367 
sional licenses or will contract with another entity when the services of 
such an individual are necessary; 
(5) with respect to binding commitments to be made to the applicant 
under this chapter, an estimate of the ratio of cash to in-kind contribu-
tions; 
(6) a description of whether and to what extent the applicant meets 
the criteria under subsection (b)(2) and the objectives of the program; 
(7) information regarding the management and financial strength of 
any parent firm, affiliated firm, or any other firm essential to the suc-
cess of the applicant’s business plan; and 
(8) such other information as the Administrator may require. 
(b) CONDITIONAL APPROVAL.— 
(1) IN GENERAL.—From among eligible companies submitting appli-
cations under subsection (a), the Administrator shall conditionally ap-
prove applicants to operate as renewable fuel capital investment compa-
nies. 
(2) SELECTION
CRITERIA.—In conditionally approving companies 
under paragraph (1), the Administrator shall consider— 
(A) the likelihood that an applicant will meet the goal of its 
business plan; 
(B) the experience and background of an applicant’s manage-
ment team; 
(C) the need for venture capital investments in the geographic 
areas in which an applicant intends to invest; 
(D) the extent to which an applicant will concentrate its activi-
ties on serving the geographic areas in which the applicant intends 
to invest; 
(E) the likelihood that an applicant will be able to satisfy the 
conditions under paragraph (4); 
(F) the extent to which the activities proposed by the applicant 
will expand economic opportunities in the geographic areas in 
which the company intends to invest; 
(G) the strength of the applicant’s proposal to provide oper-
ational assistance as the proposal relates to the ability of the ap-
plicant to meet applicable cash requirements and properly use in- 
kind contributions, including the use of resources for the services 
of licensed professionals, when necessary, whether provided by em-
ployees or by contractors; and 
(H) any other factor that the Administrator considers appro-
priate. 
VerDate Nov 24 2008 
00:04 Apr 23, 2009
Jkt 079200
PO 00000
Frm 00367
Fmt 6652
Sfmt 6221
E:\BILLS\H1983.IH
H1983
smartinez on PROD1PC63 with BILLS
368 
(3) NATIONWIDE DISTRIBUTION.—From among eligible companies 
submitting applications under subsection (a), the Administrator shall 
consider the selection criteria under paragraph (2) and shall, to the 
maximum extent practicable, approve at least one applicant from each 
geographic region of the Administration. 
(4) REQUIREMENTS FOR FINAL APPROVAL.— 
(A) IN GENERAL.—On granting conditional approval of an ap-
plicant, the Administrator shall grant each conditionally approved 
applicant 2 years to satisfy the requirements stated in this para-
graph. 
(B) CAPITAL REQUIREMENT.—A conditionally approved appli-
cant shall raise not less than $3,000,000 of private capital or 
binding capital commitments from one or more investors (other 
than Federal agencies) that meet criteria established by the Ad-
ministrator. 
(C) NONADMINISTRATION RESOURCES FOR OPERATIONAL AS-
SISTANCE.— 
(i) IN
GENERAL.—To provide operational assistance to 
smaller enterprises expected to be financed by the applicant, 
a conditionally approved applicant shall have binding commit-
ments (for contribution in cash or in-kind)— 
(I) from any source other than the Administrator that 
meet criteria established by the Administrator; and 
(II) payable or available over a multiyear period that 
the Administrator considers appropriate (not to exceed 
10 years). 
(ii) EXCEPTION.—On a showing of special circumstances 
and good cause, the Administrator may consider an applicant 
to satisfy the requirements of clause (i) if the applicant has— 
(I) a viable plan that reasonably projects the capacity 
of the applicant to raise the amount (in cash or in-kind) 
required under clause (i); and 
(II) binding commitments in an amount that is equal 
to not less than 20 percent of the amount required under 
clause (i). 
(iii) LIMITATION.—To comply with the requirements of 
clauses (i) and (ii), the amount of in-kind contributions made 
by a conditionally approved applicant shall not exceed 50 per-
cent of the total contributions made by the conditionally ap-
proved applicant. 
VerDate Nov 24 2008 
00:04 Apr 23, 2009
Jkt 079200
PO 00000
Frm 00368
Fmt 6652
Sfmt 6221
E:\BILLS\H1983.IH
H1983
smartinez on PROD1PC63 with BILLS
369 
(D) PARTICIPATION AGREEMENT.—A conditionally approved ap-
plicant shall enter into a participation agreement with the Admin-
istrator that— 
(i) details the conditionally approved applicant’s operating 
plan and investment criteria; and 
(ii) requires the conditionally approved applicant, after 
final approval under subsection (c), to make investments in 
smaller enterprises primarily engaged in researching, manu-
facturing, developing, producing, or bringing to market goods, 
products, or services that generate or support the production 
of renewable energy. 
(c) FINAL APPROVAL.—The Administrator shall, with respect to each ap-
plicant conditionally approved under subsection (c)— 
(1) grant final approval to the conditionally approved applicant to 
operate as a renewable fuel capital investment company if the condi-
tionally approved applicant satisfies the requirements of paragraph (4) 
of subsection (b) on or before the expiration of the time period de-
scribed in that subsection; or 
(2) if the conditionally approved applicant fails to satisfy those re-
quirements on or before the expiration of that time period, revoke the 
conditional approval granted under subsection (b). 
