 

24 ‘‘(D) RESUBMITTAL.—The certified devel25 opment company shall be permitted to resubmit 

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1 the contract and the Administrator’s review of 

2 any such resubmittal shall be limited to 

3 insufficiencies described in the notification of 

4 rejection. 

5 ‘‘(E) REGULATIONS.—The Administrator 

6 shall promulgate regulations, after notice and 

7 opportunity for comment, adopting standards 

8 for the approval of qualified third-party con9 tractors within 90 days after the date of enact10 ment of the Small Business Financing and In11 vestment Act of 2009. 

12 ‘‘(F) FAILURE TO PROMULGATE REGULA13 TIONS.—If the Administrator fails to promul14 gate such regulations, any contract for liquida15 tion entered into by a certified development 

16 company under this subsection shall be consid17 ered valid for the purposes of this subsection 

18 and subsection (f). 

19 ‘‘(G) EFFECT OF ADMINISTRATOR’S PRO20 MULGATION OF REGULATIONS.—If the Adminis21 trator promulgates regulations after the dead22 line specified in subparagraph (E), those regu23 lations shall not have any retroactive applica24 tion with respect to contracts that are described 

25 in subparagraph (F). 

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1 ‘‘(2) COMMENCEMENT.—This subsection shall 

2 not require any certified development company to 

3 liquidate defaulted loans until the Administrator im4 plements a system to compensate and reimburse cer5 tified development companies for liquidation of any 

6 defaulted loans. 

7 ‘‘(f) COMPENSATION AND REIMBURSEMENT.— 

8 ‘‘(1) REIMBURSEMENT OF EXPENSES.—The 

9 Administrator shall reimburse each certified develop10 ment company for all expenses paid by such com11 pany as part of the foreclosure and liquidation ac12 tivities taken to carry out this section, if the ex13 penses— 

14 ‘‘(A) were— 

15 ‘‘(i) approved in advance by the Ad16 ministrator, either specifically in a plan 

17 submitted pursuant to subsection (c) or 

18 generally, such as, but not limited to, ac19 tions approved by the Administrator in 

20 regulations or other interpretative 

21 issuances; or 

22 ‘‘(ii) incurred by the development 

23 company on an emergency basis without 

24 prior approval from the Administrator, if 

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1 penses were reasonable and appropriate; 

2 and 

3 ‘‘(B) are submitted by the certified devel4 opment company to the Administrator not later 

5 than 3 years after the date the expense was in6 curred or the bill therefore is submitted to the 

7 certified development company, whichever is 

8 later. 

9 ‘‘(2) ALTERNATIVE REIMBURSEMENT.—As an 

10 alternative to the procedure in paragraph (1), a cer11 tified development company may elect to obtain re12 imbursement for all such expenses from the proceeds 

13 of any collateral provided by the borrower that was 

14 liquidated by the certified development company if 

15 the expenses comply with the requirements of para16 graph (1). Within 6 months of the reimbursement, 

17 the certified development company shall provide the 

18 Administrator with the same information and docu19 mentation it would be required to submit to obtain 

20 payment from the Administrator. 

21 ‘‘(3) REGULATIONS.—The Administrator shall 

22 promulgate regulations, after notice and comment to 

23 carry out the provisions of paragraphs (1) and (2). 

24 If the Administrator does not promulgate such regu25 lations within one year, certified development compamstockstill on DSKH9S0YB1PROD with BILLS

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1 nies shall be authorized, notwithstanding the re2 quirements of subsection (e)(2), to liquidate de3 faulted loans and such costs and expenses incurred, 

4 absent clear and convincing evidence of fraud, shall 

5 be deemed to be approved. 

6 ‘‘(4) COMPENSATION FOR RESULTS.— 

7 ‘‘(A) DEVELOPMENT.—In regulations pro8 mulgated pursuant to paragraph (3), the Ad9 ministrator also shall develop a schedule of 

10 compensation that provides monetary incentives 

11 for certified development companies in order to 

12 increase recoveries on defaulted loans. 

13 ‘‘(B) CRITERIA.—The schedule shall— 

14 ‘‘(i) be based on a percentage of the 

15 net amount recovered, but shall not exceed 

16 a maximum amount; and 

17 ‘‘(ii) not apply to any foreclosure 

18 which is conducted under a contract be19 tween a certified development company and 

20 a qualified third party to perform the fore21 closure and liquidation. 

22 ‘‘(C) PAYMENT.—The Administrator shall 

23 transmit the compensation provided herein to 

24 the development company from the proceeds of 

25 liquidated collateral, unless the Administrator 

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1 utilizes another source for funds, within 30 

2 days from the date when the liquidation case 

3 has been closed and documentation received.’’. 

4 SEC. 221. REPORTS AND REGULATIONS. 

5 Title V of the Small Business Investment Act of 1958 

6 (15 U.S.C. 695 et seq.) is amended by adding at the end 

7 the following: 

8 ‘‘SEC. 511. REPORTS. 

9 ‘‘(a) PREMIER CERTIFIED DEVELOPMENT COMPA10 NIES.—The Administrator shall report annually to the 

11 Committee on Small Business of the House of Representa12 tives and the Committee on Small Business and Entrepre13 neurship of the Senate on the implementation of section 

14 504. Each report shall include— 

15 ‘‘(1) the number of premier certified develop16 ment companies; 

17 ‘‘(2) the debenture volume of each premier cer18 tified development company; 

19 ‘‘(3) a comparison of the loss rate for premier 

20 certified development companies to the loss rate for 

21 accredited or certified development companies; and 

22 ‘‘(4) such other information as the Adminis23 trator deems appropriate. 

24 ‘‘(b) REPORTS ON LIQUIDATION AND FORE25 CLOSURES.— 

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1 ‘‘(1) IN GENERAL.—Based on information pro2 vided by certified development companies and the 

3 Administrator, the Administrator shall submit annu4 ally to the Committee on Small Business and Entre5 preneurship of the Senate and the Committee on 

6 Small Business of the House of Representatives a 

7 report on the results of delegation of authority under 

8 section 510. 

9 ‘‘(2) CONTENTS.—Each report submitted under 

10 paragraph (1) shall include the following informa11 tion: 

12 ‘‘(A) With respect to each loan foreclosed 

13 or liquidated by a certified development com14 pany, or for which losses were otherwise miti15 gated by pursuant to a workout plan— 

16 ‘‘(i) the total cost of the project fi17 nanced with the loan; 

18 ‘‘(ii) the total original dollar amount 

19 guaranteed by the Administration; 

20 ‘‘(iii) the total dollar amount of the 

21 loan at the time of liquidation, foreclosure, 

22 or mitigation of loss; 

23 ‘‘(iv) the total dollar losses resulting 

24 from the liquidation, foreclosure, or mitiga25 tion of loss; and 

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1 ‘‘(v) the total recoveries resulting 

2 from the liquidation, foreclosure, or mitiga3 tion of loss, both as a percentage of the 

4 amount guaranteed and the total cost of 

5 the project financed. 

6 ‘‘(B) With respect to each certified devel7 opment company to which authority is dele8 gated under section 510, the totals of each of 

9 the amounts described in clauses (i) through (v) 

10 of subparagraph (A). 

11 ‘‘(C) With respect to each certified devel12 opment company that contracts with a qualified 

13 third-party contractor pursuant to section 

14 510(e), the total of each of the amounts de15 scribed in clauses (i) through (v) of subpara16 graph (A). 

17 ‘‘(D) With respect to all loans subject to 

18 foreclosure, liquidation, or mitigation under sec19 tion 510, the totals of each of the amounts de20 scribed in clauses (i) through (v) of subpara21 graph (A). 

