Small Business Assistance and Relief Act of 2010 - Expresses the sense of Congress that: (1) assistance should be made available to creditworthy small businesses that cannot obtain lending in the current environment; and (2) reforming Fannie Mae and Freddie Mac should be a top priority for Congress.
Provides, with respect to small businesses: (1) an extension of specified tax provisions concerning deductions, credits, and income exclusion; and (2) a limit on the paperwork required to be submitted from a small business to federal agencies.
Small Business Financing and Investment Act of 2010 - Amends the Small Business Act and the Small Business Investment Act of 1958 to provide for the establishment of a small lender outreach program, a rural lending outreach program, a national lender training program, a capital backstop program, and an independent appellate process within the Small Business Administration (SBA), with an SBA ombudsman.
Revises or adds provisions affecting a certified development company (CDC), including concerning: (1) operational requirements; (2) an accredited lenders program; (3) a premier certified lenders program; (4) SBA guarantee of debentures issued by a CDC; (5) economic development through debentures; (6) CDC project funding requirements; (7) private debenture sales and the pooling of debentures; and (8) CDC authority to foreclose and liquidate SBA-guaranteed loans.
Expands eligibility for, and increases loan limits under, the SBA's Microloan program.
Revises or adds provisions affecting the small business investment company (SBIC) program, including concerning: (1) expedited SBIC licensing for experienced applicants; (2) revised loan leverage limitations for successful SBICs; (3) SBIC authority to invest in veteran-owned small businesses; and (4) increased SBIC program levels.
Revises or adds provisions concerning investment in small businesses engaged primarily in manufacturing and in renewable-energy small businesses.
Authorizes the SBA to guarantee loans to certain medical professionals for the acquisition of health information technology used in the professionals' practice.
Directs the SBA Administrator to establish and carry out a program to provide equity investment financing to support early-stage small businesses in specified targeted industries.
Revises requirements and increases loan limits under the SBA's disaster loan program.
Requires certain SBA studies.
[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5554 Introduced in House (IH)]
111th CONGRESS
2d Session
H. R. 5554
To provide tax relief for, ease the regulatory burden on, and provide
expanded access to credit to small businesses, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
June 17, 2010
Mr. Castle (for himself, Mrs. Biggert, Ms. Ginny Brown-Waite of
Florida, Mr. Dent, Mr. Gerlach, Mr. Lance, Mr. LaTourette, and Mr. Lee
of New York) introduced the following bill; which was referred to the
Committee on Small Business, and in addition to the Committees on Ways
and Means, Appropriations, Energy and Commerce, and Financial Services,
for a period to be subsequently determined by the Speaker, in each case
for consideration of such provisions as fall within the jurisdiction of
the committee concerned
_______________________________________________________________________
A BILL
To provide tax relief for, ease the regulatory burden on, and provide
expanded access to credit to small businesses, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Small Business Assistance and Relief
Act of 2010''.
TITLE I--FINDINGS
SEC. 101. FINDINGS.
Congress finds the following:
(1) The U.S. unemployment rate was 9.7 percent in May 2010.
(2) Small businesses have generated 64 percent of net new
jobs over the past 15 years.
(3) Very small firms with fewer than 20 employees annually
spend 45 percent more per employee than larger firms to comply
with Federal regulations.
(4) Small firms spend four and a half times as much per
employee than larger firms to comply with environmental
regulations.
(5) Small firms spend 67 percent more per employee on tax
compliance than their larger counterparts.
TITLE II--SENSE OF CONGRESS
SEC. 201. SENSE OF CONGRESS.
It is the sense of Congress that--
(1) assistance should be made available to assist credit-
worthy small businesses who cannot obtain lending in the
current environment;
(2) the ``too big to fail'' doctrine is no longer
acceptable;
(3) reforming Fannie Mae and Freddie Mac should be a top
priority for Congress; and
(4) the Inspector General for Treasury should investigate
the role that the Department of the Treasury has in decisions
by community banks to invest in GSE stock.
TITLE III--TAX RELIEF
SEC. 301. TAX RELIEF.
(a) Extension of Certain Tax Provisions.--The Secretary of the
Treasury or the delegate of the Secretary shall treat as extended, with
respect to any taxpayer that is a small business concern (as such term
is defined in section 3(a) of the Small Business Act (15 U.S.C.
632(a)), until at least December 31, 2011, each of the following tax
provisions, as identified by the Secretary:
(1) The 5-year net operating loss carryback.
(2) The 15-year recovery period for qualified leasehold
improvement property, qualified restaurant property, and
qualified retail improvement property.
(3) Bonus/Accelerated Depreciation.
(4) Enhanced section 179 expensing limits.
(5) Current tax law treatment of carried interest.
(6) Current tax law treatment of financial transactions.
(b) Extension of Research Credit; Alternative Simplified Research
Credit Increased and Made Permanent.--
(1) Extension of credit.--
(A) In general.--Subparagraph (B) of section
41(h)(1) of the Internal Revenue Code of 1986 is
amended by striking ``December 31, 2009'' and inserting
``December 31, 2010''.
(B) Conforming amendment.--Subparagraph (D) of
section 45C(b)(1) of such Code is amended by striking
``December 31, 2009'' and inserting ``December 31,
2010''.
(C) Effective date.--The amendments made by this
paragraph shall apply to amounts paid or incurred after
December 31, 2009.
(2) Alternative simplified research credit increased and
made permanent.--
(A) Increased credit.--Subparagraph (A) of section
41(c)(5) of such Code (relating to election of
alternative simplified credit) is amended by striking
``14 percent (12 percent in the case of taxable years
ending before January 1, 2009)'' and inserting ``20
percent''.
(B) Credit made permanent.--
(i) In general.--Subsection (h) of section
41 of such Code is amended by redesignating the
paragraph (2) relating to computation of
taxable year in which credit terminates as
paragraph (4) and by inserting before such
paragraph the following new paragraph:
``(3) Termination not to apply to alternative simplified
credit.--Paragraph (1) shall not apply to the credit determined
under subsection (c)(5).''.
(ii) Conforming amendment.--Paragraph (4)
of section 41(h) of such Code, as redesignated
by subparagraph (A), is amended to read as
follows:
``(4) Computation for taxable year in which credit
terminates.--In the case of any taxable year with respect to
which this section applies to a number of days which is less
than the total number of days in such taxable year, the amount
determined under subsection (c)(1)(B) with respect to such
taxable year shall be the amount which bears the same ratio to
such amount (determined without regard to this paragraph) as
the number of days in such taxable year to which this section
applies bears to the total number of days in such taxable
year.''.
(C) Effective date.--The amendment made by this
paragraph shall apply to taxable years ending after
December 31, 2008.
(c) Increase in Amount Allowed as Deduction for Start-Up
Expenditures.--
(1) In general.--Subsection (b) of section 195 of the
Internal Revenue Code of 1986 is amended by adding at the end
the following:
``(3) Special rule for taxable years beginning in 2009,
2010, or 2011.--In the case of a taxable year beginning in
2009, 2010, or 2011, paragraph (1)(A)(ii) shall be applied--
``(A) by substituting `$20,000' for `$5,000'; and
``(B) by substituting `$75,000' for `$50,000'.''.
(2) Effective date.--The amendments made by this subsection
shall apply to amounts paid or incurred in taxable years
beginning after the date of the enactment of this Act.
(d) Temporary Exclusion of 100 Percent of Gain on Certain Small
Business Stock.--
(1) In general.--Subsection (a) of section 1202 of the
Internal Revenue Code of 1986 is amended by adding at the end
the following new paragraph:
``(4) Special 100 percent exclusion.--In the case of
qualified small business stock acquired after March 15, 2010,
and before January 1, 2012--
``(A) paragraph (1) shall be applied by
substituting `100 percent' for `50 percent',
``(B) paragraph (2) shall not apply, and
``(C) paragraph (7) of section 57(a) shall not
apply.''.
(2) Conforming amendments.--Paragraph (3) of section
1202(a) of such Code is amended--
(A) by striking ``after the date of the enactment
of this paragraph and before January 1, 2011'' and
inserting ``after February 17, 2009, and before March
16, 2010''; and
(B) by striking ``Special rules for 2009 and 2010''
in the heading and inserting ``Special 75 percent
exclusion''.
(3) Effective date.--The amendments made by this section
shall apply to stock acquired after March 15, 2010.
TITLE IV--EASE REGULATORY BURDEN
SEC. 401. EASE REGULATORY BURDEN.
(a) In General.--The Administrator, acting through the Chief
Counsel of the Office of Advocacy of the Small Business Administration,
is authorized to provide such support as may be necessary with regard
to any Federal regulation to ensure that a small business concern is
not required to expend more than a total of 200 man-hours annually on
applications, filings, petitions, or other paperwork submitted to
Federal departments or agencies.
(b) Commonly Required Information Form.--Support provided under
subsection (a) shall include the establishment of a form on the public
Internet Web site of the Administrator, by means of which a small
business concern may provide to the Administrator information that the
Administrator determines to be frequently required as part of any
applications, filings, petitions, or other paperwork described in
subsection (a). The Administrator shall use information so provided to
assist in the expedited completion of such applications, filings,
petitions, or other paperwork.
(c) GAO Report.--The Comptroller General of the United States shall
conduct a study of each regulation of each Federal agency or department
to determine the burden that such regulation imposes on small business
concerns. The Comptroller General shall submit a report containing
information on such burden to the Administrator not later than the date
that is 9 months after the date of enactment of this Act.
(d) SBA Recommendations.--Not later than 6 months after receiving
the report under subsection (c), the Administrator shall publish and
maintain on the public Internet Web site of the Administrator
recommendations on how to reduce the burden imposed by such regulation
on small business concerns.
(e) Reduction of Paperwork.--In carrying out any program under the
Small Business Act or the Small Business Investment Act of 1958, the
Administrator, acting through the Chief Counsel of the Office of
Advocacy in the Small Business Administration, shall take any actions
the Administrator determines appropriate to reduce the amount of
paperwork (including any application, filing, or petition) that a small
business concern may be required to complete by any Federal department
or agency. Such steps shall include providing for the replacement of
such paperwork with electronic or telephone filing or reporting.
TITLE V--EXPAND ACCESS TO CREDIT/LENDING
SEC. 501. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This title may be cited as the ``Small Business
Financing and Investment Act of 2010''.
(b) Table of Contents.--The table of contents for this title is as
follows:
Sec. 501. Short title; table of contents.
Subtitle A--Small Business Lending Enhancements
Sec. 511. Small lender outreach program.
Sec. 512. Rural lending outreach program.
Sec. 513. Community Express Program made permanent.
Sec. 514. Increased veteran participation program made permanent.
Sec. 515. Leasing policy.
Sec. 516. National lender training program.
Sec. 517. Applications for repurchase of loans.
Sec. 518. Alternative size standard.
Sec. 519. Pilot program authority.
Sec. 520. Loans to cooperatives.
Sec. 521. Capital backstop program.
Sec. 522. Loans to finance goodwill.
Sec. 523. Appellate process and ombudsman.
Sec. 524. Extension of recovery and relief loan benefits.
Sec. 525. Reduced documentation for business stabilization loans.
Sec. 526. Expanded eligibility for business stabilization loans.
Sec. 527. Increased amount of business stabilization loans.
Sec. 528. Extension of business stabilization loans.
Sec. 529. Study and report on business stabilization loans.
Sec. 530. Delayed repayment for small business concerns in areas with
high unemployment.
Sec. 531. SBA secondary market lending authority made permanent.
