(2) by redesignating subsections (f), (h), and (i) 
as subsections (e), (f), and (g), respectively. 
SEC. 532. SBA SECONDARY MARKET LENDING AUTHORITY 
EXPANDED. 
Section 509 of title V of division A of the American 
Recovery and Reinvestment Act of 2009 (Public Law 111– 
5), as amended by this Act, is further amended— 
(1) in subsection (c)(1) by adding at the end 
the following: ‘‘Such process shall include the des-
ignation of each lender participating in a program 
under section 7(a) of the Small Business Act as a 
Systematically Important Secondary Market Broker- 
Dealer for purposes of this section.’’; and 
(2) in subsection (e), as so redesignated by sec-
tion 530 of this Act, by adding at the end the fol-
lowing: ‘‘To the extent that the cost of an elimi-
nation or reduction of fees is offset by appropria-
tions, the Administrator shall in lieu of the fee oth-
erwise applicable under this subsection collect no fee 
or reduce fees to the maximum extent possible.’’. 
SEC. 533. INCREASED LOAN LIMITS. 
Section 7(a) of the Small Business Act (15 U.S.C. 
636(a)), as amended by this Act, is further amended— 
(1) in paragraph (2)(A)— 
(A) in clause (i)— 
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(i) by inserting after ‘‘$150,000’’ the 
following: ‘‘and is less than or equal to 
$2,000,000’’; and 
(ii) by striking ‘‘or’’ at the end; 
(B) in clause (ii) by striking the period at 
the end and inserting ‘‘; or’’; and 
(C) by adding at the end the following: 
‘‘(iii) 50 percent of the balance of the 
financing outstanding at the time of dis-
bursement of the loan, if such balance ex-
ceeds $2,000,000.’’; and 
(2) 
in 
paragraph 
(3)(A) 
by 
striking 
‘‘$2,000,000’’ and inserting ‘‘$3,000,000’’. 
SEC. 534. REAL ESTATE APPRAISALS. 
Section 7(a)(29) of the Small Business Act (15 
U.S.C. 636(a)(29)) is amended— 
(1) in the matter preceding subparagraph (A) 
by striking ‘‘a State licensed or certified appraiser’’ 
and inserting ‘‘an appraiser licensed or certified by 
the State in which such property is located’’; 
(2) 
in 
subparagraph 
(A) 
by 
striking 
‘‘$250,000’’ and inserting ‘‘$400,000’’; and 
(3) 
in 
subparagraph 
(B) 
by 
striking 
‘‘$250,000’’ and inserting ‘‘$400,000’’. 
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SEC. 535. ADDITIONAL SUPPORT FOR EXPRESS LOAN PRO-
GRAM. 
Section 7(a)(18)(B) of the Small Business Act (15 
U.S.C. 636(a)(18)(B)) is amended by adding after ‘‘under 
subparagraph (A)(i)’’ the following: ‘‘, except that a lender 
making a loan under paragraph (31) may not retain any 
percentage of a fee collected under such subparagraph’’. 
SEC. 536. LOANS USED TO PURCHASE UNOCCUPIED MANU-
FACTURING CENTERS OR EQUIPMENT. 
Section 7(a) of the Small Business Act (15 U.S.C. 
636(a)), as amended by this Act, is further amended by 
adding at the end the following: 
‘‘(42) LOANS USED TO PURCHASE UNOCCUPIED 
MANUFACTURING
CENTERS
OR
EQUIPMENT.—The 
Administration may provide loans under this sub-
section for the purchase of what the Administrator 
determines to be unoccupied manufacturing centers 
or equipment.’’. 
SEC. 537. 100 PERCENT GUARANTEE FOR SMALL BUSINESS 
CONCERNS OWNED AND CONTROLLED BY 
VETERANS. 
Section 7(a) of the Small Business Act (15 U.S.C. 
636(a)), as amended by this Act, is further amended— 
(1) in paragraph (3)(A) by striking the semi-
colon at the end and inserting the following: ‘‘or in 
paragraph (42);’’; and 
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(2) by adding at the end the following: 
‘‘(42) 100 PERCENT GUARANTEE FOR SMALL 
BUSINESS CONCERNS OWNED AND CONTROLLED BY 
VETERANS.—Notwithstanding paragraph (2), in an 
agreement to participate in a loan on a deferred 
basis under this subsection with respect to a small 
business concern owned and controlled by veterans, 
participation by the Administrator may be equal to 
100 percent. The total amount outstanding and 
committed (by participation or otherwise) with re-
spect to a loan to such a small business concern 
from the business loan and investment fund estab-
lished by this Act may not exceed $3,000,000.’’. 
SEC. 538. DEFERRED REPAYMENT FOR CERTAIN SMALL 
BUSINESS CONCERNS. 
Section 7(a)(7) of the Small Business Act (15 U.S.C. 
636(a)(7)) is amended by adding at the end the following: 
‘‘If a small business concern classified in sector 23 of the 
North American Industry Classification System receives a 
loan under this subsection after the date of the enactment 
of the Small Business Financing and Investment Act of 
2010, such concern may defer repayment on such loan for 
a period of not more than 12 months beginning on the 
date that such concern receives the final disbursement of 
such loan.’’. 
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SEC. 539. AUTHORIZATION OF APPROPRIATIONS. 
Section 20 of the Small Business Act (15 U.S.C. 631 
note) is amended by inserting after subsection (e) the fol-
lowing: 
‘‘(f) FISCAL YEARS 2010 AND 2011 WITH RESPECT 
TO SECTION 7(a).— 
‘‘(1) PROGRAM LEVELS.—For the programs au-
thorized by this Act, in each of fiscal years 2010 and 
2011 commitments for general business loans au-
thorized under section 7(a) may not exceed 
$20,000,000,000. 
‘‘(2) AUTHORIZATION
OF
APPROPRIATIONS.— 
There are authorized to be appropriated such sums 
as may be necessary to carry out paragraph (1).’’. 
Subtitle B—CDC Economic 
Development Loan Program 
CHAPTER 1—GENERAL PROVISIONS 
SEC. 541. PROGRAM LEVELS. 
Section 20 of the Small Business Act (15 U.S.C. 631 
note), as amended by this Act, is further amended by in-
serting after subsection (f) the following: 
‘‘(g) PROGRAM LEVELS WITH RESPECT TO CDC 
ECONOMIC DEVELOPMENT LOAN PROGRAM.— 
‘‘(1) FISCAL
YEAR
2010.—For financings au-
thorized by section 7(a)(13) of this Act and title V 
of the Small Business Investment Act of 1958, the 
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Administrator is authorized to make $9,000,000,000 
in guarantees of debentures for fiscal year 2010. 
‘‘(2) FISCAL
YEAR
2011.—For financings au-
thorized by section 7(a)(13) of this Act and title V 
of the Small Business Investment Act of 1958, the 
Administrator 
is 
authorized 
to 
make 
$10,000,000,000 in guarantees of debentures for fis-
cal year 2011.’’. 
SEC. 542. DEFINITIONS. 
Section 103 of the Small Business Investment Act 
of 1958 (5 U.S.C. 662) is amended as follows: 
(1) By amending paragraph (6) to read as fol-
lows: 
‘‘(6) the term ‘development company’ means 
any corporation organized in order to promote eco-
nomic development and the growth of small business 
concerns and includes companies chartered under a 
special State law authorizing them to operate on a 
statewide basis;’’. 
(2) By striking ‘‘and’’ at the end of paragraph 
(18), by striking the period at the end of paragraph 
(19) and inserting a semicolon, and by adding at the 
end the following new paragraphs: 
‘‘(20) the term ‘certified development company’ 
means a development company that the Adminis-
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trator has determined meets the criteria set forth in 
section 501; 
‘‘(21) the term ‘local governmental entity’ 
means— 
‘‘(A) a State or a political subdivision of a 
State; or 
‘‘(B) a combination of political subdivisions 
which— 
‘‘(i) has been formed to promote eco-
nomic or community development; 
‘‘(ii) is composed of representatives of 
the State or a political subdivision acting 
in their official capacity; and 
‘‘(iii) includes an area in an adjacent 
State if it is part of a local economic area, 
a rural area, or has a population deter-
mined by the Administrator to be insuffi-
cient to support the formation of a sepa-
rate development company; 
such term includes entities meeting the require-
ments of clauses (i) through (iii), such as, but 
not limited to, a council of governments, re-
gional development corporation, regional plan-
ning commission, or economic development dis-
trict; 
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‘‘(22) the term ‘member’ means any person au-
thorized to vote for a director of a corporation or the 
dissolution or merger of a company (for purposes of 
this definition, a shareholder of a for-profit corpora-
tion shall be considered a member); 
‘‘(23) the terms ‘rural’ and ‘rural area’ shall 
have the same meaning as those terms are given in 
section 1991(a)(13)(A) of title 7, United States 
Code; and 
‘‘(24) the term ‘small manufacturer’ means a 
small business concern— 
‘‘(A) the primary business of which is clas-
sified in sector 31, 32, or 33 of the North 
American Industrial Classification System; and 
‘‘(B) all of the production facilities of 
which are located in the United States.’’. 
CHAPTER 2—CERTIFIED DEVELOPMENT 
COMPANIES 
SEC. 551. CERTIFIED DEVELOPMENT COMPANIES. 
Section 501 of the Small Business Investment Act 
of 1958 (15 U.S.C. 695) is amended to read as follows: 
‘‘SEC. 501. CERTIFIED DEVELOPMENT COMPANIES. 
‘‘(a) CERTIFIED DEVELOPMENT COMPANY DEBEN-
TURE AUTHORITY.—Only development companies cer-
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tified by the Administrator shall have the authority to 
issue debentures under this Act. 
‘‘(b) CERTIFICATION STANDARDS.—A development 
company shall be certified for the purposes of issuing de-
bentures if the Administrator determines that it meets 
each of the following criteria: 
‘‘(1) SMALL CONCERN.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (C) of paragraph (2), the com-
pany, including its affiliates, shall have no more 
than 200 employees. 
‘‘(B) CONTROL.—Except as provided in 
paragraph (2) (B) or (C) the company shall not 
be under the control of any other concern. 
‘‘(C) NOT FOR PROFIT.—The development 
company is organized as a not-for-profit cor-
poration. 
‘‘(2) EXCEPTIONS.— 
‘‘(A) FOR PROFIT STATUS.—If a develop-
ment company was chartered as a for-profit 
corporation and issued debentures prior to Jan-
uary 1, 1987, the company shall not be re-
quired to change its status to not-for-profit in 
order to be certified. 
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‘‘(B) AFFILIATION
GRANDFATHER.—Any 
company that was authorized by the Adminis-
trator to issue debentures before December 31, 
2005, shall be eligible for certification without 
regard to its status as part of, or its affiliation 
with, any other not-for-profit corporation or 
local governmental entity unless that not-for- 
profit corporation or local governmental entity 
is another entity that issues debentures under 
this title. 
‘‘(C) AFFILIATION WITH LOCAL GOVERN-
MENTAL ENTITIES.—Any company that was or-
ganized after the date of enactment of the 
Small Business Financing and Investment Act 
of 2010 shall be eligible for certification without 
regard to its status as part of or affiliation with 
any local governmental entity. 
‘‘(3) GOOD
STANDING.—A development com-
pany shall be in good standing and comply with all 
laws, in every State in which it is incorporated or 
authorized to conduct business. 
‘‘(4) MEMBERSHIP.— 
‘‘(A) IN GENERAL.—The development com-
pany shall have at least 25 members. 
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‘‘(B) VOTING RIGHTS.—No member shall 
control more than 10 percent of the total voting 
power in the development company. 
‘‘(C) RESIDENCE.—Members must be resi-
dents of the State in which the development 
company is chartered or authorized to do busi-
ness. 
‘‘(D) DIVERSITY.—The development com-
pany must have at least one member from each 
of the following: 
‘‘(i) A local governmental entity. 
‘‘(ii) A financial institution subject to 
regulation by a Federal organization be-
longing to the Federal Financial Institu-
tions Examination Council and that pro-
vides long-term fixed asset financing in the 
commercial market. 
‘‘(iii) A not-for-profit organization, 
other than a development company, that is 
dedicated to promoting economic growth. 
‘‘(iv) A for-profit business, other than 
a financial institution described in clause 
(ii). 
‘‘(E) EMPLOYMENT STATUS.—Membership 
in a development company shall not be predi-
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cated on employment status and an individual 
who retired from or was terminated (for rea-
sons other than fraud or the commission of a 
crime) from an entity described in subpara-
graph (D) shall be deemed to be from the orga-
nization described in that subparagraph. 
‘‘(5) BOARD OF DIRECTORS.— 
‘‘(A) IN GENERAL.—The development com-
pany’s board consists of members and each di-
rector receives a majority vote of the members 
unless the development company is a for-profit 
corporation in which case the board need not 
consist entirely of members. 
‘‘(B) BOARD
REPRESENTATION.—There 
shall be at least one director from not fewer 
than 3 of the 4 types of organizations specified 
in paragraph (4)(D) but no single type of orga-
nization shall have more than 50 percent rep-
resentation on the board of the development 
company. If the development company is a for- 
profit corporation, financial institution rep-
resentatives may make up more than 50 per-
cent of the board. 
‘‘(C) AFFILIATED
ENTITY
REPRESENTA-
TION RESTRICTIONS.—A development company 
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that is described in paragraph (1)(C) may have 
any or all of its board members appointed by 
entities affiliated with the company and may in-
clude common members who also serve on the 
affiliate’s board of directors if the appointment 
of board members was exercised by an affiliate 
prior to December 31, 2005. 
‘‘(D) SPECIAL RULE FOR CERTAIN DEVEL-
OPMENT COMPANIES.—The board of directors 
for any development company issuing deben-
tures before December 31, 2005, and incor-
porated under a State law requiring, or which 
is interpreted by the State’s legal department 
as imposing specific requirements on, the num-
ber and selection of members, board members, 
or both, and the rights and privileges conferred 
by such State law, may adhere to such provi-
sions. 
‘‘(6) 
PROFESSIONAL
MANAGEMENT
AND 
STAFF.— 
‘‘(A) IN GENERAL.—The development com-
pany shall have full-time independent profes-
sional management, including a chief executive 
officer to manage the daily operations and a 
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full-time professional staff qualified to carry out 
the functions authorized under this title. 
‘‘(B) UTILIZATION
OF
STAFF
FROM
AF-
FILIATED ENTITIES.—A development company 
shall not be denied certification under this sec-
tion if its chief executive or full-time profes-
sional staff is from an affiliated entity as de-
scribed in paragraph (1)(C). 
‘‘(C) STAFF UNDER CONTRACT.—The Ad-
ministrator shall not deny certification to a de-
velopment company that contracts for its full 
time staff if one of the following conditions is 
met: 
‘‘(i) The development company is lo-
cated in a rural area, obtains its staff 
through contract from another develop-
ment company that is certified by the Ad-
ministrator and that development company 
operates in the same or a contiguous 
State. 
‘‘(ii) The development company had 
issued debentures under this title prior to 
December 31, 2005, and had contracted 
with a for-profit business concern to pro-
vide staffing and management services. 
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‘‘(c) APPLICATIONS.— 
‘‘(1) DEVELOPMENT COMPANIES ISSUING DE-
BENTURES BEFORE SEPTEMBER 30, 2009.— 
‘‘(A) SHORT FORM APPLICATION.—(i) For 
any development company that issued deben-
tures pursuant to this title before September 
30, 2009, the Administrator shall develop, after 
an opportunity for notice and comment, no 
later than 90 days after the date of enactment 
of the Small Business Financing and Invest-
ment Act of 2010, a short-form application that 
contains sufficient information for the Adminis-
trator to determine that the development com-
pany currently meets the standards set forth in 
subsection (b). In developing such application, 
the Administrator shall be required to limit the 
amount of paperwork necessary to determine 
whether the development company meets the 
standards for certification and may limit the 
application to the filing of reports previously 
submitted to the Administrator. 
‘‘(ii) For those companies that obtain staff 
through contracts, the application shall include 
a copy of the contract. 
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‘‘(B) CERTIFICATION DECISION.—(i) The 
Administrator shall certify the development 
company if the application demonstrates that 
the applicant meets the standards in subsection 
(b). The decision to certify or not approve the 
request for certification shall be made within 7 
business days from the date the initial submis-
sion of the application is received by the Ad-
ministrator. If the Administrator takes no ac-
tion to approve or disapprove within 7 business 
days, the application for certification is deemed 
approved and no further action is required by 
the Administrator or the development company 
to obtain certification. If the Administrator dis-
approves the application, the Administrator 
shall provide in writing within 3 business days 
the reasons for the disapproval. If such docu-
ment is not provided within the time specified, 
the application is deemed approved and no fur-
ther action is required by the Administrator or 
the development company to obtain certifi-
cation. 
‘‘(ii) For those development companies 
that submit contracts under subparagraph 
(A)(ii), the Administrator is limited in rejecting 
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the application only if the Administrator finds 
that the entity servicing the applicant is no 
longer able to provide the employees or services 
needed by the applicant to perform the func-
tions that would be authorized under this title. 
‘‘(C) APPLICATION RESUBMITTAL.—If the 
Administrator disapproves the application for 
certification and provides a written statement 
as set forth in subparagraph (B), the develop-
ment company may file a new application lim-
ited solely to addressing the concerns of the Ad-
ministrator and the certification procedures set 
forth in subparagraph (B) shall recommence. 
‘‘(D) APPEALS.—If the Administrator dis-
approves an application in accordance with the 
procedures of subparagraphs (B) or (C), the 
applicant may, within 10 calendar days after 
receipt of the disapproval, appeal such dis-
approval. The Administrator shall conduct a 
hearing to determine such appeal pursuant to 
sections 554, 556, and 557 of title 5, United 
States Code, and shall issue a decision not later 
than 45 days after the appeal is filed. The deci-
sion on appeal shall constitute final agency ac-
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tion for purposes of chapter 7 of title 5, United 
States Code. 
‘‘(E) GRANDFATHERING.— 
‘‘(i) IN GENERAL.—For the period 2 
years after date of enactment of the Small 
Business Financing and Investment Act of 
2010, any development company that was 
issuing debentures on or before the date 
set forth in this clause (i) shall be deemed 
to be a certified development company. 
‘‘(ii) COMPLETION
OF
APPLICATION 
PROCESS.—The procedures set forth in 
this paragraph for determining certifi-
cation shall apply to any development com-
pany meeting the qualifications of clause 
(i). 
‘‘(iii) EFFECT OF DENIAL.—The de-
nial or rejection of an application for cer-
tification as set forth in this subsection 
shall have no effect on the ability of a de-
velopment company meeting the qualifica-
tions in clause (i) from continuing to issue 
debentures during the entire two-year pe-
riod established in that clause. 
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pact on any guarantee of a debenture issued 
prior to the date of enactment of the Small 
Business Financing and Investment Act of 
2010. 
‘‘(2) APPLICATION PROCESS FOR NEW DEVEL-
OPMENT COMPANIES.— 
‘‘(A) IN GENERAL.—For any development 
company that has not issued debentures prior 
to September 30, 2009, the Administrator shall 
develop no later than 180 days after the date 
of enactment of the Small Business Financing 
and Investment Act of 2010, after an oppor-
tunity for notice and comment, an application 
form for certification that provides the Admin-
istrator with sufficient information to insure 
that the applicant meets the standards set forth 
in subsection (b). The Administrator shall cer-
tify such development company or reject the ap-
plication within 60 calendar days from the date 
the initial submission was received by the Ad-
ministrator. If the Administrator rejects the ap-
plication, the Administrator shall provide in 
writing within 7 business days after the deci-
sion, the reason for rejecting the application. 
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‘‘(B) APPEALS.—A development company 
shall be able to appeal the disapproval of an ap-
plication under the procedures set forth in 
paragraph (1)(D).’’. 
SEC. 552. CERTIFIED DEVELOPMENT COMPANY; OPER-
ATIONAL REQUIREMENTS. 
Section 502 of the Small Business Investment Act 
of 1958 (15 U.S.C. 696) is amended to read as follows: 
‘‘SEC. 502. OPERATIONAL REQUIREMENTS FOR CERTIFIED 
DEVELOPMENT COMPANIES. 
‘‘(a) MAINTENANCE OF STANDARDS FOR CERTIFI-
CATION.—Any company certified pursuant to section 501 
shall continue to comply with the requirements of that sec-
tion to remain certified. The Administrator shall develop 
a reporting form, which to the extent possible, incor-
porates other documents and reports already kept by cer-
tified development companies, demonstrating their contin-
ued compliance. The form shall be developed in a manner 
that the estimated time for completion shall take no more 
than 2 hours. 
‘‘(b) ETHICS AND CONFLICT OF INTERESTS.— 
‘‘(1) IN
GENERAL.—A certified development 
company, its officers, employees, and contractors 
shall act ethically and avoid activities which con-
stitute a conflict of interest or appear to constitute 
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a conflict of interest. For purposes of this sub-
section, conduct that is unethical includes, but is not 
limited to, the actions specified in section 120.140 of 
title 13, Code of Federal Regulations, as in effect on 
January 1, 2009. 