22 ‘‘(E) A comparison between— 

23 ‘‘(i) the information provided under 

24 subparagraph (D) with respect to the 12- 

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1 month period preceding the date on which 

2 the report is submitted; and 

3 ‘‘(ii) the same information with re4 spect to loans foreclosed and liquidated, or 

5 otherwise treated, by the Administrator 

6 during the same period. 

7 ‘‘(F) The number of times that the Admin8 istrator has failed to approve or reject a liq9 uidation plan, workout plan, request to pur10 chase indebtedness, or failed to approve a third11 party contractor under section 510, including 

12 specific information regarding the reasons for 

13 the Administrator’s failure and any delays that 

14 resulted. 

15 ‘‘(c) REPORTS ON COMBINATION FINANCING.— 

16 ‘‘(1) REPORTING REQUIREMENT.—Not later 

17 than 90 days after the date of enactment of the 

18 Small Business Financing and Investment Act of 

19 2009, and annually thereafter, the Administrator 

20 shall submit a report to the Committee on Small 

21 Business and Entrepreneurship of the Senate and 

22 the Committee on Small Business of the House of 

23 Representatives that— 

24 ‘‘(A) includes the number of small business 

25 concerns that have financing under both section 

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1 7(a) of the Small Business Act (15 U.S.C. 

2 636(a)) and title V of the Small Business In3 vestment Act of 1958 (15 U.S.C. 695 et seq.) 

4 during the year before the year of that report; 

5 and 

6 ‘‘(B) describes the total amount and gen7 eral performance of the financing described in 

8 subparagraph (A). 

9 ‘‘(d) REPORT ON OTHER ECONOMIC DEVELOPMENT

10 ACTIVITY.—The Administrator shall compile and submit 

11 to the Committee on Small Business of the House of Rep12 resentatives and the Committee on Small Business and 

13 Entrepreneurship of the Senate on an annual basis, com14 mencing in the year that the Small Business Financing 

15 and Investment Act of 2009 is enacted, a report that de16 scribes the economic and community development activi17 ties, other than loan making under this title, of each cer18 tified development company during the prior fiscal year. 

19 The Administrator may contract with another party, in20 cluding non-governmental entities, to collect information 

21 or otherwise assist in the preparation of the report re22 quired by this subsection. 

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1 ‘‘SEC. 512. PROMULGATION OF REGULATIONS UNDER THIS 

2 TITLE. 

3 ‘‘(a) DEADLINES FOR IMPLEMENTING REGULA4 TIONS.—Except as expressly provided elsewhere in the 

5 Small Business Financing and Investment Act of 2009, 

6 the Administrator shall promulgate regulations under this 

7 title, after providing notice and the opportunity for com8 ment, within 180 days after the date of enactment of that 

9 Act. 

10 ‘‘(b) NOTICE AND COMMENT REQUIREMENTS IN

11 GENERAL.—Except as otherwise provided elsewhere in 

12 this title, the Administrator shall provide, after the date 

13 of enactment of the Small Business Financing and Invest14 ment Act of 2009, notice of any proposed change to a reg15 ulation implementing this title (whether in existence on 

16 the date of enactment of the Small Business Financing 

17 and Investment Act of 2009 or subsequently adopted), 

18 publish such notification in the Federal Register, and pro19 vide a comment period of not less than 60 days.’’. 

20 SEC. 222. PROGRAM NAME. 

21 Title V of the Small Business Investment Act of 1958 

22 (15 U.S.C. 695 et seq.), as amended by this Act, is further 

23 amended by adding at the end the following: 

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1 ‘‘SEC. 513 PROGRAM NAME. 

2 ‘‘(a) IN GENERAL.—The program created by this 

3 title shall be referred to as the CDC Economic Develop4 ment Loan Program. 

5 ‘‘(b) MODIFICATION OF MATERIALS USED.—Not 

6 later than 60 days after the date of enactment of the 

7 Small Business Financing and Investment Act of 2009, 

8 the Administrator shall modify all documents and websites 

9 to conform to the name change made by this section.’’. 

10 Subtitle C—Miscellaneous 

11 SEC. 231. REPORT ON STANDARD OPERATING PROCE12 DURES. 

13 (a) REPORT.—The Administrator of the Small Busi14 ness Administration shall submit to the Committee on 

15 Small Business of the House of Representatives and the 

16 Committee on Small Business and Entrepreneurship of 

17 the Senate a report within 180 days after enactment of 

18 this Act identifying each Standard Operating Procedure 

19 issued after January 1, 1996, that relates to the operation 

20 of a development company (in any manner) under title V 

21 of the Small Business Investment Act of 1958, that is still 

22 in effect on the date of enactment of this Act, and the 

23 regulation codified in title 13 of the Code of Federal Regu24 lations that authorizes the issuance of the Standard Oper25 ating Procedure and separately identifies the regulation 

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1 that the Standard Operating Procedure purports to inter2 pret. 

3 (b) INAPPLICABILITY.—If the Administrator fails to 

4 complete the report by the time specified in subsection (a), 

5 the Administrator shall, unless there is clear and con6 vincing evidence of fraud, honor the terms and conditions 

7 of any debenture to the entity that issued the debenture 

8 pursuant to title V of the Small Business Investment Act 

9 of 1958 without regard to whether the entity complied 

10 with any of the Standard Operating Procedures described 

11 in subsection (a) until such time as the Administrator sub12 mits the report required under subsection (a). 

13 (c) DEFINITION.—For purposes of this section, the 

14 term ‘‘Standard Operating Procedure’’ has the meaning 

15 given that term in section 120.10 of title 13, Code of Fed16 eral Regulations, as in effect on January 1, 2009, and 

17 includes any reference to the acronym ‘‘SOP’’. 

18 SEC. 232. ALTERNATIVE SIZE STANDARD. 

19 (a) REVIEW AND STUDY.— 

20 (1) IN GENERAL.—The Administrator of the 

21 Small Business Administration shall study and re22 view the optional size standard set forth in section 

23 121.301(b) of title 13, Code of Federal Regulations, 

24 as in effect on January 1, 2009, for eligibility of a 

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1 small business concern for financing under title V of 

2 the Small Business Investment Act of 1958. 

3 (2) CONTENTS.—The review shall analyze 

4 whether the alternative size standard includes the 

5 business concerns defined in section 3(a)(1) of the 

6 Small Business Act and what, if any, regulatory 

7 changes are needed in the alternative size standard. 

8 (3) SUBMISSION TO CONGRESS.—The Adminis9 trator shall submit its study and conclusions within 

10 180 days after the date of enactment of the Small 

11 Business Financing and Investment Act of 2009 to 

12 the Committee on Small Business and Entrepre13 neurship of the Senate and the Committee on Small 

14 Business of the House of Representatives. 

15 (b) ISSUANCE OF REGULATIONS.—Any changes in 

16 the optional size standard described in subsection (a)(1) 

17 shall be promulgated within 180 days of the submission 

18 of the report to committees referred to in paragraph (3) 

19 of subsection (a). 

20 (c) INTERIM ALTERNATIVE SIZE STANDARD.—Until 

21 the Administrator promulgates regulations either re22 adopting the size standard referred to in subsection (a)(1) 

23 or adopts a new alternative size standard, the alternative 

24 size standard shall be a maximum tangible net worth of 

25 not more than $15,000,000 and an average net income 

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1 after the payment of Federal taxes (but excluding any car2 ryover losses) for the preceding two fiscal years not more 

3 than $5,000,000. 