Sec. 532. SBA secondary market lending authority expanded.
Sec. 533. Increased loan limits.
Sec. 534. Real estate appraisals.
Sec. 535. Additional support for Express Loan Program.
Sec. 536. Loans used to purchase unoccupied manufacturing centers or
equipment.
Sec. 537. 100 percent guarantee for small business concerns owned and
controlled by veterans.
Sec. 538. Deferred repayment for certain small business concerns.
Sec. 539. Authorization of appropriations.
Subtitle B--CDC Economic Development Loan Program
Chapter 1--General Provisions
Sec. 541. Program levels.
Sec. 542. Definitions.
Chapter 2--Certified Development Companies
Sec. 551. Certified development companies.
Sec. 552. Certified development company; operational requirements.
Sec. 553. Accredited lenders program.
Sec. 554. Premier certified lender program.
Sec. 555. Multi-State operations.
Sec. 556. Guaranty of debentures.
Sec. 557. Economic development through debentures.
Sec. 558. Project funding requirements.
Sec. 559. Private debenture sales and pooling of debentures.
Sec. 560. Foreclosure and liquidation of loans.
Sec. 561. Reports and regulations.
Sec. 562. Program name.
Chapter 3--Miscellaneous
Sec. 571. Report on standard operating procedures.
Sec. 572. Alternative size standard.
Subtitle C--Microlending Expansion
Sec. 581. Microloan credit building initiative.
Sec. 582. Flexible credit terms.
Sec. 583. Increased program participation.
Sec. 584. Increased limit on intermediary borrowing.
Sec. 585. Expanded borrower education assistance.
Sec. 586. Young Entrepreneurs program.
Sec. 587. Interest rates and loan size.
Sec. 588. Reporting requirement.
Sec. 589. Surplus interest rate subsidy for businesses.
Sec. 590. Authorization of appropriations.
Subtitle D--Small Business Investment Company Modernization
Sec. 591. Increased investment from States.
Sec. 592. Expedited licensing for experienced applicants.
Sec. 593. Revised leverage limitations for successful SBICs.
Sec. 594. Consistency for cost control.
Sec. 595. Investment in veteran-owned small businesses.
Sec. 596. Tangible net worth.
Sec. 597. Development of agency record.
Sec. 598. Program levels.
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.
Sec. 602. Improved nationwide distribution.
Sec. 603. Increased investment in small business concerns engaged
primarily in manufacturing.
Sec. 604. Expanded uses for operational assistance in manufacturing.
Sec. 605. Updating definition of low-income geographic area.
Sec. 606. Expanding operational assistance to conditionally approved
companies.
Sec. 607. Limitation on time for final approval.
Sec. 608. Streamlined application for New Markets Venture Capital
Program.
Sec. 609. Elimination of matching requirement.
Sec. 610. Simplified formula for operational assistance grants.
Sec. 611. Financing with respect to veterans.
Sec. 612. Authorization of appropriations and enhanced allocation for
small manufacturing.
Chapter 2--Expanded Investment in Small Business Renewable Energy
Sec. 621. Expanded investment in renewable energy.
Sec. 622. Renewable Energy Capital Investment Program made permanent.
Sec. 623. Expanded eligibility for small businesses.
Sec. 624. Expanded uses for operational assistance in manufacturing and
small businesses.
Sec. 625. Expansion of Renewable Energy Capital Investment Program.
Sec. 626. Simplified fee structure to expedite implementation.
Sec. 627. Increased operational assistance grants.
Sec. 628. Authorizations of appropriations.
Subtitle F--Small Business Health Information Technology Financing
Program
Sec. 631. Small business health information technology financing
program.
Subtitle G--Small Business Early-Stage Investment Program
Sec. 641. Small business early-stage investment program.
Sec. 642. Prohibitions on earmarks.
Subtitle H--SBA Disaster Program Reform
Sec. 651. Revised collateral requirements.
Sec. 652. Increased limits.
Sec. 653. Revised repayment terms.
Sec. 654. Revised disbursement process.
Sec. 655. Grant program.
Sec. 656. Regional disaster working groups.
Sec. 657. Outreach grants for loan applicant assistance.
Sec. 658. Homeowners impacted by toxic drywall.
Sec. 659. Authorization of appropriations.
Subtitle I--Regulations
Sec. 661. Regulations.
Subtitle J--Temporary Employee Services Franchises
Sec. 671. Temporary employee services franchises.
Subtitle K--Study on Private Sector Lending
Sec. 681. Study on private sector lending.
Subtitle L--Study on Increases in Certain Caps
Sec. 691. Study on increases in certain caps.
Subtitle M--Rural Outreach
Sec. 701. Rural outreach.
Subtitle N--Study Relating to Medical Technology
Sec. 711. Study relating to medical technology.
Subtitle O--Study on Additional Credit Risk Factors
Sec. 721. Study on additional credit risk factors.
Subtitle A--Small Business Lending Enhancements
SEC. 511. SMALL LENDER OUTREACH PROGRAM.
Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is
amended by adding at the end the following:
``(34) Small lender outreach program.--The Administrator
shall establish and carry out a program to provide support to
regional, district, and branch offices of the Administration to
assist small lenders, who do not participate in the Preferred
Lenders Program, to participate in the programs under this
subsection.''.
SEC. 512. RURAL LENDING OUTREACH PROGRAM.
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:
``(35) Rural lending outreach program.--
``(A) In general.--The Administrator shall
establish and carry out a rural lending outreach
program (hereinafter referred to in this paragraph as
the `program') to provide loans under this subsection
in accordance with this paragraph.
``(B) Maximum participation.--A loan under the
program shall include the maximum participation levels
by the Administrator permitted for loans made under
this subsection.
``(C) Maximum loan amount.--The maximum amount of a
loan under the program shall be $250,000.
``(D) Use of rural lenders.--The program shall be
carried out through lenders located in a rural area (as
such term is defined under subsection (m)(11)(C)) or,
if a small business concern located in a rural area
does not have a lender located within 30 miles of the
principal place of business of such concern, through
any lender chosen by such concern that provides loans
under this subsection.
``(E) Time for approval.--The Administrator shall
approve or disapprove a loan under the program within
36 hours.
``(F) Documentation.--The program shall use
abbreviated application and documentation requirements.
``(G) Credit standards.--Minimum credit standards,
as the Administrator considers necessary to limit the
rate of default on loans made under the program, shall
apply.''.
SEC. 513. COMMUNITY EXPRESS PROGRAM MADE PERMANENT.
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:
``(36) Community express program.--
``(A) In general.--The Administrator shall carry
out a Community Express Program to provide loans under
this subsection in accordance with this paragraph.
``(B) Requirements.--For a loan made under the
Community Express Program, the following shall apply:
``(i) The loan shall be in an amount not
exceeding $250,000.
``(ii) The loan shall be made to a small
business concern the majority ownership
interest of which is directly held by
individuals the Administrator determines are,
without regard to the geographic location of
such individuals, women, members of qualified
Indian tribes, socially or economically
disadvantaged individuals, veterans, or members
of the reserve components of the Armed Forces.
``(iii) The loan shall comply with the
collateral policy of the Administration.
``(iv) The loan shall include terms
requiring the lender to provide, at the expense
of the lender, technical assistance to the
borrower through the lender or a third-party
provider.
``(v) The Administrator shall approve or
disapprove the loan within 36 hours.''.
SEC. 514. INCREASED VETERAN PARTICIPATION PROGRAM MADE PERMANENT.
Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as
amended by this Act, is further amended--
(1) by redesignating the second paragraph (32), as added by
section 208 of the Military Reservist and Veteran Small
Business Reauthorization and Opportunity Act of 2008 (Public
Law 110-186; 122 Stat. 631), as paragraph (33); and
(2) in paragraph (33), as so redesignated by paragraph (1)
of this section--
(A) by striking ``pilot program'' each place it
appears and inserting ``program'';
(B) by striking subparagraphs (C) and (F); and
(C) by redesignating subparagraphs (D) and (E) as
subparagraphs (C) and (D), respectively.
SEC. 515. LEASING POLICY.
Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as
amended by this Act, is further amended by striking paragraph (28) and
inserting the following:
``(28) Leasing.--If a loan under this subsection is used to
acquire or construct a facility, the assisted small business
concern--
``(A) shall permanently occupy and use not less
than 50 percent of the space in such facility; and
``(B) may, on a temporary or permanent basis, lease
to others not more than 50 percent of the space in such
facility.''.
SEC. 516. NATIONAL LENDER TRAINING PROGRAM.
(a) In General.--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:
``(37) National lender training program.--
``(A) In general.--The Administrator shall
establish and carry out, through the regional offices
of the Administration, a lender training program for
new and existing lenders under this subsection with
respect to the lending systems, policies, and
procedures of the Administration.
``(B) Fees.--The Administrator shall charge a fee
for the program established under subparagraph (A) to
reduce the cost of such program to zero.
``(C) Limitation.--The program established under
subparagraph (A) may not be carried out by contract
with a nongovernmental entity.''.
(b) Participation.--An entity may not be permitted to participate
in any program under the Small Business Act (15 U.S.C. 631 et seq.) or
the Small Business Investment Act of 1958 (15 U.S.C. 661 et seq.) that
is established or amended under this Act, as a lending or investment
entity or as an agent of the Small Business Administration, unless such
entity satisfies at least one of the following:
(1) The entity has as the primary mission of the entity the
financing or development of small business concerns.
(2) The entity is primarily engaged in the business of
banking, investing, or entrepreneurial development and does not
engage in activities which are not incidental to the business
of banking, investing, or entrepreneurial development.
SEC. 517. APPLICATIONS FOR REPURCHASE OF LOANS.
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:
``(38) Applications for repurchase of loans.--
``(A) In general.--Not later than 45 days after the
date of the receipt of a claim from a lender for proper
payment of the guaranteed portion of a loan under this
subsection due to default, the Administrator shall make
a final determination with respect to the approval or
denial of such claim.
``(B) Late determinations.--If the Administrator
does not make a final determination under subparagraph
(A) in the time period specified in such subparagraph,
the claim shall be approved and paid promptly.
``(C) If the lender demonstrates, with respect to a
claim for payment described in subparagraph (A), that
it followed the applicable requirements of the National
Lender Training Program as established under paragraph
(37) of this section, the Administrator shall pay the
claim unless the Administrator has clear and convincing
evidence demonstrating that the lender failed to comply
with regulatory requirements established by the
Administrator.''.
SEC. 518. ALTERNATIVE SIZE STANDARD.
(a) In General.--Section 3(a) of the Small Business Act (15 U.S.C.
632(a)) is amended by adding at the end the following:
``(5) In addition to any other size standard under this
subsection, the Administrator shall establish and permit a
lender making a loan under section 7(a) to use an alternative
size standard. The alternative size standard shall be based on
factors including the maximum tangible net worth and average
net income of a business concern.''.
(b) Applicability.--Until the Administrator establishes under
section 3(a)(5) of the Small Business Act, as added by subsection (a)
of this section, an alternative size standard for use by a lender
making a loan under section 7(a) of such Act, the alternative size
standard in section 121.301(b) of title 13, Code of Federal
Regulations, shall apply in such a case.
SEC. 519. PILOT PROGRAM AUTHORITY.
Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as
amended by this Act, is further amended by striking paragraph (25) and
inserting the following:
``(25) Limitation on conducting pilot projects.--
``(A) Limitation on number.--Not more than 10
percent of the total number of loans guaranteed in any
fiscal year under this subsection may be awarded as
part of a pilot program.