§ 30704. Guarantee of renewable fuel capital investment 
company debentures 
(a) IN GENERAL.—To enable a renewable fuel capital investment com-
pany to make venture capital investments in smaller enterprises engaged in 
the research, development, manufacture, production, and bringing to market 
of goods, products, or services that generate or support the production of 
renewable energy, the Administrator may guarantee the timely payment of 
principal and interest, as scheduled, on debentures issued by the renewable 
fuel capital investment company. 
(b) TERMS AND CONDITIONS.—The Administrator may make a guarantee 
under this section on such terms and conditions as the Administrator con-
siders appropriate, except that— 
(1) the term of any debenture guaranteed under this section shall 
not exceed 15 years; and 
(2) a debenture guaranteed under this section— 
(A) shall carry no front-end or annual fees; 
(B) shall be issued at a discount; 
(C) shall require no interest payments during the 5-year period 
beginning on the date on which the debenture is issued; 
VerDate Nov 24 2008 
00:04 Apr 23, 2009
Jkt 079200
PO 00000
Frm 00369
Fmt 6652
Sfmt 6221
E:\BILLS\H1983.IH
H1983
smartinez on PROD1PC63 with BILLS
370 
(D) shall be prepayable without penalty after the end of the 
one-year period beginning on the date on which the debenture is 
issued; and 
(E) shall require semiannual interest payments after the period 
described in subparagraph (C). 
(c) FULL FAITH AND CREDIT OF THE UNITED STATES.—The full faith 
and credit of the United States is pledged to pay all amounts that may be 
required to be paid under any guarantee under this chapter. 
(d) MAXIMUM AMOUNT OF GUARANTEE.— 
(1) IN GENERAL.—The Administrator may guarantee the debentures 
issued by a renewable fuel capital investment company only to the ex-
tent that the total face amount of outstanding guaranteed debentures 
of the renewable fuel capital investment company does not exceed 150 
percent of the private capital of the renewable fuel capital investment 
company, as determined by the Administrator. 
(2) TREATMENT OF CERTAIN FEDERAL FUNDS.—For purposes of 
paragraph (1), private capital may include capital that is considered to 
be Federal funds (within the meaning of section 30101(15)(C)(iii) of 
this title) if the capital is contributed by an investor other than a Fed-
eral agency. 
§ 30705. Trust certificates 
(a) ISSUANCE.— 
(1) IN GENERAL.—The Administrator, acting directly or through an 
agent, may issue trust certificates representing ownership of all or a 
fractional part of debentures issued by a renewable fuel capital invest-
ment company and guaranteed by the Administrator under section 
30704 of this title. 
(2) TRUST OR POOL.—Trust certificates issued under paragraph (1) 
shall be based on and backed by a trust or pool approved by the Ad-
ministrator and composed solely of guaranteed debentures. 
(b) GUARANTEE.— 
(1) IN GENERAL.—The Administrator may, under such terms and 
conditions as the Administrator considers appropriate, guarantee the 
timely payment of the principal of and interest on trust certificates 
issued by the Administrator or an agent of the Administrator under 
this section. 
(2) LIMITATION.—A guarantee under this subsection shall be limited 
to the extent of principal and interest on the guaranteed debentures 
that compose the trust or pool. 
(3) PREPAYMENT OR DEFAULT.— 
VerDate Nov 24 2008 
00:04 Apr 23, 2009
Jkt 079200
PO 00000
Frm 00370
Fmt 6652
Sfmt 6221
E:\BILLS\H1983.IH
H1983
smartinez on PROD1PC63 with BILLS
371 
(A) IN GENERAL.—In the event that a debenture in a trust or 
pool is prepaid, or in the event of default of such a debenture, the 
guarantee of timely payment of principal and interest on the trust 
certificates shall be reduced in proportion to the amount of prin-
cipal and interest that the prepaid debenture represents in the 
trust or pool. 
(B) INTEREST PERIOD.—Interest on a prepaid or defaulted de-
benture shall accrue and be guaranteed by the Administrator only 
through the date of payment of the guarantee. 
(C) CALL.—At any time during the term of a trust certificate, 
a trust certificate may be called for redemption due to prepayment 
or default of all debentures that compose the trust or pool. 
(c) FULL FAITH AND CREDIT OF THE UNITED STATES.—The full faith 
and credit of the United States is pledged to pay all amounts that may be 
required to be paid under any guarantee of a trust certificate issued by the 
Administrator or an agent of the Administrator under this section. 
(d) FEES.—The Administrator shall not collect a fee for any guarantee 
of a trust certificate under this section, but an agent of the Administrator 
may collect a fee approved by the Administrator for the functions described 
in subsection (f)(2). 
(e) SUBROGATION AND OWNERSHIP RIGHTS.— 
(1) SUBROGATION.—If the Administrator pays a claim under a guar-
antee issued under this section, the Administrator shall be subrogated 
fully to the rights satisfied by the payment. 
(2) OWNERSHIP RIGHTS.—No Federal, State, or local law shall pre-
clude or limit the exercise by the Administrator of the ownership rights 
of the Administrator in the debentures residing in a trust or pool 
against which trust certificates are issued under this section. 
(f) MANAGEMENT AND ADMINISTRATION.— 
(1) REGISTRATION.—The Administrator may provide for a central 
registration of all trust certificates issued under this section. 