4 TITLE III—MICROLENDING 

5 EXPANSION 

6 SEC. 301. MICROLOAN CREDIT BUILDING INITIATIVE. 

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

8 636(m)) is amended by adding at the end the following: 

9 ‘‘(14) CREDIT REPORTING INFORMATION.—The 

10 Administrator shall establish a process, for use by 

11 an intermediary making a loan to a borrower under 

12 this subsection, under which the intermediary shall 

13 provide to the major credit reporting agencies the in14 formation about the borrower, both positive and neg15 ative, that is relevant to credit reporting, such as the 

16 payment activity of the borrower on the loan. Such 

17 process shall allow an intermediary the option of 

18 providing information to the major credit reporting 

19 agencies through the Administration or independ20 ently.’’. 

21 SEC. 302. FLEXIBLE CREDIT TERMS. 

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

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

24 (1) in paragraph (1)(B)(i) by striking ‘‘short25 term,’’; 

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1 (2) in paragraph (6)(A) by striking ‘‘short2 term,’’; and 

3 (3) in paragraph (11)(B) by striking ‘‘short4 term,’’. 

5 SEC. 303. INCREASED PROGRAM PARTICIPATION. 

6 Section 7(m)(2) of the Small Business Act (15 

7 U.S.C. 636(m)(2)) is amended— 

8 (1) in subparagraph (A) by striking ‘‘paragraph 

9 (10)’’ and inserting ‘‘paragraph (11)’’; and 

10 (2) by amending subparagraph (B) to read as 

11 follows: 

12 ‘‘(B) has— 

13 ‘‘(i) at least— 

14 ‘‘(I) 1 year of experience making 

15 microloans to startup, newly estab16 lished, or growing small business con17 cerns; or 

18 ‘‘(II) 1 full-time employee who 

19 has not less than 3 years of experi20 ence making microloans to startup, 

21 newly established, or growing small 

22 business concerns; and 

23 ‘‘(ii) at least— 

24 ‘‘(I) 1 year of experience pro25 viding, as an integral part of its 

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1 microloan program, intensive mar2 keting, management, and technical as3 sistance to its borrowers; or 

4 ‘‘(II) 1 full-time employee who 

5 has not less than 1 year of experience 

6 providing intensive marketing, man7 agement, and technical assistance to 

8 borrowers.’’. 

9 SEC. 304. INCREASED LIMIT ON INTERMEDIARY BOR10 ROWING. 

11 Section 7(m)(3)(C) of the Small Business Act (15 

12 U.S.C. 636(m)(3)(C)) is amended— 

13 (1) by striking ‘‘$750,000’’ and inserting 

14 ‘‘$1,000,000’’; 

15 (2) by striking ‘‘$3,500,000’’ and inserting 

16 ‘‘$7,000,000’’; and 

17 (3) by adding at the end the following: ‘‘The 

18 Administrator may treat the amount of $7,000,000 

19 in this subparagraph as if such amount is 

20 $10,000,000 if the Administrator determines, with 

21 respect to an intermediary, that such treatment is 

22 appropriate.’’. 

23 SEC. 305. EXPANDED BORROWER EDUCATION ASSISTANCE. 

24 Section 7(m)(4)(E) of the Small Business Act (15 

25 U.S.C. 636(m)(4)(E)) is amended— 

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1 (1) in clause (i) by striking ‘‘25 percent’’ and 

2 inserting ‘‘35 percent’’; and 

3 (2) in clause (ii) by striking ‘‘25 percent’’ and 

4 inserting ‘‘35 percent’’. 

5 SEC. 306. INTEREST RATES AND LOAN SIZE. 

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

7 636(m)), as amended by this Act, is further amended— 

8 (1) in paragraph (3)(F)(iii) by striking 

9 ‘‘$7,500’’ and inserting ‘‘$10,000’’; 

10 (2) in paragraph (6)(C)(i) by striking ‘‘$7,500’’ 

11 and inserting ‘‘$10,000’’; and 

12 (3) in paragraph (6)(C)(ii) by striking 

13 ‘‘$7,500’’ and inserting ‘‘$10,000’’. 

14 SEC. 307. REPORTING REQUIREMENT. 

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

16 636(m)), as amended by this Act, is further amended by 

17 adding at the end the following: 

18 ‘‘(15) REPORTING REQUIREMENT.—Not later 

19 than 90 days after the end of each fiscal year, the 

20 Administrator shall submit to the Committee on 

21 Small Business of the House of Representatives and 

22 the Committee on Small Business and Entrepre23 neurship of the Senate a report that includes, with 

24 respect to such fiscal year of the microloan program, 

25 the following: 

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1 ‘‘(A) The names and locations of each 

2 intermediary that received funds to make 

3 microloans or provide marketing, management, 

4 and technical assistance. 

5 ‘‘(B) The amounts of each loan and each 

6 grant provided to each such intermediary in 

7 such fiscal year and in prior fiscal years. 

8 ‘‘(C) A description of the contributions 

9 from non-Federal sources of each such inter10 mediary. 

11 ‘‘(D) The number and amounts of 

12 microloans made by each such intermediary to 

13 all borrowers and to each of the following: 

14 ‘‘(i) Women entrepreneurs and busi15 ness owners. 

16 ‘‘(ii) Low-income entrepreneurs and 

17 business owners. 

18 ‘‘(iii) Veteran entrepreneurs and busi19 ness owners. 

20 ‘‘(iv) Disabled entrepreneurs and busi21 ness owners. 

22 ‘‘(v) Minority entrepreneurs and busi23 ness owners. 

24 ‘‘(E) A description of the marketing, man25 agement, and technical assistance provided by 

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1 each such intermediary to all borrowers and to 

2 each of the following: 

3 ‘‘(i) Women entrepreneurs and busi4 ness owners. 

5 ‘‘(ii) Low-income entrepreneurs and 

6 business owners. 

7 ‘‘(iii) Veteran entrepreneurs and busi8 ness owners. 

9 ‘‘(iv) Disabled entrepreneurs and busi10 ness owners. 

11 ‘‘(v) Minority entrepreneurs and busi12 ness owners. 

13 ‘‘(F) The number of jobs created and re14 tained as a result of microloans and marketing, 

15 management, and technical assistance provided 

16 by each such intermediary. 

17 ‘‘(G) The repayment history of each such 

18 intermediary. 

19 ‘‘(H) The number of businesses that 

20 achieved success after receipt of a microloan.’’. 

21 SEC. 308. SURPLUS INTEREST RATE SUBSIDY FOR BUSI22 NESSES. 

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

24 636(m)), as amended by this Act, is further amended by 

25 adding at the end the following: 

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1 ‘‘(16) INTEREST ASSISTANCE.— 

2 ‘‘(A) IN GENERAL.—The Administrator is 

3 authorized to use amounts determined unlikely 

4 to be expended under subparagraph (B) to as5 sist borrowers that receive a microloan under 

6 this subsection to reduce the interest paid with 

7 respect to such microloan. 

8 ‘‘(B) AMOUNTS UNLIKELY TO BE EX9 PENDED.—Not later than April 1 of each fiscal 

10 year, the Administrator shall determine if any 

11 amounts made available to carry out this sub12 section for such fiscal year are unlikely to be 

13 expended for activities under this subsection 

14 other than activities under this paragraph.’’. 