``(B) Dollar limitations.--
``(i) In general.--With respect to any
pilot program under this subsection established
on or after the date of the enactment of the
Small Business Financing and Investment Act of
2010, no loan shall be made under such program
if such loan would result in the total amount
of loans made during a fiscal year under all
such programs to be in excess of 5 percent of
the total amount of loans guaranteed in such
fiscal year under this subsection.
``(ii) Certain pre-existing programs.--With
respect to any pilot program under this
subsection established before the date of the
enactment of the Small Business Financing and
Investment Act of 2010, no loan shall be made
under such program if such loan would result in
the total amount of loans made during a fiscal
year under all such programs to be in excess of
10 percent of the total amount of loans
guaranteed in such fiscal year under this
subsection.
``(C) Expiration.--
``(i) In general.--Except as provided in
clause (iii), the duration of any pilot program
under this subsection may not exceed 3 years.
``(ii) Designation as new program.--For
purposes of this subparagraph, a pilot program
shall not be treated as a new pilot program
solely on the basis of a modification or change
in the pilot program, including the change of
its name.
``(iii) Existing programs.--With respect to
any pilot program in existence on the date of
the enactment of the Small Business Financing
and Investment Act of 2010, such program may
continue in effect for a period not exceeding 3
years after such date without regard to the
duration of such program before such date.
``(D) Regulations.--
``(i) In general.--With respect to each
pilot program under this subsection, including
each pilot program in existence on the date of
the enactment of the Small Business Financing
and Investment Act of 2010, the Administrator
shall--
``(I) issue regulations for such
program after providing notice in the
Federal Register and an opportunity for
comment; and
``(II) ensure that such regulations
are published in the Code of Federal
Regulations.
``(ii) Pilot programs established after
date of enactment.--With respect to any pilot
program established after the date of the
enactment of the Small Business Financing and
Investment Act of 2010, such program shall not
take effect until the requirements under this
subparagraph are satisfied.
``(E) Repeal of authority to waive certain rules.--
``(i) In general.--Notwithstanding section
120.3 of title 13, Code of Federal Regulations,
the Administrator may not from time to time
suspend, modify, or waive rules for a limited
period of time to test new programs or ideas
with respect to this subsection, unless such
suspension, modification, or waiver is
explicitly authorized by Act of Congress.
``(ii) Existing pilot programs.--Nothing
under clause (i) may be construed to affect a
pilot program in existence on the date of the
enactment of the Small Business Financing and
Investment Act of 2010.
``(F) Pilot program.--For purposes of this
paragraph, the term `pilot program' means any lending
program initiative, project, innovation, or other
activity not specifically authorized by Act of
Congress.''.
SEC. 520. LOANS TO COOPERATIVES.
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:
``(39) Cooperatives.--The Administration may provide loans
under this subsection to any cooperative that--
``(A) is not organized as a tax-exempt entity;
``(B) is engaged in a legal business activity;
``(C) obtains financial benefits for the
cooperative and for the members of such cooperative;
and
``(D) is eligible under applicable size standards
of the Administration, including that any business
entity that is a member of such cooperative is eligible
under applicable size standards of the
Administration.''.
SEC. 521. CAPITAL BACKSTOP PROGRAM.
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:
``(40) Capital backstop program.--
``(A) In general.--The Administrator shall
establish a process under which a small business
concern may submit an application to the Administrator
for the purpose of securing a loan under this
subsection. With respect to such application, the
Administrator shall collect all information necessary
to determine the creditworthiness and repayment ability
of an applicant and shall determine if such application
meets the eligibility and credit standards that a
lender would be required to apply to approve a loan
under this subsection.
``(B) Participation of lenders.--
``(i) In general.--The Administrator shall
establish a process under which the
Administrator makes available to lenders each
loan application submitted and determined to
meet basic eligibility and credit standards
under subparagraph (A) for the purpose of such
lenders originating, underwriting, closing, and
servicing the loan for which the applicant
applied.
``(ii) Eligibility.--Lenders are eligible
to receive a loan application described in
clause (i) if they participate in the programs
established under this subsection.
``(iii) Local lenders.--The Administrator
shall first make available a loan application
described in clause (i) to lenders within 100
miles of the principal office of the loan
applicant.
``(iv) Preferred lenders.--If a lender
described in clause (iii) does not agree to
originate, underwrite, close, and service the
loan applied for within 5 business days of
receiving a loan application described in
clause (i), the Administrator shall
subsequently make available such loan
application to lenders in the Preferred Lenders
Program under paragraph (2)(C)(ii) of this
subsection.
``(v) Authority of administration to
lend.--If a lender described in clauses (iii)
or (iv) does not agree to originate,
underwrite, close, and service the loan applied
for within 10 business days of receiving a loan
application described in clause (i), the
Administrator shall originate, underwrite,
close, and service such loan.
``(C) Asset sales.--The Administrator shall offer
to sell loans made by the Administrator under this
paragraph. Such sales shall be made through the semi-
annual public solicitation (in the Federal Register and
in other media) of offers to purchase. The
Administrator may contract with vendors for due
diligence, asset valuation, and other services related
to such sales. The Administrator may not sell any loan
under this subparagraph for less than 90 percent of the
net present value of the loan, as determined and
certified by a qualified third party.
``(D) Loans not sold.--The Administrator shall
maintain and service loans made by the Administrator
under this paragraph that are not sold through the
asset sales under this paragraph.
``(E) Effective dates.--This paragraph shall have
effect on each date during the period beginning on the
date of enactment of this paragraph and ending on
September 30, 2011, and on any other date after such
period if--
``(i) such date occurs during a period
that--
``(I) begins on the date the Bureau
of Economic Analysis, or any successor
organization, makes a determination
that the gross domestic product of the
United States has decreased for three
consecutive quarters; and
``(II) ends on the date the Bureau
of Economic Analysis, or any successor
organization, makes a determination
that the gross domestic product of the
United States has increased for two
consecutive quarters; and
``(ii) the number of loans provided under
this subsection prior to such date in the
fiscal year including such date is at least 30
percent less than the number of such loans
provided prior to the same point in the
previous fiscal year.
``(F) Implementation.--The Administrator shall
establish a group of at least 250 individuals available
to carry out activities under this paragraph on any
date on which this paragraph has effect under
subparagraph (E). The Administrator shall provide to
such group the training necessary to carry out
activities under this paragraph. The Administrator
shall ensure that each individual in such group with
loan application evaluation and underwriting
responsibilities has at least 2 years experience with
respect to such responsibilities.
``(G) Application of other law.--Nothing in this
paragraph shall be construed to exempt any activity of
the Administrator under this paragraph from the Federal
Credit Reform Act of 1990 (2 U.S.C. 661 et seq.).
``(H) Authorization of appropriations.--
``(i) Program levels.--The Administrator is
authorized to make loans under this paragraph
in an amount that is equal to half the amount
authorized for loans under this subsection
other than loans under this paragraph.
``(ii) Authorization of appropriations.--In
addition to amounts made available to carry out
this subsection, there are authorized to be
appropriated such sums as may be necessary to
carry out this paragraph.''.
SEC. 522. LOANS TO FINANCE GOODWILL.
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:
``(41) Goodwill.--The Administrator may not apply an
application, processing, or approval standard to a loan for the
purpose of financing goodwill under this subsection, unless
such standard applies to all loans under this subsection.''.
SEC. 523. APPELLATE PROCESS AND OMBUDSMAN.
The Small Business Act (15 U.S.C. 631 et seq.) is amended--
(1) by redesignating section 44 as section 45; and
(2) by inserting after section 43 the following:
``SEC. 44. APPELLATE PROCESS AND OMBUDSMAN.
``(a) Appellate Process.--
``(1) In general.--Not later than 270 days after the date
of the enactment of the Small Business Financing and Investment
Act of 2010, the Administrator shall establish an independent
appellate process within the Administration. The process shall
be available to review material determinations made by the
Administration that affect a lender or investment company that
participates or is applying to participate in a program
administered by the Administration.
``(2) Review process.--In establishing the independent
appellate process under paragraph (1), the Administrator shall
ensure that--
``(A) any appeal of a material determination by the
Administration is heard and resulting recommendations
are provided expeditiously; and
``(B) appropriate safeguards exist for protecting
the appellant from retaliation by Administration
employees.
``(3) Comment period.--Not later than 180 days after the
date of the enactment of the Small Business Financing and
Investment Act of 2010, the Administrator shall provide an
opportunity for notice and comment on proposed guidelines for
the establishment of an independent appellate process under
this section.
``(b) Agency Ombudsman.--
``(1) Establishment.--Not later than 180 days after the
date of the enactment of the Small Business Financing and
Investment Act of 2010, the Administrator shall appoint an
ombudsman.
``(2) Duties.--The ombudsman appointed in accordance with
paragraph (1) shall--
``(A) act as a liaison between the Administration
and any lender or investment company that participates
or is applying to participate in a program administered
by the Administration with respect to a problem such
entity may have in dealing with the Administration
resulting from a material determination made by the
Administration; and
``(B) ensure that safeguards exist to encourage
complainants to come forward and preserve
confidentiality.
``(c) Other Authority.--An individual carrying out the independent
appellate process established under subsection (a) or the position of
ombudsman established under subsection (b) is authorized to--
``(1) examine records and documents relating to a matter
under review pursuant to such subsections; and
``(2) initiate the review of a matter under such
subsections if such individual believes that Administration
procedures have not been followed as intended with respect to
such matter, without regard to whether an appeal or complaint
has been made.
``(d) Limitations.--
``(1) In general.--An individual carrying out the
independent appellate process established under subsection (a)
or the position of ombudsman established under subsection (b)
may not, as a result of the authority provided under this
section--
``(A) make, change, or set aside a law, policy, or
administrative decision;
``(B) make binding decisions or determine rights;
``(C) directly compel an entity to implement the
recommendations of such individual; or
``(D) accept jurisdiction over an issue that is
pending in a legal forum.
``(2) Rule of construction.--Activities carried out under
this section may not be construed--
``(A) as a formal investigation, formal hearing, or
binding decision;
``(B) as limiting any remedy or right of appeal;
``(C) as affecting any procedure concerning
grievances, appeals, or administrative matters under
law; or
``(D) as a substitute for an administrative or
judicial proceeding.
``(e) Report.--Not later than one year after the date of the
enactment of the Small Business Financing and Investment Act of 2010
and annually thereafter, the Administrator 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
describing and providing the status of appeals made under subsection
(a) and complaints made under subsection (b).
``(f) Definitions.--In this section, the following apply:
``(1) Material determination.--The term `material
determination' includes determinations relating to--
``(A) applications for payment relating to a loan
guarantee; and
``(B) the ability of an entity to participate in an
Administration loan or investing program.
``(2) Independent appellate process.--The term `independent
appellate process' means a review by an Administration official
who does not directly or indirectly report to the
Administration official who made the material determination
under review.''.
SEC. 524. EXTENSION OF RECOVERY AND RELIEF LOAN BENEFITS.
(a) Fee Reductions.--Section 501 of title V of division A of the
American Recovery and Reinvestment Act of 2009 (Public Law 111-5) is
amended--
(1) in subsection (a) by striking ``September 30, 2010''
and inserting ``September 30, 2011''; and
(2) in subsection (c) by repealing paragraph (2).
(b) Economic Stimulus Lending Program for Small Businesses.--
Section 502(f) of title V of division A of the American Recovery and
Reinvestment Act of 2009 (Public Law 111-5) is amended by striking
``the date 12 months after the date of enactment of this Act'' and
inserting ``September 30, 2011''.