(2) CONTRACTING OF FUNCTIONS.— 
(A) IN GENERAL.—The Administrator may contract with one or 
more agents to carry out on behalf of the Administrator the pool-
ing and the central registration functions provided for in this sec-
tion including, notwithstanding any other provision of law— 
(i) maintenance, on behalf of and under the direction of the 
Administrator, of such commercial bank accounts or invest-
ments in obligations of the United States as may be necessary 
to facilitate the creation of trusts or pools backed by deben-
tures guaranteed under section 30704 of this title; and 
VerDate Nov 24 2008 
00:04 Apr 23, 2009
Jkt 079200
PO 00000
Frm 00371
Fmt 6652
Sfmt 6221
E:\BILLS\H1983.IH
H1983
smartinez on PROD1PC63 with BILLS
372 
(ii) the issuance of trust certificates to facilitate the cre-
ation of such trusts or pools. 
(B) FIDELITY BOND OR INSURANCE REQUIREMENT.—An agent 
performing functions on behalf of the Administrator under this 
paragraph shall provide a fidelity bond or insurance in such 
amounts as the Administrator determines to be necessary to fully 
protect the interests of the United States. 
(3) REGULATION OF BROKERS AND DEALERS.—The Administrator 
may regulate brokers and dealers in trust certificates issued under this 
section. 
(4) FORM OF REGISTRATION.—This subsection does not preclude the 
use of a book-entry or other electronic form of registration for trust 
certificates issued under this section. 
§ 30706. Fees 
(a) IN GENERAL.—Except as provided in section 30705(d) of this title, 
the Administrator may charge such fees as the Administrator considers ap-
propriate with respect to any guarantee or grant issued under this chapter, 
in an amount established annually by the Administrator, as necessary to re-
duce to zero the cost (as defined in section 502 of the Federal Credit Re-
form Act of 1990 (2 U.S.C. 661a)) to the Administrator of purchasing and 
guaranteeing debentures under this chapter, which amounts shall be paid 
to and retained by the Administrator. 
(b) OFFSET.—The Administrator may, as provided by subsection (c), off-
set fees charged and collected under subsection (a). 
(c) FEE CONTRIBUTION.— 
(1) IN GENERAL.—To the extent that amounts are made available 
to the Administrator for the purpose of fee contributions, the Adminis-
trator shall contribute to fees paid by the renewable fuel capital invest-
ment companies under subsection (a). 
(2) ANNUAL ADJUSTMENT.—Each fee contribution under paragraph 
(1) shall be effective for one fiscal year and shall be adjusted as nec-
essary for each fiscal year thereafter to ensure that amounts under 
paragraph (1) are fully used. The fee contribution for a fiscal year 
shall be based on the outstanding commitments made and the guaran-
tees and grants that the Administrator projects will be made during 
the fiscal year, given the program level authorized by law for that fiscal 
year and any other factors that the Administrator considers appro-
priate. 
§ 30707. Operational assistance grants 
(a) IN GENERAL.— 
VerDate Nov 24 2008 
00:04 Apr 23, 2009
Jkt 079200
PO 00000
Frm 00372
Fmt 6652
Sfmt 6221
E:\BILLS\H1983.IH
H1983
smartinez on PROD1PC63 with BILLS
373 
(1) AUTHORITY.—The Administrator may make a grant to a renew-
able fuel capital investment company to enable the renewable fuel cap-
ital investment company to provide operational assistance to smaller 
enterprises financed, or expected to be financed, by the renewable fuel 
capital investment company. 
(2) TERMS.—A grant under this subsection shall be made over a 
multiyear period not to exceed 10 years, under such other terms as the 
Administrator may require. 
(3) GRANT AMOUNT.—The amount of a grant made under this sub-
section to a renewable fuel capital investment company shall be equal 
to the lesser of— 
(A) 10 percent of the resources (in cash or in kind) raised by 
the renewable fuel capital investment company under section 
30703(b)(4)(B) of this title; or 
(B) $1,000,000. 
(4) PRO RATA REDUCTIONS.—If the amount made available to carry 
out this section is insufficient for the Administrator to provide grants 
in the amounts provided for in paragraph (3), the Administrator shall 
make pro rata reductions in the amounts otherwise payable to each re-
newable fuel capital investment company under that paragraph. 
(5) GRANTS TO CONDITIONALLY APPROVED COMPANIES.— 
(A) IN GENERAL.—Subject to subparagraphs (B) and (C), on 
the request of a renewable fuel capital investment company condi-
tionally approved under section 30703(b) of this title, the Admin-
istrator shall make a grant to the renewable fuel capital invest-
ment company under this subsection. 
(B) REPAYMENT BY RENEWABLE FUEL CAPITAL INVESTMENT 
COMPANIES NOT FINALLY APPROVED.—If a renewable fuel capital 
investment company receives a grant under this paragraph and 
does not enter into a participation agreement for final approval, 
the renewable fuel capital investment company shall, subject to 
controlling Federal law, repay the amount of the grant to the Ad-
ministrator. 
(C) DEDUCTION OF GRANT TO APPROVED COMPANY.—If a re-
newable fuel capital investment company receives a grant under 
this paragraph and receives final approval under section 30703(c) 
of this title, the Administrator shall deduct the amount of the 
grant from the total grant amount that the renewable fuel capital 
investment company receives for operational assistance. 
VerDate Nov 24 2008 
00:04 Apr 23, 2009
Jkt 079200
PO 00000
Frm 00373
Fmt 6652
Sfmt 6221
E:\BILLS\H1983.IH
H1983
smartinez on PROD1PC63 with BILLS
374 
(D) AMOUNT OF GRANT.—No renewable fuel capital investment 
company may receive a grant of more than $100,000 under this 
paragraph. 