15 SEC. 309. AUTHORIZATION OF APPROPRIATIONS. 

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

17 note), as amended by this Act, is further amended by in18 serting after subsection (g) the following: 

19 ‘‘(h) FISCAL YEARS 2010 AND 2011 WITH RESPECT

20 TO SECTION 7(m).— 

21 ‘‘(1) PROGRAM LEVELS.—For the programs au22 thorized by this Act, the Administration is author23 ized to make during each of fiscal years 2010 and 

24 2011— 

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1 ‘‘(A) $80,000,000 in technical assistance 

2 grants, as provided in section 7(m); and 

3 ‘‘(B) $110,000,000 in direct loans, as pro4 vided in section 7(m). 

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 new subsection: 

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) 

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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 debentured or 

18 non-leveraged small business investment com19 pany specified under paragraph (1)(A) is ac20 tively operating under this Act on the date of 

21 the initial receipt of the application by the Ad22 ministrator to which this subsection applies; 

23 ‘‘(B) no principal manager of the applicant 

24 has been found liable in a civil action for fraud 

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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 

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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. LIMITATIONS ON PREPAYMENT. 

17 Section 305 of the Small Business Investment Act 

18 of 1958 (15 U.S.C. 685) is amended by adding at the end 

19 the following: 

20 ‘‘(g) A company may require a small business concern 

21 to accept reasonable and customary minimum prepayment 

22 amounts, terms, and notice requirements. 

23 ‘‘(h) The private capital of a licensee may include 

24 funds transferred to an account of the Telecommuni25 cations Development Fund created pursuant to section 

26 714 of the Communications Act of 1934 (47 U.S.C. 614) 

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1 and which are described in section 309(j)(8)(C)(iii) of the 

2 Communications Act of 1934 (47 U.S.C. 

3 309(j)(8)(C)(iii)). 

4 ‘‘(i) The authorization to make loans under sub5 section (a) includes the authority to engage in venture 

6 leasing, equipment leasing, real estate sale leasebacks, and 

7 similar arrangements with small business concerns, so 

8 long as such arrangements have an economic purpose 

9 similar to traditional loans. Any transaction covered by 

10 this subsection involving real property shall require the oc11 cupancy of at least 50 percent of the real property by the 

12 small business concern.’’. 

13 SEC. 407. INVESTMENT WITH CERTAIN PASSIVE ENTITIES. 

14 Part A of title III of the Small Business Investment 

15 Act of 1958 (15 U.S.C. 681 et seq.) is amended by adding 

16 at the end the following: 

17 ‘‘SEC. 321. INVESTMENT WITH CERTAIN PASSIVE ENTITIES. 

18 ‘‘A licensee may provide financing to a passive busi19 ness as defined under section 107.720(b)(1) of title 13, 

20 Code of Federal Regulations, as in effect on January 1, 

21 2009, which is a corporation or limited liability company 

22 wholly-owned by the licensee and the sole purpose of which 

23 is to provide financing by the licensee to such concerns 

24 would cause investors in the licensee to incur with respect 

25 to regulated investment companies, income not qualifying 

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1 under section 851(b)(2)(A) of the Internal Revenue Code 

2 of 1986. Nothing in this section shall affect the validity 

3 of regulations permitting financings of passive businesses 

4 previously duly promulgated by the Administrator.’’. 

5 SEC. 408. INVESTMENT IN SMALLER ENTERPRISES. 

6 Section 303(d) of the Small Business Investment Act 

7 of 1958 (15 U.S.C. 683(d)) is amended by adding at the 

8 end the following: ‘‘A licensee shall not be required to 

9 achieve any percentage of such financings (at cost) which 

10 is higher than 25 percent which may result from the appli11 cation of prior statutory or regulatory requirements to all 

12 or any portion of the licensee’s portfolio.’’ 

13 SEC. 409. CAPITAL IMPAIRMENT. 

14 Section 303(e) of the Small Business Investment Act 

15 of 1958 (15 U.S.C. 683(e)) is amended by adding at the 

16 end the following: 

17 ‘‘A licensee with Earmarked Assets (as that term is de18 fined by the Administrator) will not be in capital impair19 ment during the first 72 months after its date of licensure, 

20 if its impairment does not exceed 85 percent.’’. 

21 SEC. 410. TANGIBLE NET WORTH. 

22 Section 103 of the Small Business Investment Act 

23 of 1958 (15 U.S.C. 662), as amended by this Act, is fur24 ther amended by striking ‘‘and’’ at the end of paragraph 

25 (23), by striking the period at the end of paragraph (24) 

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1 and inserting ‘‘; and’’, and by adding at the end the fol2 lowing: 

3 ‘‘(25) for purposes of the terms ‘small-business 

4 concern’ in paragraph (5) and ‘smaller enterprise’ in 

5 paragraph (12), tangible net worth shall, to the ex6 tent used, mean the total net worth of the small 

7 business, in accordance with General Accepted Ac8 counting Principles, minus all intangibles in accord9 ance with General Accepted Accounting Principles.’’. 

10 SEC. 411. DEVELOPMENT OF AGENCY RECORD. 

11 Part A of title III of the Small Business Investment 

12 Act of 1958 (15 U.S.C. 681 et seq.), as amended by this 

13 Act, is further amended by adding at the end the fol14 lowing: 

15 ‘‘SEC. 322. AGENCY RECORD FOR LICENSING OF SMALL 

16 BUSINESS INVESTMENT COMPANIES. 

17 ‘‘(a) RECORD.—The Associate Administrator for In18 vestment shall establish an agency record of evidence re19 ferring or relating to each application for a license to be20 come a small business investment company. 

21 ‘‘(b) WRITTEN NOTIFICATION.—The Administrator 

22 shall provide a written explanation of any denial of a li23 cense application based upon evidence in the agency 

24 record. Absent an order by a Federal or State court of 

25 general jurisdiction, access to applications and the agency 

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1 record shall be limited to the applicant and to the Admin2 istrator and subordinate personnel of the Administrator.’’. 

3 SEC. 412. PROGRAM LEVELS. 

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

5 note), as amended by this Act, is further amended by in6 serting after subsection (h) the following: 

7 ‘‘(i) PART A OF TITLE III OF THE SMALL BUSINESS

8 INVESTMENT ACT OF 1958.— 

9 ‘‘(1) PROGRAM LEVELS 2010.—For fiscal year 

10 2010, in carrying out the program authorized by 

11 part A of title III of the Small Business Investment 

12 Act of 1958, the Administrator is authorized to 

13 make $5,000,000,000 in guarantees of debentures. 

14 ‘‘(2) PROGRAM LEVELS 2011.—For fiscal year 

15 2011, in carrying out the program authorized by 

16 part A of title III of the Small Business Investment 

17 Act of 1958, the Administrator is authorized to 

18 make $5,5000,000,000 in guarantees of deben19 tures.’’. 