‘‘(2) BY ASSOCIATES.—An associate may not be 
an officer, director, or manager of more than 1 cer-
tified development company. The term ‘associate’ 
shall have the same meaning given the term ‘Asso-
ciate of a CDC’ in section 120.10 of title 13, Code 
of Federal Regulations, as in effect on January 1, 
2009. For the purposes of this subsection, 10 per-
cent shall be substituted wherever section 120.10 of 
title 13, Code of Federal Regulations uses 20 per-
cent. 
‘‘(3) BY ENTITIES.—Except as provided in sec-
tions 501(b)(5) and 501(b)(6), no person, sole pro-
prietorship, partnership, or corporation shall control 
or have managerial control of more than one cer-
tified development company. Control means any of 
the following: 
‘‘(A) The ability to appoint or remove a 
member of the company or member of its board 
of directors. 
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‘‘(B) The ability to modify or approve rate 
or fee changes affecting revenues of the cer-
tified development company. 
‘‘(C) The ability to veto, overrule, or mod-
ify decisions of the certified development com-
pany’s body. 
‘‘(D) The ability, either directly or contrac-
tually, to appoint, hire, reassign, or dismiss 
those managers and employees responsible for 
the daily operations of the certified development 
company. 
‘‘(E) The ability to access the certified de-
velopment company’s resources or amend its 
budget. 
‘‘(F) The ability to control another cer-
tified development company pursuant to provi-
sions in a contract. 
‘‘(c) MEETINGS.—The board of directors of the cer-
tified development company shall meet on a regular basis 
to make policy decisions for the company. 
‘‘(d) LOAN COMMITTEES.—The board of directors of 
a certified development company may use a loan com-
mittee to process loans in the State in which it operates 
as well as adjacent local economic areas. Members of the 
loan committee shall be residents of the certified develop-
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ment company’s State of operation or the adjacent local 
economic area. Such loan committees shall meet on a peri-
odic basis as set forth by the board of directors. 
‘‘(e) PROHIBITED CONFLICT IN PROJECT LOANS.— 
‘‘(1) IN GENERAL.—Certified development com-
panies shall not recommend or approve a guarantee 
of a debenture that will be collateralized by property 
being constructed or acquired on which an institu-
tion, as provided in section 508(c)(1)(A), will have 
a first lien position. 
‘‘(2) EXCEPTION.—The prohibition in para-
graph (1) shall not apply to any certified develop-
ment company that was affiliated with or part of 
any entity that took a first lien position between Oc-
tober 1, 2003, and September 30, 2005. 
‘‘(f) AFFILIATION
WITH
LENDERS
OPERATING 
UNDER SECTION 7 OF THE SMALL BUSINESS ACT.— 
‘‘(1) PROHIBITION.—No certified development 
company may invest in, or be an affiliate of, a lender 
who participates in the loan programs authorized in 
sections 7(a) and 7(c) of the Small Business Act (15 
U.S.C. 636(a) and (c)). 
‘‘(2) EXCEPTION.—The prohibition in para-
graph (1) shall not apply to any certified develop-
ment company that is affiliated with an entity au-
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thorized by the Administrator to operate under sec-
tion 7(a) of the Small Business Act if such affili-
ation occurred on or before November 6, 2003. 
‘‘(3) CREDIT UNION AFFILIATION.—A certified 
development company shall not lose its status due to 
an affiliation with an institution regulated by the 
National Credit Union Administration if the develop-
ment company was affiliated with such an institu-
tion prior to January 1, 2007. 
‘‘(g) SERVICING
AND
PACKAGING
GUARANTEED 
LOANS.—A certified development company is authorized 
to prepare applications for loans under sections 7(a) or 
7(c) of the Small Business Act (15 U.S.C. 636(a) or (c)), 
to service such loans, and to charge a reasonable fee for 
servicing such loans. 
‘‘(h) USE OF EXCESS FUNDS.—Any funds generated 
by a certified development company from the issuance of 
debentures under this title, the sale of debentures in the 
private secondary market, or fees described in subsection 
(g) that remain unexpended after payment of staff, oper-
ating, and overhead expenses shall be used by the certified 
development company for— 
‘‘(1) operating reserves; 
‘‘(2) expanding the area in which the certified 
development company operates through the methods 
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authorized in section 505 (relating to multi-State 
operation); 
‘‘(3) investment in other community and local 
economic development activity or community devel-
opment primarily in the State from which such 
funds were generated; or 
‘‘(4) investment in small business investment 
companies subject to the limitations in subsection 
(i). 
‘‘(i) LIMITATIONS WITH RESPECT TO SMALL BUSI-
NESS INVESTMENT COMPANIES.—A certified development 
company shall not— 
‘‘(1) invest excess funds in a small business in-
vestment company that the Administrator deter-
mines to be capitally impaired as set forth in section 
107.1830 of title 13, Code of Federal Regulations, 
as in effect on January 1, 2009, or any successor 
regulation to that regulation, but may maintain its 
investment in such company if such investment was 
made prior to the determination of capital impair-
ment; and 
‘‘(2) provide a debenture under this title to a 
small business concern that has financing with a 
small business investment company in which the cer-
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tified development company has invested excess 
funds. 
‘‘(j) ECONOMIC DEVELOPMENT ACTIVITIES.—A com-
pany certified pursuant to this section shall carry out each 
of the following economic development activities that cre-
ate or preserve jobs in urban and rural areas: 
‘‘(1) The company shall provide long-term fi-
nancing to small business concerns through deben-
tures described in section 506. 
‘‘(2) The company shall operate any other pro-
gram to assist small business concerns or commu-
nities that promote local economic development and 
job creation or preservation. 
‘‘(k) RESTRICTIONS ON ASSISTANCE.— 
‘‘(1) IN GENERAL.—After the date of enact-
ment of the Small Business Financing and Invest-
ment Act of 2010, no certified development company 
may accept funding from any source, including any 
Federal agency (as that term is defined in section 
551 of title 5, United States Code) if the source im-
poses— 
‘‘(A) conditions on the types of small busi-
ness concerns that a certified development com-
pany may provide assistance to under this title; 
or 
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‘‘(B) conditions or requirements, directly 
or indirectly, upon any small business concern 
receiving assistance under this title. 
‘‘(2) EXCEPTION.—The conditions of subpara-
graphs (A) and (B) of paragraph (1) shall not apply 
if the source provides all of the financing that will 
be provided by the certified development company to 
the small business concern, provided further that 
any conditions or restrictions are limited solely to 
the financing provided by the source of funding. 
‘‘(l) REVOCATION AND SUSPENSION.—The Adminis-
trator may suspend or revoke a certified development com-
pany’s status if the Administrator determines, after a 
hearing on the record as set forth in sections 554, 556, 
and 557 of title 5, United States Code, that the certified 
development company no longer— 
‘‘(1) meets the eligibility criteria established 
under section 501 of this title; 
‘‘(2) satisfies the operational standards in this 
section; or 
‘‘(3) complies with the Administrator’s rules, 
regulations, or provisions of law. 
‘‘(m) EFFECT OF SUSPENSION OR REVOCATION.—A 
suspension or revocation under subsection (l) shall not af-
fect any outstanding debenture guarantee.’’. 
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SEC. 553. ACCREDITED LENDERS PROGRAM. 
Section 503 of the Small Business Investment of 
1958 (15 U.S.C. 697) is amended to read as follows: 
‘‘SEC. 503. ACCREDITED LENDERS PROGRAM. 
‘‘(a) ESTABLISHMENT.— 
‘‘(1) IN
GENERAL.—A certified development 
company may apply for status to become an accred-
ited certified development company if it meets the 
operational standards of section 502 and the criteria 
in subsection (b). 
‘‘(2) APPLICATION.—The Administrator shall, 
after opportunity for notice and comment, develop 
an application for certified development companies 
seeking to become accredited certified development 
companies. 
‘‘(3) PROCESSING OF APPLICATION.—The Ad-
ministrator shall make a determination within 30 
days after a complete application has been filed by 
the certified development company. 
‘‘(4) REAPPLICATION.—If the Administrator re-
jects the application, the Administrator shall provide 
in writing the reasons for the rejection. Any certified 
development company may reapply which will recom-
mence the processing time limits set forth in para-
graph (3), and such reapplication shall be limited to 
addressing the reasons for rejection. If the Adminis-
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trator rejects a second application, that shall be con-
sidered final agency action for purposes of chapter 
7 of title 5, United States Code. 
‘‘(b) STANDARDS FOR ACCREDITED CERTIFIED DE-
VELOPMENT COMPANY PROGRAM.—The Administrator 
shall designate a certified development company as accred-
ited if it meets the following standards: 
‘‘(1) Has been a certified development company 
for not less than the preceding 12 months and has 
issued debentures as authorized under this title dur-
ing that time period. 
‘‘(2) Has well-trained, qualified personnel who 
are knowledgeable in the lending policies and proce-
dures for certified development companies. 
‘‘(3) Has the ability to process, close, and serv-
ice the loan issued under this title. 
‘‘(4) Has a loss rate on the company’s deben-
tures that is reasonable and acceptable to the Ad-
ministrator. 
‘‘(5) Has a history of submitting to the Admin-
istrator complete and accurate debenture guaranty 
application packages. 
‘‘(6) Has the ability to serve small business 
credit needs for financing plant and equipment as a 
certified development company. 
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‘‘(c) EXPEDITED PROCESSING OF GUARANTEE AP-
PLICATIONS.—The Administrator shall develop an expe-
dited procedure for processing a guarantee application or 
servicing action submitted by an accredited certified devel-
opment company. For purposes of this subsection, an ex-
pedited procedure is one that takes at least two business 
days less than the processing performed for certified devel-
opment companies that have not been accredited. 
‘‘(d) SUSPENSION OR REVOCATION OF ACCREDITED 
STATUS.—The Administrator may suspend or revoke a 
certified development company’s accredited status if the 
Administrator determines, after a hearing on the record 
as set forth in sections 554, 556, and 557 of title 5, 
United States Code, that the certified development com-
pany no longer meets the eligibility criteria established 
under this section (which shall not include a time limit 
on the term of the certified development company’s ac-
credited status) or failed to adhere to the Administrator’s 
rules, regulations, or is violating some other provision of 
law. Such suspension or revocation shall have no effect 
on the development company’s status as certified. 
‘‘(e) EFFECT OF SUSPENSION OR REVOCATION ON 
EXISTING GUARANTEES.—A suspension or revocation of 
accredited status shall not affect any outstanding deben-
ture guarantee. 
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‘‘(f) GRANDFATHER PROVISION.—Any certified de-
velopment company that was accredited by the date of en-
actment of the Small Business Financing and Investment 
Act of 2010 shall remain accredited for 24 months after 
that date. If the certified development company does not 
have an application for accreditation approved by the Ad-
ministrator within the 24 months, its accreditation stand-
ard shall lapse. 
‘‘(g) AUTOMATIC QUALIFICATION.— 
‘‘(1) IN GENERAL.—Until the Administrator de-
velops procedures for granting accredited status, any 
certified development company that was accredited 
as of the date of enactment of the Small Business 
Financing and Investment Act of 2010 shall be 
deemed to be accredited. 
‘‘(2) APPLICATIONS.—Any certified develop-
ment company that satisfies the provision of para-
graph (1) shall have 24 months in which to submit 
the application established by this section for accred-
ited status. 
‘‘(3) EFFECT WHILE APPLICATION PENDING.— 
The denial or rejection of an application for accred-
ited status as set forth in this section shall have no 
effect on the ability of a development company that 
meets the standard set forth in paragraph (1) from 
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maintaining its status during the 24 months speci-
fied in this subsection. 
‘‘(h) PROMULGATION
OF
ACCREDITING
STAND-
ARDS.—The Administrator shall develop standards for ac-
crediting, suspension, and revocation under the program 
established by this section only after notice and an oppor-
tunity for comment as set forth in section 553(b) of title 
5, United States Code. After the development of such 
standards, the Administrator shall publish such standards 
in the Code of Federal Regulations. 
‘‘(i) RULE OF CONSTRUCTION.—Any reference to the 
term ‘accredited lender’ in any provision of law enacted, 
or any regulation adopted, prior to the enactment of the 
Small Business Financing and Investment Act of 2010 
shall be deemed to be a reference to the term ‘accredited 
certified development company’.’’. 
SEC. 554. PREMIER CERTIFIED LENDER PROGRAM. 
Section 504 of the Small Business Investment Act 
of 1958 (15 U.S.C. 697a) is amended to read as follows: 
‘‘SEC. 504. PREMIER CERTIFIED LENDER PROGRAM. 
‘‘(a) ESTABLISHMENT.— 
‘‘(1) IN
GENERAL.—A certified development 
company accredited under section 503 may apply for 
status to become a premier certified development 
company. 
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‘‘(2) APPLICATION.—The Administrator shall, 
after opportunity for notice and comment, develop 
an application for accredited certified development 
companies seeking to become premier certified devel-
opment companies. 
‘‘(3) PROCESSING OF APPLICATION.—The Ad-
ministrator shall make a determination within 60 
days after a complete application has been filed by 
an accredited certified development company. 
‘‘(4) REAPPLICATION.—If the Administrator re-
jects the application, the Administrator shall provide 
in writing the reasons for the rejection. Any accred-
ited certified development company may reapply 
which will recommence the processing time limits set 
forth in paragraph (3), and such reapplication shall 
be limited to addressing the reasons for rejection. If 
the Administrator rejects a second application, that 
shall be considered final agency action for purposes 
of chapter 7 of title 5, United States Code. 
‘‘(b) STANDARDS FOR OBTAINING PREMIER CER-
TIFIED DEVELOPMENT COMPANY STATUS.—The Admin-
istrator shall designate an accredited certified develop-
ment company as a premier certified development com-
pany if the application submitted pursuant to subsection 
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(a) demonstrates that the accredited certified development 
company meets the following standards: 
‘‘(1) Has been an accredited certified develop-
ment company for at least 12 months. 
‘‘(2) Has submitted to the Administrator ade-
quately analyzed debenture guarantee applications. 
‘‘(3) Has closed, in a proper manner following 
the Administrator regulations, loans under this title. 
‘‘(4) Has serviced its loan portfolio in accord-
ance with the standards set by the Administrator. 
‘‘(5) Has established a loan loss reserve estab-
lished in accordance with this section that the Ad-
ministrator determines is sufficient to meet its obli-
gations to protect the Federal Government from the 
risk of loss on each debenture guaranteed under this 
section. 
‘‘(6) Has agreed, as part of the application and 
in order to protect the Federal Government against 
the risk of loss, to the following— 
‘‘(A) on account of a debenture, the pro-
ceeds of which were used to fund a loan ap-
proved prior to the date of enactment of the 
Small Business Financing and Investment Act 
of 2010, agrees to reimburse the Administrator 
for 10 percent of any loss sustained by the Ad-
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ministrator as a result of a default by the com-
pany in the payment of principal or interest on 
a debenture issued by such company and guar-
anteed by the Administrator; 
‘‘(B) on account of a debenture, the pro-
ceeds of which were used to fund a loan ap-
proved prior to the date of enactment of the 
Small Business Financing and Investment Act 
of 2010 and which were issued during the pe-
riod in which the company had made a selection 
pursuant to section 508(c)(7) of the Small 
Business Investment Act of 1958, as in effect 
on the day before such date of enactment, 
agrees to reimburse the Administrator for 15 
percent of any loss sustained by the Adminis-
trator as a result of a default by the company 
in the payment of principal or interest on a de-
benture issued by such company and guaran-
teed by the Administrator; or 
‘‘(C) on account of a debenture, the pro-
ceeds of which are used to fund a loan approved 
on or after the date of enactment of the Small 
Business Financing and Investment Act of 
2010, upon closing, pay to the Administrator a 
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one-time participation fee in the amount equal 
to the higher of the following: 
‘‘(i) 0.25 percent of the amount of the 
debenture. 
‘‘(ii) A percent of the amount of the 
debenture equal to 10 percent of the 
amount of the company’s historic loss rate 
on debentures guaranteed under this sec-
tion as determined by the Administrator. 
The rate specified by this clause shall be 
determined annually based upon the com-
pany’s loan losses as of close of business 
on June 30 and notice of the determina-
tion shall be provided to each company not 
later than August 31. Such rate shall be 
applicable to loans approved during the fis-
cal year commencing after the determina-
tion is made and shall expire and have no 
further application after the end of such 
fiscal year. If no timely determination has 
been made prior to the commencement of 
a fiscal year, including the year of enact-
ment of the Small Business Financing and 
Investment Act of 2010, one may be made 
after the commencement and it shall be 
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applicable to loans approved during the 
balance of such fiscal year commencing 30 
days after notification to the development 
company involved. 
‘‘(c) SUSPENSION OR REVOCATION OF PREMIER STA-
TUS.—The Administrator may suspend or revoke an ac-
credited certified development company’s premier status 
if the Administrator determines, after a hearing on the 
record as set forth in sections 554, 556, and 557 of title 
5, United States Code, that the accredited certified devel-
opment company no longer meets the eligibility criteria for 
premier status as established under this section or failed 
to adhere to the Administrator’s rules, regulations, or is 
violating some other provision of law. Such revocation or 
suspension shall have no effect on its status as an accred-
ited certified development company. 
‘‘(d) LOAN LOSS RESERVE.— 
‘‘(1) ASSETS.—Each loan loss reserve main-
tained by the premier certified development company 
for loans made pursuant to the authority in sub-
section (g)(1) shall be comprised of— 
‘‘(A) segregated funds on deposit in an ac-
count or accounts with a federally insured de-
pository institution or institutions selected by 
the company, subject to a collateral assignment 
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in favor of, and in a format acceptable to, the 
Administrator that shall amount to 10 percent 
of the company’s exposure as determined pursu-
ant to subsection (b)(6); 
‘‘(B) irrevocable letter or letters of credit, 
with a collateral assignment in favor of, and a 
commercially reasonable format acceptable to, 
the Administrator; or 
‘‘(C) any combination of the assets de-
scribed in subparagraphs (A) and (B). 
‘‘(2) CONTRIBUTIONS.—The company shall 
make contributions to the loss reserve, either cash or 
letters of credit as provided above, in the following 
amounts and at the following intervals: 
‘‘(A) 50 percent when a debenture is 
closed. 
‘‘(B) 25 percent additional not later than 
1 year after a debenture is closed. 
‘‘(C) 25 percent additional not later than 
2 years after a debenture is closed. 
‘‘(3) REPLENISHMENT.—If a loss has been sus-
tained by the Administrator, any portion of the loss 
reserve, and other funds provided by the premier 
certified development company as necessary, may be 
used to reimburse the Administrator for the premier 
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certified development company’s share of the loss as 
provided for in subsection (b)(6). If the premier cer-
tified development company utilizes the reserve, it 
shall, within 30 calendar days, replace an equivalent 
amount of funds. 
‘‘(4) DISBURSEMENTS.— 
‘‘(A) IN
GENERAL.—The Administrator 
shall allow the premier certified development 
company to withdraw from the loss reserve 
amounts attributable to any debenture that has 
been repaid. 
‘‘(B) 
REDUCTION.—The 
Administrator 
shall allow the premier certified development 
company to withdraw from the loss reserve such 
amounts as are in excess of 1 percent of the ag-
gregate outstanding balances of debentures to 
which such loss reserve relates. The reduction 
authorized by this subparagraph shall not apply 
with respect to any debenture before 100 per-
cent of the contribution described in paragraph 
(2) with respect to such debenture has been 
made. 
‘‘(5) APPLICABILITY.—This subsection shall 
apply only to a premier certified development com-
pany designated as a premier certified development 
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company by the Administrator under this section on 
or after the date of the enactment of the Small 
Business Financing and Investment Act of 2010. 
The loan loss reserve requirements relating to any 
premier certified development company certified 
prior to the date of the enactment of such Act shall 
continue to be governed by regulations in effect on 
the date of the enactment of such Act. 
‘‘(e) BUREAU OF PREMIER CERTIFIED DEVELOP-
MENT COMPANY LENDER OVERSIGHT.— 
‘‘(1) IN GENERAL.—There is hereby established 
a Bureau of Premier Certified Development Com-
pany Lender Oversight in the Office of Lender Over-
sight at the Administration which shall have respon-
sibility and capability for carrying out oversight of 
premier certified development companies and such 
other responsibilities as the Administrator des-
ignates. 
‘‘(2) ANNUAL
REVIEW.—The Bureau estab-
lished in paragraph (1) annually shall review the fi-
nancing made by each premier certified development 
company. Such review shall include the premier cer-
tified development company’s credit decisions and 
general compliance with the eligibility requirements 
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for each financing approved as a result of its status 
as a premier certified development company. 
‘‘(3) RANDOM AUDITS.—The Bureau shall de-
velop and implement a method for sampling the de-
bentures issued by premier certified development 
companies. Such sampling shall be similar to the 
random file audits of development companies that 
utilize the Abridged Submission Method described in 
chapter 4 of subpart C of Standard Operating Pro-
cedure 50 10 (5)(A) as was in effect on March 2, 
2009. 