SEC. 525. REDUCED DOCUMENTATION FOR BUSINESS STABILIZATION LOANS.
Section 506(a) of title V of division A of the American Recovery
and Reinvestment Act of 2009 (Public Law 111-5) is amended by adding at
the end the following: ``The Administrator shall give priority under
such program to small business concerns in a city with an unemployment
rate that is at least 125 percent of the unemployment rate of the State
that includes such city. In carrying out such program, the
Administrator shall establish and utilize a one-page application for
loans under this section and shall authorize lenders to utilize the
same documentation and procedural requirements for loans under this
section as such lenders utilize for other loans of a similar size and
type.''.
SEC. 526. EXPANDED ELIGIBILITY FOR BUSINESS STABILIZATION LOANS.
Section 506(c) of title V of division A of the American Recovery
and Reinvestment Act of 2009 (Public Law 111-5) is amended by striking
``but shall not include'' and all that follows through ``enactment of
this Act''.
SEC. 527. INCREASED AMOUNT OF BUSINESS STABILIZATION LOANS.
Section 506(d) of title V of division A of the American Recovery
and Reinvestment Act of 2009 (Public Law 111-5) is amended by striking
``$35,000'' and inserting ``$50,000 (except as provided under
subsection (l))''.
SEC. 528. EXTENSION OF BUSINESS STABILIZATION LOANS.
Section 506(j) of title V of division A of the American Recovery
and Reinvestment Act of 2009 (Public Law 111-5) is amended by striking
``September 30, 2010'' and inserting ``September 30, 2011''.
SEC. 529. STUDY AND REPORT ON BUSINESS STABILIZATION LOANS.
(a) Study.--The Administrator of the Small Business Administration
shall conduct a study on the business stabilization program established
under section 506 of title V of division A of the American Recovery and
Reinvestment Act of 2009 (Public Law 111-5), including--
(1) how the program has been implemented;
(2) the amount of time involved in processing applications;
(3) the volume of applications received and the effect on
application processing;
(4) impediments to participation in the program by small
business concerns and lenders;
(5) courses of action that might expedite action by the
Administrator on applications;
(6) courses of action that might expand participation by
such concerns and lenders; and
(7) a cost benefit analysis with regard to changes to the
program, including--
(A) increases in loan limits;
(B) expanding eligibility requirements;
(C) changes to interest rates to lenders; and
(D) any other change the Administrator determines
appropriate.
(b) Report.--Not later than 90 days after the date of enactment of
this Act, the Administrator of the Small Business Administration shall
submit to Congress a report that includes--
(1) the results of the study under subsection (a); and
(2) recommendations on how to change the program--
(A) to expand participation by small business
concerns and lenders; and
(B) to decrease the amount of time involved in
processing applications.
(c) Outreach.--In conducting the study under subsection (a) and
preparing the report under subsection (b), the Administrator of the
Small Business Administration shall meet with and solicit the views of
relevant stakeholders, including lenders.
SEC. 530. DELAYED REPAYMENT FOR SMALL BUSINESS CONCERNS IN AREAS WITH
HIGH UNEMPLOYMENT.
Section 506 of title V of division A of the American Recovery and
Reinvestment Act of 2009 (Public Law 111-5) is amended by adding at the
end the following:
``(l) Small Business Concerns in Areas With High Unemployment.--
``(1) Increase loan limits.--Notwithstanding subsection
(d), a loan made under this section to a small business concern
in what the Administrator determines to be an area with high
unemployment may not exceed $75,000.
``(2) Delayed repayment.--Notwithstanding subsection (g),
repayment for a loan made under this section after the date of
the enactment of the Small Business Financing and Investment
Act of 2010 to a small business concern described in paragraph
(1) shall not begin until 18 months after the final
disbursement of funds is made.''.
SEC. 531. SBA SECONDARY MARKET LENDING AUTHORITY MADE PERMANENT.
Section 509 of title V of division A of the American Recovery and
Reinvestment Act of 2009 (Public Law 111-5) is amended--
(1) by striking subsection (e); and
(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 designation 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 section 530 of
this Act, by adding at the end the following: ``To the extent
that the cost of an elimination or reduction of fees is offset
by appropriations, the Administrator shall in lieu of the fee
otherwise 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)--
(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
disbursement of the loan, if such balance
exceeds $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''.
SEC. 535. ADDITIONAL SUPPORT FOR EXPRESS LOAN PROGRAM.
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 MANUFACTURING 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 subsection 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 semicolon at the
end and inserting the following: ``or in paragraph (42);''; and
(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
respect to a loan to such a small business concern from the
business loan and investment fund established 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.''.
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 following:
``(f) Fiscal Years 2010 and 2011 With Respect to Section 7(a).--
``(1) Program levels.--For the programs authorized by this
Act, in each of fiscal years 2010 and 2011 commitments for
general business loans authorized 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 inserting after subsection
(f) the following:
``(g) Program Levels With Respect to CDC Economic Development Loan
Program.--
``(1) Fiscal year 2010.--For financings authorized 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
$9,000,000,000 in guarantees of debentures for fiscal year
2010.
``(2) Fiscal year 2011.--For financings authorized 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 fiscal 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 follows:
``(6) the term `development company' means any corporation
organized in order to promote economic 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 Administrator 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 economic
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 determined by
the Administrator to be insufficient to support
the formation of a separate development
company;
such term includes entities meeting the requirements of
clauses (i) through (iii), such as, but not limited to,
a council of governments, regional development
corporation, regional planning commission, or economic
development district;
``(22) the term `member' means any person authorized 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 corporation 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 classified
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 Debenture Authority.--Only
development companies certified 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 debentures 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 company,
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 corporation.
``(2) Exceptions.--
``(A) For profit status.--If a development company
was chartered as a for-profit corporation and issued
debentures prior to January 1, 1987, the company shall
not be required to change its status to not-for-profit
in order to be certified.
``(B) Affiliation grandfather.--Any company that
was authorized by the Administrator 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 governmental
entities.--Any company that was organized 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 company 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 company shall
have at least 25 members.
``(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 residents of the
State in which the development company is chartered or
authorized to do business.
``(D) Diversity.--The development company 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 belonging
to the Federal Financial Institutions
Examination Council and that provides 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 predicated on
employment status and an individual who retired from or
was terminated (for reasons other than fraud or the
commission of a crime) from an entity described in
subparagraph (D) shall be deemed to be from the
organization described in that subparagraph.
``(5) Board of directors.--
``(A) In general.--The development company's board
consists of members and each director 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 organization shall have more than 50
percent representation on the board of the development
company. If the development company is a for-profit
corporation, financial institution representatives may
make up more than 50 percent of the board.
``(C) Affiliated entity representation
restrictions.--A development company 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 include 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 development
companies.--The board of directors for any development
company issuing debentures before December 31, 2005,
and incorporated under a State law requiring, or which
is interpreted by the State's legal department as
imposing specific requirements on, the number and
selection of members, board members, or both, and the
rights and privileges conferred by such State law, may
adhere to such provisions.
``(6) Professional management and staff.--
``(A) In general.--The development company shall
have full-time independent professional management,
including a chief executive officer to manage the daily
operations and a full-time professional staff qualified
to carry out the functions authorized under this title.
``(B) Utilization of staff from affiliated
entities.--A development company shall not be denied
certification under this section if its chief executive
or full-time professional staff is from an affiliated
entity as described in paragraph (1)(C).
``(C) Staff under contract.--The Administrator
shall not deny certification to a development company
that contracts for its full time staff if one of the
following conditions is met:
``(i) The development company is located in
a rural area, obtains its staff through
contract from another development company that
is certified by the Administrator 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 provide staffing and
management services.
``(c) Applications.--
``(1) Development companies issuing debentures before
september 30, 2009.--
``(A) Short form application.--(i) For any
development company that issued debentures 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
Investment Act of 2010, a short-form application that
contains sufficient information for the Administrator
to determine that the development company 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.
``(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 submission of the application is received by
the Administrator. If the Administrator takes no action
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 disapproves the application, the
Administrator shall provide in writing within 3
business days the reasons for the disapproval. If such
document is not provided within the time specified, the
application is deemed approved and no further action is
required by the Administrator or the development
company to obtain certification.
``(ii) For those development companies that submit
contracts under subparagraph (A)(ii), the Administrator
is limited in rejecting 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
functions 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 development company may
file a new application limited solely to addressing the
concerns of the Administrator and the certification
procedures set forth in subparagraph (B) shall
recommence.
``(D) Appeals.--If the Administrator disapproves 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 disapproval. 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
constitute final agency action 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 certification shall apply to any
development company meeting the qualifications
of clause (i).
``(iii) Effect of denial.--The denial or
rejection of an application for certification
as set forth in this subsection shall have no
effect on the ability of a development company
meeting the qualifications in clause (i) from
continuing to issue debentures during the
entire two-year period established in that
clause.
``(iv) Failure to obtain certification.--
Any development company that fails to obtain
certification in accordance with the procedures
set forth in this paragraph during the period
set forth in clause (i) shall be considered to
be a new development company and the procedures
of paragraph (2) shall apply. The authority to
issue debentures shall cease for any
development company covered by this
subparagraph that has failed to obtain
certification from the Administrator during the
time period set forth in clause (i).
``(F) Automatic qualification provision.--If the
Administrator fails to implement the certification
process set forth in this paragraph, any development
company that was issuing debentures before September
30, 2009, pursuant to this title shall be considered
certified until such time as the Administrator develops
the certification procedures set forth in this
paragraph.
``(G) Savings clause.--Any action taken by a
development company or the Administrator pursuant to
this paragraph shall have no impact 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 development 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
opportunity for notice and comment, an application form
for certification that provides the Administrator with
sufficient information to insure that the applicant
meets the standards set forth in subsection (b). The
Administrator shall certify such development company or
reject the application within 60 calendar days from the
date the initial submission was received by the
Administrator. If the Administrator rejects the
application, the Administrator shall provide in writing
within 7 business days after the decision, the reason
for rejecting the application.
``(B) Appeals.--A development company shall be able
to appeal the disapproval of an application under the
procedures set forth in paragraph (1)(D).''.
SEC. 552. CERTIFIED DEVELOPMENT COMPANY; OPERATIONAL 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 Certification.--Any company
certified pursuant to section 501 shall continue to comply with the
requirements of that section to remain certified. The Administrator
shall develop a reporting form, which to the extent possible,
incorporates other documents and reports already kept by certified
development companies, demonstrating their continued 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 constitute a conflict of interest or
appear to constitute a conflict of interest. For purposes of
this subsection, 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 certified development
company. The term `associate' shall have the same meaning given
the term `Associate 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 percent shall be
substituted wherever section 120.10 of title 13, Code of
Federal Regulations uses 20 percent.
``(3) By entities.--Except as provided in sections
501(b)(5) and 501(b)(6), no person, sole proprietorship,
partnership, or corporation shall control or have managerial
control of more than one certified 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.
``(B) The ability to modify or approve rate or fee
changes affecting revenues of the certified development
company.
``(C) The ability to veto, overrule, or modify
decisions of the certified development company's body.
``(D) The ability, either directly or
contractually, 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
development company's resources or amend its budget.
``(F) The ability to control another certified
development company pursuant to provisions in a
contract.
``(c) Meetings.--The board of directors of the certified
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 committee 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
development company's State of operation or the adjacent local economic
area. Such loan committees shall meet on a periodic basis as set forth
by the board of directors.