(b) SUPPLEMENTAL GRANTS.— 
(1) IN GENERAL.—The Administrator may make a supplemental 
grant to a renewable fuel capital investment company under such terms 
as the Administrator may require, to provide additional operational as-
sistance to smaller enterprises financed, or expected to be financed, by 
the renewable fuel capital investment company. 
(2) MATCHING REQUIREMENT.—The Administrator may require, as 
a condition of a supplemental grant under this subsection, that the re-
newable fuel capital investment company receiving the grant provide 
from resources (in cash or in kind), other than those provided by the 
Administrator, a matching contribution equal to the amount of the sup-
plemental grant. 
(c) LIMITATION.—None of the assistance made available under this sec-
tion may be used for any overhead or general and administrative expense 
of a renewable fuel capital investment company. 
§ 30708. Bank participation 
(a) IN GENERAL.—Except as provided in subsection (b), a national bank, 
a member bank of the Federal Reserve System, and (to the extent permitted 
under applicable State law) an insured bank that is not a member of the 
Federal Reserve System may invest in any renewable fuel capital investment 
company or in any entity established to invest solely in renewable fuel cap-
ital investment companies. 
(b) LIMITATION.—A bank described in subsection (a) shall not make in-
vestments described in that subsection in a total amount that is greater 
than 5 percent of the capital and surplus of the bank. 
§ 30709. Reporting requirement 
A renewable fuel capital investment company that participates in the pro-
gram shall provide the Administrator such information as the Administrator 
may require, including— 
(1) information relating to the measurement criteria that the renew-
able fuel capital investment company proposed in its program applica-
tion; and 
(2) in each case in which the renewable fuel capital investment com-
pany makes, under this chapter, an investment in, or a loan or a grant 
to, a business that is not primarily engaged in the research, develop-
ment, manufacture, or bringing to market or renewable energy sources, 
a report on the nature, origin, and revenues of the business in which 
investments are made. 
VerDate Nov 24 2008 
00:04 Apr 23, 2009
Jkt 079200
PO 00000
Frm 00374
Fmt 6652
Sfmt 6221
E:\BILLS\H1983.IH
H1983
smartinez on PROD1PC63 with BILLS
375 
§ 30710. Regulations 
The Administrator may issue such regulations as the Administrator con-
siders necessary to carry out this chapter. 
§ 30711. Examinations 
(a) IN GENERAL.—A renewable fuel capital investment company that par-
ticipates in the program shall be subject to examinations made at the direc-
tion of the Investment Division of the Administration in accordance with 
this section and modeled after oversight developed for the small business in-
vestment company program. 
(b) ASSISTANCE OF PRIVATE SECTOR ENTITIES.—An examination under 
this section may be conducted with the assistance of a private sector entity 
that has both the qualifications and the expertise necessary to conduct such 
an examination. 
(c) COSTS.— 
(1) IN GENERAL.—The Administrator may assess the cost of an ex-
amination under this section (including compensation of an examiner) 
against the renewable fuel capital investment company examined. 
(2) PAYMENT.—A renewable fuel capital investment company 
against which the Administrator assesses costs under this paragraph 
shall pay the costs. 
(d) DEPOSIT OF AMOUNTS.—Amounts collected under this section shall 
be deposited in the account for salaries and expenses of the Administration. 
§ 30712. Conflicts of interest; unlawful acts and omissions; 
revocation and suspensions of licenses; cease and 
desist orders; injunctions and other orders 
(a) ACTIONS AND PROCEDURES UNDER OTHER PROVISIONS.—To the ex-
tent that the actions and procedures described in sections 30313, 30317, 
30319, and 30321(b) of this title are not inconsistent with the requirements 
of this chapter, the Administrator may take those actions under those proce-
dures in carrying out this chapter. 
(b) APPLICABILITY OF REQUIREMENTS UNDER OTHER PROVISIONS.—To 
the extent that the requirements described in sections 30313, 30317, 30319, 
and 30321(b) of this title are not inconsistent with the requirements of this 
chapter, an officer, director, employee, agent, or other participant in the 
management or conduct of the affairs of a renewable fuel capital investment 
company shall be subject to the requirements of sections 30313, 30317, 
30319, and 30321(b) of this title. 
§ 30713. Removal or suspension of directors or officers 
Using the procedures for removing or suspending a director or an officer 
of a licensee under section 30320 of this title (to the extent that those pro-
cedures are not inconsistent with the requirements of this chapter), the Ad-
VerDate Nov 24 2008 
00:04 Apr 23, 2009
Jkt 079200
PO 00000
Frm 00375
Fmt 6652
Sfmt 6221
E:\BILLS\H1983.IH
H1983
smartinez on PROD1PC63 with BILLS
376 
ministrator may remove or suspend a director or officer of a renewable fuel 
capital investment company. 
§ 30714. Termination 
The program shall terminate at the end of the second full fiscal year after 
the date on which the Administrator establishes the program. 
DIVISION C—SURETY BOND GUARANTEE 
PROGRAM 
CHAPTER 321—SURETY BOND GUARANTEE PROGRAM 
Sec. 
32101.
Definitions. 
32102.
Surety bond guarantees and indemnification agreements. 
32103.
Surety bond guarantee fund. 
§ 32101. Definitions 
In this chapter: 
(1) BID BOND.—The term ‘‘bid bond’’ means a bond conditioned on 
the bidder on a contract— 
(A) entering into the contract, if the bidder receives the award 
of the contract; and 
(B) furnishing the prescribed payment bond and performance 
bond. 