‘‘(4) REVIEW OF LENDERS PROVIDING SENIOR 
FINANCING.— 
‘‘(A) 
CALCULATION
OF
LOAN
LOSS 
RATE.—The Bureau shall periodically calculate 
the loss rate of all debentures approved under 
this section and shall calculate a loss rate on 
the basis of the total debentures attributable to 
projects approved by premier certified develop-
ment companies in which each lender is a par-
ticipating lender. 
‘‘(B) NOTIFICATION.—If the Bureau deter-
mines that the loss rate on debentures involving 
an individual lender exceeds the average for all 
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debentures approved under this section, it shall 
advise the Administrator. 
‘‘(5) USE OF REVIEWS AND AUDITS.—The Ad-
ministrator shall consider the findings under para-
graphs (2), (3), and (4) in carrying out the respon-
sibilities under subsection (h). 
‘‘(f) SALE OF CERTAIN DEFAULTED LOANS.— 
‘‘(1) NOTICE.—If, upon default in repayment, 
the Administrator acquires a debenture issued by a 
premier certified development company and identi-
fies such loan for inclusion in a bulk asset sale of 
defaulted or repurchased loans or other financing, 
the Administrator shall give prior notice thereof to 
any premier certified development company which 
has a contingent liability under this section. The no-
tice shall be given to the premier certified develop-
ment company as soon as possible after the financ-
ing is identified, but not less than 90 days before 
the date the Administrator first makes any records 
on such financing available for examination by pro-
spective purchasers prior to its offering in a package 
of loans for bulk sale. 
‘‘(2) LIMITATIONS.—The Administrator shall 
not offer any loan described in paragraph (1) as 
part of a bulk sale unless the Administrator— 
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‘‘(A) provides prospective purchasers with 
the opportunity to examine the Administration’s 
records with respect to such loan; and 
‘‘(B) provides the notice required by para-
graph (1). 
‘‘(g) LOAN APPROVAL AUTHORITY.— 
‘‘(1) IN GENERAL.—A premier certified develop-
ment company may, under conditions determined by 
the Administrator in regulations published in the 
Code of Federal Regulations, issue guarantees on 
debentures, approve, authorize, close, service, fore-
close, litigate (except that the Administrator may 
monitor conduct of any such litigation), and liq-
uidate loans that are funded with proceeds of a de-
benture issued by a premier certified development 
company unless the Administrator advises the com-
pany that loans involving a specific institutional 
lender are to be submitted to the Administrator for 
further consideration, and approval by the Adminis-
trator. 
‘‘(2) PROGRAM GOALS.—Each premier certified 
development company shall establish a goal of proc-
essing no less than 50 percent of the applications for 
assistance under this title that the premier certified 
development company receives. Failure to meet this 
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goal shall have no affect on the company’s status as 
a premier certified development company under this 
section. 
‘‘(3) SCOPE OF REVIEW.—The approval of a 
loan and guarantee of a debenture by a premier cer-
tified development company shall be subject to final 
approval as to the eligibility of any guarantee by the 
Administrator as set forth in section 506, but such 
final approval shall not include review of decisions 
by the premier certified development company in-
volving creditworthiness, loan closing, or compliance 
with legal requirements imposed by law or regula-
tion. 
‘‘(h) SUSPENSION OR REVOCATION.—The Adminis-
trator may suspend or revoke an accredited certified devel-
opment company’s premier status if the Administrator de-
termines, after a hearing on the record as set forth in sec-
tions 554, 556, and 557 of title 5, United States Code, 
that the accredited certified development company no 
longer meets the eligibility criteria established under this 
section, fails to maintain adequate loan loss reserves man-
dated in this section even if it meets the other eligibility 
requirements for premier status, or violates the Adminis-
trator’s rules, regulations, or some other provision of law. 
The Administrator shall consider the review of the premier 
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certified development company conducted pursuant to sub-
section (e) in determining whether to suspend or revoke 
an accredited development company’s premier status. 
Such suspension or revocation shall have no effect on the 
development company’s status as an accredited certified 
development company. 
‘‘(i) EFFECT OF SUSPENSION OR REVOCATION.—A 
suspension or revocation of premier status shall not affect 
any outstanding debenture guarantee. 
‘‘(j) RULE OF CONSTRUCTION.—Any reference to the 
term ‘premier certified lender’ or ‘PCL’ in legislation en-
acted, or regulations adopted, prior to the enactment of 
the Small Business Financing and Investment Act of 2010 
shall be deemed to be a reference to the term ‘premier 
certified development company’.’’. 
SEC. 555. MULTI-STATE OPERATIONS. 
Section 505 of the Small Business Investment Act 
of 1958 (15 U.S.C. 697b) is amended to read as follows: 
‘‘SEC. 505. MULTI-STATE OPERATIONS. 
‘‘(a) AUTHORIZATION.—The Administrator shall per-
mit an accredited or premier certified development com-
pany to make loans or issue debentures in any State that 
is contiguous to the State of incorporation of that com-
pany only if the company— 
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‘‘(1) has members, from each of the States in 
which it operates with not fewer than 25 members 
who reside in such States; 
‘‘(2) has a board of directors that contains not 
fewer than 2 members from each State in which the 
company makes loans and issues debentures and are 
residents of that State; 
‘‘(3) maintains a separate loan committee to 
process loans in each expansion State and the mem-
bers of the loan committee are solely residents of the 
expansion State; and 
‘‘(4) files an application developed by the Ad-
ministrator which provides— 
‘‘(A) notice of the intention to make loans 
in multiple States; 
‘‘(B) a specification of the States in which 
the company intends to make loans; 
‘‘(C) a list of members in each expansion 
State; and 
‘‘(D) a detailed statement on how the com-
pany will comply with the requirements of this 
subsection. 
‘‘(b) LOAN
COMMITTEES.—The requirements of 
paragraph (3) of subsection (a) shall not require a devel-
opment company to establish a loan committee in its State 
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of incorporation or in a local economic area outside the 
State of incorporation unless such area is part of an ex-
pansion State. 
‘‘(c) REVIEW.— 
‘‘(1) IN GENERAL.—The Administrator shall re-
view each application for expansion under subsection 
(a), but such review shall be limited to that informa-
tion needed to determine whether the company will 
comply with the requirements of subsection (a). 
‘‘(2) DEADLINE FOR DECISION.—The Adminis-
trator shall make a decision on each application 
under subsection (a) within 15 calendar days after 
the receipt of the application. If no such decision is 
granted, the application is deemed to be approved 
and no further action is required by the applicant or 
the Administrator for the company to expand into 
the States specified in the application. 
‘‘(3) APPLICATION RESUBMITTAL.—If the Ad-
ministrator rejects the application for expansion, the 
Administrator shall provide in writing the reasons 
for denial within 10 calendar days of the decision. 
The applicant then may resubmit the application but 
the review of such resubmitted applications will be 
limited only to the areas in which the Administrator 
found the original application deficient. The dead-
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lines in paragraph (2) shall apply to resubmitted ap-
plications. 
‘‘(4) APPEAL.—If a resubmitted application is 
denied, the applicant may, within 10 calendar days 
after receipt of the disapproval, appeal such dis-
approval. The Administrator shall conduct a hearing 
to determine such appeal pursuant to sections 554, 
556, and 557 of title 5, United States Code, and 
shall issue a decision not later than 45 days after 
the appeal is filed. The decision on appeal shall con-
stitute final agency action for purposes of chapter 7 
of title 5, United States Code. 
‘‘(d) FAILURE TO DEVELOP APPLICATION.—If the 
Administrator fails to develop an application as required 
in subsection (a)(4) within 60 days of the enactment of 
the Small Business Financing and Investment Act of 
2010, an accredited or premier certified development com-
pany only need submit the information required in sub-
section (a) to the Administrator to be deemed eligible to 
commence operations authorized by this section. Such eli-
gibility shall not be terminated if the Administrator devel-
ops an application after the 60-day period set forth in this 
subsection. 
‘‘(e) AGGREGATE ACCOUNTING.—An accredited or 
premier certified development company authorized to op-
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erate in multiple States pursuant to this section may 
maintain an aggregate accounting of all revenue and ex-
penses of the company for purposes of this title. 
‘‘(f) LOCAL JOB CREATION REQUIREMENTS.— 
‘‘(1) IN GENERAL.—Any company making loans 
in multiple States as authorized in this section shall 
not count jobs created or retained in one State to-
wards any applicable job creation or retention re-
quirements mandated by this title in another State. 
‘‘(2) APPLICABILITY.—Any company operating 
under the authority of this section shall be required 
to meet any job creation or retention requirement of 
this title on the date that is 2 years after the cer-
tified development company closed its first loan in 
its new State of operation. 
‘‘(g) CONTIGUOUS STATES.—For the purposes of this 
section, the States of Alaska and Hawaii shall be deemed 
to be contiguous to any State abutting the Pacific Ocean. 
Territories of the United States located in the Pacific 
Ocean shall be deemed to be contiguous to any State abut-
ting the Pacific Ocean, including Alaska and Hawaii, and 
territories of the United States located in the Caribbean 
Sea shall be deemed contiguous to any State abutting the 
Gulf of Mexico. 
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‘‘(h) EXEMPTION FOR LOCAL ECONOMIC AREAS.— 
Except as provided in subsection (a)(3) with respect to 
loan committees, any certified, accredited, or premier de-
velopment company or applicant operating in a local eco-
nomic development area that crosses the border of another 
State shall not be considered to be operating under the 
provisions of this section and shall not be required to com-
ply with the requirements of this section for multi-State 
operation.’’. 
SEC. 556. GUARANTY OF DEBENTURES. 
Section 506 of the Small Business Investment Act 
of 1958 (15 U.S.C. 697c) is amended to read as follows: 
‘‘SEC. 506. GUARANTY OF DEBENTURES. 
‘‘(a) AUTHORITY TO GUARANTEE.—Except as pro-
vided in subsection (c), the Administrator may guarantee 
the timely payment of all principal and interest as sched-
uled on any debenture issued by a certified development 
company. 
‘‘(b) TERMS
AND
CONDITIONS
OF
THE
GUAR-
ANTEE.—Such guarantees may be made on such terms 
and conditions as the Administrator may by regulation, 
published in the Code of Federal Regulations, determine 
to be appropriate, except that the Administrator shall not 
decline to issue such guarantee when the ownership inter-
ests of the small business concern and the ownership inter-
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ests of the property to be financed with the proceeds of 
the loan made pursuant to subsection (e)(1) are not iden-
tical because one or more of the following classes of rel-
atives have an ownership interest in either the small busi-
ness concern or the property: father, mother, son, daugh-
ter, wife, husband, brother, or sister, if the Administrator 
or his designee has determined on a case-by-case basis 
that such ownership interest, such guarantee, and the pro-
ceeds of such loan, will substantially benefit the small 
business concern. 
‘‘(c) FULL FAITH AND CREDIT.—The full faith and 
credit of the United States is pledged to the payment of 
all amounts guaranteed under this section. 
‘‘(d) SUBORDINATION.—Any debenture issued by a 
certified development company with respect to which a 
guarantee is made under this section may be subordinated 
by the Administrator to any other debenture, promissory 
note, or other debt or obligation of such company. 
‘‘(e) STANDARDS
FOR ADMINISTRATOR GUARAN-
TEES.—No guarantee may be made with respect to any 
debenture under this section unless— 
‘‘(1) the debenture is issued for the purpose of 
making one or more loans to small business concerns 
the proceeds of which shall be used for the purposes 
set forth in section 507; 
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‘‘(2) the interest rate on such debentures is not 
less than the rate of interest determined by the Sec-
retary of the Treasury for purposes of section 
303(b); 
‘‘(3) the aggregate amount of such debenture 
does not exceed the amount of the loans to be made 
from the proceeds of such debenture plus, at the 
election of the borrower, other amounts attributable 
to the administrative and closing costs of such loans, 
except for the attorney fees of the borrower; 
‘‘(4) the amount of any loan to be made from 
such proceeds does not exceed an amount equal to 
50 percent of the cost of the project with respect to 
which such loan is made; 
‘‘(5) the Administrator, except to the extent 
provided in section 504 with respect to premier cer-
tified development companies, approves each loan to 
be made from such proceeds; and 
‘‘(6) with respect to each loan made from the 
proceeds of such debenture, the Administrator— 
‘‘(A) assesses and collects a fee, which 
shall be payable by the borrower, in an amount 
established annually by the Administration, 
which amount shall not exceed— 
‘‘(i) the lesser of— 
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‘‘(I) 0.9375 percent per year of 
the outstanding balance of the loan; 
or 
‘‘(II) the minimum amount nec-
essary to reduce the cost (as defined 
in section 502 of the Federal Credit 
Reform Act of 1990) to the Adminis-
trator of purchasing and guaranteeing 
debentures under this title to zero; 
and 
‘‘(ii) 50 percent of the amount estab-
lished under clause (i) in the case of a loan 
made during the 2-year period beginning 
on October 1, 2002, for the life of the 
loan; and 
‘‘(B) uses the proceeds of such fee to offset 
the cost (as such term is defined in section 502 
of the Federal Credit Reform Act of 1990) to 
the Administrator of making guarantees under 
this section. 
‘‘(f) INTEREST RATES ON COMMERCIAL LOANS.— 
Notwithstanding the provisions of the constitution or laws 
of any State limiting the rate or amount of interest which 
may be charged, taken, received, or reserved, the max-
imum legal rate of interest on any commercial loan which 
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funds any portion of the cost of the project financed pur-
suant to this title which is not funded by a debenture 
guaranteed under this section shall be a rate which is es-
tablished by the Administrator who shall publish such rate 
quarterly in, at a minimum, the Federal Register and on 
the Administration’s website. 
‘‘(g) DEBENTURE REPAYMENT.—Any debenture that 
is issued under this section shall provide for the payment 
of principal and interest on a semiannual basis. 
‘‘(h) CHARGES FOR ADMINISTRATOR’S EXPENSES.— 
The Administrator may impose an additional charge for 
administrative expenses with respect to each debenture for 
which payment of principal and interest is guaranteed 
under this section. Such administrative expenses may in-
clude— 
‘‘(1) development company fees for processing, 
closing, servicing, late payment, or loan assumption; 
‘‘(2) agent or trustee fees for central servicing, 
underwriters, or debenture funding; and 
‘‘(3) fees charged by the Administrator for the 
debenture guaranty and from the certified develop-
ment company to reduce the subsidy cost. 
‘‘(i) PARTICIPATION FEE.—The Administrator shall 
collect a one-time fee in an amount equal to 50 basis 
points on the total participation in any project of any 
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State or local government, bank, other financial institu-
tion, or foundation or not-for-profit institution. Such fee 
shall be imposed only when the participation of the entity 
described in the previous sentence will occupy a senior 
credit position to that of the development company. All 
proceeds of the fee shall be used to offset the cost (as 
that term is defined in section 502 of the Credit Reform 
Act of 1990) to the Administrator of making guarantees 
under this section. 
‘‘(j) CERTIFIED DEVELOPMENT COMPANY FEE.— 
The Administrator shall collect annually from each devel-
opment company a fee of 0.125 percent of the outstanding 
principal balance of any guaranteed debenture authorized 
by the Administrator after September 30, 1996. Such fee 
shall be derived from the servicing fees collected by the 
certified development company pursuant to regulation, 
and shall not be derived from any additional fees imposed 
on small business concerns. All proceeds of the fee shall 
be used to offset the cost (as that term is defined in sec-
tion 502 of the Credit Reform Act of 1990) to the Admin-
istrator of making guarantees under this section. 
‘‘(k) EFFECTIVE DATE.—The fees authorized by this 
section shall apply to any financing approved under this 
title on or after October 1, 1996. 
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‘‘(l) CALCULATION OF SUBSIDY RATE.—All fees, in-
terest, and profits received and retained by the Adminis-
trator under this section shall be included in the calcula-
tions made by the Director of the Office of Management 
and Budget to offset the cost (as that term is defined in 
section 502 of the Federal Credit Reform Act of 1990) 
to the Administrator of purchasing and guaranteeing de-
bentures under this title. 
‘‘(m) ACTIONS UPON DEFAULT.— 
‘‘(1) INITIAL
ACTIONS.—Not later than the 
45th day after the date on which a payment on a 
loan funded through a debenture guaranteed under 
this section is due and not received, the Adminis-
trator shall— 
‘‘(A) take all necessary steps to bring such 
loan current; or 
‘‘(B) implement a formal written deferral 
agreement. 
‘‘(2) PURCHASE OR ACCELERATION OF DEBEN-
TURE.—Not later than the 65th day after the date 
on which a payment on a loan described in para-
graph (1) is due and not received, and absent a for-
mal written deferral agreement, the Administrator 
shall take all necessary steps to purchase or accel-
erate the debenture. 
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‘‘(3) PREPAYMENT PENALTIES.—With respect 
to the portion of any project derived from funds not 
provided by a debenture issued by a certified devel-
opment company or borrower, the Administrator— 
‘‘(A) shall negotiate the elimination of any 
prepayment penalties or late fees on defaulted 
loans made prior to September 30, 1996; 
‘‘(B) shall not pay any prepayment penalty 
or late fee on the default based purchase of 
loans issued after September 30, 1996; and 
‘‘(C) shall not pay a default interest rate 
higher than the interest rate on the note prior 
to the date of default for any project financed 
after September 30, 1996. 
‘‘(4) COLLECTION AND SERVICING.— 
‘‘(A) IN GENERAL.—In the event of the de-
fault of any loan and the repurchase of a de-
benture guaranteed by the Administrator under 
this title, the Administrator shall continue to 
delegate to the central servicing agent that was 
contracted for that service as of January 1, 
2009, or successor contractor the authority to 
collect and disburse all funds or payments re-
ceived on such defaulted loans, including pay-
ments from guarantors or on notes in com-
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promise of the original note. The central serv-
icing agent shall continue to provide an ac-
counting of income and expenses for any such 
loan on the same basis it does for any other 
loan issued under this title. The central serv-
icing agent shall make the accounting of income 
and expenses and reports thereon available as 
requested by the certified development company 
that issued the debenture or the Administrator. 
‘‘(B) EFFECTIVE
DATE.—The require-
ments of subparagraph (A) shall become effec-
tive 180 days after the date of enactment of the 
Small Business Financing and Investment Act 
of 2010.’’. 
SEC. 557. ECONOMIC DEVELOPMENT THROUGH DEBEN-
TURES. 
Section 507 of the Small Business Investment Act 
of 1958 (15 U.S.C. 697d) is amended to read as follows: 
‘‘SEC. 507 ECONOMIC DEVELOPMENT AND DEBENTURES. 
‘‘(a) IN GENERAL.—A certified development company 
shall be prohibited from issuing a debenture under this 
title unless the project funded with the debenture meets 
one of the following economic development objectives: 
‘‘(1) The creation of job opportunities within 
two years of the completion of the project or the 
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100 
preservation or retention of jobs attributable to the 
project. 
‘‘(2) Improving the economy of the locality, 
such as stimulating other business development in 
the community, bringing new income into the area, 
or assisting the community in diversifying and stabi-
lizing its economy. 
‘‘(3) The achievement of one or more of the fol-
lowing public policy goals: 
‘‘(A) Business district revitalization or ex-
pansion of businesses in low-income commu-
nities which would be eligible for a new markets 
tax credit under section 45D(a) of the Internal 
Revenue Code of 1986, or implementing regula-
tions issued under that section. 
‘‘(B) Expansion of exports. 
‘‘(C) Expansion of minority business devel-
opment or women-owned business development. 
‘‘(D) Rural development. 
‘‘(E) Expansion of small business concerns 
owned and controlled by veterans, as defined in 
section 3(q) of the Small Business Act (15 
U.S.C. 632(q)), especially service-disabled vet-
erans, as defined in such section. 
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101 
‘‘(F) Enhanced economic competition, in-
cluding the advancement of technology, plan re-
tooling, conversion to robotics, or competition 
with imports. 
‘‘(G) Changes necessitated by Federal 
budget cutbacks, including defense related in-
dustries. 
‘‘(H) Business restructuring arising from 
federally mandated standards or policies affect-
ing the environment or the safety and health of 
employees. 
‘‘(I) Reduction of energy consumption by 
at least 10 percent. 
‘‘(J) Increased use of sustainable design, 
including designs that reduce the use of green-
house gas emitting fossil fuels, or low-impact 
design to produce buildings that reduce the use 
of nonrenewable resources and minimize envi-
ronmental impact. 
‘‘(K) Plant, equipment, and process up-
grades of renewable energy sources such as the 
small-scale production of energy for individual 
buildings or communities consumption, com-
monly known as micropower, or renewable fuels 
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102 
producers including biodiesel and ethanol pro-
ducers. 
‘‘(4) Debt refinancing to the extent permitted 
by subsection (d). 