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1 TITLE V—INVESTMENT IN 

2 SMALL MANUFACTURERS 

3 AND RENEWABLE ENERGY 

4 SMALL BUSINESSES 

5 Subtitle A—Enhanced New 

6 Markets Venture Capital Program 

7 SEC. 501. EXPANSION OF NEW MARKETS VENTURE CAPITAL 

8 PROGRAM. 

9 (a) ADMINISTRATION PARTICIPATION REQUIRED.— 

10 Section 353 of the Small Business Investment Act of 1958 

11 (15 U.S.C. 689b) is amended by striking ‘‘under which 

12 the Administrator may’’ and inserting ‘‘under which the 

13 Administrator shall’’. 

14 (b) REPORT TO CONGRESS.—Not later than 1 year 

15 after the date of the enactment of this Act, the Adminis16 trator of the Small Business Administration shall submit 

17 to Congress a report describing any expansion of the New 

18 Markets Venture Capital Program as a result of this sec19 tion. 

20 SEC. 502. IMPROVED NATIONWIDE DISTRIBUTION. 

21 Section 354 of the Small Business Investment Act 

22 of 1958 (15 U.S.C. 689c) is amended by adding at the 

23 end the following: 

24 ‘‘(f) GEOGRAPHIC EXPANSION.—From among com25 panies submitting applications under subsection (b), the 

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1 Administrator shall consider the selection criteria and pro2 motion of nationwide distribution under subsection (c) and 

3 shall, to the extent practicable, approve at least one com4 pany from each geographic region of the Small Business 

5 Administration.’’. 

6 SEC. 503. INCREASED INVESTMENT IN SMALL BUSINESS 

7 CONCERNS ENGAGED PRIMARILY IN MANU8 FACTURING. 

9 (a) DEVELOPMENTAL VENTURE CAPITAL AND PAR10 TICIPATION AGREEMENTS.—Section 351 of the Small 

11 Business Investment Act of 1958 (15 U.S.C. 689) is 

12 amended— 

13 (1) in paragraph (1) by inserting after ‘‘geo14 graphic areas’’ the following: ‘‘or encouraging the 

15 growth or continuation of small business concerns 

16 located in low-income geographic areas and engaged 

17 primarily in manufacturing’’; and 

18 (2) in paragraph (6)(B) by inserting after ‘‘geo19 graphic areas’’ the following: ‘‘or in small business 

20 concerns located in low-income geographic areas at 

21 least 80 percent of which are engaged primarily in 

22 manufacturing’’. 

23 (b) PURPOSES.—Section 352(2) of the Small Busi24 ness Investment Act of 1958 (15 U.S.C. 689a(2)) is 

25 amended— 

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

2 by inserting after ‘‘geographic areas’’ the following: 

3 ‘‘and small business concerns located in low-income 

4 geographic areas and engaged primarily in manufac5 turing’’; 

6 (2) in subparagraph (B) by inserting after ‘‘ge7 ographic areas’’ the following: ‘‘or in small business 

8 concerns located in low-income geographic areas and 

9 engaged primarily in manufacturing’’; and 

10 (3) in subparagraph (C) by inserting after 

11 ‘‘smaller enterprises’’ the following: ‘‘and small busi12 ness concerns’’. 

13 (c) ELIGIBILITY, APPLICATIONS, AND REQUIRE14 MENTS FOR FINAL APPROVAL.—Section 354 of the Small 

15 Business Investment Act of 1958 (15 U.S.C. 689c), as 

16 amended by this Act, is further amended— 

17 (1) in subsection (a)(3) by inserting after ‘‘geo18 graphic areas’’ the following: ‘‘or investing in small 

19 business concerns located in low-income geographic 

20 areas and engaged primarily in manufacturing’’; 

21 (2) in subsection (b)— 

22 (A) in paragraph (1) by inserting after 

23 ‘‘geographic areas’’ the following: ‘‘or in small 

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1 graphic areas and engaged primarily in manu2 facturing’’; and 

3 (B) in paragraph (4) by inserting after 

4 ‘‘smaller enterprises’’ the following: ‘‘or small 

5 business concerns’’; and 

6 (3) in subsection (d)— 

7 (A) in paragraph (1)— 

8 (i) by striking ‘‘Each’’ and inserting 

9 the following: 

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

11 subparagraph (B), each’’; and 

12 (ii) by adding at the end the fol13 lowing: 

14 ‘‘(B) SMALL BUSINESS CONCERNS EN15 GAGED PRIMARILY IN MANUFACTURING.—Each 

16 conditionally approved company engaged pri17 marily in development of and investment in 

18 small business concerns located in low-income 

19 geographic areas and engaged primarily in 

20 manufacturing shall raise not less than 

21 $3,000,000 of private capital or binding capital 

22 commitments from one or more investors (other 

23 than agencies or departments of the Federal 

24 Government) who met criteria established by 

25 the Administrator.’’; and 

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1 (B) in paragraph (2)(A) by inserting after 

2 ‘‘smaller enterprises’’ the following: ‘‘or small 

3 business concerns’’. 

4 (d) OPERATIONAL ASSISTANCE GRANTS.—Section 

5 358 of the Small Business Investment Act of 1958 (15 

6 U.S.C. 689g) is amended— 

7 (1) in subsection (a)(1) by inserting after 

8 ‘‘smaller enterprises’’ the following: ‘‘and small busi9 ness concerns’’; and 

10 (2) in subsection (b)(1) by inserting after 

11 ‘‘smaller enterprises’’ the following: ‘‘and small busi12 ness concerns’’. 

13 SEC. 504. EXPANDED USES FOR OPERATIONAL ASSISTANCE 

14 IN MANUFACTURING. 

15 Section 351 of the Small Business Investment Act 

16 of 1958 (15 U.S.C. 689), as amended by this Act, is fur17 ther amended in paragraph (5) by inserting after ‘‘busi18 ness development’’ the following: ‘‘or assistance that as19 sists a small business concern located in a low-income geo20 graphic area and engaged primarily in manufacturing with 

21 retooling, updating, or replacing machinery or equip22 ment’’. 

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1 SEC. 505. UPDATING DEFINITION OF LOW-INCOME GEO2 GRAPHIC AREA. 

3 Section 351 of the Small Business Investment Act 

4 of 1958 (15 U.S.C. 689), as amended by this Act, is fur5 ther amended— 

6 (1) by striking paragraphs (2) and (3); 

7 (2) by inserting after paragraph (1) the fol8 lowing: 

9 ‘‘(2) LOW-INCOME GEOGRAPHIC AREA.—The 

10 term ‘low-income geographic area’ has the meaning 

11 given the term ‘low-income community’ in section 

12 45D(e) of the Internal Revenue Code of 1986.’’; and 

13 (3) by redesignating paragraphs (4) through 

14 (8) as paragraphs (3) through (7), respectively. 

15 SEC. 506. EXPANDING OPERATIONAL ASSISTANCE TO CON16 DITIONALLY APPROVED COMPANIES. 

17 Section 358(a) of the Small Business Investment Act 

18 of 1958 (15 U.S.C. 689g(a)) is amended by adding at the 

19 end the following: 

20 ‘‘(6) GRANTS TO CONDITIONALLY APPROVED

21 COMPANIES.— 

22 ‘‘(A) IN GENERAL.—Subject to the provi23 sions of this paragraph, upon the request of a 

24 company conditionally approved under section 

25 354(c), the Administrator shall make a grant to 

26 the company under this subsection. 

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1 ‘‘(B) REPAYMENT BY COMPANIES NOT AP2 PROVED.—If a company receives a grant under 

3 this paragraph and does not receive final ap4 proval under section 354(e), the company shall 

5 repay the amount of the grant to the Adminis6 trator. 

7 ‘‘(C) DEDUCTION FROM GRANT TO AP8 PROVED COMPANY.—If a company receives a 

9 grant under this paragraph and receives final 

10 approval under section 354(e), the Adminis11 trator shall deduct the amount of such grant 

12 from the amount of any immediately succeeding 

13 grant the company receives for operational as14 sistance. 

15 ‘‘(D) AMOUNT OF GRANT.—No company 

16 may receive a grant of more than $50,000 

17 under this paragraph.’’. 

18 SEC. 507. LIMITATION ON TIME FOR FINAL APPROVAL. 

19 Section 354(d) of the Small Business Investment Act 

20 of 1958 (15 U.S.C. 689c(d)) is amended in the matter 

21 preceding paragraph (1) by striking ‘‘a period of time, not 

22 to exceed 2 years,’’ and inserting ‘‘2 years’’. 

