which constitute a conflict of interest or appear to 
constitute a conflict of interest. No one may serve as 
an officer, director or chief executive officer of more 
than one certified development company. 
‘‘(2) 
PROHIBITED
CONFLICT
IN
PROJECT 
LOANS.—As part of a project under the Certified 
Development Company Economic Development Loan 
Program, no certified development company may 
recommend or approve a guarantee of a debenture 
by the Administration that is collateralized by a sec-
ond lien position on the property being constructed 
or acquired and also provide, or be affiliated with a 
corporation or other entity, for-profit or non-profit, 
which provides, financing collateralized by a first 
lien on the same property. A business development 
company that was participating as a first mortgage 
lender, either directly or through an affiliate, for the 
Certified Development Company Economic Develop-
ment Loan Program in either fiscal years 2004 or 
2005 may continue to do so. 
‘‘(3) OTHER ECONOMIC DEVELOPMENT ACTIVI-
TIES.—Operation of multiple programs to assist 
small business concerns in order for a certified de-
velopment company to carry out its economic devel-
opment mission shall not be deemed a conflict of in-
terest, but notwithstanding any other provision of 
law, no development company may accept funding 
from any source, including but not limited to any de-
partment or agency of the United States Govern-
ment—
‘‘(A) if such funding includes any condi-
tions, priorities or restrictions upon the types of 
small businesses to which they may provide fi-
nancial assistance under this title; or 
‘‘(B) if it includes any conditions or im-
poses any requirements, directly or indirectly, 
upon any recipient of assistance under this title 
unless the department or agency also provides 
all of the financial assistance to be delivered by 
the development company to the small business 
and such conditions, priorities or restrictions 
are limited solely to the financial assistance so 
provided.’’. 
SEC. 204. DEFINITION OF RURAL AREAS. 
Section 501 of the Small Business Investment Act 
of 1958 (15 U.S.C. 695) is amended by adding at the end 
the following new subsection: 
‘‘(f) As used in subsection (d)(3)(D), the term ‘rural’ 
shall include any area other than—
‘‘(1) a city or town that has a population great-
er than 50,000 inhabitants; and 
‘‘(2) the urbanized area contiguous and adja-
cent to such a city or town.’’. 
SEC. 205. BUSINESSES IN LOW-INCOME AREAS. 
Section 501(d)(3) of the Small Business Investment 
Act of 1958 (15 U.S.C. 695(d)(3)) is amended by insert-
ing after ‘‘business district revitalization’’ the following: 
‘‘or expansion of businesses in low-income communities 
that would be eligible for new market tax credit invest-
ments under section 45D of the Internal Revenue Code 
of 1986 (26 U.S.C. 45D)’’. 
SEC. 206. COMBINATIONS OF CERTAIN GOALS. 
Section 501(e) of the Small Business Investment Act 
of 1958 (15 U.S.C. 695(e)) is amended by adding at the 
end the following: 
‘‘(7) A small business concern that is uncondi-
tionally owned by more than one individual, or a cor-
poration whose stock is owned by more than one in-
dividual, is deemed to achieve a public policy goal 
under subsection (d)(3) if a combined ownership 
share of at least 51 percent is held by individuals 
who are in one of the groups listed as public policy 
goals 
specified 
in 
subsection 
(d)(3)(C) 
or 
(d)(3)(E).’’.
SEC. 207. REFINANCING. 
Section 502 of the Small Business Investment Act 
of 1958 (15 U.S.C. 696) is amended by adding at the end 
the following: 
‘‘(7) PERMISSIBLE DEBT REFINANCING.—Any 
financing approved under this title may also include 
a limited amount of debt refinancing for debt that 
was not previously guaranteed by the Administra-
tion. If the project involves expansion of a small 
business 
which 
has 
existing 
indebtedness 
collateralized by fixed assets, any amount of existing 
indebtedness that does not exceed one-half of the 
project cost of the expansion may be refinanced and 
added to the expansion cost, providing—
‘‘(A) the proceeds of the indebtedness were 
used to acquire land, including a building situ-
ated thereon, to construct a building thereon or 
to purchase equipment; 
‘‘(B) the borrower has been current on all 
payments due on the existing debt for at least 
the past year; and 
‘‘(C) the financing under the Certified De-
velopment Company Economic Development 
Loan Program will provide better terms or rate 
of interest than now exists on the debt.’’.
SEC. 208. ADDITIONAL EQUITY INJECTIONS. 
Clause (ii) of section 502(3)(B) of the Small Business 
Investment Act of 1958 (15 U.S.C. 696(3)(B)) is amend-
ed to read as follows: 
‘‘(ii) 
FUNDING
FROM
INSTITU-
TIONS.—
‘‘(I) If a small business concern 
provides the minimum contribution re-
quired under paragraph (C), not less 
than 50 percent of the total cost of 
any project financed pursuant to 
clauses (i), (ii), or (iii) of subpara-
graph (C) shall come from the institu-
tions described in subclauses (I), (II), 
and (III) of clause (i). 
‘‘(II) If a small business concern 
provides more than the minimum con-
tribution required under paragraph 
(C), any excess contribution may be 
used to reduce the amount required 
from the institutions described in sub-
clauses (I), (II), and (III) of clause (i) 
except that the amount from such in-
stitutions may not be reduced to an 
amount less than the amount of the 
loan made by the Administration.’’.
SEC. 209. LOAN LIQUIDATIONS. 
Section 510 of the Small Business Investment Act 
of 1958 (15 U.S.C. 697g) is amended—
(1) by redesignating subsection (e) as sub-
section (g); and 
(2) by inserting after subsection (d) the fol-
lowing: 
‘‘(e) PARTICIPATION.—
‘‘(1) MANDATORY.—Any certified development 
company which elects not to apply for authority to 
foreclose and liquidate defaulted loans under this 
section or which the Administration determines to be 
ineligible for such authority shall contract with a 
qualified third-party to perform foreclosure and liq-
uidation of defaulted loans in its portfolio. The con-
tract shall be contingent upon approval by the Ad-
ministration with respect to the qualifications of the 
contractor and the terms and conditions of liquida-
tion activities. 
‘‘(2) COMMENCEMENT.—The provisions of this 
subsection shall not require any development com-
pany to liquidate defaulted loans until the Adminis-
tration has adopted and implemented a program to 
compensate and reimburse development companies 
as provided under subsection (f). 
‘‘(f) COMPENSATION AND REIMBURSEMENT.—