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-
tions from parties other than the debenture issued 
by the certified development company: 
‘‘(A) FUNDING FROM INSTITUTIONS.— 
‘‘(i) If a small business concern pro-
vides— 
‘‘(I) the minimum contribution 
required 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 institutions, or founda-
tions or other not-for-profit institu-
tions; and 
‘‘(II) more than the minimum 
contribution required under subpara-
graph (B), any excess contribution 
may be used to reduce the amount re-
quired from institutions in described 
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in subclause (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— 
‘‘(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) or (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-
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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-
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 
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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-
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. 
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‘‘(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 used by the 
small business concern that received fund-
ing under this section. 
‘‘(d) REGULATIONS.—(1) The Administrator shall 
promulgate regulations, after notice and comment, rules 
to implement the provisions of this section within 60 days 
after enactment of the Job Creation and Economic Devel-
opment Through CDC Modernization Act of 2009. The 
Administrator may limit the comment 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 
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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 Job Creation and Economic Development 
Through CDC Modernization Act of 2009 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-
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. 
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‘‘(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 small business concern seeking 
funds for a project described in subsection (b)(3), 
the size standard promulgated by the Administrator 
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-
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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 
the regulations set forth in section 120.101 and 120.102 
of title 13, Code of Federal Regulation as in effect on Jan-
uary 1, 200,9 or any successor regulation that applies a 
credit elsewhere or personal resources test to any applica-
tion for a loan under this title pending or filed after the 
date of enactment of the Job Creation and Economic De-
velopment through CDC Modernization Act of 2009.’’. 
SEC. 209. 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: 
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‘‘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— 
‘‘(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-
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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 
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-
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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-
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 
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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 
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 
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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. 210. 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-
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 
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Small Business Programs Improvement 
Act of 1996 (15 U.S.C. 695 note), before 
the enactment of the Job Creation and 
Economic Development Through CDC 
Modernization Act of 2009; 
‘‘(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— 
‘‘(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-
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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 
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-
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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 section (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); 
‘‘(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 
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‘‘(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)(C). 
‘‘(2) ADMINISTRATOR APPROVAL OF PLANS.— 
‘‘(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. 
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‘‘(B) ADMINISTRATOR
APPROVAL
PROCE-
DURES.— 
‘‘(i) TIMING.—Not late 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 
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— 
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‘‘(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 
‘‘(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 
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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 certified development company if the Ad-
ministrator 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-
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). 
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‘‘(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 certified development 
company which elects not to apply for authority to 
foreclose 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 foreclosure and liq-
uidation of defaulted loans in its portfolio. 
‘‘(A) CONTRACT APPROVAL.—The contract 
entered into by the certified development com-
pany specified in paragraph (1) shall be contin-
gent upon approval by the Administrator with 
respect to the qualifications of the contractor 
and the terms and conditions of liquidation ac-
tivities. The Administrator shall not unreason-
ably withhold such approval. 
‘‘(B) 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. 
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‘‘(C) 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. 
‘‘(D) 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 Job Creation and Economic Devel-
opment Through CDC Modernization Act of 
2009. 
‘‘(E) FAILURE TO PROMULGATE REGULA-
TIONS.—If the Administrator fails to promul-
gate such regulations, any contract for liquida-
tion entered into by a certified development 
company under this subsection shall be consid-
ered to valid for the purposes of this subsection 
and subsection (f). 
‘‘(F) EFFECT OF ADMINISTRATOR’S PRO-
MULGATION OF REGULATIONS.—If the Adminis-
trator promulgates regulations after the dead-
line specified in subparagraph (D), those regu-
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lations shall not have any retroactive applica-
tion with respect to contracts that are described 
in subparagraph (E). 
‘‘(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— 
‘‘(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 
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‘‘(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 
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. 
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‘‘(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— 
‘‘(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 
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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 he utilizes another 
source for funds, within 30 days from the date 
when the liquidation case has been closed and 
documentation received.’’. 
SEC. 211. REPORTS AND REGULATIONS. 
Title V of the Small Business Investment Act of 1958 
(15 U.S.C. 661 and following) 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-
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; 
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‘‘(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: 
‘‘(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; 
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‘‘(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). 
‘‘(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). 