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1 SEC. 508. STREAMLINED APPLICATION FOR NEW MARKETS 

2 VENTURE CAPITAL PROGRAM. 

3 Not later than 60 days after the date of the enact4 ment of this Act, the Administrator of the Small Business 

5 Administration shall prescribe standard documents for a 

6 New Markets Venture Capital company final approval ap7 plication under section 354(e) of the Small Business In8 vestment Act of 1958 (15 U.S.C. 689c(e)). The Adminis9 trator shall ensure that the standard documents are de10 signed to substantially reduce the cost burden of the appli11 cation process for companies. 

12 SEC. 509. ELIMINATION OF MATCHING REQUIREMENT. 

13 Section 354(d)(2)(A)(i) of the Small Business Invest14 ment Act of 1958 (15 U.S.C. 689c(d)(2)(A)(i)) is amend15 ed— 

16 (1) in subclause (I) by adding ‘‘and’’ at the 

17 end; 

18 (2) in subclause (II) by striking ‘‘and’’ at the 

19 end; and 

20 (3) by striking subclause (III). 

21 SEC. 510. SIMPLIFIED FORMULA FOR OPERATIONAL AS22 SISTANCE GRANTS. 

23 Section 358(a)(4)(A) of the Small Business Invest24 ment Act of 1958 (15 U.S.C. 689g(a)(4)(A)) is amend25 ed— 

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1 (1) by striking ‘‘shall be equal to’’ and all that 

2 follows through the period at the end and inserting 

3 ‘‘shall be equal to the lesser of—’’; and 

4 (2) by adding at the end the following: 

5 ‘‘(i) 10 percent of the resources (in 

6 cash or in-kind) raised by the company 

7 under section 354(d)(2); or 

8 ‘‘(ii) $1,000,000.’’. 

9 SEC. 511. AUTHORIZATION OF APPROPRIATIONS AND EN10 HANCED ALLOCATION FOR SMALL MANUFAC11 TURING. 

12 Section 368(a) of the Small Business Investment Act 

13 of 1958 (15 U.S.C. 689q(a)) is amended— 

14 (1) in the matter preceding paragraph (1) by 

15 striking ‘‘fiscal years 2001 through 2006’’ and in16 serting ‘‘fiscal years 2010 and 2011’’; 

17 (2) in paragraph (1)— 

18 (A) by striking ‘‘$150,000,000’’ and in19 serting ‘‘$100,000,000’’; and 

20 (B) by inserting before the period at the 

21 end the following: ‘‘, of which not less than 50 

22 percent shall be used to guarantee debentures 

23 of companies engaged primarily in development 

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1 cated in low-income geographic areas and en2 gaged primarily in manufacturing’’; and 

3 (3) in paragraph (2)— 

4 (A) by striking ‘‘$30,000,000’’ and insert5 ing ‘‘$20,000,000’’; and 

6 (B) by inserting before the period at the 

7 end the following: ‘‘, of which not less than 50 

8 percent shall be used to make grants to compa9 nies engaged primarily in development of and 

10 investment in small business concerns located in 

11 low-income geographic areas and engaged pri12 marily in manufacturing’’. 

13 Subtitle B—Expanded Investment 

14 in Small Business Renewable 

15 Energy 

16 SEC. 521. EXPANDED INVESTMENT IN RENEWABLE EN17 ERGY. 

18 Part C of title III of the Small Business Investment 

19 Act of 1958 (15 U.S.C. 690 et seq.) is amended— 

20 (1) in the heading by striking ‘‘RENEWABLE

21 FUEL CAPITAL INVESTMENT’’ and inserting ‘‘RE22 NEWABLE ENERGY CAPITAL INVESTMENT’’; 

23 (2) in the heading of paragraph (4) of section 

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1 VESTMENT’’ and inserting ‘‘RENEWABLE ENERGY

2 CAPITAL INVESTMENT’’; 

3 (3) in the heading of section 384 by striking 

4 ‘‘RENEWABLE FUEL CAPITAL INVESTMENT’’ and 

5 inserting ‘‘RENEWABLE ENERGY CAPITAL IN6 VESTMENT’’; and 

7 (4) by striking ‘‘Renewable Fuel Capital Invest8 ment’’ each place it appears and inserting ‘‘Renew9 able Energy Capital Investment’’. 

10 SEC. 522. RENEWABLE ENERGY CAPITAL INVESTMENT PRO11 GRAM MADE PERMANENT. 

12 Part C of title III of the Small Business Investment 

13 Act of 1958 (15 U.S.C. 690 et seq.), as amended by this 

14 Act, is further amended— 

15 (1) in the heading by striking ‘‘PILOT’’; and 

16 (2) by striking section 398. 

17 SEC. 523. EXPANDED ELIGIBILITY FOR SMALL BUSINESSES. 

18 Part C of title III of the Small Business Investment 

19 Act of 1958 (15 U.S.C. 690 et seq.), as amended by this 

20 Act, is further amended by striking ‘‘smaller enterprises’’ 

21 each place it appears and inserting ‘‘small business con22 cerns’’. 

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1 SEC. 524. EXPANDED USES FOR OPERATIONAL ASSISTANCE 

2 IN MANUFACTURING AND SMALL BUSI3 NESSES. 

4 Section 381(1) of the Small Business Investment Act 

5 of 1958 (15 U.S.C. 690(1)) is amended by inserting after 

6 ‘‘business development’’ the following: ‘‘, assistance that 

7 assists a small business concern to reduce energy con8 sumption, or assistance that assists a small business con9 cern engaged primarily in manufacturing with retooling, 

10 updating, or replacing machinery or equipment’’. 

11 SEC. 525. EXPANSION OF RENEWABLE ENERGY CAPITAL IN12 VESTMENT PROGRAM. 

13 (a) ADMINISTRATION PARTICIPATION REQUIRED.— 

14 Section 383 of the Small Business Investment Act of 1958 

15 (15 U.S.C. 690b) is amended by striking ‘‘under which 

16 the Administrator may’’ and inserting ‘‘under which the 

17 Administrator shall’’. 

18 (b) REPORT TO CONGRESS.—Not later than 1 year 

19 after the date of the enactment of this Act, the Adminis20 trator of the Small Business Administration shall submit 

21 to Congress a report describing any expansion of the Re22 newable Energy Capital Investment Program as a result 

23 of this section. 

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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 ‘‘(3) The term ‘qualified eligible professional’ 

16 means an eligible professional whose office can be 

17 classified as a small business concern by the Admin18 istrator for purposes of this Act under size stand19 ards established under section 3 of this Act. 

20 ‘‘(4) The term ‘qualified medical 

21 transcriptionist’ means a specialist in medical lan22 guage and the healthcare documentation process 

23 who interprets and transcribes dictation by physi24 cians and other healthcare professionals to ensure 

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1 accurate, complete, and consistent documentation of 

2 healthcare encounters. 

3 ‘‘(b) LOAN GUARANTEES FOR QUALIFIED ELIGIBLE

4 PROFESSIONALS.— 

5 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

6 the Administrator may guarantee up to 90 percent 

7 of the amount of a loan made to a qualified eligible 

8 professional to be used for the acquisition of health 

9 information technology for use in such eligible pro10 fessional’s medical practice and for the costs associ11 ated with the installation of such technology. Except 

12 as otherwise provided in this section, the terms and 

13 conditions that apply to loans made under section 

14 7(a) of this Act shall apply to loan guarantees made 

15 under this section. 

16 ‘‘(2) LIMITATIONS ON GUARANTEE AMOUNTS.— 

17 The maximum amount of loan principal guaranteed 

18 under this subsection may not exceed— 

19 ‘‘(A) $350,000 with respect to any single 

20 qualified eligible professional; and 

21 ‘‘(B) $2,000,000 with respect to a single 

22 group of affiliated qualified eligible profes23 sionals. 