‘‘(b) JOB CREATION
AND RETENTION REQUIRE-
MENTS.— 
‘‘(1) IN
GENERAL.—A project meets the job 
creation or retention objective set forth in subsection 
(a)(1) if the project creates or retains one job for 
every $65,000 guaranteed by the Administrator, ex-
cept that the amount shall be $100,000 in the case 
of a project of a small manufacturer. 
‘‘(2) EXCEPTIONS.— 
‘‘(A) Paragraph (1) shall not apply to a 
project for which eligibility is based on the ob-
jectives set forth in subsection (a)(2) or (a)(3) 
if the certified development company’s portfolio 
of outstanding debentures creates or retains one 
job for every $65,000 guaranteed by the Ad-
ministrator. 
‘‘(B) For projects in Alaska, Hawaii, 
State-designated enterprise zones, empower-
ment zones, enterprise communities, or labor 
surplus areas designated by the Administrator, 
the certified development company’s portfolio 
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103 
may average not more than $75,000 per job 
created or retained. 
‘‘(C) Loans for projects of small manufac-
turers shall be excluded from the calculations in 
subparagraphs (A) and (B). 
‘‘(c) COMBINATION OF CERTAIN GOALS.—A small 
business concern that is unconditionally owned by more 
than 1 individual, or a corporation, the stock of which is 
owned by more than 1 individual, shall be deemed to have 
achieved a goal under subsection (a)(3) if a combined own-
ership share of not less than 51 percent is held by individ-
uals who are in 1 of, or a combination of, the groups de-
scribed in subparagraphs (C) or (E) of subsection (a)(1). 
‘‘(d) COMPOSITION OF THE PROJECT.— 
‘‘(1) IN GENERAL.—The projects described in 
this section shall include, but not be limited to, plant 
acquisition, construction, conversion, expansion (in-
cluding the acquisition of land), equipment and re-
lated project costs, or to acquire the stock of a cor-
poration (as long as the value of the loan for the ac-
quisition of the stock does not exceed the fixed asset 
value attributable to such assets as would be eligible 
for financing under subsection (a)). 
‘‘(2) DEBT REFINANCING.—Any financing ap-
proved under this title may include a limited amount 
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104 
of debt refinancing if the project involves the expan-
sion of a small business concern. 
‘‘(3) LIMITATION.—The amount of the existing 
indebtedness may be refinanced and added to the ex-
pansion cost if— 
‘‘(A) the existing indebtedness does not ex-
ceed 50 percent of the project cost of the ex-
pansion; 
‘‘(B) 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; 
‘‘(C) 
the 
existing 
indebtedness 
is 
collateralized by fixed assets; 
‘‘(D) the existing indebtedness was in-
curred for the benefit of the small business con-
cern; 
‘‘(E) the financing under this title will be 
used only for refinancing existing indebtedness 
or costs relating to the project financed under 
this title; 
‘‘(F) the financing under this title will pro-
vide a substantial benefit to the borrower when 
prepayment penalties, financing fees, and other 
financing costs are accounted for; 
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‘‘(G) the borrower has been current on all 
payments due on the existing debt for not less 
than 1 year preceding the date of refinancing; 
and 
‘‘(H) the financing under this title will 
provide better terms or rate of interest than the 
existing indebtedness at the time of refinancing. 
‘‘(e) DEFINITION.—For purposes of subparagraphs 
(J) and (K) of subsection (a)(3), the terms included have 
the meanings given those terms under the Leadership in 
Energy and Environmental Design (more generally re-
ferred to as LEED) standard for green building certifi-
cation, as determined by the Administrator through regu-
lation to be published in the Code of Federal Regula-
tions.’’. 
SEC. 558. PROJECT FUNDING REQUIREMENTS. 
Section 508 of the Small Business Investment Act 
of 1958 (15 U.S.C. 697e) is amended to read as follows: 
‘‘SEC. 508. PROJECT FUNDING REQUIREMENTS. 
‘‘(a) IN GENERAL.—Any project described in section 
507 must meet the funding standards set forth in this sec-
tion. 
‘‘(b) SIZE OF DEBENTURE.—The Administrator shall 
only be permitted to guarantee debenture issued by a cer-
tified development company up to the following amounts: 
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‘‘(1) $3,000,000 for any project of a small busi-
ness concern. 
‘‘(2) $4,000,000 for any project that meets the 
public policy goals set forth in section 507(a)(3). 
‘‘(3) $4,000,000 for any project to be located in 
a low-income community as that term is described in 
section 507(a)(3)(A). 
‘‘(4) $8,000,000 for each project of a small 
manufacturer. 
‘‘(5) $8,000,000 for each project that reduces 
the borrower’s energy consumption by at least 10 
percent. 
‘‘(6) $8,000,000 for each project that generates 
renewable energy or renewable fuels, such as, but 
not limited to, biodiesel or ethanol production. 
‘‘(7) $10,000,000 for each project for a small 
business concern that constitutes a major source of 
employment as that term is used in section 
7(b)(3)(E) of the Small Business Act (15 U.S.C. 
636(b)(3)(E)). 
‘‘(c) FUNDING FROM SOURCES OTHER THAN DE-
BENTURES ISSUED BY CERTIFIED DEVELOPMENT COM-
PANIES.— 
‘‘(1) IN GENERAL.—Any project financed pur-
suant to this title must have the following contribu-
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tions from parties other than the debenture issued 
by the certified development company: 
‘‘(A) FUNDING FROM INSTITUTIONS.—If a 
small business concern provides— 
‘‘(i) the minimum contribution re-
quired by subparagraph (B), not less than 
50 percent of the total cost of any project 
financed shall come from State or local 
governments, banks or other financial in-
stitutions, or foundations or other not-for- 
profit institutions; and 
‘‘(ii) more than the minimum con-
tribution required under subparagraph 
(B), any excess contribution may be used 
to reduce the amount required from insti-
tutions described in clause (i), except that 
the amount provided by such institution 
may not be reduced to an amount that is 
less than the amount of the loan made by 
the Administrator. 
‘‘(B) FUNDING
FROM
SMALL
BUSINESS 
CONCERNS.—The small business concern (or its 
owners, stockholders, or affiliates) that will 
have a project financed pursuant to this title 
shall provide— 
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‘‘(i) at least 15 percent of the total 
cost of the project financed if the small 
business concern has been in operation for 
a period of 2 years or less; 
‘‘(ii) at least 15 percent of the total 
cost of the project financed if the project 
involves construction of a limited or single 
purposed building or structure; 
‘‘(iii) at least 20 percent of the total 
cost of the project financed if the project 
involves both of the conditions in clauses 
(i) and (ii); or 
‘‘(iv) at least 10 percent of the total 
cost of the project financed and not cov-
ered by clauses (i), (ii), or (iii), at the dis-
cretion of the certified development com-
pany. 
‘‘(2) SELLER
FINANCING.—Seller-provided fi-
nancing may be used to meet the requirements of 
paragraph (1)(B), if the seller subordinates the in-
terest of the seller in the property to the debenture 
guaranteed by the Administrator. 
‘‘(3) COLLATERALIZATION.— 
‘‘(A) IN
GENERAL.—The collateral pro-
vided by the small business concern shall gen-
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109 
erally include a subordinate lien position on the 
property being financed under this title, and is 
only one of the factors to be evaluated in the 
credit determination. Additional collateral shall 
be required only if the Administrator deter-
mines, on a case-by-case basis, that additional 
security is necessary to protect the interest of 
the Government. 
‘‘(B) APPRAISALS.—With respect to com-
mercial real property provided by the small 
business concern as collateral, an appraisal of 
the property by a State licensed or certified ap-
praiser— 
‘‘(i) shall be required by the Adminis-
trator before disbursement of the loan if 
the estimated value of that property is 
more than $400,000; or 
‘‘(ii) may be required by the Adminis-
trator or the lender before disbursement of 
the loan if the estimated value of that 
property is $400,000 or less, and such ap-
praisal is necessary for appropriate evalua-
tion of creditworthiness. 
‘‘(C) ADJUSTMENT.—The Administrator 
shall periodically adjust the amount under sub-
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paragraph (B) to account for the effects of in-
flation, provided that no such adjustment shall 
be less than $50,000. 
‘‘(4) LIMITATION ON LEASING.— 
‘‘(A) If the project funded under this sec-
tion includes the acquisition of a facility or the 
construction of a new facility, the small busi-
ness concern— 
‘‘(i) shall permanently occupy and use 
not less than 50 percent of the project 
property; and 
‘‘(ii) may, on a temporary or perma-
nent basis, lease to others not more than 
50 percent of the project property. 
‘‘(B) For purposes of this paragraph, the 
term ‘project property’ means— 
‘‘(i) the building and any exterior 
areas used in connection with the building 
or a part thereof and includes all of the 
parcels of real property included in the 
project in the aggregate; and 
‘‘(ii) occupancy and use of the project 
property by the operating company shall be 
deemed to be occupancy and use by the 
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small business concern that received fund-
ing under this section. 
‘‘(d) REGULATIONS.—(1) The Administrator shall 
promulgate regulations, after notice and comment, to im-
plement the provisions of this section within 60 days after 
enactment of the Small Business Financing and Invest-
ment Act of 2010. The Administrator may limit the com-
ment period to 15 days to meet this deadline. 
‘‘(2) If the Administrator fails to promulgate the reg-
ulations as provided in paragraph (1), all leases entered 
into, absent clear and convincing evidence of fraud, shall 
be deemed to be in compliance with the limitations on leas-
ing in this subparagraph for purposes of honoring the 
guarantee on the debenture issued by the certified develop-
ment company. 
‘‘(3) Any regulation of the Administrator or interpre-
tation of any regulation by the Administrator or the Office 
of Hearings and Appeals that restricts the use of proceeds 
for leased projects that was in effect on the date of enact-
ment of the Small Business Financing and Investment Act 
of 2010 shall hereby cease to apply. 
‘‘(4) Any interpretation of the leasing provisions 
issued by the Administrator prior to the issuance of regu-
lations required by paragraph (1) shall be considered null 
and void and may be not be used in any court of com-
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petent jurisdiction, be it Federal or State court, to dis-
honor any guarantee of a debenture issued by a certified 
development company for a project funded pursuant to 
this section. 
‘‘(e) OWNERSHIP
CALCULATION.—Ownership re-
quirements to determine the eligibility of a small business 
concern that applies for funding under this title shall be 
determined without regard to any ownership interest of 
a spouse arising solely from the application of the commu-
nity property laws of a State for purposes of determining 
marital interests. 
‘‘(f) COMBINATION FINANCING.—Financing under 
this title may be provided to a borrower in the maximum 
amount provided in this section, and a loan guarantee 
under section 7(a) of the Small Business Act (15 U.S.C. 
636(a)) may be provided to the same borrower in the max-
imum amount provided in section 7(a)(3)(A) of such Act, 
to the extent that the borrower otherwise qualifies for such 
assistance. 
‘‘(g) RULES FOR DEBENTURES FUNDING PROJECTS 
IN LOW-INCOME AREAS.— 
‘‘(1) SIZE STANDARDS.—For purposes of deter-
mining the size of a small business concern seeking 
funds for a project described in subsection (b)(3), 
the size standard promulgated by the Administrator 
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113 
in section 121.201 of title 13, Code of Federal Reg-
ulations, as in effect on January, 1, 2009, or any 
successor regulation, shall be increased by 25 per-
cent. 
‘‘(2) PERSONAL LIQUIDITY.— 
‘‘(A) IN GENERAL.—The amount of per-
sonal resources of an owner for a project de-
scribed in subsection (b)(3) that are excluded 
from the amount required to reduce the portion 
of the project funded by the Administrator shall 
be not less than 25 percent more than that re-
quired for funding of any other project de-
scribed in subsection (b). 
‘‘(B) DEFINITION.—For purposes of sub-
paragraph (A), the term ‘owner’ means any 
person that owns not less than 20 percent of 
the equity or has not less than 20 percent of 
the voting rights (in the case of a small busi-
ness organized as a partnership) of a small 
business concern seeking funds under this sec-
tion. 
‘‘(h) APPLICABILITY OF CREDIT ELSEWHERE AND 
PERSONAL RESOURCES REGULATIONS.—Except as pro-
vided in subsection (c)(1)(B) with respect to project fund-
ing, the Administrator shall be prohibited from applying 
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the regulations set forth in sections 120.101 and 120.102 
of title 13, Code of Federal Regulations, as in effect on 
January 1, 2009, or any successor regulation that applies 
a credit elsewhere or personal resources test to any appli-
cation for a loan under this title pending or filed after 
the date of enactment of the Small Business Financing 
and Investment Act of 2010.’’. 
SEC. 559. PRIVATE DEBENTURE SALES AND POOLING OF 
DEBENTURES. 
Section 509 of the Small Business Investment Act 
of 1958 (15 U.S.C. 697f) is amended to read as follows: 
‘‘SEC. 509. PRIVATE DEBENTURE SALES AND POOLING OF 
DEBENTURES. 
‘‘(a) 
PRIVATE
DEBENTURE
SALES.—Notwith-
standing any other law, rule, or regulation, the Adminis-
trator shall sell to investors, either publicly or by private 
placement, debentures issued by certified development 
companies pursuant to this title for the full amount of the 
program levels authorized in each fiscal year and if there 
is not authorization of a level, the amount of debentures 
actually issued. 
‘‘(b) FEDERAL FINANCING BANK.—Nothing in any 
provision of law shall be construed to authorize the Fed-
eral Financing Bank to acquire— 
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‘‘(1) any obligation the payment of principal or 
interest on which at any time has been guaranteed 
in whole or in part under this title and which is 
being sold pursuant to the provisions of this section; 
‘‘(2) any obligation which is an interest in any 
obligation which is an interest in any obligation de-
scribed in paragraph (1); or 
‘‘(3) any obligation which is secured by, or sub-
stantially all of the value of which is attributable to, 
any obligation described in paragraph (1) or (2). 
‘‘(c) POOLING OF DEBENTURES.— 
‘‘(1) IN GENERAL.—The Administrator is au-
thorized to issue trust certificates representing own-
ership of all or a fractional part of debentures issued 
by certified development companies and guaranteed 
under this title if such trust certificates are based on 
and backed by a trust or pool approved by the Ad-
ministrator and composed solely of guaranteed de-
bentures. 
‘‘(2) GUARANTEE OF TRUST CERTIFICATES.— 
The Administrator is authorized, upon such terms 
and conditions as are deemed appropriate, to guar-
antee the timely payment of the principal of and in-
terest on trust certificates issued by the Adminis-
trator or its agent for purposes of this section. Such 
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guarantee shall be limited to the extent of principal 
and interest on the guaranteed debentures which 
compose the trust or pool. In the event that a deben-
ture in such trust or pool is prepaid, either volun-
tarily or in the event of default, the guarantee of 
timely payment of principal and interest on the trust 
certificates shall be reduced in proportion to the 
amount of principal and interest such prepaid deben-
ture represents in the trust or pool. Interest on pre-
paid or defaulted debentures shall accrue and be 
guaranteed by the Administrator only through the 
date of payment on the guarantee. During the term 
of the trust certificate, it may be called for redemp-
tion due to prepayment or default of all debentures 
constituting the pool. 
‘‘(3) FULL FAITH AND CREDIT.—The full faith 
and credit of the United States is pledged to the 
payment of all amounts which may be required to be 
paid under any guarantee of such trust certificates 
issued by the Administrator or its agent pursuant to 
this section. 
‘‘(4) PROHIBITION
ON
GUARANTEE
FEE
FOR 
POOLS.—The Administrator shall not collect any fee 
for any guarantee under this section, provided that 
nothing herein shall preclude any agent of the Ad-
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117 
ministrator from collecting a fee approved by the 
Administrator for the functions performed in para-
graph (6)(F). 
‘‘(5) SUBROGATION.— 
‘‘(A) IN GENERAL.—In the event the Ad-
ministrator pays a claim under a guarantee 
issued under this section, it shall be subrogated 
fully to the rights satisfied by such payment. 
‘‘(B) 
ADMINISTRATOR
EXERCISE
OF 
RIGHTS.—No Federal, State, or local law shall 
preclude or limit the exercise by the Adminis-
trator of its ownership rights in the debentures 
constituting the trust or pool against which the 
trust certificates are issued. 
‘‘(6) CENTRAL REGISTRATION.— 
‘‘(A) IN
GENERAL.—The Administrator 
shall provide for a central registration of all 
trust certificates sold pursuant to this section. 
‘‘(B) CONTRACT.—The Administrator shall 
contract with an agent to carry out on behalf 
of the Administrator the central registration 
functions of this section and the issuance of 
trust certificates to facilitate pooling. 
‘‘(C) BOND.—The Administrator shall re-
quire the contractor to provide a fidelity bond 
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or insurance in such amounts as is deemed nec-
essary to fully protect the interests of the Gov-
ernment. 
‘‘(D) DISCLOSURE
REQUIREMENTS.—The 
Administrator shall, prior to any sale, require 
the seller to disclose to a purchaser of a trust 
certificate issued pursuant to this section, infor-
mation on terms, conditions, and yield of such 
instruments. 
‘‘(E) AUTHORITY TO REGULATE.—The Ad-
ministrator shall have the authority to regulate 
brokers and dealers in trust certificates sold 
pursuant to this section. 
‘‘(F) BOOK ENTRY PERMITTED.—Nothing 
in this paragraph shall prohibit the utilization 
of a book-entry or other electronic form of reg-
istration for trust certificates.’’. 
SEC. 560. FORECLOSURE AND LIQUIDATION OF LOANS. 
Section 510 of the Small Business Investment Act 
of 1958 (15 U.S.C. 697g) is amended to read as follows: 
‘‘SEC. 510. FORECLOSURE AND LIQUIDATION OF LOANS. 
‘‘(a) DELEGATION OF AUTHORITY.—In accordance 
with this section, the Administrator shall delegate to any 
certified development company that meets the eligibility 
requirements of subsection (b)(1), the authority to fore-
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close and liquidate, or to otherwise treat in accordance 
with this section, defaulted loans in its portfolio that are 
funded with the proceeds of debentures guaranteed by the 
Administrator pursuant to this title. 
‘‘(b) ELIGIBILITY FOR DELEGATION.— 
‘‘(1) REQUIREMENTS.—A certified development 
company shall be eligible for a delegation of author-
ity under subsection (a) if— 
‘‘(A) the certified development company— 
‘‘(i) has participated in the loan liq-
uidation pilot program established by the 
Small Business Programs Improvement 
Act of 1996 (15 U.S.C. 695 note), before 
the enactment of the Small Business Fi-
nancing and Investment Act of 2010; 
‘‘(ii) is an accredited or premier cer-
tified development company; or 
‘‘(iii) during the 3 fiscal years imme-
diately prior to seeking such a delegation, 
has made an average of not less than 10 
loans per year that are funded with the 
proceeds of debentures guaranteed under 
this title; and 
‘‘(B) the certified development company— 
‘‘(i) has one or more employees— 
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‘‘(I) with not less than 2 years of 
substantive, decisionmaking experi-
ence in administering the liquidation 
and workout of problem loans secured 
in a manner substantially similar to 
loans funded with the proceeds of de-
bentures guaranteed under this title; 
and 
‘‘(II) who have completed a train-
ing program on loan liquidation devel-
oped by the Administrator in conjunc-
tion with a certified development com-
pany that meet the requirements of 
this paragraph; or 
‘‘(ii) submits to the Administrator 
documentation demonstrating that the 
company has contracted with a qualified 
third party to perform any liquidation ac-
tivities and secures the approval of the 
contract by the Administrator with respect 
to the qualifications of the contractor and 
the terms and conditions of liquidation ac-
tivities. 
‘‘(2) CONFIRMATION.—On the request, the Ad-
ministrator shall examine the qualifications of any 
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121 
certified development company described in sub-
section (a) to determine if such company is eligible 
for the delegation of authority under this section. If 
the Administrator determines that a company is not 
eligible, the Administrator shall provide the com-
pany, in writing, with the reasons for such ineligi-
bility. The certified development company shall be 
entitled to request delegated authority and the Ad-
ministrator shall review the request only to address 
whether the certified development company has rec-
tified the reasons for the Administrator’s original 
determination of ineligibility. 
‘‘(c) SCOPE OF DELEGATED AUTHORITY.— 
‘‘(1) IN GENERAL.—Each certified development 
company to which the Administrator delegates au-
thority under subsection (a) may with respect to any 
loan described in subsection (a)— 
‘‘(A) perform all liquidation and fore-
closure functions, including the purchase in ac-
cordance with this subsection of any other in-
debtedness secured by the property securing the 
loan, in a reasonable and sound manner accord-
ing to commercially accepted practices, pursu-
ant to a liquidation plan approved in advance 
by the Administrator under paragraph (2)(A); 
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‘‘(B) litigate any matter relating to the 
performance of the functions described in sub-
paragraph (A), except that the Administrator 
may— 
‘‘(i) defend or bring any claim if— 
‘‘(I) the outcome of the litigation 
may adversely affect the Administra-
tor’s management of the program es-
tablished under this title; or 
‘‘(II) the Administrator is enti-
tled to legal remedies not available to 
a certified development company and 
such remedies will benefit either the 
Administrator or the certified develop-
ment company; and 
‘‘(ii) oversee the conduct of any such 
litigation; and 
‘‘(C) take other appropriate actions to 
mitigate loan losses in lieu of total liquidation 
or foreclosures, including the restructuring of a 
loan in accordance with prudent loan servicing 
practices and pursuant to a workout plan ap-
proved in advance by the Administrator under 
paragraph (2). 