(2) BOND.—Except in paragraphs (1), (7), and (8), the term ‘‘bond’’ 
means— 
(A) a bid bond; 
(B) a payment bond; 
(C) a performance bond; and 
(D) a bond that is ancillary to a bid bond, payment bond, or 
performance bond. 
(3) GUARANTEE.—The term ‘‘guarantee’’ means a guarantee of a 
bond issued under section 32102(a) of this title. 
(4) INDEMNIFICATION
AGREEMENT.—The term ‘‘indemnification 
agreement’’ means an agreement entered into between the Adminis-
trator and a participating surety under section 32102(b) of this title. 
(5) OBLIGEE.—The term ‘‘obligee’’ means— 
(A) in the case of a bid bond, the person requesting bids for 
the performance of a contract; or 
(B) in the case of a payment bond or performance bond, the 
person that has contracted with a principal for the completion of 
the contract and to which the obligation of the surety runs in the 
event of a breach by the principal of a condition of a payment 
bond or performance bond. 
(6) PARTICIPATING SURETY.— 
VerDate Nov 24 2008 
00:04 Apr 23, 2009
Jkt 079200
PO 00000
Frm 00376
Fmt 6652
Sfmt 6221
E:\BILLS\H1983.IH
H1983
smartinez on PROD1PC63 with BILLS
378 
(B) under the terms of a performance bond, undertakes to incur 
the cost of fulfilling the terms of a contract if the principal 
breaches the conditions of the contract; 
(C) under the terms of a payment bond, undertakes to make 
payment to all persons supplying labor and material in the pros-
ecution of the work provided for in the contract if the principal 
fails to make prompt payment; or 
(D) is an agent, independent agent, underwriter, or any other 
person authorized to act on behalf of a person described in sub-
paragraph (A), (B), or (C). 
§ 32102. Surety bond guarantees and indemnification agree-
ments 
(a) GUARANTEE OF SURETY AGAINST LOSS FROM PRINCIPAL’S BREACH 
OF BOND.— 
(1) IN GENERAL.—The Administrator may, on such terms and con-
ditions as the Administrator may prescribe, guarantee and enter into 
commitments to guarantee a surety against loss resulting from a 
breach of the terms of a bond by a principal on any total work order 
or contract amount that at the time of bond execution does not exceed 
$2,000,000. 
(2) TERMS AND CONDITIONS.—The terms and conditions of guaran-
tees and commitments under paragraph (1) may vary from surety to 
surety on the basis of the Administrator’s experience with the par-
ticular surety. 
(3) ELIGIBILITY.—A guarantee of a bond shall not be issued under 
paragraph (1) unless— 
(A) the person that would be principal under the bond is a small 
business concern; 
(B) the bond is required for the person to bid on a contract or 
to serve as a prime contractor or subcontractor on a contract; 
(C) the person is not able to obtain the bond on reasonable 
terms and conditions without a guarantee under this section; and 
(D)(i) there is a reasonable expectation that the principal will 
perform the covenants and conditions of the contract with respect 
to which the bond is required; and 
(ii) the terms and conditions of the bond are reasonable in the 
light of the risks involved and the extent of the surety’s participa-
tion. 
(4) PREFERRED SURETY BOND GUARANTEE PROGRAM.— 
(A) IN GENERAL.—The Administrator may authorize a surety, 
without further approval by the Administrator, to issue, monitor, 
VerDate Nov 24 2008 
00:04 Apr 23, 2009
Jkt 079200
PO 00000
Frm 00378
Fmt 6652
Sfmt 6221
E:\BILLS\H1983.IH
H1983
smartinez on PROD1PC63 with BILLS
379 
and service bonds that are subject to a guarantee under paragraph 
(1). 
(B) ACTION BY THE ADMINISTRATOR.—The Administrator shall 
promptly act on an application from a surety to participate in the 
preferred surety bond guarantee program, in accordance with cri-
teria and procedures established in regulations under subsection 
(d). 
(C) REDUCTION OF ALLOTMENT; TERMINATION.—The Adminis-
trator may reduce the allotment of bond guarantee authority or 
terminate the participation of a preferred surety based on the rate 
of participation of the preferred surety during the 4 most recent 
fiscal year quarters compared with the median rate of participa-
tion by the other preferred sureties. 
(b) INDEMNIFICATION OF PARTICIPATING SURETY AGAINST LOSS FROM 
AVOIDING BREACH.— 
(1) IN GENERAL.—In connection with the issuance of a guarantee 
to a surety, the Administrator may enter into an indemnification agree-
ment with a participating surety to indemnify the participating surety 
against a loss sustained by the participating surety in avoiding or at-
tempting to avoid a breach of the terms of a bond guaranteed by the 
Administrator under subsection (a). 
(2) DETERMINATION.—Before making any payment under this sub-
section, the Administrator shall determine that a breach of the terms 
of the bond was imminent. 
(3) APPROVAL.—A participating surety shall obtain approval from 
the Administrator before making any payments under this subsection 
unless the participating surety is a preferred surety. 
(4) LIMITATION ON AMOUNT OF PAYMENT.— 
(A) IN GENERAL.—Subject to subparagraph (B), no payment by 
the Administrator under this subsection shall exceed 10 percent of 
the contract price unless the Administrator determines that a 
greater payment should be made as a result of a finding by the 
Administrator that the participating surety’s loss sustained in 
avoiding or attempting to avoid the breach was necessary and rea-
sonable. 
(B) MAXIMUM AMOUNT.—In no event shall the Administrator 
pay a participating surety under this subsection an amount ex-
ceeding the guaranteed share of the bond available to the partici-
pating surety under subsection (a). 