24 ‘‘(c) FEES.—(1) The Administrator may impose a 

25 guarantee fee on the borrower for the purpose of reducing 

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1 the cost (as defined in section 502(5) of the Federal Credit 

2 Reform Act of 1990) of the guarantee to zero in an 

3 amount not to exceed 2 percent of the total guaranteed 

4 portion of any loan guaranteed under this section. The Ad5 ministrator may also impose annual servicing fees on lend6 ers not to exceed 0.5 percent of the outstanding balance 

7 of the guarantees on lenders’ books. 

8 ‘‘(2) No service fees, processing fees, origination fees, 

9 application fees, points, brokerage fees, bonus points, or 

10 other fees may be charged to a loan applicant or recipient 

11 by a lender in the case of a loan guaranteed under this 

12 section. 

13 ‘‘(d) DEFERRAL PERIOD.—Loans guaranteed under 

14 this section shall carry a deferral period of not less than 

15 1 year and not more than 3 years. The Administrator shall 

16 have the authority to subsidize interest during the deferral 

17 period. 

18 ‘‘(e) EFFECTIVE DATE.—No loan may be guaranteed 

19 under this section until the meaningful EHR use require20 ments have been determined by the Secretary of Health 

21 and Human Services. 

22 ‘‘(f) SUNSET.—No loan may be guaranteed under 

23 this section after the date that is 5 years after meaningful 

24 EHR use requirements have been determined by the Sec25 retary of Health and Human Services. 

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1 ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There 

2 are authorized to be appropriated such sums as are nec3 essary for the cost (as defined in section 502(5) of the 

4 Federal Credit Reform Act of 1990) of guaranteeing 

5 $10,000,000,000 in loans under this section. The Admin6 istrator shall determine such program cost separately and 

7 distinctly from other programs operated by the Adminis8 trator.’’. 

9 TITLE VII—SMALL BUSINESS 

10 EARLY-STAGE INVESTMENT 

11 PROGRAM 

12 SEC. 701. SMALL BUSINESS EARLY-STAGE INVESTMENT 

13 PROGRAM. 

14 Title III of the Small Business Investment Act of 

15 1958 (15 U.S.C. 681 et seq.) is amended by adding at 

16 the end the following: 

17 ‘‘PART D—SMALL BUSINESS EARLY-STAGE 

18 INVESTMENT PROGRAM 

19 ‘‘SEC. 399A. ESTABLISHMENT OF PROGRAM. 

20 ‘‘The Administrator shall establish and carry out an 

21 early-stage investment program (hereinafter referred to in 

22 this part as the ‘program’) to provide equity investment 

23 financing to support early-stage small businesses in tar24 geted industries in accordance with this part. 

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1 ‘‘SEC. 399B. ADMINISTRATION OF PROGRAM. 

2 ‘‘The program shall be administered by the Adminis3 trator acting through the Associate Administrator de4 scribed under section 201. 

5 ‘‘SEC. 399C. APPLICATIONS. 

6 ‘‘(a) IN GENERAL.—Any incorporated body, limited 

7 liability company, or limited partnership organized and 

8 chartered or otherwise existing under Federal or State law 

9 for the purpose of performing the functions and con10 ducting the activities contemplated under the program and 

11 any small business investment company may submit to the 

12 Administrator an application to participate in the pro13 gram. 

14 ‘‘(b) REQUIREMENTS FOR APPLICATION.—An appli15 cation to participate in the program shall include the fol16 lowing: 

17 ‘‘(1) A business plan describing how the appli18 cant intends to make successful venture capital in19 vestments in early-stage small businesses in targeted 

20 industries. 

21 ‘‘(2) Information regarding the relevant venture 

22 capital investment qualifications and backgrounds of 

23 the individuals responsible for the management of 

24 the applicant. 

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1 ‘‘(3) A description of the extent to which the 

2 applicant meets the selection criteria under section 

3 399D. 

4 ‘‘(c) APPLICATIONS FROM SMALL BUSINESS INVEST5 MENT COMPANIES.—The Administrator shall establish an 

6 abbreviated application process for small business invest7 ment companies that have received a license under section 

8 301 and that are applying to participate in the program. 

9 Such abbreviated process shall incorporate a presumption 

10 that such small business investment companies satisfac11 torily meet the selection criteria under paragraphs (3) and 

12 (5) of section 399D(b). 

13 ‘‘SEC. 399D. SELECTION OF PARTICIPATING INVESTMENT 

14 COMPANIES. 

15 ‘‘(a) IN GENERAL.—Not later than 90 days after the 

16 date on which the Administrator receives an application 

17 from an applicant under section 399C, the Administrator 

18 shall make a final determination to approve or disapprove 

19 such applicant to participate in the program and shall 

20 transmit such determination to the applicant in writing. 

21 ‘‘(b) SELECTION CRITERIA.—In making a determina22 tion under subsection (a), the Administrator shall consider 

23 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 

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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 ‘‘(2) PARTICIPATING INVESTMENT COMPANY.— 

8 The term ‘participating investment company’ means 

9 an applicant approved under section 399D to par10 ticipate in the program. 

11 ‘‘(3) SMALL BUSINESS CONCERN.—The term 

12 ‘small business concern’ has the same meaning given 

13 such term under section 3(a) of the Small Business 

14 Act (15 U.S.C. 632(a)). 

15 ‘‘SEC. 399L. AUTHORIZATION OF APPROPRIATIONS. 

16 ‘‘There is authorized to be appropriated to carry out 

17 the program $200,000,000 for the first full fiscal year be18 ginning after the date of the enactment of this part.’’. 

19 TITLE VIII—SBA DISASTER 

20 PROGRAM REFORM 

21 SEC. 801. REVISED COLLATERAL REQUIREMENTS. 

22 Section 7 of the Small Business Act (15 U.S.C. 636) 

23 is amended— 

24 (1) by striking ‘‘(e) [RESERVED].’’ and ‘‘(f) 

25 [RESERVED].’’; and 

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1 (2) in subsection (f), as added by section 

2 12068(a)(2) of the Small Business Disaster Re3 sponse and Loan Improvements Act of 2008 (sub4 title B of title XII of the Food, Conservation, and 

5 Energy Act of 2008; Public Law 110–246), by add6 ing at the end the following: 

7 ‘‘(2) REVISED COLLATERAL REQUIREMENTS.— 

8 In making a loan with respect to a business under 

9 subsection (b), if the total approved amount of such 

10 loan is less than or equal to $250,000, the Adminis11 trator may not require the borrower to use the bor12 rower’s home as collateral.’’. 

13 SEC. 802. INCREASED LIMITS. 

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

15 636(b)) is amended— 

16 (1) in paragraph (3)(E) by striking 

17 ‘‘$1,500,000’’ each place it appears and inserting 

18 ‘‘$3,000,000’’; and 

19 (2) in paragraph (8)(A) by striking 

20 ‘‘$2,000,000’’ and inserting ‘‘$3,000,000’’. 

21 SEC. 803. REVISED REPAYMENT TERMS. 

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

23 636(f)) is amended by adding at the end the following: 

24 ‘‘(3) REVISED REPAYMENT TERMS.—In making 

25 loans under subsection (b), the Administrator— 

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1 ‘‘(A) may not require repayment to begin 

2 until the date that is 12 months after the date 

3 on which the final disbursement of approved 

4 amounts is made; and 

5 ‘‘(B) shall calculate the amount of repay6 ment based solely on the amounts disbursed.’’. 