‘‘(2) ADMINISTRATOR APPROVAL OF PLANS.— 
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‘‘(A) CERTIFIED DEVELOPMENT COMPANY 
SUBMISSION
OF
PLANS.—Before carrying out 
functions described in paragraph (1)(A) or 
(1)(C), the certified development company shall 
submit to the Administrator a proposed liquida-
tion plan, any proposal for the Administrator to 
the purchase of any other indebtedness secured 
by the property securing a defaulted loan, or a 
workout plan or any combination thereof. 
‘‘(B) ADMINISTRATOR
APPROVAL
PROCE-
DURES.— 
‘‘(i) TIMING.—Not later than 15 busi-
ness days after the plans described in sub-
paragraph (A) are received by the Admin-
istrator, the Administrator shall approve or 
reject the plan. 
‘‘(ii) NOTICE OF NO DECISION.—With 
respect to any plan that cannot be ap-
proved or denied within the 15-day period 
required by clause (i), the Administrator 
shall within such period provide in accord-
ance with subparagraph (E) notice to the 
company that submitted the plan. 
‘‘(C) ROUTINE ACTIONS.—In carrying out 
the functions described in paragraph (1)(A), a 
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certified development company may undertake 
routine actions not addressed in a liquidation or 
workout plan without obtaining additional ap-
proval from the Administrator. 
‘‘(D) COMPROMISE OF INDEBTEDNESS.— 
In carrying out functions described in para-
graph (1)(A), a certified development company 
may— 
‘‘(i) consider an offer made by an obli-
gor to compromise the debt for less than 
the full amount owing; and 
‘‘(ii) pursuant to such offer, release 
any obligor or other party contingently lia-
ble, if the company secures the written ap-
proval of the Administrator. 
‘‘(E) CONTENTS OF NOTICE OF NO DECI-
SION.—Any notice provided by the Adminis-
trator pursuant to subparagraph (B)(ii) shall— 
‘‘(i) be in writing stating the specific 
reasons for which the Administrator was 
unable to act on the request submitted 
pursuant to subparagraph (A); 
‘‘(ii) provide an estimate of the addi-
tional time needed for the Administrator to 
reach a decision on the request; and 
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‘‘(iii) specify any additional informa-
tion or documentation that the Adminis-
trator needs to make a decision but was 
not provided in the plan submitted by the 
certified development company. 
‘‘(3) CONFLICT OF INTEREST.—In carrying out 
functions described in paragraph (1), a certified de-
velopment company shall take no action that would 
result in an actual or apparent conflict of interest 
between the company (or any employee of the com-
pany) and any third-party lender, associate of a 
third-party lender, or any other person participating 
in a liquidation, foreclosure, or loss mitigation ac-
tion. 
‘‘(d) SUSPENSION
OR REVOCATION
OF AUTHOR-
ITY.— 
‘‘(1) IN GENERAL.—The Administrator may re-
voke or suspend a delegation of authority under this 
section to a certified development company if the 
Administrator determines that the company— 
‘‘(A) does not meet the requirements of 
subsection (b)(1); 
‘‘(B) violated any applicable law or rule or 
regulation of the Administrator that in the esti-
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126 
mation of the Administrator requires revoca-
tion; or 
‘‘(C) fails to comply with any reporting 
that may be established by the Administrator 
relating to the establishment of eligibility in 
subsection (b)(1) or carrying out the functions 
described in subsection (c)(1). 
‘‘(2) WRITTEN
NOTICE.—The Administrator 
shall provide in writing detailed reason why the dele-
gation of authority was suspended or revoked. 
‘‘(e) PARTICIPATION IN LIQUIDATION.— 
‘‘(1) IN GENERAL.— 
‘‘(A) CONTRACT WITH QUALIFIED THIRD 
PARTY.—A 
certified 
development 
company 
which elects not to apply for authority to fore-
close and liquidate defaulted loans under this 
section, or which the Administrator determines 
to be ineligible for such authority, shall contract 
with a qualified third party to perform fore-
closure and liquidation of defaulted loans in its 
portfolio. 
‘‘(B) CONTRACT APPROVAL.—The contract 
entered into by the certified development com-
pany specified in subparagraph (A) shall be 
contingent upon approval by the Administrator 
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with respect to the qualifications of the con-
tractor and the terms and conditions of liquida-
tion activities. The Administrator shall not un-
reasonably withhold such approval. 
‘‘(C) NOTIFICATION
OF
REJECTION.—If 
the Administrator rejects the contract, the Ad-
ministrator shall provide a notice to the cer-
tified development company, in writing, explain-
ing the reasons for such rejection within ten 
business days after submission of the contract. 
‘‘(D) RESUBMITTAL.—The certified devel-
opment company shall be permitted to resubmit 
the contract and the Administrator’s review of 
any such resubmittal shall be limited to 
insufficiencies described in the notification of 
rejection. 
‘‘(E) REGULATIONS.—The Administrator 
shall promulgate regulations, after notice and 
opportunity for comment, adopting standards 
for the approval of qualified third-party con-
tractors within 90 days after the date of enact-
ment of the Small Business Financing and In-
vestment Act of 2010. 
‘‘(F) FAILURE TO PROMULGATE REGULA-
TIONS.—If the Administrator fails to promul-
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128 
gate such regulations, any contract for liquida-
tion entered into by a certified development 
company under this subsection shall be consid-
ered valid for the purposes of this subsection 
and subsection (f). 
‘‘(G) EFFECT OF ADMINISTRATOR’S PRO-
MULGATION OF REGULATIONS.—If the Adminis-
trator promulgates regulations after the dead-
line specified in subparagraph (E), those regu-
lations shall not have any retroactive applica-
tion with respect to contracts that are described 
in subparagraph (F). 
‘‘(2) COMMENCEMENT.—This subsection shall 
not require any certified development company to 
liquidate defaulted loans until the Administrator im-
plements a system to compensate and reimburse cer-
tified development companies for liquidation of any 
defaulted loans. 
‘‘(f) COMPENSATION AND REIMBURSEMENT.— 
‘‘(1) REIMBURSEMENT
OF
EXPENSES.—The 
Administrator shall reimburse each certified develop-
ment company for all expenses paid by such com-
pany as part of the foreclosure and liquidation ac-
tivities taken to carry out this section, if the ex-
penses— 
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129 
‘‘(A) were— 
‘‘(i) approved in advance by the Ad-
ministrator, either specifically in a plan 
submitted pursuant to subsection (c) or 
generally, such as, but not limited to, ac-
tions approved by the Administrator in 
regulations 
or 
other 
interpretative 
issuances; or 
‘‘(ii) incurred by the development 
company on an emergency basis without 
prior approval from the Administrator, if 
the Administrator determines that the ex-
penses were reasonable and appropriate; 
and 
‘‘(B) are submitted by the certified devel-
opment company to the Administrator not later 
than 3 years after the date the expense was in-
curred or the bill therefore is submitted to the 
certified development company, whichever is 
later. 
‘‘(2) ALTERNATIVE
REIMBURSEMENT.—As an 
alternative to the procedure in paragraph (1), a cer-
tified development company may elect to obtain re-
imbursement for all such expenses from the proceeds 
of any collateral provided by the borrower that was 
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130 
liquidated by the certified development company if 
the expenses comply with the requirements of para-
graph (1). Within 6 months of the reimbursement, 
the certified development company shall provide the 
Administrator with the same information and docu-
mentation it would be required to submit to obtain 
payment from the Administrator. 
‘‘(3) REGULATIONS.—The Administrator shall 
promulgate regulations, after notice and comment to 
carry out the provisions of paragraphs (1) and (2). 
If the Administrator does not promulgate such regu-
lations within one year, certified development compa-
nies shall be authorized, notwithstanding the re-
quirements of subsection (e)(2), to liquidate de-
faulted loans and such costs and expenses incurred, 
absent clear and convincing evidence of fraud, shall 
be deemed to be approved. 
‘‘(4) COMPENSATION FOR RESULTS.— 
‘‘(A) DEVELOPMENT.—In regulations pro-
mulgated pursuant to paragraph (3), the Ad-
ministrator also shall develop a schedule of 
compensation that provides monetary incentives 
for certified development companies in order to 
increase recoveries on defaulted loans. 
‘‘(B) CRITERIA.—The schedule shall— 
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131 
‘‘(i) be based on a percentage of the 
net amount recovered, but shall not exceed 
a maximum amount; and 
‘‘(ii) not apply to any foreclosure 
which is conducted under a contract be-
tween a certified development company and 
a qualified third party to perform the fore-
closure and liquidation. 
‘‘(C) PAYMENT.—The Administrator shall 
transmit the compensation provided herein to 
the development company from the proceeds of 
liquidated collateral, unless the Administrator 
utilizes another source for funds, within 30 
days from the date when the liquidation case 
has been closed and documentation received.’’. 
SEC. 561. REPORTS AND REGULATIONS. 
Title V of the Small Business Investment Act of 1958 
(15 U.S.C. 695 et seq.) is amended by adding at the end 
the following: 
‘‘SEC. 511. REPORTS. 
‘‘(a) PREMIER CERTIFIED DEVELOPMENT COMPA-
NIES.—The Administrator shall report annually to the 
Committee on Small Business of the House of Representa-
tives and the Committee on Small Business and Entrepre-
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neurship of the Senate on the implementation of section 
504. Each report shall include— 
‘‘(1) the number of premier certified develop-
ment companies; 
‘‘(2) the debenture volume of each premier cer-
tified development company; 
‘‘(3) a comparison of the loss rate for premier 
certified development companies to the loss rate for 
accredited or certified development companies; and 
‘‘(4) such other information as the Adminis-
trator deems appropriate. 
‘‘(b) 
REPORTS
ON
LIQUIDATION
AND
FORE-
CLOSURES.— 
‘‘(1) IN GENERAL.—Based on information pro-
vided by certified development companies and the 
Administrator, the Administrator shall submit annu-
ally to the Committee on Small Business and Entre-
preneurship of the Senate and the Committee on 
Small Business of the House of Representatives a 
report on the results of delegation of authority under 
section 510. 
‘‘(2) CONTENTS.—Each report submitted under 
paragraph (1) shall include the following informa-
tion: 
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133 
‘‘(A) With respect to each loan foreclosed 
or liquidated by a certified development com-
pany, or for which losses were otherwise miti-
gated by pursuant to a workout plan— 
‘‘(i) the total cost of the project fi-
nanced with the loan; 
‘‘(ii) the total original dollar amount 
guaranteed by the Administration; 
‘‘(iii) the total dollar amount of the 
loan at the time of liquidation, foreclosure, 
or mitigation of loss; 
‘‘(iv) the total dollar losses resulting 
from the liquidation, foreclosure, or mitiga-
tion of loss; and 
‘‘(v) the total recoveries resulting 
from the liquidation, foreclosure, or mitiga-
tion of loss, both as a percentage of the 
amount guaranteed and the total cost of 
the project financed. 
‘‘(B) With respect to each certified devel-
opment company to which authority is dele-
gated under section 510, the totals of each of 
the amounts described in clauses (i) through (v) 
of subparagraph (A). 
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134 
‘‘(C) With respect to each certified devel-
opment company that contracts with a qualified 
third-party contractor pursuant to section 
510(e), the total of each of the amounts de-
scribed in clauses (i) through (v) of subpara-
graph (A). 
‘‘(D) With respect to all loans subject to 
foreclosure, liquidation, or mitigation under sec-
tion 510, the totals of each of the amounts de-
scribed in clauses (i) through (v) of subpara-
graph (A). 
‘‘(E) A comparison between— 
‘‘(i) the information provided under 
subparagraph (D) with respect to the 12- 
month period preceding the date on which 
the report is submitted; and 
‘‘(ii) the same information with re-
spect to loans foreclosed and liquidated, or 
otherwise treated, by the Administrator 
during the same period. 
‘‘(F) The number of times that the Admin-
istrator has failed to approve or reject a liq-
uidation plan, workout plan, request to pur-
chase indebtedness, or failed to approve a third- 
party contractor under section 510, including 
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135 
specific information regarding the reasons for 
the Administrator’s failure and any delays that 
resulted. 
‘‘(c) REPORTS ON COMBINATION FINANCING.—Not 
later than 90 days after the date of enactment of the 
Small Business Financing and Investment Act of 2010, 
and annually thereafter, the Administrator shall submit 
a report to the Committee on Small Business and Entre-
preneurship of the Senate and the Committee on Small 
Business of the House of Representatives that— 
‘‘(1) includes the number of small business con-
cerns that have financing under both section 7(a) of 
the Small Business Act (15 U.S.C. 636(a)) and title 
V of the Small Business Investment Act of 1958 (15 
U.S.C. 695 et seq.) during the year before the year 
of that report; and 
‘‘(2) describes the total amount and general 
performance of the financing described in paragraph 
(1). 
‘‘(d) REPORT ON OTHER ECONOMIC DEVELOPMENT 
ACTIVITY.—The Administrator shall compile and submit 
to the Committee on Small Business of the House of Rep-
resentatives and the Committee on Small Business and 
Entrepreneurship of the Senate on an annual basis, com-
mencing in the year that the Small Business Financing 
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136 
and Investment Act of 2010 is enacted, a report that de-
scribes the economic and community development activi-
ties, other than loan making under this title, of each cer-
tified development company during the prior fiscal year. 
The Administrator may contract with another party, in-
cluding non-governmental entities, to collect information 
or otherwise assist in the preparation of the report re-
quired by this subsection. 
‘‘SEC. 512. PROMULGATION OF REGULATIONS UNDER THIS 
TITLE. 
‘‘(a) DEADLINES
FOR
IMPLEMENTING
REGULA-
TIONS.—Except as expressly provided elsewhere in the 
Small Business Financing and Investment Act of 2010, 
the Administrator shall promulgate regulations under this 
title, after providing notice and the opportunity for com-
ment, within 180 days after the date of enactment of that 
Act. 
‘‘(b) NOTICE
AND COMMENT REQUIREMENTS
IN 
GENERAL.—Except as otherwise provided elsewhere in 
this title, the Administrator shall provide, after the date 
of enactment of the Small Business Financing and Invest-
ment Act of 2010, notice of any proposed change to a reg-
ulation implementing this title (whether in existence on 
the date of enactment of the Small Business Financing 
and Investment Act of 2010 or subsequently adopted), 
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137 
publish such notification in the Federal Register, and pro-
vide a comment period of not less than 60 days.’’. 
SEC. 562. PROGRAM NAME. 
Title V of the Small Business Investment Act of 1958 
(15 U.S.C. 695 et seq.), as amended by this Act, is further 
amended by adding at the end the following: 
‘‘SEC. 513 PROGRAM NAME. 
‘‘(a) IN GENERAL.—The program created by this 
title shall be referred to as the CDC Economic Develop-
ment Loan Program. 
‘‘(b) MODIFICATION
OF MATERIALS USED.—Not 
later than 60 days after the date of enactment of the 
Small Business Financing and Investment Act of 2010, 
the Administrator shall modify all documents and websites 
to conform to the name change made by this section.’’. 
CHAPTER 3—MISCELLANEOUS 
SEC. 571. REPORT ON STANDARD OPERATING PROCE-
DURES. 
(a) REPORT.—The Administrator of the Small Busi-
ness Administration shall submit to the Committee on 
Small Business of the House of Representatives and the 
Committee on Small Business and Entrepreneurship of 
the Senate a report within 180 days after enactment of 
this Act identifying each Standard Operating Procedure 
issued after January 1, 1996, that relates to the operation 
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138 
of a development company (in any manner) under title V 
of the Small Business Investment Act of 1958, that is still 
in effect on the date of enactment of this Act, and the 
regulation codified in title 13 of the Code of Federal Regu-
lations that authorizes the issuance of the Standard Oper-
ating Procedure and separately identifies the regulation 
that the Standard Operating Procedure purports to inter-
pret. 
(b) INAPPLICABILITY.—If the Administrator fails to 
complete the report by the time specified in subsection (a), 
the Administrator shall, unless there is clear and con-
vincing evidence of fraud, honor the terms and conditions 
of any debenture to the entity that issued the debenture 
pursuant to title V of the Small Business Investment Act 
of 1958 without regard to whether the entity complied 
with any of the Standard Operating Procedures described 
in subsection (a) until such time as the Administrator sub-
mits the report required under subsection (a). 
(c) DEFINITION.—For purposes of this section, the 
term ‘‘Standard Operating Procedure’’ has the meaning 
given that term in section 120.10 of title 13, Code of Fed-
eral Regulations, as in effect on January 1, 2009, and 
includes any reference to the acronym ‘‘SOP’’. 
SEC. 572. ALTERNATIVE SIZE STANDARD. 
(a) REVIEW AND STUDY.— 
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139 
(1) IN
GENERAL.—The Administrator of the 
Small Business Administration shall study and re-
view the optional size standard set forth in section 
121.301(b) of title 13, Code of Federal Regulations, 
as in effect on January 1, 2009, for eligibility of a 
small business concern for financing under title V of 
the Small Business Investment Act of 1958. 
(2) CONTENTS.—The review shall analyze 
whether the alternative size standard includes the 
business concerns defined in section 3(a)(1) of the 
Small Business Act and what, if any, regulatory 
changes are needed in the alternative size standard. 
(3) SUBMISSION TO CONGRESS.—The Adminis-
trator shall submit its study and conclusions within 
180 days after the date of enactment of the Small 
Business Financing and Investment Act of 2010 to 
the Committee on Small Business and Entrepre-
neurship of the Senate and the Committee on Small 
Business of the House of Representatives. 
(b) ISSUANCE OF REGULATIONS.—Any changes in 
the optional size standard described in subsection (a)(1) 
shall be promulgated within 180 days of the submission 
of the report to committees referred to in paragraph (3) 
of subsection (a). 
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(c) INTERIM ALTERNATIVE SIZE STANDARD.—Until 
the Administrator promulgates regulations either re-
adopting the size standard referred to in subsection (a)(1) 
or adopts a new alternative size standard, the alternative 
size standard shall be a maximum tangible net worth of 
not more than $15,000,000 and an average net income 
after the payment of Federal taxes (but excluding any car-
ryover losses) for the preceding two fiscal years not more 
than $5,000,000. 
Subtitle C—Microlending 
Expansion 
SEC. 581. MICROLOAN CREDIT BUILDING INITIATIVE. 
Section 7(m) of the Small Business Act (15 U.S.C. 
636(m)) is amended by adding at the end the following: 
‘‘(14) CREDIT REPORTING INFORMATION.—The 
Administrator shall establish a process, for use by 
an intermediary making a loan to a borrower under 
this subsection, under which the intermediary shall 
provide to the major credit reporting agencies the in-
formation about the borrower, both positive and neg-
ative, that is relevant to credit reporting, such as the 
payment activity of the borrower on the loan. Such 
process shall allow an intermediary the option of 
providing information to the major credit reporting 
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141 
agencies through the Administration or independ-
ently.’’. 
SEC. 582. FLEXIBLE CREDIT TERMS. 
Section 7(m) of the Small Business Act (15 U.S.C. 
636(m)), as amended by this Act, is further amended— 
(1) in paragraph (1)(B)(i) by striking ‘‘short- 
term,’’; 
(2) in paragraph (6)(A) by striking ‘‘short- 
term,’’; and 
(3) in paragraph (11)(B) by striking ‘‘short- 
term,’’. 
SEC. 583. INCREASED PROGRAM PARTICIPATION. 
Section 7(m)(2) of the Small Business Act (15 
U.S.C. 636(m)(2)) is amended— 
(1) in subparagraph (A) by striking ‘‘paragraph 
(10)’’ and inserting ‘‘paragraph (11)’’; and 
(2) by amending subparagraph (B) to read as 
follows: 
‘‘(B) has— 
‘‘(i) at least— 
‘‘(I) 1 year of experience making 
microloans to startup, newly estab-
lished, or growing small business con-
cerns; or 
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142 
‘‘(II) 1 full-time employee who 
has not less than 3 years of experi-
ence making microloans to startup, 
newly established, or growing small 
business concerns; and 
‘‘(ii) at least— 
‘‘(I) 1 year of experience pro-
viding, as an integral part of its 
microloan program, intensive mar-
keting, management, and technical as-
sistance to its borrowers; or 
‘‘(II) 1 full-time employee who 
has not less than 1 year of experience 
providing intensive marketing, man-
agement, and technical assistance to 
borrowers.’’. 
SEC. 584. INCREASED LIMIT ON INTERMEDIARY BOR-
ROWING. 