VerDate Nov 24 2008 
00:04 Apr 23, 2009
Jkt 079200
PO 00000
Frm 00379
Fmt 6652
Sfmt 6221
E:\BILLS\H1983.IH
H1983
smartinez on PROD1PC63 with BILLS
380 
(c) AMOUNT OF LIABILITY OF THE ADMINISTRATOR.—A guarantee or in-
demnification agreement shall obligate the Administrator to pay to the par-
ticipating surety— 
(1) in the case of a preferred surety, an amount not to exceed 70 
percent of the amount of the loss incurred and paid by the preferred 
surety; or 
(2) in the case of a participating surety other than a preferred sur-
ety— 
(A) an amount not to exceed 90 percent of the amount of the 
loss incurred and paid by the participating surety (but in no event 
may the Administrator make a duplicate payment under sub-
section (b) or any other provision of this section); or 
(B) the amount that is equal to 90 percent of the loss incurred 
and paid by the participating surety, if— 
(i) the total amount of the contract at the time of execution 
of the bond or bonds is $100,000 or less; or 
(ii) the bond was issued to a small business concern owned 
and controlled by socially and economically disadvantaged in-
dividuals or to a qualified HUBZone small business concern. 
(d) REGULATIONS.— 
(1) IN GENERAL.—The Administrator may prescribe regulations for 
participating sureties. 
(2) CONTENTS.—The regulations under paragraph (1) shall require 
a participating surety to meet standards established by the Adminis-
trator for underwriting, claim practices, and loss ratios. 
(e) REIMBURSEMENT OF SURETY.— 
(1) IN GENERAL.—Except as provided in paragraph (2), the Admin-
istrator shall reimburse a participating surety as provided in a guar-
antee or indemnification agreement. 
(2) NO LIABILITY.—The Administrator shall be relieved of all liabil-
ity under a guarantee or indemnification agreement if— 
(A) the participating surety obtained the guarantee or indem-
nification agreement, or applied for reimbursement, by fraud or 
material misrepresentation; 
(B) the total contract amount at the time of execution of the 
bond or bonds exceeds $2,000,000; 
(C) the participating surety has breached a material term or 
condition of the guarantee or indemnification agreement; or 
(D) the participating surety has substantially violated the regu-
lations prescribed under subsection (d). 
VerDate Nov 24 2008 
00:04 Apr 23, 2009
Jkt 079200
PO 00000
Frm 00380
Fmt 6652
Sfmt 6221
E:\BILLS\H1983.IH
H1983
smartinez on PROD1PC63 with BILLS
381 
(f) REIMBURSEMENT PROCEDURE.—The Administrator may, on such 
terms and conditions as the Administrator may prescribe, establish a proce-
dure for reimbursing a participating surety for the paid losses of the partici-
pating surety billed each month, based on prior monthly payments to the 
participating surety, with subsequent adjustments after such reimburse-
ment. 
(g) REPORTING BY PARTICIPATING SURETIES; AUDITS.— 
(1) REPORTING BY PARTICIPATING SURETIES.—A participating sur-
ety shall submit reports to the Administrator at such times and in such 
form as the Administrator may require. 
(2) AUDITS.— 
(A) IN GENERAL.—The Administrator may at all reasonable 
times audit, in the offices of a participating surety, all records rel-
evant to the Administration’s guarantee, commitments to guar-
antee, and indemnification agreements issued to or entered into 
with the participating surety under this section. 
(B) PREFERRED SURETY BOND GUARANTEE PROGRAM PARTICI-
PANTS.—A preferred surety shall be audited at least once every 
3 years by examiners selected and approved by the Administrator. 
(h) ADMINISTRATIVE PROVISIONS.—The Administrator shall— 
(1) administer the program on a prudent and economically justifiable 
basis; and 
(2) establish such fees for small business concerns and premiums for 
participating sureties as the Administrator considers reasonable and 
necessary, to be payable at such times and under such conditions as 
the Administrator may determine. 
§ 32103. Surety bond guarantee fund 
(a) IN GENERAL.—There is created in the Treasury a separate fund for 
guarantees, which shall be available to the Administrator without fiscal year 
limitation as a revolving fund for the purposes of the program. 
(b) DEPOSIT
OF AMOUNTS RECEIVED
BY
THE ADMINISTRATOR.—All 
amounts received by the Administrator (including any money, property, or 
assets derived by the Administrator from operations in connection with the 
program) shall be deposited in the fund. 
(c) USE OF FUND.—All expenses and payments, excluding administrative 
expenses, pursuant to operations of the Administrator under the program 
shall be paid from the fund. 
(d) APPROPRIATIONS.—Such sums as may be appropriated to the Fund 
to carry out the programs authorized by this chapter shall be without fiscal 
year limitation. 
VerDate Nov 24 2008 
00:04 Apr 23, 2009
Jkt 079200
PO 00000
Frm 00381
Fmt 6652
Sfmt 6221
E:\BILLS\H1983.IH
H1983
smartinez on PROD1PC63 with BILLS
382 
DIVISION D—CERTIFIED DEVELOPMENT 
COMPANY PROGRAM 
CHAPTER 331—CERTIFIED DEVELOPMENT COMPANY 
PROGRAM 
Sec. 
33101.
Definitions. 
33102.
Establishment of program. 
33103.
Debenture guarantees. 
33104.
Private debenture sales. 
33105.
Pooling of debentures. 
33106.
Prohibition of acceptance of funding with certain conditions, priorities, restrictions, 
or requirements. 