``(e) Prohibited Conflict in Project Loans.--
``(1) In general.--Certified development companies shall
not recommend or approve a guarantee of a debenture that will
be collateralized by property being constructed or acquired on
which an institution, as provided in section 508(c)(1)(A), will
have a first lien position.
``(2) Exception.--The prohibition in paragraph (1) shall
not apply to any certified development company that was
affiliated with or part of any entity that took a first lien
position between October 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 paragraph (1) shall
not apply to any certified development company that is
affiliated with an entity authorized by the Administrator to
operate under section 7(a) of the Small Business Act if such
affiliation 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 development company was affiliated with
such an institution 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, operating, 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 authorized in section 505
(relating to multi-State operation);
``(3) investment in other community and local economic
development activity or community development 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 Business Investment
Companies.--A certified development company shall not--
``(1) invest excess funds in a small business investment
company that the Administrator determines 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 impairment; 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 certified development company
has invested excess funds.
``(j) Economic Development Activities.--A company certified
pursuant to this section shall carry out each of the following economic
development activities that create or preserve jobs in urban and rural
areas:
``(1) The company shall provide long-term financing to
small business concerns through debentures described in section
506.
``(2) The company shall operate any other program to assist
small business concerns or communities that promote local
economic development and job creation or preservation.
``(k) Restrictions on Assistance.--
``(1) In general.--After the date of enactment of the Small
Business Financing and Investment 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
imposes--
``(A) conditions on the types of small business
concerns that a certified development company may
provide assistance to under this title; or
``(B) conditions or requirements, directly or
indirectly, upon any small business concern receiving
assistance under this title.
``(2) Exception.--The conditions of subparagraphs (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 Administrator may suspend or
revoke a certified development company'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 affect any outstanding
debenture guarantee.''.
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 accredited 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 Administrator shall
make a determination within 30 days after a complete
application has been filed by the certified development
company.
``(4) Reapplication.--If the Administrator rejects the
application, the Administrator shall provide in writing the
reasons for the rejection. Any 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 Accredited Certified Development Company
Program.--The Administrator shall designate a certified development
company as accredited 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 during that time period.
``(2) Has well-trained, qualified personnel who are
knowledgeable in the lending policies and procedures for
certified development companies.
``(3) Has the ability to process, close, and service the
loan issued under this title.
``(4) Has a loss rate on the company's debentures that is
reasonable and acceptable to the Administrator.
``(5) Has a history of submitting to the Administrator
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.
``(c) Expedited Processing of Guarantee Applications.--The
Administrator shall develop an expedited procedure for processing a
guarantee application or servicing action submitted by an accredited
certified development company. For purposes of this subsection, an
expedited procedure is one that takes at least two business days less
than the processing performed for certified development 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 company 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 accredited 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 debenture guarantee.
``(f) Grandfather Provision.--Any certified development company
that was accredited by the date of enactment 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 Administrator
within the 24 months, its accreditation standard shall lapse.
``(g) Automatic Qualification.--
``(1) In general.--Until the Administrator develops
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 development company that
satisfies the provision of paragraph (1) shall have 24 months
in which to submit the application established by this section
for accredited status.
``(3) Effect while application pending.--The denial or
rejection of an application for accredited 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 maintaining its status during the 24 months
specified in this subsection.
``(h) Promulgation of Accrediting Standards.--The Administrator
shall develop standards for accrediting, suspension, and revocation
under the program established by this section only after notice and an
opportunity 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.
``(2) Application.--The Administrator shall, after
opportunity for notice and comment, develop an application for
accredited certified development companies seeking to become
premier certified development companies.
``(3) Processing of application.--The Administrator 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 rejects the
application, the Administrator shall provide in writing the
reasons for the rejection. Any accredited 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 Certified Development Company
Status.--The Administrator shall designate an accredited certified
development company as a premier certified development company if the
application submitted pursuant to subsection (a) demonstrates that the
accredited certified development company meets the following standards:
``(1) Has been an accredited certified development company
for at least 12 months.
``(2) Has submitted to the Administrator adequately
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 accordance with
the standards set by the Administrator.
``(5) Has established a loan loss reserve established in
accordance with this section that the Administrator determines
is sufficient to meet its obligations 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 proceeds of
which were used to fund a loan approved 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 Administrator as a result of a default by the
company in the payment of principal or interest on a
debenture issued by such company and guaranteed by the
Administrator;
``(B) on account of a debenture, the proceeds of
which were used to fund a loan approved prior to the
date of enactment of the Small Business Financing and
Investment Act of 2010 and which were issued during the
period 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 Administrator as a result of a default by the
company in the payment of principal or interest on a
debenture issued by such company and guaranteed by the
Administrator; or
``(C) on account of a debenture, the proceeds 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 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 section as determined by
the Administrator. The rate specified by this
clause shall be determined annually based upon
the company's loan losses as of close of
business on June 30 and notice of the
determination shall be provided to each company
not later than August 31. Such rate shall be
applicable to loans approved during the fiscal
year commencing after the determination 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 enactment of the Small Business
Financing and Investment Act of 2010, one may
be made after the commencement and it shall be
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 Status.--The
Administrator may suspend or revoke an accredited 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 development
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 accredited certified development company.
``(d) Loan Loss Reserve.--
``(1) Assets.--Each loan loss reserve maintained by the
premier certified development company for loans made pursuant
to the authority in subsection (g)(1) shall be comprised of--
``(A) segregated funds on deposit in an account or
accounts with a federally insured depository
institution or institutions selected by the company,
subject to a collateral assignment in favor of, and in
a format acceptable to, the Administrator that shall
amount to 10 percent of the company's exposure as
determined pursuant 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 described 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 sustained 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 certified development company's share of the loss as
provided for in subsection (b)(6). If the premier certified
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 aggregate 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 percent
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 company designated as a premier
certified development 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 Development Company Lender
Oversight.--
``(1) In general.--There is hereby established a Bureau of
Premier Certified Development Company Lender Oversight in the
Office of Lender Oversight at the Administration which shall
have responsibility and capability for carrying out oversight
of premier certified development companies and such other
responsibilities as the Administrator designates.
``(2) Annual review.--The Bureau established in paragraph
(1) annually shall review the financing made by each premier
certified development company. Such review shall include the
premier certified development company's credit decisions and
general compliance with the eligibility requirements for each
financing approved as a result of its status as a premier
certified development company.
``(3) Random audits.--The Bureau shall develop and
implement a method for sampling the debentures 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 Procedure 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 development companies in which each lender is
a participating lender.
``(B) Notification.--If the Bureau determines that
the loss rate on debentures involving an individual
lender exceeds the average for all debentures approved
under this section, it shall advise the Administrator.
``(5) Use of reviews and audits.--The Administrator shall
consider the findings under paragraphs (2), (3), and (4) in
carrying out the responsibilities 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 identifies 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 notice
shall be given to the premier certified development company as
soon as possible after the financing is identified, but not
less than 90 days before the date the Administrator first makes
any records on such financing available for examination by
prospective 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--
``(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 paragraph
(1).
``(g) Loan Approval Authority.--
``(1) In general.--A premier certified development 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,
foreclose, litigate (except that the Administrator may monitor
conduct of any such litigation), and liquidate loans that are
funded with proceeds of a debenture issued by a premier
certified development company unless the Administrator advises
the company that loans involving a specific institutional
lender are to be submitted to the Administrator for further
consideration, and approval by the Administrator.
``(2) Program goals.--Each premier certified development
company shall establish a goal of processing no less than 50
percent of the applications for assistance under this title
that the premier certified development company receives.
Failure to meet this 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 certified 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 involving creditworthiness, loan closing, or compliance
with legal requirements imposed by law or regulation.
``(h) Suspension or Revocation.--The Administrator may suspend or
revoke an accredited 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 development company no longer meets the
eligibility criteria established under this section, fails to maintain
adequate loan loss reserves mandated in this section even if it meets
the other eligibility requirements for premier status, or violates the
Administrator's rules, regulations, or some other provision of law. The
Administrator shall consider the review of the premier certified
development company conducted pursuant to subsection (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 enacted, 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 permit an accredited
or premier certified development company to make loans or issue
debentures in any State that is contiguous to the State of
incorporation of that company only if the company--
``(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 members of the loan committee
are solely residents of the expansion State; and
``(4) files an application developed by the Administrator
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 company will
comply with the requirements of this subsection.
``(b) Loan Committees.--The requirements of paragraph (3) of
subsection (a) shall not require a development company to establish a
loan committee in its State of incorporation or in a local economic
area outside the State of incorporation unless such area is part of an
expansion State.
``(c) Review.--
``(1) In general.--The Administrator shall review each
application for expansion under subsection (a), but such review
shall be limited to that information needed to determine
whether the company will comply with the requirements of
subsection (a).
``(2) Deadline for decision.--The Administrator 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 Administrator
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 deadlines in
paragraph (2) shall apply to resubmitted applications.
``(4) Appeal.--If a resubmitted application is denied, the
applicant may, within 10 calendar days after receipt of the
disapproval, appeal such disapproval. 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 constitute 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 company
only need submit the information required in subsection (a) to the
Administrator to be deemed eligible to commence operations authorized
by this section. Such eligibility shall not be terminated if the
Administrator develops an application after the 60-day period set forth
in this subsection.
``(e) Aggregate Accounting.--An accredited or premier certified
development company authorized to operate in multiple States pursuant
to this section may maintain an aggregate accounting of all revenue and
expenses 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 towards any applicable job
creation or retention requirements 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 certified 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 abutting 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.
``(h) Exemption for Local Economic Areas.--Except as provided in
subsection (a)(3) with respect to loan committees, any certified,
accredited, or premier development company or applicant operating in a
local economic 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 comply 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 provided in subsection
(c), the Administrator may guarantee the timely payment of all
principal and interest as scheduled on any debenture issued by a
certified development company.
``(b) Terms and Conditions of the Guarantee.--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 interests of the small business
concern and the ownership interests of the property to be financed with
the proceeds of the loan made pursuant to subsection (e)(1) are not
identical because one or more of the following classes of relatives
have an ownership interest in either the small business concern or the
property: father, mother, son, daughter, 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
proceeds 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 Guarantees.--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;
``(2) the interest rate on such debentures is not less than
the rate of interest determined by the Secretary 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 certified 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--
``(I) 0.9375 percent per year of
the outstanding balance of the loan; or
``(II) the minimum amount necessary
to reduce the cost (as defined in
section 502 of the Federal Credit
Reform Act of 1990) to the
Administrator of purchasing and
guaranteeing debentures under this
title to zero; and
``(ii) 50 percent of the amount established
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 maximum legal rate of interest on any commercial loan
which funds any portion of the cost of the project financed pursuant to
this title which is not funded by a debenture guaranteed under this
section shall be a rate which is established 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
include--
``(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 development 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 State or local government, bank,
other financial institution, 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 development 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 section 502 of the Credit Reform Act of 1990) to the
Administrator 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.
``(l) Calculation of Subsidy Rate.--All fees, interest, and profits
received and retained by the Administrator under this section shall be
included in the calculations 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 debentures 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 Administrator shall--
``(A) take all necessary steps to bring such loan
current; or
``(B) implement a formal written deferral
agreement.
``(2) Purchase or acceleration of debenture.--Not later
than the 65th day after the date on which a payment on a loan
described in paragraph (1) is due and not received, and absent
a formal written deferral agreement, the Administrator shall
take all necessary steps to purchase or accelerate the
debenture.