Section 7(m)(3)(C) of the Small Business Act (15 
U.S.C. 636(m)(3)(C)) is amended— 
(1) by striking ‘‘$750,000’’ and inserting 
‘‘$1,000,000’’; 
(2) by striking ‘‘$3,500,000’’ and inserting 
‘‘$7,000,000’’; and 
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(3) by adding at the end the following: ‘‘The 
Administrator may treat the amount of $7,000,000 
in this subparagraph as if such amount is 
$10,000,000 if the Administrator determines, with 
respect to an intermediary, that such treatment is 
appropriate.’’. 
SEC. 585. EXPANDED BORROWER EDUCATION ASSISTANCE. 
Section 7(m)(4)(E) of the Small Business Act (15 
U.S.C. 636(m)(4)(E)) is amended— 
(1) in clause (i) by striking ‘‘25 percent’’ and 
inserting ‘‘35 percent’’; and 
(2) in clause (ii) by striking ‘‘25 percent’’ and 
inserting ‘‘35 percent’’. 
SEC. 586. YOUNG ENTREPRENEURS PROGRAM. 
Section 7(m)(4) of the Small Business Act (15 
U.S.C. 636(m)(4)) is amended by adding at the end the 
following: 
‘‘(G) 
YOUNG
ENTREPRENEURS
PRO-
GRAM.— 
‘‘(i) IN
GENERAL.—An intermediary 
that receives a grant under paragraph 
(1)(B)(ii) may establish a program for the 
geographic area served by such inter-
mediary that provides to young entre-
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144 
preneurs technical assistance regarding the 
following: 
‘‘(I) Establishing or operating a 
small business concern in the geo-
graphic area served by the inter-
mediary. 
‘‘(II) Acquiring or securing fi-
nancing to carry out the activities de-
scribed in subclause (I). 
‘‘(ii) YOUNG
ENTREPRENEUR
DE-
FINED.—For purposes of this subpara-
graph, a young entrepreneur is an indi-
vidual who— 
‘‘(I) is 25 years of age or young-
er; and 
‘‘(II) has resided in the geo-
graphic area served by the inter-
mediary for not less than 2 years. 
‘‘(iii) GOOD FAITH EFFORT REQUIRE-
MENT.—If a young entrepreneur who re-
ceives technical assistance under this sub-
paragraph from an intermediary estab-
lishes or operates a small business concern, 
the young entrepreneur shall make a good 
faith effort to establish or operate such 
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145 
concern in the geographic area served by 
the intermediary. 
‘‘(iv) DEFERRED
REPAYMENT.—If a 
small business concern established or oper-
ated by a young entrepreneur receives a 
loan under this subsection, such concern 
may defer repayment on such loan for a 
period of not more than 6 months begin-
ning on the date that such concern receives 
the final disbursement of such loan.’’. 
SEC. 587. INTEREST RATES AND LOAN SIZE. 
Section 7(m) of the Small Business Act (15 U.S.C. 
636(m)), as amended by this Act, is further amended— 
(1) 
in 
paragraph 
(3)(F)(iii) 
by 
striking 
‘‘$7,500’’ and inserting ‘‘$10,000’’; 
(2) in paragraph (6)(C)(i) by striking ‘‘$7,500’’ 
and inserting ‘‘$10,000’’; and 
(3) 
in 
paragraph 
(6)(C)(ii) 
by 
striking 
‘‘$7,500’’ and inserting ‘‘$10,000’’. 
SEC. 588. REPORTING REQUIREMENT. 
Section 7(m) of the Small Business Act (15 U.S.C. 
636(m)), as amended by this Act, is further amended by 
adding at the end the following: 
‘‘(15) REPORTING
REQUIREMENT.—Not later 
than 90 days after the end of each fiscal year, the 
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Administrator shall submit to the Committee on 
Small Business of the House of Representatives and 
the Committee on Small Business and Entrepre-
neurship of the Senate a report that includes, with 
respect to such fiscal year of the microloan program, 
the following: 
‘‘(A) The names and locations of each 
intermediary that received funds to make 
microloans or provide marketing, management, 
and technical assistance. 
‘‘(B) The amounts of each loan and each 
grant provided to each such intermediary in 
such fiscal year and in prior fiscal years. 
‘‘(C) A description of the contributions 
from non-Federal sources of each such inter-
mediary. 
‘‘(D) 
The 
number 
and 
amounts 
of 
microloans made by each such intermediary to 
all borrowers and to each of the following: 
‘‘(i) Women entrepreneurs and busi-
ness owners. 
‘‘(ii) Low-income entrepreneurs and 
business owners. 
‘‘(iii) Veteran entrepreneurs and busi-
ness owners. 
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‘‘(iv) Disabled entrepreneurs and busi-
ness owners. 
‘‘(v) Minority entrepreneurs and busi-
ness owners. 
‘‘(E) A description of the marketing, man-
agement, and technical assistance provided by 
each such intermediary to all borrowers and to 
each of the following: 
‘‘(i) Women entrepreneurs and busi-
ness owners. 
‘‘(ii) Low-income entrepreneurs and 
business owners. 
‘‘(iii) Veteran entrepreneurs and busi-
ness owners. 
‘‘(iv) Disabled entrepreneurs and busi-
ness owners. 
‘‘(v) Minority entrepreneurs and busi-
ness owners. 
‘‘(F) The number of jobs created and re-
tained as a result of microloans and marketing, 
management, and technical assistance provided 
by each such intermediary. 
‘‘(G) The repayment history of each such 
intermediary. 
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148 
‘‘(H) The number of businesses that 
achieved success after receipt of a microloan.’’. 
SEC. 589. SURPLUS INTEREST RATE SUBSIDY FOR BUSI-
NESSES. 
Section 7(m) of the Small Business Act (15 U.S.C. 
636(m)), as amended by this Act, is further amended by 
adding at the end the following: 
‘‘(16) INTEREST
ASSISTANCE.—The Adminis-
trator is authorized to make grants to intermediaries 
for the purposes of reducing interest rates charged 
to borrowers that receive financing under this sub-
section.’’. 
SEC. 590. AUTHORIZATION OF APPROPRIATIONS. 
Section 20 of the Small Business Act (15 U.S.C. 631 
note), as amended by this Act, is further amended by in-
serting after subsection (g) the following: 
‘‘(h) FISCAL YEARS 2010 AND 2011 WITH RESPECT 
TO SECTION 7(m).— 
‘‘(1) PROGRAM LEVELS.—For the programs au-
thorized by this Act, the Administration is author-
ized to make during each of fiscal years 2010 and 
2011— 
‘‘(A) $80,000,000 in technical assistance 
grants, as provided in section 7(m); and 
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149 
‘‘(B) $110,000,000 in direct loans, as pro-
vided in section 7(m). 
‘‘(C) $10,000,000 in interest assistance 
grants, as provided in section 7(m)(16). 
‘‘(2) AUTHORIZATION
OF
APPROPRIATIONS.— 
There is authorized to be appropriated such sums as 
may be necessary to carry out paragraph (1).’’. 
Subtitle D—Small Business Invest-
ment Company Modernization 
SEC. 591. INCREASED INVESTMENT FROM STATES. 
Section 103(13)(C) of the Small Business Investment 
Act of 1958 (15 U.S.C. 662(13)(C)) is amended by strik-
ing ‘‘33 percent’’ and inserting ‘‘45 percent’’. 
SEC. 592. EXPEDITED LICENSING FOR EXPERIENCED AP-
PLICANTS. 
Section 301 of the Small Business Investment Act 
of 1958 (15 U.S.C. 681) is amended by inserting after 
subsection (c) the following: 
‘‘(d) LICENSES FOR EXPERIENCED APPLICANTS.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of this section, not later than 60 days after 
the initial receipt by the Administrator of any re-
quest (which shall be deemed to be the application) 
for a license to operate as a small business invest-
ment company under this Act, the Administrator 
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shall approve the request and issue such license if 
each of the following requirements is satisfied: 
‘‘(A) At least 50 percent of the principal 
managers of the applicant consist of at least 
two-thirds of the principal managers of a small 
business investment company that has been li-
censed under this Act. 
‘‘(B) The licensed small business invest-
ment company specified under subparagraph 
(A) has operated under such license for at least 
3 years prior to the receipt of the request speci-
fied in this paragraph. 
‘‘(C) The licensed small business invest-
ment company specified under subparagraph 
(A)— 
‘‘(i) either has invested at least 70 
percent of its private capital and drawn at 
least 50 percent of its projected leverage at 
the time of the receipt of the request speci-
fied in this paragraph or reserved for in-
vestment and expenses or some combina-
tion of both at least 70 percent of its pri-
vate capital in the one-year period prior to 
the date on which the application referred 
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151 
to in this paragraph was received by the 
Administrator; 
‘‘(ii) has maintained 6 consecutive 
quarters of profitable net investment in-
come; and 
‘‘(iii) has made at least 3 exits from 
investments in small businesses that have 
realized profits from those respective in-
vestments. 
‘‘(D) The applicant submits to the Admin-
istrator, in writing, an application consisting of 
all of the following: 
‘‘(i) A certification, in the form pre-
scribed by the Administrator, that such ap-
plicant satisfies the requirements of this 
subsection and that all information con-
tained in the application is true and com-
plete. 
‘‘(ii) A copy of the organizational doc-
uments of the applicant. 
‘‘(iii) A copy of the operating plan of 
the applicant demonstrating that at least 
50 percent of the amount of the planned 
investments of the applicant will be in the 
same or substantially similar investment 
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152 
stage and use the same or substantially 
similar type of investment instruments as 
the investments of the licensed small busi-
ness investment company specified under 
subparagraph (A). 
‘‘(iv) A certification, in a form pre-
scribed by the Administrator, that the ap-
plicant satisfies the requirements of sub-
sections (a) and (c) of section 302 of this 
Act. 
‘‘(E) The applicant is in good standing as 
set forth in paragraph (2). 
‘‘(F) The applicant pays all fees prescribed 
by the Administrator under subsection (e). 
‘‘(2) GOOD STANDING.—For purposes of this 
subsection, an applicant is in good standing if— 
‘‘(A) a licensed leveraged or non-leveraged 
small business investment company specified 
under paragraph (1)(A) is actively operating 
under this Act on the date of the initial receipt 
of the application by the Administrator to 
which this subsection applies; 
‘‘(B) no principal manager of the applicant 
has been found liable in a civil action for fraud 
if the Administrator makes a reasonable deter-
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153 
mination based on evidence in the agency 
record that such liability has a material adverse 
effect on the ability of the applicant to perform 
obligations required by a license issued pursu-
ant to this Act; and 
‘‘(C) no principal manager is under inves-
tigation by a governmental agency or authority 
for, is under indictment for, or has been con-
victed of a felony for a violation of Federal or 
State securities laws, fraud, or another criminal 
violation if such investigation, indictment, or 
conviction has a material adverse effect on the 
ability of the applicant to perform obligations 
under a license issued under this Act. 
‘‘(3) LIMITATION.— 
‘‘(A) IN
GENERAL.—The Administrator 
may remove an application from the approval 
process under this subsection if the Adminis-
trator determines based on evidence in the 
agency record that the approval of the license 
would present an unacceptable risk to the Fed-
eral Government. 
‘‘(B) IN
WRITING.—Such determination 
shall be made in writing and provided to the 
applicant no later than 10 calendar days after 
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154 
such determination is made. Failure to provide 
this determination to the applicant shall be 
deemed to be a permanent waiver of the Admin-
istrator’s authority to remove an application 
pursuant to this subsection. 
‘‘(C) NON-DELEGABILITY.—The Adminis-
trator may rely on agency personnel to collect 
data or other material relevant to establishing 
a record, but the decision to remove the appli-
cation may not be delegated by the Adminis-
trator to any subordinate personnel in the agen-
cy. 
‘‘(4) NOTICE AND OPPORTUNITY TO CURE NON- 
CONFORMANCE.— 
‘‘(A) NOTICE
OF
NON-CONFORMANCE.— 
Except for a determination made pursuant to 
paragraph (3), the Administrator shall provide 
an applicant described in paragraph (1) within 
60 days after receipt of the application a writ-
ten notice and description of any nonconform-
ance with any requirement of this subsection 
based on evidence in the agency record. 
‘‘(B) OPPORTUNITY TO CURE.—The appli-
cant shall have 30 days following the receipt of 
notice of nonconformance or the receipt of re-
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155 
moval as set forth in paragraph (3) to cure 
such nonconformance. 
‘‘(C) FAILURE TO PROVIDE NOTICE.—Fail-
ure to provide the notice within the time limit 
set forth in subparagraph (A) shall be deemed 
to be acceptance by the Administrator of the 
applicant’s conformance with the requirements 
of this subsection. 
‘‘(5) BACKGROUND
REVIEWS.—The Adminis-
trator shall ensure that a timely background check 
of the principal managers of each applicant is com-
pleted with respect to paragraphs (2)(B) and (2)(C). 
‘‘(6) FEES.—The Administrator may charge an 
applicant additional fees for carrying out the back-
ground reviews mandated by paragraph (5). Such 
fees shall not exceed $10,000. 
‘‘(7) EFFECT
OF
NON-QUALIFICATION.—The 
failure of an applicant to qualify for expedited licen-
sure under this subsection shall have no effect on an 
existing license or the ability for the applicant or 
any of its individual managers to apply for or receive 
a license to operate a small business investment 
company under the procedures established elsewhere 
in this Act or its implementing regulations. 
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156 
‘‘(8) REGULATIONS.—The Administrator shall 
develop forms and promulgate regulations to imple-
ment this subsection after providing an opportunity 
for notice and comment. Regulations promulgated 
pursuant to this paragraph shall be published in the 
Code of Federal Regulations.’’. 
SEC. 593. REVISED LEVERAGE LIMITATIONS FOR SUCCESS-
FUL SBICS. 
(a) MAXIMUM LEVERAGE.—Section 303(b)(2) of the 
Small Business Investment Act of 1958 (15 U.S.C. 
683(b)(2)) is amended by striking so much of paragraph 
(2) as precedes subparagraph (C) and inserting the fol-
lowing: 
‘‘(2) MAXIMUM LEVERAGE.— 
‘‘(A) IN
GENERAL.—(i) The maximum 
amount of outstanding leverage made available 
to any one company licensed under section 
301(c) of this Act may not exceed the lesser 
of— 
‘‘(I) 300 percent of such com-
pany’s private capital; or 
‘‘(II) $150,000,000. 
‘‘(ii) In applying clause (i)(I) in the case of 
a debenture licensee which is in good standing 
without the imposition of additional regulatory 
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standards and whose financings at cost are 
comprised of at least 50 percent of loans and 
debt securities, such licensee may be leveraged 
as follows: 
‘‘(I) The first one-third of private cap-
ital to 300 percent. 
‘‘(II) The second one-third of private 
capital to 200 percent. 
‘‘(III) The last third of private capital 
to 100 percent. 
‘‘(iii) Notwithstanding clause (i), in the 
case of any company operating as a business 
development company (as such term is defined 
under section 2(a)(48) of the Investment Com-
pany Act of 1940) or a majority-owned sub-
sidiary of such a company that is in good 
standing without the imposition of additional 
regulatory requirements, the maximum amount 
of outstanding leverage made available to such 
company shall be $250,000,000. 
‘‘(B) MULTIPLE LICENSEES UNDER COM-
MON CONTROL.—The maximum amount of out-
standing leverage made available to two or more 
debenture companies licensed under section 
301(c) of this Act that are commonly controlled 
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(as determined by the Administrator) and not 
under capital impairment may not exceed 
$350,000,000.’’. 
(b) REGULATIONS.—Section 303(b)(2) of the Small 
Business Investment Act of 1958 (15 U.S.C. 683(b)(2)), 
as amended by this Act, is further amended by adding 
at the end the following: 
‘‘(E) REGULATIONS.—The Administrator 
shall promulgate regulations, after notice and 
opportunity for comment, establishing quantifi-
able objective criteria under which a licensee’s 
private capital in its entirety may be leveraged 
up to 300 percent. Such regulations shall be 
published in the Code of Federal Regulations.’’. 
(c) INVESTMENTS
IN LOW-INCOME GEOGRAPHIC 
AREAS.—Section 303(b)(2)(C)(ii) of the Small Business 
Investment Act of 1958 (15 U.S.C. 683(b)(2)(C)(ii)) is 
amended by striking ‘‘$250,000,000’’ in subclause (II) 
and inserting ‘‘$400,000,000’’. 
SEC. 594. CONSISTENCY FOR COST CONTROL. 
Section 305(c) of the Small Business Investment Act 
of 1958 (15 U.S.C. 685(c)) is amended by adding at the 
end the following: 
‘‘In addition to the foregoing, with respect to a loan 
made, or debt with equity features acquired, under this 
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159 
section, the minimum coupon rate of interest (cost of 
money ceiling) imposed by the Administrator shall not be 
less than 19 percent per annum for a loan or a debt secu-
rity, except that nothing herein shall alter or affect provi-
sions permitting higher coupon rates of interest (cost of 
money ceilings) and a company may charge up to an addi-
tional 7 percent more than the interest rate set forth in 
the loan or debt security in the event of a default. For 
purposes of this subsection a default means the occurrence 
of any of the following: 
‘‘(1) Failure to pay an amount when due. 
‘‘(2) Failure to provide in a timely manner ma-
terial information required under the applicable fi-
nancing documents. 
‘‘(3) Failure to observe any material term, cov-
enant, or other agreement contained in the applica-
ble financing documents. 
‘‘(4) A representation, warranty, certification, 
or statement of fact made by or on behalf of a bor-
rower in any applicable financing document or in 
any document delivered in connection therewith, that 
was materially incorrect or misleading when made. 
‘‘(5) Any material event of default specified in 
the applicable financing documents.’’. 
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160 
SEC. 595. INVESTMENT IN VETERAN-OWNED SMALL BUSI-
NESSES. 
Section 303(b)(2)(C) of the Small Business Invest-
ment Act of 1958 (15 U.S.C. 683(b)(2)(C)) is amended 
as follows: 
(1) In the heading, by inserting after ‘‘AREAS’’ 
the following: ‘‘AND VETERANS’’. 
(2) In clause (i), by inserting after ‘‘351)’’ the 
following: ‘‘or in a small business concern owned and 
controlled by veterans (as such term is defined in 
section 3(q)(3) of the Small Business Act)’’. 
(3) In clause (iii), by inserting after ‘‘351)’’ the 
following: ‘‘or in small business concerns owned and 
controlled by veterans (as such term is defined in 
section 3(q)(3) of the Small Business Act)’’. 
SEC. 596. TANGIBLE NET WORTH. 
Section 103 of the Small Business Investment Act 
of 1958 (15 U.S.C. 662), as amended by this Act, is fur-
ther amended by striking ‘‘and’’ at the end of paragraph 
(23), by striking the period at the end of paragraph (24) 
and inserting ‘‘; and’’, and by adding at the end the fol-
lowing: 
‘‘(25) for purposes of the terms ‘small-business 
concern’ in paragraph (5) and ‘smaller enterprise’ in 
paragraph (12), tangible net worth shall, to the ex-
tent used, mean the total net worth of the small 
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161 
business, in accordance with General Accepted Ac-
counting Principles, minus all intangibles in accord-
ance with General Accepted Accounting Principles.’’. 
SEC. 597. DEVELOPMENT OF AGENCY RECORD. 
Part A of title III of the Small Business Investment 
Act of 1958 (15 U.S.C. 681 et seq.), as amended by this 
Act, is further amended by adding at the end the fol-
lowing: 
‘‘SEC. 321. AGENCY RECORD FOR LICENSING OF SMALL 
BUSINESS INVESTMENT COMPANIES. 
‘‘(a) RECORD.—The Associate Administrator for In-
vestment shall establish an agency record of evidence re-
ferring or relating to each application for a license to be-
come a small business investment company. 
‘‘(b) WRITTEN NOTIFICATION.—The Administrator 
shall provide a written explanation of any denial of a li-
cense application based upon evidence in the agency 
record. Absent an order by a Federal or State court of 
general jurisdiction, access to applications and the agency 
record shall be limited to the applicant and to the Admin-
istrator and subordinate personnel of the Administrator.’’. 
SEC. 598. PROGRAM LEVELS. 
Section 20 of the Small Business Act (15 U.S.C. 631 
note), as amended by this Act, is further amended by in-
serting after subsection (h) the following: 
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162 
‘‘(i) PART A OF TITLE III OF THE SMALL BUSINESS 
INVESTMENT ACT OF 1958.— 
‘‘(1) PROGRAM LEVELS 2010.—For fiscal year 
2010, in carrying out the program authorized by 
part A of title III of the Small Business Investment 
Act of 1958, the Administrator is authorized to 
make $5,000,000,000 in guarantees of debentures. 
‘‘(2) PROGRAM LEVELS 2011.—For fiscal year 
2011, in carrying out the program authorized by 
part A of title III of the Small Business Investment 
Act of 1958, the Administrator is authorized to 
make $5,500,000,000 in guarantees of debentures.’’. 