33107.
Accredited lenders program. 
33108.
Premier certified lenders program. 
33109.
Foreclosure and liquidation of loans. 
§ 33101. Definitions 
In this chapter: 
(1) ACCREDITED LENDER.—The term ‘‘accredited lender’’ means a 
qualified development company that is designated as an accredited 
lender under section 33107 of this title. 
(2) CERTIFIED DEVELOPMENT COMPANY.—The term ‘‘certified de-
velopment company’’ means a qualified development company that the 
Administrator certifies as meeting criteria established under this chap-
ter to receive assistance under the program. 
(3) COMMERCIAL LOAN.—The term ‘‘commercial loan’’ means a loan 
from a private source. 
(4) DEVELOPMENT COMPANY.—The term ‘‘development company’’ 
means an enterprise that is incorporated under State law with the au-
thority to promote and assist the growth and development of small 
business concerns in the area covered by the operations of the enter-
prise. 
(5) GUARANTEED DEBENTURE.—The term ‘‘guaranteed debenture’’ 
means a debenture that is guaranteed by the Administrator under the 
program. 
(6) PREMIER
CERTIFIED
LENDER.—The term ‘‘premier certified 
lender’’ means a certified development company that is designated as 
a premier certified lender under section 33108 of this title. 
(7) PROGRAM.—The term ‘‘program’’ means the certified develop-
ment company program. 
(8) PROJECT.—The term ‘‘project’’ means a project described in sec-
tion 33103(a)(1) of this title. 
(9) QUALIFIED DEVELOPMENT COMPANY.— 
(A) IN GENERAL.—The term ‘‘qualified development company’’ 
means a development company that, as determined by the Admin-
istrator, has— 
VerDate Nov 24 2008 
00:04 Apr 23, 2009
Jkt 079200
PO 00000
Frm 00382
Fmt 6652
Sfmt 6221
E:\BILLS\H1983.IH
H1983
smartinez on PROD1PC63 with BILLS
383 
(i) a full-time professional staff; 
(ii) professional management ability (including adequate 
accounting, legal, and business-servicing abilities); and 
(iii) a board of directors, or membership, that meets on a 
regular basis to make management decisions for the develop-
ment company, including decisions relating to the making and 
servicing of loans by the development company. 
(B) DEVELOPMENT COMPANIES IN A RURAL AREA.—A develop-
ment company in a rural area that does not satisfy the require-
ments of clauses (i) and (ii) of subparagraph (A) shall be deemed 
to satisfy those requirements if the development company con-
tracts with a certified development company that does satisfy 
those requirements and is located in the same general area to pro-
vide the services described in those clauses. 
(10) SMALL
MANUFACTURER.—The term ‘‘small manufacturer’’ 
means a small business concern— 
(A) the primary business of which is classified in sector 31, 32, 
or 33 of the North American Industry Classification System; and 
(B) all of the production facilities of which are located in the 
United States. 
§ 33102. Establishment of program 
There is established within the Administration a certified development 
company program for the purpose of fostering economic development and 
creating and preserving job opportunities in both urban and rural areas by 
providing long-term financing for small business concerns. 
§ 33103. Debenture guarantees 
(a) IN GENERAL.— 
(1) AUTHORITY.—The Administrator may guarantee the timely pay-
ment of all principal and interest as scheduled on a debenture issued 
by a certified development company the proceeds of which are used to 
make a loan to a small business concern to be used for a project for 
a sound business purpose, approved by the Administrator, of plant ac-
quisition, construction, conversion, or expansion (including land acqui-
sition). 
(2) LIMITATION.—The Administrator shall not guarantee a deben-
ture for the purposes of making a loan described in paragraph (1) un-
less necessary funds for making the loan are not available to the cer-
tified development company from a private source on reasonable terms. 
(3) TERMS AND CONDITIONS.—A debenture guarantee may be made 
on such terms and conditions as the Administrator may by regulation 
determine to be appropriate. 
VerDate Nov 24 2008 
00:04 Apr 23, 2009
Jkt 079200
PO 00000
Frm 00383
Fmt 6652
Sfmt 6221
E:\BILLS\H1983.IH
H1983
smartinez on PROD1PC63 with BILLS
384 
(4) FULL FAITH AND CREDIT OF THE UNITED STATES.—The full 
faith and credit of the United States is pledged to the payment of all 
amounts guaranteed under this subsection. 
(5) SUBORDINATION.—A guaranteed debenture may be subordinated 
by the Administrator to any other debenture, promissory note, or other 
debt or obligation of the certified development company that issues the 
debenture. 
(b) ELIGIBILITY FOR ASSISTANCE.— 
(1) ECONOMIC DEVELOPMENT OBJECTIVES.— 
(A) DEFINITIONS.—In subclauses (IX) and (X) of subpara-
graph (B)(iii), terms have the meanings given the terms under the 
Leadership in Energy and Environmental Design standard for 
green building certification, as determined by the Administrator. 
(B) ELIGIBILITY.—To be eligible for assistance under the pro-
gram, a certified development company shall demonstrate that the 
project to be funded with the proceeds of a guaranteed debenture 
is directed toward at least one of the following economic develop-
ment objectives: 
(i) JOB CREATION OR RETENTION OBJECTIVE.—The cre-
ation of job opportunities within 2 years after completion of 
the project, or the retention of jobs attributable to the 
project, as provided in paragraph (3). 