``(3) Prepayment penalties.--With respect to the portion of
any project derived from funds not provided by a debenture
issued by a certified development 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 default of
any loan and the repurchase of a debenture 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
received on such defaulted loans, including payments
from guarantors or on notes in compromise of the
original note. The central servicing agent shall
continue to provide an accounting of income and
expenses for any such loan on the same basis it does
for any other loan issued under this title. The central
servicing 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 requirements of
subparagraph (A) shall become effective 180 days after
the date of enactment of the Small Business Financing
and Investment Act of 2010.''.
SEC. 557. ECONOMIC DEVELOPMENT THROUGH DEBENTURES.
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 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 stabilizing its economy.
``(3) The achievement of one or more of the following
public policy goals:
``(A) Business district revitalization or expansion
of businesses in low-income communities which would be
eligible for a new markets tax credit under section
45D(a) of the Internal Revenue Code of 1986, or
implementing regulations issued under that section.
``(B) Expansion of exports.
``(C) Expansion of minority business development 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 veterans, as defined in
such section.
``(F) Enhanced economic competition, including the
advancement of technology, plan retooling, conversion
to robotics, or competition with imports.
``(G) Changes necessitated by Federal budget
cutbacks, including defense related industries.
``(H) Business restructuring arising from federally
mandated standards or policies affecting 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 greenhouse gas
emitting fossil fuels, or low-impact design to produce
buildings that reduce the use of nonrenewable resources
and minimize environmental impact.
``(K) Plant, equipment, and process upgrades of
renewable energy sources such as the small-scale
production of energy for individual buildings or
communities consumption, commonly known as micropower,
or renewable fuels producers including biodiesel and
ethanol producers.
``(4) Debt refinancing to the extent permitted by
subsection (d).
``(b) Job Creation and Retention Requirements.--
``(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, except 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 objectives 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 Administrator.
``(B) For projects in Alaska, Hawaii, State-
designated enterprise zones, empowerment zones,
enterprise communities, or labor surplus areas
designated by the Administrator, the certified
development company's portfolio may average not more
than $75,000 per job created or retained.
``(C) Loans for projects of small manufacturers
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 ownership
share of not less than 51 percent is held by individuals who are in 1
of, or a combination of, the groups described 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 (including the acquisition
of land), equipment and related project costs, or to acquire
the stock of a corporation (as long as the value of the loan
for the acquisition 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 approved under this
title may include a limited amount of debt refinancing if the
project involves the expansion of a small business concern.
``(3) Limitation.--The amount of the existing indebtedness
may be refinanced and added to the expansion cost if--
``(A) the existing indebtedness does not exceed 50
percent of the project cost of the expansion;
``(B) the proceeds of the indebtedness were used to
acquire land, including a building situated thereon, to
construct a building thereon, or to purchase equipment;
``(C) the existing indebtedness is collateralized
by fixed assets;
``(D) the existing indebtedness was incurred for
the benefit of the small business concern;
``(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 provide a
substantial benefit to the borrower when prepayment
penalties, financing fees, and other financing costs
are accounted for;
``(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 referred to as LEED) standard for green building
certification, as determined by the Administrator through regulation to
be published in the Code of Federal Regulations.''.
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 section.
``(b) Size of Debenture.--The Administrator shall only be permitted
to guarantee debenture issued by a certified development company up to
the following amounts:
``(1) $3,000,000 for any project of a small business
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 Debentures Issued by
Certified Development Companies.--
``(1) In general.--Any project financed pursuant to this
title must have the following contributions 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 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 foundations or
other not-for-profit institutions; and
``(ii) more than the minimum contribution
required under subparagraph (B), any excess
contribution may be used to reduce the amount
required from institutions 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--
``(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 covered by
clauses (i), (ii), or (iii), at the discretion
of the certified development company.
``(2) Seller financing.--Seller-provided financing may be
used to meet the requirements of paragraph (1)(B), if the
seller subordinates the interest of the seller in the property
to the debenture guaranteed by the Administrator.
``(3) Collateralization.--
``(A) In general.--The collateral provided by the
small business concern shall generally 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 determines, on a case-by-case basis, that
additional security is necessary to protect the
interest of the Government.
``(B) Appraisals.--With respect to commercial real
property provided by the small business concern as
collateral, an appraisal of the property by a State
licensed or certified appraiser--
``(i) shall be required by the
Administrator before disbursement of the loan
if the estimated value of that property is more
than $400,000; or
``(ii) may be required by the Administrator
or the lender before disbursement of the loan
if the estimated value of that property is
$400,000 or less, and such appraisal is
necessary for appropriate evaluation of
creditworthiness.
``(C) Adjustment.--The Administrator shall
periodically adjust the amount under subparagraph (B)
to account for the effects of inflation, provided that
no such adjustment shall be less than $50,000.
``(4) Limitation on leasing.--
``(A) If the project funded under this section
includes the acquisition of a facility or the
construction of a new facility, the small business
concern--
``(i) shall permanently occupy and use not
less than 50 percent of the project property;
and
``(ii) may, on a temporary or permanent
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 small
business concern that received funding under
this section.
``(d) Regulations.--(1) The Administrator shall promulgate
regulations, after notice and comment, to implement the provisions of
this section within 60 days after enactment of the Small Business
Financing and Investment Act of 2010. The Administrator may limit the
comment period to 15 days to meet this deadline.
``(2) If the Administrator fails to promulgate the regulations 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 leasing in this subparagraph for purposes of
honoring the guarantee on the debenture issued by the certified
development company.
``(3) Any regulation of the Administrator or interpretation 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 enactment 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 regulations required by
paragraph (1) shall be considered null and void and may be not be used
in any court of competent jurisdiction, be it Federal or State court,
to dishonor any guarantee of a debenture issued by a certified
development company for a project funded pursuant to this section.
``(e) Ownership Calculation.--Ownership requirements 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
community 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 maximum
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 determining the size
of a 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 Regulations, as in effect on January, 1, 2009, or any
successor regulation, shall be increased by 25 percent.
``(2) Personal liquidity.--
``(A) In general.--The amount of personal resources
of an owner for a project described 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 required for funding of any other project
described in subsection (b).
``(B) Definition.--For purposes of subparagraph
(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
business organized as a partnership) of a small
business concern seeking funds under this section.
``(h) Applicability of Credit Elsewhere and Personal Resources
Regulations.--Except as provided in subsection (c)(1)(B) with respect
to project funding, the Administrator shall be prohibited from applying
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 application 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.--Notwithstanding any other law,
rule, or regulation, the Administrator 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 Federal 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 described in paragraph
(1); or
``(3) any obligation which is secured by, or substantially
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 authorized to issue
trust certificates representing ownership 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 Administrator and composed solely of guaranteed
debentures.
``(2) Guarantee of trust certificates.--The Administrator
is authorized, upon such terms and conditions as are deemed
appropriate, to guarantee the timely payment of the principal
of and interest on trust certificates issued by the
Administrator 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 debenture in such trust or pool is
prepaid, either voluntarily 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 debenture represents in
the trust or pool. Interest on prepaid 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 redemption 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 Administrator from collecting a fee approved by
the Administrator for the functions performed in paragraph
(6)(F).
``(5) Subrogation.--
``(A) In general.--In the event the Administrator
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 Administrator 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 require the
contractor to provide a fidelity bond or insurance in
such amounts as is deemed necessary to fully protect
the interests of the Government.
``(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, information on terms,
conditions, and yield of such instruments.
``(E) Authority to regulate.--The Administrator
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 registration 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 foreclose 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 authority under subsection (a)
if--
``(A) the certified development company--
``(i) has participated in the loan
liquidation 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 Financing and Investment Act
of 2010;
``(ii) is an accredited or premier
certified development company; or
``(iii) during the 3 fiscal years
immediately 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 experience
in administering the liquidation and
workout of problem loans secured in a
manner substantially similar to loans
funded with the proceeds of debentures
guaranteed under this title; and
``(II) who have completed a
training program on loan liquidation
developed by the Administrator in
conjunction with a certified
development company 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 activities 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 activities.
``(2) Confirmation.--On the request, the Administrator
shall examine the qualifications of any certified development
company described in subsection (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 company, in
writing, with the reasons for such ineligibility. The certified
development company shall be entitled to request delegated
authority and the Administrator shall review the request only
to address whether the certified development company has
rectified 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 authority under subsection
(a) may with respect to any loan described in subsection (a)--
``(A) perform all liquidation and foreclosure
functions, including the purchase in accordance with
this subsection of any other indebtedness secured by
the property securing the loan, in a reasonable and
sound manner according to commercially accepted
practices, pursuant 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 subparagraph
(A), except that the Administrator may--
``(i) defend or bring any claim if--
``(I) the outcome of the litigation
may adversely affect the
Administrator's management of the
program established under this title;
or
``(II) the Administrator is
entitled to legal remedies not
available to a certified development
company and such remedies will benefit
either the Administrator or the
certified development 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 approved in advance by the
Administrator under paragraph (2).
``(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
liquidation 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 procedures.--
``(i) Timing.--Not later than 15 business
days after the plans described in subparagraph
(A) are received by the Administrator, the
Administrator shall approve or reject the plan.
``(ii) Notice of no decision.--With respect
to any plan that cannot be approved or denied
within the 15-day period required by clause
(i), the Administrator shall within such period
provide in accordance 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 approval from the Administrator.
``(D) Compromise of indebtedness.--In carrying out
functions described in paragraph (1)(A), a certified
development company may--
``(i) consider an offer made by an obligor
to compromise the debt for less than the full
amount owing; and
``(ii) pursuant to such offer, release any
obligor or other party contingently liable, if
the company secures the written approval of the
Administrator.
``(E) Contents of notice of no decision.--Any
notice provided by the Administrator 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
additional time needed for the Administrator to
reach a decision on the request; and
``(iii) specify any additional information
or documentation that the Administrator 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 development company
shall take no action that would result in an actual or apparent
conflict of interest between the company (or any employee of
the company) and any third-party lender, associate of a third-
party lender, or any other person participating in a
liquidation, foreclosure, or loss mitigation action.
``(d) Suspension or Revocation of Authority.--
``(1) In general.--The Administrator may revoke 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 estimation
of the Administrator requires revocation; 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 delegation 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 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 liquidation of defaulted loans in its
portfolio.
``(B) Contract approval.--The contract entered into
by the certified development company specified in
subparagraph (A) shall be contingent upon approval by
the Administrator with respect to the qualifications of
the contractor and the terms and conditions of
liquidation activities. The Administrator shall not
unreasonably withhold such approval.
``(C) Notification of rejection.--If the
Administrator rejects the contract, the Administrator
shall provide a notice to the certified development
company, in writing, explaining the reasons for such
rejection within ten business days after submission of
the contract.
``(D) Resubmittal.--The certified development
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 contractors within 90 days after
the date of enactment of the Small Business Financing
and Investment Act of 2010.
``(F) Failure to promulgate regulations.--If the
Administrator fails to promulgate such regulations, any
contract for liquidation entered into by a certified
development company under this subsection shall be
considered valid for the purposes of this subsection
and subsection (f).
``(G) Effect of administrator's promulgation of
regulations.--If the Administrator promulgates
regulations after the deadline specified in
subparagraph (E), those regulations shall not have any
retroactive application 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 implements a system to compensate and
reimburse certified development companies for liquidation of
any defaulted loans.
