HR 1332 PCS
‘‘(B) A development company in a rural 
area (as defined in section 501(f)) shall be 
deemed to have satisfied the requirements of a 
full-time professional staff and professional 
management ability if it contracts with another 
certified development company which has such 
staff and management ability and which is lo-
cated in the same general area to provide such 
services. 
‘‘(C) A development company that has 
been certified by the Administration as of De-
cember 31, 2005, and that has contracted with 
a for-profit company to provide services as of 
such date may continue to do so. 
‘‘(b) AREA
OF OPERATIONS.—The Administration 
shall specify the area in which an applicant is certified 
to provide assistance to small businesses under this title, 
which may not initially exceed its State of incorporation 
unless it proposes to operate in a local economic area 
which is required to include part of its State of incorpora-
tion and may include adjacent areas within several States. 
After a development company has demonstrated its ability 
to provide assistance in its area of operations, it may re-
quest the Administration to be allowed to operate in one 
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or more additional States as a multi-state certified devel-
opment company if it satisfies the following criteria: 
‘‘(1) Each additional State is contiguous to the 
State of incorporation, except the States of Alaska 
and Hawaii shall be deemed to be contiguous to any 
State abutting the Pacific ocean. 
‘‘(2) It demonstrates its proficiency in making 
and servicing loans under the Certified Development 
Company Economic Development Loan Program 
by— 
‘‘(A) requesting and receiving designation 
as an accredited lender under section 507 or a 
premier certified lender under section 508; and 
‘‘(B) meeting or exceeding performance 
standards established by the Administration. 
‘‘(3) The development company adds to the 
membership of its State of incorporation additional 
membership from each additional State and the 
added membership meets the requirements of sub-
section (a)(6). 
‘‘(4) The development company adds at least 
one member to its board of directors in the State of 
incorporation, providing that added member was se-
lected by the membership of the development com-
pany. 
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‘‘(5) The company meets such other criteria or 
complies with such conditions as the Administration 
deems appropriate. 
‘‘(c) PROCESSING OF EXPANSION APPLICATIONS.— 
The Administration shall respond to the request of a cer-
tified development company for certification as a multi- 
state company on an expedited basis within 30 days of 
receipt of a completed application if the application dem-
onstrates that the development company meets the re-
quirements of subsection (b)(1) through (b)(4). 
‘‘(d) USE OF FUNDS LIMITED TO STATE WHERE 
GENERATED.—Any funds generated by a development 
company from making loans under the Certified Develop-
ment Company Economic Development Loan Program 
which remain after payment of staff, operating and over-
head expenses shall be retained by the development com-
pany as a reserve for future operations, for expanding its 
area of operations in a local economic area as authorized 
by the Administration, or for investment in other local eco-
nomic development activity in the State from which the 
funds were generated. 
‘‘(e) ETHICAL REQUIREMENTS.— 
‘‘(1) IN GENERAL.—Certified development com-
panies, their officers, employees and other staff, 
shall at all times act ethically and avoid activities 
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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-
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