(ii) COMMUNITY ECONOMIC IMPROVEMENT OBJECTIVE.— 
Improvement of the economy of the local community, such as 
stimulating other business development in the community, 
bringing new income into the area, or assisting the commu-
nity in diversifying and stabilizing its economy. 
(iii) PUBLIC POLICY OBJECTIVE.—The achievement of one 
or more of the following public policy objectives: 
(I) Business district revitalization. 
(II) Expansion of exports. 
(III) Expansion of minority business development or 
women-owned business development. 
(IV) Rural development. 
(V) Expansion of small business concerns owned and 
controlled by veterans, especially small business concerns 
owned and controlled by service-disabled veterans. 
(VI) Enhancement of economic competition, including 
the advancement of technology, plan retooling, conver-
sion to robotics, and competition with imports. 
VerDate Nov 24 2008 
00:04 Apr 23, 2009
Jkt 079200
PO 00000
Frm 00384
Fmt 6652
Sfmt 6221
E:\BILLS\H1983.IH
H1983
smartinez on PROD1PC63 with BILLS
385 
(VII) Changes necessitated by Federal budget cut-
backs, including cutbacks in defense-related industries. 
(VIII) Business restructuring arising from Federally 
mandated standards or policies affecting the environment 
or the safety and health of employees. 
(IX) Reduction of energy consumption by at least 10 
percent. 
(X) Increased use of sustainable design, including— 
(aa) designs that reduce the use of greenhouse 
gas emitting fossil fuels; and 
(bb) low-impact designs to produce buildings that 
reduce the use of nonrenewable resources and mini-
mize environmental impact. 
(XI) Plant, equipment, and process upgrades of re-
newable energy sources such as— 
(aa) the small-scale production of energy for indi-
vidual buildings or communities consumption, com-
monly known as micropower; and 
(bb) renewable fuels producers, including biodiesel 
and ethanol producers. 
(2) COMMUNITY ECONOMIC IMPROVEMENT OBJECTIVE; PUBLIC POL-
ICY OBJECTIVE.—If eligibility is based on the criteria stated in clause 
(ii) or (iii) of paragraph (1)(B), the project need not meet the job cre-
ation or job preservation criteria developed by the Administrator if the 
overall portfolio of the development company meets or exceeds those job 
creation or retention criteria. 
(3) JOB CREATION OR RETENTION OBJECTIVE.— 
(A) PROJECT STANDARD.—A project meets the job creation or 
retention objective under paragraph (1)(B)(i)) if the project cre-
ates or retains— 
(i) one job for every $50,000 guaranteed by the Adminis-
trator; or 
(ii) in the case of a project of a small manufacturer, one 
job for every $100,000 guaranteed by the Administrator. 
(B) PORTFOLIO
STANDARD.—A project need not meet the 
project standard under subparagraph (A) if— 
(i) eligibility of the project is based on the community eco-
nomic improvement objective under paragraph (1)(B)(ii) or 
one or more of the public policy objectives under paragraph 
(1)(B)(iii); and 
VerDate Nov 24 2008 
00:04 Apr 23, 2009
Jkt 079200
PO 00000
Frm 00385
Fmt 6652
Sfmt 6221
E:\BILLS\H1983.IH
H1983
smartinez on PROD1PC63 with BILLS
386 
(ii) after the loan is made for the project, the certified de-
velopment company’s portfolio of outstanding guaranteed de-
bentures, excluding guaranteed debentures for loans to small 
manufacturers, creates or retains— 
(I) one job for every $50,000 guaranteed by the Ad-
ministrator; or 
(II) in the case of a project in Alaska, Hawaii, a 
State-designated enterprise zone, an empowerment zone, 
an enterprise community, or labor surplus area, as deter-
mined by the Secretary of Labor, or in any other area 
designated by the Administrator, one job for every 
$75,000 guaranteed by the Administrator. 
(4) WAIVER OF REQUIREMENTS.— 
(A) IN GENERAL.—Under regulations prescribed by the Admin-
istrator, the Administrator may waive, on a case-by-case basis or 
by regulation, any requirement of paragraph (3) (other than the 
requirement that a calculation under paragraph (3)(B)(ii)(II) ex-
clude debentures for loans to small manufacturers). 
(B) DOLLAR AMOUNTS.—The Administrator may not, in con-
nection with any waiver under subparagraph (A), adopt any dollar 
amount that is lower than a dollar amount specified in paragraph 
(3). 
(c) CRITERIA FOR ASSISTANCE.— 
(1) IN GENERAL.—A certified development company shall meet cri-
teria established by the Administrator, including such an extent of par-
ticipation to be required or amount of paid-in capital to be used in each 
instance as the Administrator determines to be reasonable. 
(2) SMALL BUSINESS CONCERN FUNDS.—In the case of any project 
of a small business concern financed under the program, the small 
business concern (or its owners, stockholders, or affiliates) receiving as-
sistance through a body authorized by this chapter shall provide— 
(A) at least 15 percent of the total financed cost of the project 
if the small business concern has been in operation for a period 
of 2 years or less or if the project involves the construction of a 
limited-purpose or single-purpose building or other structure; 
(B) at least 20 percent of the total financed cost of the project 
if the project involves both of the conditions described in subpara-
graph (A); or 
(C) an amount specified by the certified development company, 
which shall be at least 10 percent of the total financed cost of the 
VerDate Nov 24 2008 
00:04 Apr 23, 2009
Jkt 079200
PO 00000
Frm 00386
Fmt 6652
Sfmt 6221
E:\BILLS\H1983.IH
H1983
smartinez on PROD1PC63 with BILLS