``(f) Compensation and Reimbursement.--
``(1) Reimbursement of expenses.--The Administrator shall
reimburse each certified development company for all expenses
paid by such company as part of the foreclosure and liquidation
activities taken to carry out this section, if the expenses--
``(A) were--
``(i) approved in advance by the
Administrator, either specifically in a plan
submitted pursuant to subsection (c) or
generally, such as, but not limited to, actions
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 expenses were reasonable
and appropriate; and
``(B) are submitted by the certified development
company to the Administrator not later than 3 years
after the date the expense was incurred 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 certified development company may
elect to obtain reimbursement 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 paragraph (1). Within 6 months
of the reimbursement, the certified development company shall
provide the Administrator with the same information and
documentation 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 regulations within one year, certified
development companies shall be authorized, notwithstanding the
requirements of subsection (e)(2), to liquidate defaulted 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 promulgated
pursuant to paragraph (3), the Administrator 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 between a
certified development company and a qualified
third party to perform the foreclosure 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 Companies.--The Administrator
shall report annually to the Committee on Small Business of the House
of Representatives and the Committee on Small Business and
Entrepreneurship of the Senate on the implementation of section 504.
Each report shall include--
``(1) the number of premier certified development
companies;
``(2) the debenture volume of each premier certified
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 Administrator deems
appropriate.
``(b) Reports on Liquidation and Foreclosures.--
``(1) In general.--Based on information provided by
certified development companies and the Administrator, the
Administrator shall submit annually to the Committee on Small
Business and Entrepreneurship 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 information:
``(A) With respect to each loan foreclosed or
liquidated by a certified development company, or for
which losses were otherwise mitigated by pursuant to a
workout plan--
``(i) the total cost of the project
financed 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
mitigation of loss; and
``(v) the total recoveries resulting from
the liquidation, foreclosure, or mitigation of
loss, both as a percentage of the amount
guaranteed and the total cost of the project
financed.
``(B) With respect to each certified development
company to which authority is delegated 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 development
company that contracts with a qualified third-party
contractor pursuant to section 510(e), the total of
each of the amounts described in clauses (i) through
(v) of subparagraph (A).
``(D) With respect to all loans subject to
foreclosure, liquidation, or mitigation under section
510, the totals of each of the amounts described in
clauses (i) through (v) of subparagraph (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 respect to
loans foreclosed and liquidated, or otherwise
treated, by the Administrator during the same
period.
``(F) The number of times that the Administrator
has failed to approve or reject a liquidation plan,
workout plan, request to purchase 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.--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
Entrepreneurship of the Senate and the Committee on Small Business of
the House of Representatives that--
``(1) 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
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 Representatives and the Committee on Small
Business and Entrepreneurship of the Senate on an annual basis,
commencing in the year that the Small Business Financing and Investment
Act of 2010 is enacted, a report that describes the economic and
community development activities, other than loan making under this
title, of each certified development company during the prior fiscal
year. The Administrator may contract with another party, including non-
governmental entities, to collect information or otherwise assist in
the preparation of the report required by this subsection.
``SEC. 512. PROMULGATION OF REGULATIONS UNDER THIS TITLE.
``(a) Deadlines for Implementing Regulations.--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 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 Small Business Financing
and Investment Act of 2010, notice of any proposed change to a
regulation implementing this title (whether in existence on the date of
enactment of the Small Business Financing and Investment Act of 2010 or
subsequently adopted), publish such notification in the Federal
Register, and provide 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 Development 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 PROCEDURES.
(a) Report.--The Administrator of the Small Business 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 Regulations
that authorizes the issuance of the Standard Operating Procedure and
separately identifies the regulation that the Standard Operating
Procedure purports to interpret.
(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 convincing 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 submits 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 Federal 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.--
(1) In general.--The Administrator of the 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 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 Administrator 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 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 committees referred to in
paragraph (3) of subsection (a).
(c) Interim Alternative Size Standard.--Until the Administrator
promulgates regulations either readopting 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 carryover 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 information about the borrower, both positive and
negative, 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 agencies through the
Administration or independently.''.
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
established, or growing small business
concerns; or
``(II) 1 full-time employee who has
not less than 3 years of experience
making microloans to startup, newly
established, or growing small business
concerns; and
``(ii) at least--
``(I) 1 year of experience
providing, as an integral part of its
microloan program, intensive marketing,
management, and technical assistance to
its borrowers; or
``(II) 1 full-time employee who has
not less than 1 year of experience
providing intensive marketing,
management, and technical assistance to
borrowers.''.
SEC. 584. INCREASED LIMIT ON INTERMEDIARY BORROWING.
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
(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 program.--
``(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 intermediary that provides to
young entrepreneurs technical assistance
regarding the following:
``(I) Establishing or operating a
small business concern in the
geographic area served by the
intermediary.
``(II) Acquiring or securing
financing to carry out the activities
described in subclause (I).
``(ii) Young entrepreneur defined.--For
purposes of this subparagraph, a young
entrepreneur is an individual who--
``(I) is 25 years of age or
younger; and
``(II) has resided in the
geographic area served by the
intermediary for not less than 2 years.
``(iii) Good faith effort requirement.--If
a young entrepreneur who receives technical
assistance under this subparagraph from an
intermediary establishes or operates a small
business concern, the young entrepreneur shall
make a good faith effort to establish or
operate such concern in the geographic area
served by the intermediary.
``(iv) Deferred repayment.--If a small
business concern established or operated 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 beginning 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 Administrator 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 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 intermediary.
``(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 business
owners.
``(ii) Low-income entrepreneurs and
business owners.
``(iii) Veteran entrepreneurs and business
owners.
``(iv) Disabled entrepreneurs and business
owners.
``(v) Minority entrepreneurs and business
owners.
``(E) A description of the marketing, management,
and technical assistance provided by each such
intermediary to all borrowers and to each of the
following:
``(i) Women entrepreneurs and business
owners.
``(ii) Low-income entrepreneurs and
business owners.
``(iii) Veteran entrepreneurs and business
owners.
``(iv) Disabled entrepreneurs and business
owners.
``(v) Minority entrepreneurs and business
owners.
``(F) The number of jobs created and retained as a
result of microloans and marketing, management, and
technical assistance provided by each such
intermediary.
``(G) The repayment history of each such
intermediary.
``(H) The number of businesses that achieved
success after receipt of a microloan.''.
SEC. 589. SURPLUS INTEREST RATE SUBSIDY FOR BUSINESSES.
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 Administrator is
authorized to make grants to intermediaries for the purposes of
reducing interest rates charged to borrowers that receive
financing under this subsection.''.
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 inserting after subsection
(g) the following:
``(h) Fiscal Years 2010 and 2011 With Respect to Section 7(m).--
``(1) Program levels.--For the programs authorized by this
Act, the Administration is authorized 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
``(B) $110,000,000 in direct loans, as provided 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 Investment 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 striking ``33 percent'' and inserting
``45 percent''.
SEC. 592. EXPEDITED LICENSING FOR EXPERIENCED APPLICANTS.
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 request (which shall be deemed to
be the application) for a license to operate as a small
business investment company under this Act, the Administrator
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 licensed under this Act.
``(B) The licensed small business investment
company specified under subparagraph (A) has operated
under such license for at least 3 years prior to the
receipt of the request specified in this paragraph.
``(C) The licensed small business investment
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
specified in this paragraph or reserved for
investment and expenses or some combination of
both at least 70 percent of its private capital
in the one-year period prior to the date on
which the application referred to in this
paragraph was received by the Administrator;
``(ii) has maintained 6 consecutive
quarters of profitable net investment income;
and
``(iii) has made at least 3 exits from
investments in small businesses that have
realized profits from those respective
investments.
``(D) The applicant submits to the Administrator,
in writing, an application consisting of all of the
following:
``(i) A certification, in the form
prescribed by the Administrator, that such
applicant satisfies the requirements of this
subsection and that all information contained
in the application is true and complete.
``(ii) A copy of the organizational
documents 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 stage
and use the same or substantially similar type
of investment instruments as the investments of
the licensed small business investment company
specified under subparagraph (A).
``(iv) A certification, in a form
prescribed by the Administrator, that the
applicant satisfies the requirements of
subsections (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 determination 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
pursuant to this Act; and
``(C) no principal manager is under investigation
by a governmental agency or authority for, is under
indictment for, or has been convicted 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 Administrator determines based on
evidence in the agency record that the approval of the
license would present an unacceptable risk to the
Federal Government.
``(B) In writing.--Such determination shall be made
in writing and provided to the applicant no later than
10 calendar days after such determination is made.
Failure to provide this determination to the applicant
shall be deemed to be a permanent waiver of the
Administrator's authority to remove an application
pursuant to this subsection.
``(C) Non-delegability.--The Administrator may rely
on agency personnel to collect data or other material
relevant to establishing a record, but the decision to
remove the application may not be delegated by the
Administrator to any subordinate personnel in the
agency.
``(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 written notice and description of any
nonconformance with any requirement of this subsection
based on evidence in the agency record.
``(B) Opportunity to cure.--The applicant shall
have 30 days following the receipt of notice of
nonconformance or the receipt of removal as set forth
in paragraph (3) to cure such nonconformance.
``(C) Failure to provide notice.--Failure 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 Administrator shall ensure
that a timely background check of the principal managers of
each applicant is completed with respect to paragraphs (2)(B)
and (2)(C).
``(6) Fees.--The Administrator may charge an applicant
additional fees for carrying out the background 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 licensure 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.
``(8) Regulations.--The Administrator shall develop forms
and promulgate regulations to implement 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 SUCCESSFUL 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
following:
``(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 company'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 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
capital 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 Company Act of 1940) or a majority-owned
subsidiary 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 common control.--The
maximum amount of outstanding leverage made available
to two or more debenture companies licensed under
section 301(c) of this Act that are commonly controlled
(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 quantifiable 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 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 security, except that nothing herein shall alter or affect
provisions permitting higher coupon rates of interest (cost of money
ceilings) and a company may charge up to an additional 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 material
information required under the applicable financing documents.
``(3) Failure to observe any material term, covenant, or
other agreement contained in the applicable financing
documents.
``(4) A representation, warranty, certification, or
statement of fact made by or on behalf of a borrower 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.''.
SEC. 595. INVESTMENT IN VETERAN-OWNED SMALL BUSINESSES.
Section 303(b)(2)(C) of the Small Business Investment 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 further 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
following:
``(25) for purposes of the terms `small-business concern'
in paragraph (5) and `smaller enterprise' in paragraph (12),
tangible net worth shall, to the extent used, mean the total
net worth of the small business, in accordance with General
Accepted Accounting Principles, minus all intangibles in
accordance 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 following:
``SEC. 321. AGENCY RECORD FOR LICENSING OF SMALL BUSINESS INVESTMENT
COMPANIES.
``(a) Record.--The Associate Administrator for Investment shall
establish an agency record of evidence referring or relating to each
application for a license to become a small business investment
company.
``(b) Written Notification.--The Administrator shall provide a
written explanation of any denial of a license 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 Administrator 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 inserting after subsection
(h) the following:
``(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''.
(b) Report to Congress.--Not later than 1 year after the date of
the enactment of this Act, the Administrator 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 section.
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 companies submitting
applications under subsection (b), the Administrator shall consider the
selection criteria and promotion of nationwide distribution under
subsection (c) and shall, to the extent practicable, approve at least
one company from each geographic region of the Small Business
Administration.''.
SEC. 603. INCREASED INVESTMENT IN SMALL BUSINESS CONCERNS ENGAGED
PRIMARILY IN MANUFACTURING.