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‘‘(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 
specific information regarding the reasons for 
the Administrator’s failure and any delays that 
resulted. 
‘‘(c) REPORTS ON COMBINATION FINANCING.— 
‘‘(1) REPORTING
REQUIREMENT.—Not later 
than 90 days after the date of enactment of the Job 
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Creation and Economic Development Through CDC 
Modernization Act of 2009, and annually thereafter, 
the Administrator shall submit a report to the Com-
mittee on Small Business and Entrepreneurship of 
the Senate and the Committee on Small Business of 
the House of Representatives that— 
‘‘(A) includes the number of small business 
concerns 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 In-
vestment Act of 1958 (15 U.S.C. 695 et seq.) 
during the year before the year of that report; 
and 
‘‘(B) describes the total amount and gen-
eral performance of the financing described in 
subparagraph (A). 
‘‘(d) REPORT ON OTHER ECONOMIC DEVELOPMENT 
ACTIVITY.—The Administrator shall compile and submit 
to 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 Job Creation and Economic 
Development Through CDC Modernization Act of 2009 
was enacted, a report that describes the economic and 
community development activities, other than loan making 
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under this title, of each certified development company 
during the prior fiscal year. The Administrator may con-
tract with another party, including non-governmental enti-
ties, to collect information or otherwise assist in the prepa-
ration of the report required by this subsection. 
‘‘SEC. 512. PROMULGATION OF REGULATIONS UNDER THIS 
TITLE. 
‘‘(a) DEADLINES
FOR
IMPLEMENTING
REGULA-
TIONS.—Except as expressly provided elsewhere in the Job 
Creation and Economic Development Through CDC Mod-
ernization Act of 2009, the Administrator shall promul-
gate regulations under this title, after providing notice and 
the opportunity for comment, 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 Job Creation and Economic Develop-
ment Through CDC Modernization Act of 2009, notice of 
any proposed change to a regulation implementing this 
title V (whether in existence on the date of enactment of 
the Job Creation and Economic Development Through 
CDC Modernization Act of 2009 or subsequently adopt-
ed), publish such notification in the Federal Register, and 
provide a comment period of not less than 60 days.’’. 
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SEC. 212. PROGRAM NAME. 
Title V of the Small Business Investment Act is 
amended by adding the following new section after section 
512: 
‘‘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.—Within 
60 days after the date of enactment of the Job Creation 
and Economic Development Through CDC Modernization 
Act of 2009, the Administrator shall modify all documents 
and websites to conform to the name change made by this 
section.’’. 
TITLE III—MISCELLANEOUS 
SEC. 301. TERMINATION OF PILOT PROGRAM REGULATION. 
(a) TERMINATION.—Section 120.3 of title 13, Code 
of Federal Regulations, as in effect on January 1, 2009, 
shall cease to have any force and effect as of the date 
of enactment of this Act, and the Administrator is prohib-
ited from adopting a new regulation that authorizes the 
Administrator to waive any regulation for the purpose of 
conducting a pilot program unless such waiver is specifi-
cally granted by statute. 
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(b) EFFECT
ON EXISTING PROGRAM.—Subsection 
(a) shall have no effect on any pilot program currently 
conducted by the Administrator. 
(c) FUTURE PILOT PROGRAMS.—Any future pilot 
program conducted under the Administrator’s own initia-
tive or pursuant to statutory authority granted in the 
Small Business Investment Act of 1958 or section 7 of 
the Small Business Act must be implemented only after 
notice in the Federal Register and the opportunity for 
comment. 
SEC. 302. 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 
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 
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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 that was in effect on January 1, 2009, 
and includes any reference to the acronym ‘‘SOP’’. 
SEC. 303. ALTERNATIVE SIZE STANDARD. 
(a) REVIEW AND STUDY.— 
(1) IN
GENERAL.—The Administrator of the 
United States Small Business Administration shall 
study and review the optional size standard set forth 
in section 121.301(b) of title 13, Code of Federal 
Regulations as was in effect on January 1, 2009, for 
eligibility of a small business concern for financing 
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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 Job 
Creation and Economic Development through CDC 
Modernization Act of 2009 to the Committee on 
Small Business and Entrepreneurship 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 committes referred to in paragraph (3) 
of subsection (a). 
(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 
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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. 
Æ 
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