7 SEC. 804. REVISED DISBURSEMENT PROCESS. 

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

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

10 adding at the end the following: 

11 ‘‘(4) REVISED DISBURSEMENT PROCESS.—In 

12 making a loan under subsection (b), the Adminis13 trator shall disburse loan amounts in accordance 

14 with the following: 

15 ‘‘(A) If the total amount approved with re16 spect to such loan is less than or equal to 

17 $150,000— 

18 ‘‘(i) the first disbursement with re19 spect to such loan shall consist of 40 per20 cent of the total loan amount, or a lesser 

21 percentage of the total loan amount if the 

22 Administrator and the borrower agree on 

23 such a lesser percentage; 

24 ‘‘(ii) the second disbursement shall 

25 consist of 50 percent of the loan amounts 

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1 that remain after the first disbursement, 

2 and shall be made when the borrower has 

3 produced satisfactory receipts to dem4 onstrate the proper use of 50 percent of 

5 the first disbursement; and 

6 ‘‘(iii) the third disbursement shall 

7 consist of the loan amounts that remain 

8 after the preceding disbursements, and 

9 shall be made when the borrower has pro10 duced satisfactory receipts to demonstrate 

11 the proper use of the first disbursement 

12 and 50 percent of the second disburse13 ment. 

14 ‘‘(B) If the total amount approved with re15 spect to such loan is more than $150,000 but 

16 less than or equal to $500,000— 

17 ‘‘(i) the first disbursement with re18 spect to such loan shall consist of 20 per19 cent of the total loan amount, or a lesser 

20 percentage of the total loan amount if the 

21 Administrator and the borrower agree on 

22 such a lesser percentage; 

23 ‘‘(ii) the second disbursement shall 

24 consist of 30 percent of the loan amounts 

25 that remain after the first disbursement, 

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1 and shall be made when the borrower has 

2 produced satisfactory receipts to dem3 onstrate the proper use of 50 percent of 

4 the first disbursement; 

5 ‘‘(iii) the third disbursement shall 

6 consist of 25 percent of the loan amounts 

7 that remain after the first and second dis8 bursements, and shall be made when the 

9 borrower has produced satisfactory receipts 

10 to demonstrate the proper use of the first 

11 disbursement and 50 percent of the second 

12 disbursement; and 

13 ‘‘(iv) the fourth disbursement shall 

14 consist of the loan amounts that remain 

15 after the preceding disbursements, and 

16 shall be made when the borrower has pro17 duced satisfactory receipts to demonstrate 

18 the proper use of the first and second dis19 bursements and 50 percent of the third 

20 disbursement. 

21 ‘‘(C) If the total amount approved with re22 spect to such loan is more than $500,000— 

23 ‘‘(i) the first disbursement with re24 spect to such loan shall consist of at least 

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1 ministrator and the borrower agree on 

2 such a lesser amount; and 

3 ‘‘(ii) the number of disbursements 

4 after the first, and the amount of each 

5 such disbursement, shall be in the discre6 tion of the Administrator, but the amount 

7 of each such disbursement shall be at least 

8 $100,000.’’. 

9 SEC. 805. GRANT PROGRAM. 

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

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

12 inserting after paragraph (9) the following: 

13 ‘‘(10) GRANTS TO DISASTER-AFFECTED SMALL

14 BUSINESSES.— 

15 ‘‘(A) IN GENERAL.—If the Administrator 

16 declares eligibility for additional disaster assist17 ance under paragraph (9), the Administrator 

18 may make a grant, in an amount not exceeding 

19 $100,000, to a small business concern that— 

20 ‘‘(i) is located in an area affected by 

21 the applicable major disaster; 

22 ‘‘(ii) submits to the Administrator a 

23 certification by the owner of the concern 

24 that such owner intends to reestablish the 

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1 concern in the same county in which the 

2 concern was originally located; 

3 ‘‘(iii) has applied for, and was rejected 

4 for, a conventional disaster assistance loan 

5 under this subsection; and 

6 ‘‘(iv) was in existence for at least 2 

7 years before the date on which the applica8 ble disaster declaration was made. 

9 ‘‘(B) PRIORITY.—In making grants under 

10 this paragraph, the Administrator shall give 

11 priority to a small business concern that the 

12 Administrator determines is economically viable 

13 but unable to meet short-term financial obliga14 tions. 

15 ‘‘(C) PROGRAM LEVEL AND AUTHORIZA16 TION OF APPROPRIATIONS.— 

17 ‘‘(i) PROGRAM LEVEL.—The Adminis18 trator is authorized to make $100,000,000 

19 in grants under this paragraph for each of 

20 fiscal years 2010 and 2011. 

21 ‘‘(ii) AUTHORIZATION OF APPROPRIA22 TIONS.—There are authorized to be appro23 priated to the Administrator such sums as 

24 may be necessary to carry out this para25 graph.’’. 

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1 SEC. 806. REGIONAL DISASTER WORKING GROUPS. 

2 Section 40 of the Small Business Act (15 U.S.C. 

3 657l) is amended— 

4 (1) in subsection (a), in the matter preceding 

5 paragraph (1), by striking ‘‘or’’ and inserting ‘‘and’’; 

6 (2) by redesignating subsection (d) as sub7 section (e); and 

8 (3) by inserting after subsection (c) the fol9 lowing: 

10 ‘‘(d) REGIONAL DISASTER WORKING GROUPS.—In 

11 carrying out subsection (a), the Administrator, acting 

12 through the regional administrators of the regional offices 

13 of the Administration, shall develop a disaster prepared14 ness and response plan for each region of the Administra15 tion. Each such plan shall be developed in cooperation 

16 with Federal, State, and local emergency response authori17 ties and representatives of businesses located in the region 

18 to which such plan applies. Each such plan shall identify 

19 and include a plan relating to the 3 disasters, natural or 

20 manmade, most likely to occur in the region to which such 

21 plan applies.’’. 

22 SEC. 807. OUTREACH GRANTS FOR LOAN APPLICANT AS23 SISTANCE. 

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

25 636(b)), as amended by this Act, is further amended by 

26 inserting after paragraph (10) the following: 

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1 ‘‘(11) OUTREACH GRANTS FOR LOAN APPLI2 CANT ASSISTANCE.— 

3 ‘‘(A) IN GENERAL.—From amounts made 

4 available for administrative expenses relating to 

5 activities under this subsection, the Adminis6 trator is authorized to make grants to the fol7 lowing: 

8 ‘‘(i) A women’s business center in an 

9 area affected by a disaster. 

10 ‘‘(ii) A small business development 

11 center in an area affected by a disaster. 

12 ‘‘(iii) A Veteran Business Outreach 

13 Center in an area affected by a disaster. 

14 ‘‘(iv) A chamber of commerce in an 

15 area affected by a disaster. 

16 ‘‘(B) USE OF GRANT.—An entity specified 

17 under subparagraph (A) shall use a grant re18 ceived under this paragraph to provide applica19 tion preparation assistance to applicants for a 

20 loan under this subsection. 

21 ‘‘(C) PROGRAM LEVEL.—The Adminis22 trator is authorized to make $50,000,000 in 

23 grants under this paragraph for each of fiscal 

24 years 2010 and 2011.’’. 

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1 SEC. 808. 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. 

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Union Calendar No. 181 

111TH CONGRESS 

1ST SESSION H. R. 3854 

[Report No. 111–315] 

A BILL 

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 proOCTOBER 26, 2009 

Committed to the Committee of the Whole House on the 

State of the Union and ordered to be printed 

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