Subtitle E—Investment in Small 
Manufacturers and Renewable 
Energy Small Businesses 
CHAPTER 1—ENHANCED NEW MARKETS 
VENTURE CAPITAL PROGRAM 
SEC. 601. EXPANSION OF NEW MARKETS VENTURE CAPITAL 
PROGRAM. 
(a) ADMINISTRATION PARTICIPATION REQUIRED.— 
Section 353 of the Small Business Investment Act of 1958 
(15 U.S.C. 689b) is amended by striking ‘‘under which 
the Administrator may’’ and inserting ‘‘under which the 
Administrator shall’’. 
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(b) REPORT TO CONGRESS.—Not later than 1 year 
after the date of the enactment of this Act, the Adminis-
trator of the Small Business Administration shall submit 
to Congress a report describing any expansion of the New 
Markets Venture Capital Program as a result of this sec-
tion. 
SEC. 602. IMPROVED NATIONWIDE DISTRIBUTION. 
Section 354 of the Small Business Investment Act 
of 1958 (15 U.S.C. 689c) is amended by adding at the 
end the following: 
‘‘(f) GEOGRAPHIC EXPANSION.—From among com-
panies submitting applications under subsection (b), the 
Administrator shall consider the selection criteria and pro-
motion of nationwide distribution under subsection (c) and 
shall, to the extent practicable, approve at least one com-
pany from each geographic region of the Small Business 
Administration.’’. 
SEC. 603. INCREASED INVESTMENT IN SMALL BUSINESS 
CONCERNS ENGAGED PRIMARILY IN MANU-
FACTURING. 
(a) DEVELOPMENTAL VENTURE CAPITAL AND PAR-
TICIPATION AGREEMENTS.—Section 351 of the Small 
Business Investment Act of 1958 (15 U.S.C. 689) is 
amended— 
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164 
(1) in paragraph (1) by inserting after ‘‘geo-
graphic areas’’ the following: ‘‘or encouraging the 
growth or continuation of small business concerns 
located in low-income geographic areas and engaged 
primarily in manufacturing’’; and 
(2) in paragraph (6)(B) by inserting after ‘‘geo-
graphic areas’’ the following: ‘‘or in small business 
concerns located in low-income geographic areas at 
least 80 percent of which are engaged primarily in 
manufacturing’’. 
(b) PURPOSES.—Section 352(2) of the Small Busi-
ness Investment Act of 1958 (15 U.S.C. 689a(2)) is 
amended— 
(1) in the matter preceding subparagraph (A) 
by inserting after ‘‘geographic areas’’ the following: 
‘‘and small business concerns located in low-income 
geographic areas and engaged primarily in manufac-
turing’’; 
(2) in subparagraph (B) by inserting after ‘‘ge-
ographic areas’’ the following: ‘‘or in small business 
concerns located in low-income geographic areas and 
engaged primarily in manufacturing’’; and 
(3) in subparagraph (C) by inserting after 
‘‘smaller enterprises’’ the following: ‘‘and small busi-
ness concerns’’. 
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165 
(c) ELIGIBILITY, APPLICATIONS, AND
REQUIRE-
MENTS FOR FINAL APPROVAL.—Section 354 of the Small 
Business Investment Act of 1958 (15 U.S.C. 689c), as 
amended by this Act, is further amended— 
(1) in subsection (a)(3) by inserting after ‘‘geo-
graphic areas’’ the following: ‘‘or investing in small 
business concerns located in low-income geographic 
areas and engaged primarily in manufacturing’’; 
(2) in subsection (b)— 
(A) in paragraph (1) by inserting after 
‘‘geographic areas’’ the following: ‘‘or in small 
business concerns located in low-income geo-
graphic areas and engaged primarily in manu-
facturing’’; and 
(B) in paragraph (4) by inserting after 
‘‘smaller enterprises’’ the following: ‘‘or small 
business concerns’’; and 
(3) in subsection (d)— 
(A) in paragraph (1)— 
(i) by striking ‘‘Each’’ and inserting 
the following: 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), each’’; and 
(ii) by adding at the end the fol-
lowing: 
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166 
‘‘(B) SMALL
BUSINESS
CONCERNS
EN-
GAGED PRIMARILY IN MANUFACTURING.—Each 
conditionally approved company engaged pri-
marily in development of and investment in 
small business concerns located in low-income 
geographic areas and engaged primarily in 
manufacturing 
shall 
raise 
not 
less 
than 
$3,000,000 of private capital or binding capital 
commitments from one or more investors (other 
than agencies or departments of the Federal 
Government) who met criteria established by 
the Administrator.’’; and 
(B) in paragraph (2)(A) by inserting after 
‘‘smaller enterprises’’ the following: ‘‘or small 
business concerns’’. 
(d) OPERATIONAL ASSISTANCE GRANTS.—Section 
358 of the Small Business Investment Act of 1958 (15 
U.S.C. 689g) is amended— 
(1) in subsection (a)(1) by inserting after 
‘‘smaller enterprises’’ the following: ‘‘and small busi-
ness concerns’’; and 
(2) in subsection (b)(1) by inserting after 
‘‘smaller enterprises’’ the following: ‘‘and small busi-
ness concerns’’. 
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167 
SEC. 604. EXPANDED USES FOR OPERATIONAL ASSISTANCE 
IN MANUFACTURING. 
Section 351 of the Small Business Investment Act 
of 1958 (15 U.S.C. 689), as amended by this Act, is fur-
ther amended in paragraph (5) by inserting after ‘‘busi-
ness development’’ the following: ‘‘or assistance that as-
sists a small business concern located in a low-income geo-
graphic area and engaged primarily in manufacturing with 
retooling, updating, or replacing machinery or equip-
ment’’. 
SEC. 605. UPDATING DEFINITION OF LOW-INCOME GEO-
GRAPHIC AREA. 
Section 351 of the Small Business Investment Act 
of 1958 (15 U.S.C. 689), as amended by this Act, is fur-
ther amended— 
(1) by striking paragraphs (2) and (3); 
(2) by inserting after paragraph (1) the fol-
lowing: 
‘‘(2) LOW-INCOME
GEOGRAPHIC
AREA.—The 
term ‘low-income geographic area’ has the meaning 
given the term ‘low-income community’ in section 
45D(e) of the Internal Revenue Code of 1986, ex-
cept that, without regard to such meaning, such 
term includes an area that the Administrator deter-
mines to be an area with high unemployment.’’; and 
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168 
(3) by redesignating paragraphs (4) through 
(8) as paragraphs (3) through (7), respectively. 
SEC. 606. EXPANDING OPERATIONAL ASSISTANCE TO CON-
DITIONALLY APPROVED COMPANIES. 
Section 358(a) of the Small Business Investment Act 
of 1958 (15 U.S.C. 689g(a)) is amended by adding at the 
end the following: 
‘‘(6) GRANTS
TO
CONDITIONALLY
APPROVED 
COMPANIES.— 
‘‘(A) IN GENERAL.—Subject to the provi-
sions of this paragraph, upon the request of a 
company conditionally approved under section 
354(c), the Administrator shall make a grant to 
the company under this subsection. 
‘‘(B) REPAYMENT BY COMPANIES NOT AP-
PROVED.—If a company receives a grant under 
this paragraph and does not receive final ap-
proval under section 354(e), the company shall 
repay the amount of the grant to the Adminis-
trator. 
‘‘(C) DEDUCTION
FROM
GRANT
TO
AP-
PROVED
COMPANY.—If a company receives a 
grant under this paragraph and receives final 
approval under section 354(e), the Adminis-
trator shall deduct the amount of such grant 
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169 
from the amount of any immediately succeeding 
grant the company receives for operational as-
sistance. 
‘‘(D) AMOUNT
OF
GRANT.—No company 
may receive a grant of more than $50,000 
under this paragraph.’’. 
SEC. 607. LIMITATION ON TIME FOR FINAL APPROVAL. 
Section 354(d) of the Small Business Investment Act 
of 1958 (15 U.S.C. 689c(d)) is amended in the matter 
preceding paragraph (1) by striking ‘‘a period of time, not 
to exceed 2 years,’’ and inserting ‘‘2 years’’. 
SEC. 608. STREAMLINED APPLICATION FOR NEW MARKETS 
VENTURE CAPITAL PROGRAM. 
Not later than 60 days after the date of the enact-
ment of this Act, the Administrator of the Small Business 
Administration shall prescribe standard documents for a 
New Markets Venture Capital company final approval ap-
plication under section 354(e) of the Small Business In-
vestment Act of 1958 (15 U.S.C. 689c(e)). The Adminis-
trator shall ensure that the standard documents are de-
signed to substantially reduce the cost burden of the appli-
cation process for companies. 
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170 
SEC. 609. ELIMINATION OF MATCHING REQUIREMENT. 
Section 354(d)(2)(A)(i) of the Small Business Invest-
ment Act of 1958 (15 U.S.C. 689c(d)(2)(A)(i)) is amend-
ed— 
(1) in subclause (I) by adding ‘‘and’’ at the 
end; 
(2) in subclause (II) by striking ‘‘and’’ at the 
end; and 
(3) by striking subclause (III). 
SEC. 610. SIMPLIFIED FORMULA FOR OPERATIONAL AS-
SISTANCE GRANTS. 
Section 358(a)(4)(A) of the Small Business Invest-
ment Act of 1958 (15 U.S.C. 689g(a)(4)(A)) is amend-
ed— 
(1) by striking ‘‘shall be equal to’’ and all that 
follows through the period at the end and inserting 
‘‘shall be equal to the lesser of—’’; and 
(2) by adding at the end the following: 
‘‘(i) 10 percent of the resources (in 
cash or in-kind) raised by the company 
under section 354(d)(2); or 
‘‘(ii) $1,000,000.’’. 
SEC. 611. FINANCING WITH RESPECT TO VETERANS. 
Section 354 of the Small Business Investment Act 
of 1958 (15 U.S.C. 689c), as amended by this Act, is fur-
ther amended by adding at the end the following: 
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171 
‘‘(g) FINANCING WITH RESPECT TO VETERANS.—A 
New Markets Venture Capital company shall, to the extent 
practicable, provide financing to small business concerns 
owned and controlled by veterans, as defined in section 
3(q) of the Small Business Act (15 U.S.C. 632(q)), lo-
cated in low-income geographic areas.’’. 
SEC. 612. AUTHORIZATION OF APPROPRIATIONS AND EN-
HANCED ALLOCATION FOR SMALL MANUFAC-
TURING. 
Section 368(a) of the Small Business Investment Act 
of 1958 (15 U.S.C. 689q(a)) is amended— 
(1) in the matter preceding paragraph (1) by 
striking ‘‘fiscal years 2001 through 2006’’ and in-
serting ‘‘fiscal years 2010 and 2011’’; 
(2) in paragraph (1)— 
(A) by striking ‘‘$150,000,000’’ and in-
serting ‘‘$100,000,000’’; and 
(B) by inserting before the period at the 
end the following: ‘‘, of which not less than 50 
percent shall be used to guarantee debentures 
of companies engaged primarily in development 
of and investment in small business concerns lo-
cated in low-income geographic areas and en-
gaged primarily in manufacturing’’; and 
(3) in paragraph (2)— 
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172 
(A) by striking ‘‘$30,000,000’’ and insert-
ing ‘‘$20,000,000’’; and 
(B) by inserting before the period at the 
end the following: ‘‘, of which not less than 50 
percent shall be used to make grants to compa-
nies engaged primarily in development of and 
investment in small business concerns located in 
low-income geographic areas and engaged pri-
marily in manufacturing’’. 
CHAPTER 2—EXPANDED INVESTMENT IN 
SMALL BUSINESS RENEWABLE ENERGY 
SEC. 621. EXPANDED INVESTMENT IN RENEWABLE EN-
ERGY. 
Part C of title III of the Small Business Investment 
Act of 1958 (15 U.S.C. 690 et seq.) is amended— 
(1) in the heading by striking ‘‘RENEWABLE 
FUEL CAPITAL INVESTMENT’’ and inserting ‘‘RE-
NEWABLE ENERGY CAPITAL INVESTMENT’’; 
(2) in the heading of paragraph (4) of section 
381 by striking ‘‘RENEWABLE FUEL CAPITAL IN-
VESTMENT’’ and inserting ‘‘RENEWABLE
ENERGY 
CAPITAL INVESTMENT’’; 
(3) in the heading of section 384 by striking 
‘‘RENEWABLE FUEL CAPITAL INVESTMENT’’ and 
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173 
inserting ‘‘RENEWABLE
ENERGY
CAPITAL
IN-
VESTMENT’’; and 
(4) by striking ‘‘Renewable Fuel Capital Invest-
ment’’ each place it appears and inserting ‘‘Renew-
able Energy Capital Investment’’. 
SEC. 622. RENEWABLE ENERGY CAPITAL INVESTMENT PRO-
GRAM MADE PERMANENT. 
Part C of title III of the Small Business Investment 
Act of 1958 (15 U.S.C. 690 et seq.), as amended by this 
Act, is further amended— 
(1) in the heading by striking ‘‘PILOT’’; and 
(2) by striking section 398. 
SEC. 623. EXPANDED ELIGIBILITY FOR SMALL BUSINESSES. 
Part C of title III of the Small Business Investment 
Act of 1958 (15 U.S.C. 690 et seq.), as amended by this 
Act, is further amended by striking ‘‘smaller enterprises’’ 
each place it appears and inserting ‘‘small business con-
cerns’’. 
SEC. 624. EXPANDED USES FOR OPERATIONAL ASSISTANCE 
IN 
MANUFACTURING 
AND 
SMALL 
BUSI-
NESSES. 
Section 381(1) of the Small Business Investment Act 
of 1958 (15 U.S.C. 690(1)) is amended by inserting after 
‘‘business development’’ the following: ‘‘, assistance that 
assists a small business concern to reduce energy con-
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174 
sumption, or assistance that assists a small business con-
cern engaged primarily in manufacturing with retooling, 
updating, or replacing machinery or equipment’’. 
SEC. 625. EXPANSION OF RENEWABLE ENERGY CAPITAL IN-
VESTMENT PROGRAM. 
(a) ADMINISTRATION PARTICIPATION REQUIRED.— 
Section 383 of the Small Business Investment Act of 1958 
(15 U.S.C. 690b) is amended by striking ‘‘under which 
the Administrator may’’ and inserting ‘‘under which the 
Administrator shall’’. 
(b) REPORTS TO CONGRESS.—At quarterly intervals 
after the date of the enactment of this Act, the Adminis-
trator of the Small Business Administration shall submit 
to Congress a report describing the Administrator’s 
progress towards the expansion of the Renewable Energy 
Capital Investment Program as a result of amendments 
made by this title. 
(c) REGULATIONS.—The Administrator of the Small 
Business Administration shall promulgate such regula-
tions as are necessary to carry out the Renewable Energy 
Capital Investment Program established pursuant to this 
title within 180 days after the enactment of this Act. 
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175 
SEC. 626. SIMPLIFIED FEE STRUCTURE TO EXPEDITE IM-
PLEMENTATION. 
Section 387(a) of the Small Business Investment Act 
of 1958 (15 U.S.C. 690f(a)) is amended by striking ‘‘or 
grant’’. 
SEC. 627. INCREASED OPERATIONAL ASSISTANCE GRANTS. 
Section 397(a) of the Small Business Investment Act 
of 1958 (15 U.S.C. 690p(a)) is amended by inserting after 
‘‘and 2009’’ the following: ‘‘and $30,000,000 in such 
grants for each of fiscal years 2010 and 2011’’. 
SEC. 628. AUTHORIZATIONS OF APPROPRIATIONS. 
Section 397 of the Small Business Investment Act 
of 1958 (15 U.S.C. 690p) is amended— 
(1) in the heading by inserting after ‘‘APPRO-
PRIATIONS’’ the following: ‘‘AND PROGRAM LEV-
ELS’’; and 
(2) by adding at the end the following: 
‘‘(c) PROGRAM LEVELS.—For the programs author-
ized by this part, the Administration is authorized to make 
$1,000,000,000 in guarantees of debentures for each of 
fiscal years 2010 and 2011.’’. 
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176 
Subtitle F—Small Business Health 
Information Technology Financ-
ing Program 
SEC. 631. SMALL BUSINESS HEALTH INFORMATION TECH-
NOLOGY FINANCING PROGRAM. 
The Small Business Act (15 U.S.C. 631 et seq.), as 
amended by this Act, is further amended by redesignating 
section 45 as section 46 and by inserting the following 
new section after section 44: 
‘‘SEC. 45. LOAN GUARANTEES FOR HEALTH INFORMATION 
TECHNOLOGY. 
‘‘(a) DEFINITIONS.—As used in this section: 
‘‘(1) The term ‘health information technology’ 
means computer hardware, software, and related 
technology that supports the meaningful EHR use 
requirements set forth in section 1848(o)(2)(A) of 
the Social Security Act (42 U.S.C. 1395w– 
4(o)(2)(A)) and is purchased by an eligible profes-
sional to aid in the provision of health care in a 
health care setting, including, but not limited to, 
electronic medical records, and that provides for— 
‘‘(A) enhancement of continuity of care for 
patients through electronic storage, trans-
mission, and exchange of relevant personal 
health data and information, such that this in-
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177 
formation is accessible at the times and places 
where clinical decisions will be or are likely to 
be made; 
‘‘(B) enhancement of communication be-
tween patients and health care providers; 
‘‘(C) improvement of quality measurement 
by eligible professionals enabling them to col-
lect, store, measure, and report on the proc-
esses and outcomes of individual and population 
performance and quality of care; 
‘‘(D) improvement of evidence-based deci-
sion support; or 
‘‘(E) enhancement of consumer and pa-
tient empowerment. 
Such term shall not include information technology 
whose sole use is financial management, mainte-
nance of inventory of basic supplies, or appointment 
scheduling. 
‘‘(2) The term ‘eligible professional’ means any 
of the following: 
‘‘(A) A physician (as defined in section 
1861(r) of the Social Security Act (42 U.S.C. 
1395x(r))). 
‘‘(B) A practitioner described in section 
1842(b)(18)(C) of that Act. 
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178 
‘‘(C) A physical or occupational therapist 
or a qualified speech-language pathologist. 
‘‘(D) A qualified audiologist (as defined in 
section 1861(ll)(3)(B)) of that Act. 
‘‘(E) A qualified medical transcriptionist 
who is either certified by or registered with the 
Association for Healthcare Documentation In-
tegrity, or a successor association thereto. 
‘‘(F) A State-licensed pharmacist. 
‘‘(G) A State-licensed supplier of durable 
medical equipment, prosthetics, orthotics, or 
supplies. 
‘‘(H) A State-licensed, a State-certified, or 
a nationally accredited home health care pro-
vider. 
‘‘(3) The term ‘qualified eligible professional’ 
means an eligible professional whose office can be 
classified as a small business concern by the Admin-
istrator for purposes of this Act under size stand-
ards established under section 3 of this Act. 
‘‘(4) 
The 
term 
‘qualified 
medical 
transcriptionist’ means a specialist in medical lan-
guage and the healthcare documentation process 
who interprets and transcribes dictation by physi-
cians and other healthcare professionals to ensure 
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accurate, complete, and consistent documentation of 
healthcare encounters. 
‘‘(b) LOAN GUARANTEES FOR QUALIFIED ELIGIBLE 
PROFESSIONALS.— 
‘‘(1) IN GENERAL.—Subject to paragraph (2), 
the Administrator may guarantee up to 90 percent 
of the amount of a loan made to a qualified eligible 
professional to be used for the acquisition of health 
information technology for use in such eligible pro-
fessional’s medical practice and for the costs associ-
ated with the installation of such technology. Except 
as otherwise provided in this section, the terms and 
conditions that apply to loans made under section 
7(a) of this Act shall apply to loan guarantees made 
under this section. 
‘‘(2) LIMITATIONS ON GUARANTEE AMOUNTS.— 
The maximum amount of loan principal guaranteed 
under this subsection may not exceed— 
‘‘(A) $350,000 with respect to any single 
qualified eligible professional; and 
‘‘(B) $2,000,000 with respect to a single 
group of affiliated qualified eligible profes-
sionals. 
‘‘(c) FEES.—(1) The Administrator may impose a 
guarantee fee on the borrower for the purpose of reducing 
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180 
the cost (as defined in section 502(5) of the Federal Credit 
Reform Act of 1990) of the guarantee to zero in an 
amount not to exceed 2 percent of the total guaranteed 
portion of any loan guaranteed under this section. The Ad-
ministrator may also impose annual servicing fees on lend-
ers not to exceed 0.5 percent of the outstanding balance 
of the guarantees on lenders’ books. 
‘‘(2) No service fees, processing fees, origination fees, 
application fees, points, brokerage fees, bonus points, or 
other fees may be charged to a loan applicant or recipient 
by a lender in the case of a loan guaranteed under this 
section. 
‘‘(d) DEFERRAL PERIOD.—Loans guaranteed under 
this section shall carry a deferral period of not less than 
1 year and not more than 3 years. The Administrator shall 
have the authority to subsidize interest during the deferral 
period. 
‘‘(e) EFFECTIVE DATE.—No loan may be guaranteed 
under this section until the meaningful EHR use require-
ments have been determined by the Secretary of Health 
and Human Services. 
‘‘(f) SUNSET.—No loan may be guaranteed under 
this section after the date that is 7 years after meaningful 
EHR use requirements have been determined by the Sec-
retary of Health and Human Services. 
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181 
‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as are nec-
essary for the cost (as defined in section 502(5) of the 
Federal Credit Reform Act of 1990) of guaranteeing 
$10,000,000,000 in loans under this section. The Admin-
istrator shall determine such program cost separately and 
distinctly from other programs operated by the Adminis-
trator.’’. 
Subtitle G—Small Business Early- 
Stage Investment Program 
SEC. 641. SMALL BUSINESS EARLY-STAGE INVESTMENT 
PROGRAM. 
Title III of the Small Business Investment Act of 
1958 (15 U.S.C. 681 et seq.) is amended by adding at 
the end the following: 
‘‘PART D—SMALL BUSINESS EARLY-STAGE 
INVESTMENT PROGRAM 
‘‘SEC. 399A. ESTABLISHMENT OF PROGRAM. 
‘‘The Administrator shall establish and carry out an 
early-stage investment program (hereinafter referred to in 
this part as the ‘program’) to provide equity investment 
financing to support early-stage small businesses in tar-
geted industries in accordance with this part. 
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182 
‘‘SEC. 399B. ADMINISTRATION OF PROGRAM. 
‘‘The program shall be administered by the Adminis-
trator acting through the Associate Administrator de-
scribed under section 201. 
‘‘SEC. 399C. APPLICATIONS. 
‘‘(a) IN GENERAL.—Any incorporated body, limited 
liability company, or limited partnership organized and 
chartered or otherwise existing under Federal or State law 
for the purpose of performing the functions and con-
ducting the activities contemplated under the program and 
any small business investment company may submit to the 
Administrator an application to participate in the pro-
gram. 
‘‘(b) REQUIREMENTS FOR APPLICATION.—An appli-
cation to participate in the program shall include the fol-
lowing: 
‘‘(1) A business plan describing how the appli-
cant intends to make successful venture capital in-
vestments in early-stage small businesses in targeted 
industries. 
‘‘(2) Information regarding the relevant venture 
capital investment qualifications and backgrounds of 
the individuals responsible for the management of 
the applicant. 
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183 
‘‘(3) A description of the extent to which the 
applicant meets the selection criteria under section 
399D. 
‘‘(c) APPLICATIONS FROM SMALL BUSINESS INVEST-
MENT COMPANIES.—The Administrator shall establish an 
abbreviated application process for small business invest-
ment companies that have received a license under section 
301 and that are applying to participate in the program. 
Such abbreviated process shall incorporate a presumption 
that such small business investment companies satisfac-
torily meet the selection criteria under paragraphs (3) and 
(5) of section 399D(b). 
‘‘SEC. 399D. SELECTION OF PARTICIPATING INVESTMENT 
COMPANIES. 
‘‘(a) IN GENERAL.—Not later than 90 days after the 
date on which the Administrator receives an application 
from an applicant under section 399C, the Administrator 
shall make a final determination to approve or disapprove 
such applicant to participate in the program and shall 
transmit such determination to the applicant in writing. 
‘‘(b) SELECTION CRITERIA.—In making a determina-
tion under subsection (a), the Administrator shall consider 
each of the following: 
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184 
‘‘(1) The likelihood that the applicant will meet 
the goals specified in the business plan of the appli-
cant. 
‘‘(2) The likelihood that the investments of the 
applicant will create or preserve jobs, both directly 
and indirectly. 
‘‘(3) The character and fitness of the manage-
ment of the applicant. 
‘‘(4) The experience and background of the 
management of the applicant. 
‘‘(5) The extent to which the applicant will con-
centrate investment activities on early-stage small 
businesses in targeted industries. 
‘‘(6) The likelihood that the applicant will 
achieve profitability. 
‘‘(7) The experience of the management of the 
applicant with respect to establishing a profitable in-
vestment track record. 
‘‘SEC. 399E. GRANTS. 
‘‘(a) IN GENERAL.—The Administrator may make 
one or more grants to a participating investment company. 
‘‘(b) GRANT AMOUNTS.— 
‘‘(1) NON-FEDERAL CAPITAL.—A grant made 
to a participating investment company under the 
program may not be in an amount that exceeds the 
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185 
amount of the capital of such company that is not 
from a Federal source and that is available for in-
vestment on or before the date on which a grant is 
drawn upon. Such capital may include legally bind-
ing commitments with respect to capital for invest-
ment. 
‘‘(2) LIMITATION ON AGGREGATE AMOUNT.— 
The aggregate amount of all grants made to a par-
ticipating investment company under the program 
may not exceed $100,000,000. 
‘‘(c) GRANT PROCESS.—In making a grant under the 
program, the Administrator shall commit a grant amount 
to a participating investment company and the amount of 
each such commitment shall remain available to be drawn 
upon by such company— 
‘‘(1) for new-named investments during the 5- 
year period beginning on the date on which each 
such commitment is first drawn upon; and 
‘‘(2) for follow-on investments and management 
fees during the 10-year period beginning on the date 
on which each such commitment is first drawn upon, 
with not more than 2 additional 1-year periods avail-
able at the discretion of the Administrator. 
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186 
‘‘SEC. 399F. INVESTMENTS IN EARLY-STAGE SMALL BUSI-
NESSES IN TARGETED INDUSTRIES. 
‘‘(a) IN GENERAL.—As a condition of receiving a 
grant under the program, a participating investment com-
pany shall make all of the investments of such company 
in small business concerns, of which at least 50 percent 
shall be early-stage small businesses in targeted indus-
tries. 
‘‘(b) EVALUATION OF COMPLIANCE.—With respect to 
a grant amount committed to a participating investment 
company under section 399E, the Administrator shall 
evaluate the compliance of such company with the require-
ments under this section if such company has drawn upon 
50 percent of such commitment. 
‘‘SEC. 399G. PRO RATA INVESTMENT SHARES. 
‘‘Each investment made by a participating invest-
ment company under the program shall be treated as com-
prised of capital from grants under the program according 
to the ratio that capital from grants under the program 
bears to all capital available to such company for invest-
ment. 
‘‘SEC. 399H. GRANT INTEREST. 
‘‘(a) GRANT INTEREST.— 
‘‘(1) IN GENERAL.—As a condition of receiving 
a grant under the program, a participating invest-
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187 
ment company shall convey a grant interest to the 
Administrator in accordance with paragraph (2). 
‘‘(2) EFFECT OF CONVEYANCE.—The grant in-
terest conveyed under paragraph (1) shall have all 
the rights and attributes of other investors attrib-
utable to their interests in the participating invest-
ment company, but shall not denote control or vot-
ing rights to the Administrator. The grant interest 
shall entitle the Administrator to a pro rata portion 
of any distributions made by the participating in-
vestment company equal to the percentage of capital 
in the participating investment company that the 
grant comprises. The Administrator shall receive dis-
tributions from the participating investment com-
pany at the same times and in the same amounts as 
any other investor in the company with a similar in-
terest. The investment company shall make alloca-
tions of income, gain, loss, deduction, and credit to 
the Administrator with respect to the grant interest 
as if the Administrator were an investor. 
‘‘(b) MANAGER PROFITS.—As a condition of receiv-
ing a grant under the program, the manager profits inter-
est payable to the managers of a participating investment 
company under the program shall not exceed 20 percent 
of profits, exclusive of any profits that may accrue as a 
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result of the capital contributions of any such managers 
with respect to such company. Any excess of this amount, 
less taxes payable thereon, shall be returned by the man-
agers and paid to the investors and the Administrator in 
proportion to the capital contributions and grants paid in. 
No manager profits interest (other than a tax distribution) 
shall be paid prior to the repayment to the investors and 
the Administrator of all contributed capital and grants 
made. 
‘‘(c) DISTRIBUTION REQUIREMENTS.—As a condition 
of receiving a grant under the program, a participating 
investment company shall make all distributions to all in-
vestors in cash and shall make distributions within a rea-
sonable time after exiting investments, including following 
a public offering or market sale of underlying investments. 
‘‘SEC. 399I. FUND. 
‘‘There is hereby created within the Treasury a sepa-
rate fund for grants which shall be available to the Admin-
istrator subject to annual appropriations as a revolving 
fund to be used for the purposes of the program. All 
amounts received by the Administrator, including any 
moneys, property, or assets derived by the Administrator 
from operations in connection with the program, shall be 
deposited in the fund. All expenses and payments, exclud-
ing administrative expenses, pursuant to the operations of 
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189 
the Administrator under the program shall be paid from 
the fund. 
‘‘SEC. 399J. APPLICATION OF OTHER SECTIONS. 
‘‘To the extent not inconsistent with requirements 
under this part, the Administrator may apply sections 
309, 311, 312, 313, and 314 to activities under this part 
and an officer, director, employee, agent, or other partici-
pant in a participating investment company shall be sub-
ject to the requirements under such sections. 
‘‘SEC. 399K. DEFINITIONS. 
‘‘In this part, the following definitions apply: 
‘‘(1) EARLY-STAGE SMALL BUSINESS IN A TAR-
GETED
INDUSTRY.—The term ‘early-stage small 
business in a targeted industry’ means a small busi-
ness concern that— 
‘‘(A) is domiciled in a State; 
‘‘(B) has not generated gross annual sales 
revenues exceeding $15,000,000 in any of the 
previous 3 years; and 
‘‘(C) is engaged primarily in researching, 
developing, manufacturing, producing, or bring-
ing to market goods, products, or services with 
respect to any of the following business sectors: 
‘‘(i) Agricultural technology. 
‘‘(ii) Energy technology. 
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190 
‘‘(iii) Environmental technology. 
‘‘(iv) Life science. 
‘‘(v) Information technology. 
‘‘(vi) Digital media. 
‘‘(vii) Clean technology. 
‘‘(viii) Defense technology. 
‘‘(ix) Photonics technology. 
‘‘(2) PARTICIPATING INVESTMENT COMPANY.— 
The term ‘participating investment company’ means 
an applicant approved under section 399D to par-
ticipate in the program. 
‘‘(3) SMALL
BUSINESS
CONCERN.—The term 
‘small business concern’ has the same meaning given 
such term under section 3(a) of the Small Business 
Act (15 U.S.C. 632(a)). 
‘‘SEC. 399L. AUTHORIZATION OF APPROPRIATIONS. 
‘‘There is authorized to be appropriated to carry out 
the program $200,000,000 for the first full fiscal year be-
ginning after the date of the enactment of this part.’’. 
SEC. 642. PROHIBITIONS ON EARMARKS. 
None of the funds appropriated for the program es-
tablished under part D of title III of the Small Business 
Investment Act of 1958, as added by this title, may be 
used for a Congressional earmark as defined in clause 9(d) 
of rule XXI of the Rules of the House of Representatives. 
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191 
Subtitle H—SBA Disaster Program 
Reform 
SEC. 651. REVISED COLLATERAL REQUIREMENTS. 
Section 7 of the Small Business Act (15 U.S.C. 636) 
is amended— 
(1) by striking ‘‘(e) [RESERVED].’’ and ‘‘(f) 
[RESERVED].’’; and 
(2) in subsection (f), as added by section 
12068(a)(2) of the Small Business Disaster Re-
sponse and Loan Improvements Act of 2008 (sub-
title B of title XII of the Food, Conservation, and 
Energy Act of 2008; Public Law 110–246), by add-
ing at the end the following: 
‘‘(2) REVISED COLLATERAL REQUIREMENTS.— 
In making a loan with respect to a business under 
subsection (b), if the total approved amount of such 
loan is less than or equal to $250,000, the Adminis-
trator may not require the borrower to use the bor-
rower’s home as collateral.’’. 
SEC. 652. INCREASED LIMITS. 
Section 7(b) of the Small Business Act (15 U.S.C. 
636(b)) is amended— 
(1) 
in 
paragraph 
(3)(E) 
by 
striking 
‘‘$1,500,000’’ each place it appears and inserting 
‘‘$3,000,000’’; and 
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(2) 
in 
paragraph 
(8)(A) 
by 
striking 
‘‘$2,000,000’’ and inserting ‘‘$3,000,000’’. 
SEC. 653. REVISED REPAYMENT TERMS. 
Section 7(f) of the Small Business Act (15 U.S.C. 
636(f)) is amended by adding at the end the following: 
‘‘(3) REVISED REPAYMENT TERMS.—In making 
loans under subsection (b), the Administrator— 
‘‘(A) may not require repayment to begin 
until the date that is 12 months after the date 
on which the final disbursement of approved 
amounts is made; and 
‘‘(B) shall calculate the amount of repay-
ment based solely on the amounts disbursed.’’. 
SEC. 654. REVISED DISBURSEMENT PROCESS. 
Section 7(f) of the Small Business Act (15 U.S.C. 
636(f)), as amended by this Act, is further amended by 
adding at the end the following: 
‘‘(4) REVISED
DISBURSEMENT
PROCESS.—In 
making a loan under subsection (b), the Adminis-
trator shall disburse loan amounts in accordance 
with the following: 
‘‘(A) If the total amount approved with re-
spect to such loan is less than or equal to 
$150,000— 
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‘‘(i) the first disbursement with re-
spect to such loan shall consist of 40 per-
cent of the total loan amount, or a lesser 
percentage of the total loan amount if the 
Administrator and the borrower agree on 
such a lesser percentage; 
‘‘(ii) the second disbursement shall 
consist of 50 percent of the loan amounts 
that remain after the first disbursement, 
and shall be made when the borrower has 
produced satisfactory receipts to dem-
onstrate the proper use of 50 percent of 
the first disbursement; and 
‘‘(iii) the third disbursement shall 
consist of the loan amounts that remain 
after the preceding disbursements, and 
shall be made when the borrower has pro-
duced satisfactory receipts to demonstrate 
the proper use of the first disbursement 
and 50 percent of the second disburse-
ment. 
‘‘(B) If the total amount approved with re-
spect to such loan is more than $150,000 but 
less than or equal to $500,000— 
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‘‘(i) the first disbursement with re-
spect to such loan shall consist of 20 per-
cent of the total loan amount, or a lesser 
percentage of the total loan amount if the 
Administrator and the borrower agree on 
such a lesser percentage; 
‘‘(ii) the second disbursement shall 
consist of 30 percent of the loan amounts 
that remain after the first disbursement, 
and shall be made when the borrower has 
produced satisfactory receipts to dem-
onstrate the proper use of 50 percent of 
the first disbursement; 
‘‘(iii) the third disbursement shall 
consist of 25 percent of the loan amounts 
that remain after the first and second dis-
bursements, and shall be made when the 
borrower has produced satisfactory receipts 
to demonstrate the proper use of the first 
disbursement and 50 percent of the second 
disbursement; and 
‘‘(iv) the fourth disbursement shall 
consist of the loan amounts that remain 
after the preceding disbursements, and 
shall be made when the borrower has pro-
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duced satisfactory receipts to demonstrate 
the proper use of the first and second dis-
bursements and 50 percent of the third 
disbursement. 
‘‘(C) If the total amount approved with re-
spect to such loan is more than $500,000— 
‘‘(i) the first disbursement with re-
spect to such loan shall consist of at least 
$100,000, or a lesser amount if the Ad-
ministrator and the borrower agree on 
such a lesser amount; and 
‘‘(ii) the number of disbursements 
after the first, and the amount of each 
such disbursement, shall be in the discre-
tion of the Administrator, but the amount 
of each such disbursement shall be at least 
$100,000.’’. 
SEC. 655. GRANT PROGRAM. 
Section 7(b) of the Small Business Act (15 U.S.C. 
636(b)), as amended by this Act, is further amended by 
inserting after paragraph (9) the following: 
‘‘(10) GRANTS TO DISASTER-AFFECTED SMALL 
BUSINESSES.— 
‘‘(A) IN GENERAL.—If the Administrator 
declares eligibility for additional disaster assist-
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196 
ance under paragraph (9), the Administrator 
may make a grant, in an amount not exceeding 
$100,000, to a small business concern that— 
‘‘(i) is located in an area affected by 
the applicable major disaster; 
‘‘(ii) submits to the Administrator a 
certification by the owner of the concern 
that such owner intends to reestablish the 
concern in the same county in which the 
concern was originally located; 
‘‘(iii) has applied for, and was rejected 
for, a conventional disaster assistance loan 
under this subsection; and 
‘‘(iv) was in existence for at least 2 
years before the date on which the applica-
ble disaster declaration was made. 
‘‘(B) PRIORITY.—In making grants under 
this paragraph, the Administrator shall give 
priority to a small business concern that the 
Administrator determines is economically viable 
but unable to meet short-term financial obliga-
tions. 
‘‘(C) PROGRAM
LEVEL
AND
AUTHORIZA-
TION OF APPROPRIATIONS.— 
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‘‘(i) PROGRAM LEVEL.—The Adminis-
trator is authorized to make $100,000,000 
in grants under this paragraph for each of 
fiscal years 2010 and 2011. 
‘‘(ii) AUTHORIZATION OF APPROPRIA-
TIONS.—There are authorized to be appro-
priated to the Administrator such sums as 
may be necessary to carry out this para-
graph.’’. 
SEC. 656. REGIONAL DISASTER WORKING GROUPS. 
Section 40 of the Small Business Act (15 U.S.C. 
657l) is amended— 
(1) in subsection (a), in the matter preceding 
paragraph (1), by striking ‘‘or’’ and inserting ‘‘and’’; 
(2) by redesignating subsection (d) as sub-
section (e); and 
(3) by inserting after subsection (c) the fol-
lowing: 
‘‘(d) REGIONAL DISASTER WORKING GROUPS.—In 
carrying out the responsibilities pertaining to loan making 
activities under subsection (a), the Administrator, acting 
through the regional administrators of the regional offices 
of the Administration, shall develop a disaster prepared-
ness and response plan for each region of the Administra-
tion. Each such plan shall be developed in cooperation 
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with Federal, State, and local emergency response authori-
ties and representatives of businesses located in the region 
to which such plan applies. Each such plan shall identify 
and include a plan relating to the 3 disasters, natural or 
manmade, most likely to occur in the region to which such 
plan applies.’’. 
SEC. 657. OUTREACH GRANTS FOR LOAN APPLICANT AS-
SISTANCE. 
Section 7(b) of the Small Business Act (15 U.S.C. 
636(b)), as amended by this Act, is further amended by 
inserting after paragraph (10) the following: 
‘‘(11) OUTREACH
GRANTS
FOR
LOAN
APPLI-
CANT ASSISTANCE.— 
‘‘(A) IN GENERAL.—From amounts made 
available for administrative expenses relating to 
activities under this subsection, the Adminis-
trator is authorized to make grants to the fol-
lowing: 
‘‘(i) A women’s business center in an 
area affected by a disaster. 
‘‘(ii) A small business development 
center in an area affected by a disaster. 
‘‘(iii) A Veteran Business Outreach 
Center in an area affected by a disaster. 
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‘‘(iv) A chamber of commerce in an 
area affected by a disaster. 
‘‘(B) USE OF GRANT.—An entity specified 
under subparagraph (A) shall use a grant re-
ceived under this paragraph to provide applica-
tion preparation assistance to applicants for a 
loan under this subsection. 
‘‘(C) PROGRAM
LEVEL.—The Adminis-
trator is authorized to make $50,000,000 in 
grants under this paragraph for each of fiscal 
years 2010 and 2011.’’. 
SEC. 658. HOMEOWNERS IMPACTED BY TOXIC DRYWALL. 
Section 7(b) of the Small Business Act (15 U.S.C. 
636(b)), as amended by this Act, is further amended by 
inserting after paragraph (11) the following: 
‘‘(12) HOMEOWNERS
IMPACTED
BY
TOXIC 
DRYWALL.—The Administrator may make a loan 
under this subsection to any homeowner if the pri-
mary residence of such homeowner has been ad-
versely impacted by the installation of toxic drywall 
manufactured in China. A loan under this paragraph 
may be used only for the repair or replacement of 
such toxic drywall.’’. 
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206 
nesses receiving such loans to make timely repayment of 
such loans. 
(b) PUBLIC POLICY GOALS.—The public policy goals 
referred to in subsection (a) are the provision of adequate 
access to capital to assist small business concerns with one 
or more of the following: 
(1) Offsetting the costs to such concerns result-
ing from the imposition of a surtax on the income 
of small business owners. 
(2) Offsetting the costs to such concerns result-
ing from the enactment of a requirement that such 
concerns offer health care of a minimum acceptable 
coverage level. 
(3) Offsetting the costs to such concerns result-
ing from an increase in the marginal tax rates of 
small business owners. 
(4) Offsetting the reduction in capital available 
for such concerns resulting from an increase in the 
tax on capital gains. 
(5) Offsetting the reduction in capital available 
for such concerns resulting from an increase in the 
taxes on carried interest. 
(6) Offsetting the increased energy costs for 
such concerns resulting from the enactment of a cap 
on carbon dioxide emissions. 
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