(a) Developmental Venture Capital and Participation Agreements.--
Section 351 of the Small Business Investment Act of 1958 (15 U.S.C.
689) is amended--
(1) in paragraph (1) by inserting after ``geographic
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 ``geographic
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 Business 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 manufacturing'';
(2) in subparagraph (B) by inserting after ``geographic
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 business concerns''.
(c) Eligibility, Applications, and Requirements 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 ``geographic
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 geographic
areas and engaged primarily in manufacturing''; 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 following:
``(B) Small business concerns engaged primarily in
manufacturing.--Each conditionally approved company
engaged primarily 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 business concerns'';
and
(2) in subsection (b)(1) by inserting after ``smaller
enterprises'' the following: ``and small business concerns''.
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 further amended in paragraph (5) by
inserting after ``business development'' the following: ``or assistance
that assists a small business concern located in a low-income
geographic area and engaged primarily in manufacturing with retooling,
updating, or replacing machinery or equipment''.
SEC. 605. UPDATING DEFINITION OF LOW-INCOME GEOGRAPHIC AREA.
Section 351 of the Small Business Investment Act of 1958 (15 U.S.C.
689), as amended by this Act, is further amended--
(1) by striking paragraphs (2) and (3);
(2) by inserting after paragraph (1) the following:
``(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, except that, without regard to such meaning, such term
includes an area that the Administrator determines to be an
area with high unemployment.''; and
(3) by redesignating paragraphs (4) through (8) as
paragraphs (3) through (7), respectively.
SEC. 606. EXPANDING OPERATIONAL ASSISTANCE TO CONDITIONALLY 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 provisions 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 approved.--If a
company receives a grant under this paragraph and does
not receive final approval under section 354(e), the
company shall repay the amount of the grant to the
Administrator.
``(C) Deduction from grant to approved company.--If
a company receives a grant under this paragraph and
receives final approval under section 354(e), the
Administrator shall deduct the amount of such grant
from the amount of any immediately succeeding grant the
company receives for operational assistance.
``(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 enactment of this Act,
the Administrator of the Small Business Administration shall prescribe
standard documents for a New Markets Venture Capital company final
approval application under section 354(e) of the Small Business
Investment Act of 1958 (15 U.S.C. 689c(e)). The Administrator shall
ensure that the standard documents are designed to substantially reduce
the cost burden of the application process for companies.
SEC. 609. ELIMINATION OF MATCHING REQUIREMENT.
Section 354(d)(2)(A)(i) of the Small Business Investment Act of
1958 (15 U.S.C. 689c(d)(2)(A)(i)) is amended--
(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 ASSISTANCE GRANTS.
Section 358(a)(4)(A) of the Small Business Investment Act of 1958
(15 U.S.C. 689g(a)(4)(A)) is amended--
(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 further amended by adding at the end
the following:
``(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)), located in
low-income geographic areas.''.
SEC. 612. AUTHORIZATION OF APPROPRIATIONS AND ENHANCED ALLOCATION FOR
SMALL MANUFACTURING.
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 inserting ``fiscal years
2010 and 2011'';
(2) in paragraph (1)--
(A) by striking ``$150,000,000'' and inserting
``$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 located in low-income geographic
areas and engaged primarily in manufacturing''; and
(3) in paragraph (2)--
(A) by striking ``$30,000,000'' and inserting
``$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 companies engaged primarily
in development of and investment in small business
concerns located in low-income geographic areas and
engaged primarily in manufacturing''.
CHAPTER 2--EXPANDED INVESTMENT IN SMALL BUSINESS RENEWABLE ENERGY
SEC. 621. EXPANDED INVESTMENT IN RENEWABLE ENERGY.
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 ``renewable energy capital
investment'';
(2) in the heading of paragraph (4) of section 381 by
striking ``Renewable fuel capital investment'' and inserting
``Renewable energy capital investment'';
(3) in the heading of section 384 by striking ``renewable
fuel capital investment'' and inserting ``renewable energy
capital investment''; and
(4) by striking ``Renewable Fuel Capital Investment'' each
place it appears and inserting ``Renewable Energy Capital
Investment''.
SEC. 622. RENEWABLE ENERGY CAPITAL INVESTMENT PROGRAM 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 concerns''.
SEC. 624. EXPANDED USES FOR OPERATIONAL ASSISTANCE IN MANUFACTURING AND
SMALL BUSINESSES.
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 consumption, or assistance that assists a small business
concern engaged primarily in manufacturing with retooling, updating, or
replacing machinery or equipment''.
SEC. 625. EXPANSION OF RENEWABLE ENERGY CAPITAL INVESTMENT 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 Administrator 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 regulations 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.
SEC. 626. SIMPLIFIED FEE STRUCTURE TO EXPEDITE IMPLEMENTATION.
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 ``appropriations''
the following: ``and program levels''; and
(2) by adding at the end the following:
``(c) Program Levels.--For the programs authorized 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.''.
Subtitle F--Small Business Health Information Technology Financing
Program
SEC. 631. SMALL BUSINESS HEALTH INFORMATION TECHNOLOGY 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 professional
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, transmission, and
exchange of relevant personal health data and
information, such that this information is accessible
at the times and places where clinical decisions will
be or are likely to be made;
``(B) enhancement of communication between patients
and health care providers;
``(C) improvement of quality measurement by
eligible professionals enabling them to collect, store,
measure, and report on the processes and outcomes of
individual and population performance and quality of
care;
``(D) improvement of evidence-based decision
support; or
``(E) enhancement of consumer and patient
empowerment.
Such term shall not include information technology whose sole
use is financial management, maintenance 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.
``(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 Integrity, 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 provider.
``(3) The term `qualified eligible professional' means an
eligible professional whose office can be classified as a small
business concern by the Administrator for purposes of this Act
under size standards established under section 3 of this Act.
``(4) The term `qualified medical transcriptionist' means a
specialist in medical language and the healthcare documentation
process who interprets and transcribes dictation by physicians
and other healthcare professionals to ensure 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 professional's medical practice and for the costs
associated 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 professionals.
``(c) Fees.--(1) The Administrator may impose a guarantee fee on
the borrower for the purpose of reducing 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
Administrator may also impose annual servicing fees on lenders 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 requirements 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 Secretary of Health and Human Services.
``(g) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary 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
Administrator shall determine such program cost separately and
distinctly from other programs operated by the Administrator.''.
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 targeted industries in accordance with this
part.
``SEC. 399B. ADMINISTRATION OF PROGRAM.
``The program shall be administered by the Administrator acting
through the Associate Administrator described 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 conducting the activities contemplated under the program
and any small business investment company may submit to the
Administrator an application to participate in the program.
``(b) Requirements for Application.--An application to participate
in the program shall include the following:
``(1) A business plan describing how the applicant intends
to make successful venture capital investments 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.
``(3) A description of the extent to which the applicant
meets the selection criteria under section 399D.
``(c) Applications From Small Business Investment Companies.--The
Administrator shall establish an abbreviated application process for
small business investment 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 satisfactorily 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 determination under
subsection (a), the Administrator shall consider each of the following:
``(1) The likelihood that the applicant will meet the goals
specified in the business plan of the applicant.
``(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 management of the
applicant.
``(4) The experience and background of the management of
the applicant.
``(5) The extent to which the applicant will concentrate
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 investment 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 amount of the capital of such company that is
not from a Federal source and that is available for investment
on or before the date on which a grant is drawn upon. Such
capital may include legally binding commitments with respect to
capital for investment.
``(2) Limitation on aggregate amount.--The aggregate amount
of all grants made to a participating 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 available at the discretion of the
Administrator.
``SEC. 399F. INVESTMENTS IN EARLY-STAGE SMALL BUSINESSES IN TARGETED
INDUSTRIES.
``(a) In General.--As a condition of receiving a grant under the
program, a participating investment company 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
industries.
``(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
requirements 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 investment company under
the program shall be treated as comprised 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 investment.
``SEC. 399H. GRANT INTEREST.
``(a) Grant Interest.--
``(1) In general.--As a condition of receiving a grant
under the program, a participating investment company shall
convey a grant interest to the Administrator in accordance with
paragraph (2).
``(2) Effect of conveyance.--The grant interest conveyed
under paragraph (1) shall have all the rights and attributes of
other investors attributable to their interests in the
participating investment company, but shall not denote control
or voting rights to the Administrator. The grant interest shall
entitle the Administrator to a pro rata portion of any
distributions made by the participating investment company
equal to the percentage of capital in the participating
investment company that the grant comprises. The Administrator
shall receive distributions from the participating investment
company at the same times and in the same amounts as any other
investor in the company with a similar interest. The investment
company shall make allocations 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 receiving a grant under
the program, the manager profits interest 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
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 managers 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 investors in cash and shall make distributions
within a reasonable 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 separate fund for
grants which shall be available to the Administrator 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, excluding administrative expenses,
pursuant to the operations of 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 participant in a participating investment company shall be
subject to the requirements under such sections.
``SEC. 399K. DEFINITIONS.
``In this part, the following definitions apply:
``(1) Early-stage small business in a targeted industry.--
The term `early-stage small business in a targeted industry'
means a small business 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 bringing to
market goods, products, or services with respect to any
of the following business sectors:
``(i) Agricultural technology.
``(ii) Energy technology.
``(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 participate 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 beginning after the date of
the enactment of this part.''.
SEC. 642. PROHIBITIONS ON EARMARKS.
None of the funds appropriated for the program established 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.
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 Response and Loan Improvements Act
of 2008 (subtitle B of title XII of the Food, Conservation, and
Energy Act of 2008; Public Law 110-246), by adding 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 Administrator may not require the borrower to use the
borrower'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
(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 repayment 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 Administrator shall disburse loan amounts
in accordance with the following:
``(A) If the total amount approved with respect to
such loan is less than or equal to $150,000--
``(i) the first disbursement with respect
to such loan shall consist of 40 percent 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 demonstrate 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 produced satisfactory
receipts to demonstrate the proper use of the
first disbursement and 50 percent of the second
disbursement.
``(B) If the total amount approved with respect to
such loan is more than $150,000 but less than or equal
to $500,000--
``(i) the first disbursement with respect
to such loan shall consist of 20 percent 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 demonstrate 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
disbursements, 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 produced satisfactory
receipts to demonstrate the proper use of the
first and second disbursements and 50 percent
of the third disbursement.
``(C) If the total amount approved with respect to
such loan is more than $500,000--
``(i) the first disbursement with respect
to such loan shall consist of at least
$100,000, or a lesser amount if the
Administrator 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 discretion 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 assistance 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 applicable
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 obligations.
``(C) Program level and authorization of
appropriations.--
``(i) Program level.--The Administrator is
authorized to make $100,000,000 in grants under
this paragraph for each of fiscal years 2010
and 2011.
``(ii) Authorization of appropriations.--
There are authorized to be appropriated to the
Administrator such sums as may be necessary to
carry out this paragraph.''.
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 subsection (e); and
(3) by inserting after subsection (c) the following:
``(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
preparedness and response plan for each region of the Administration.
Each such plan shall be developed in cooperation with Federal, State,
and local emergency response authorities 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 ASSISTANCE.
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 applicant assistance.--
``(A) In general.--From amounts made available for
administrative expenses relating to activities under
this subsection, the Administrator is authorized to
make grants to the following:
``(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.
``(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 received under this
paragraph to provide application preparation assistance
to applicants for a loan under this subsection.
``(C) Program level.--The Administrator 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 primary residence of such homeowner has been
adversely 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.''.
SEC. 659. AUTHORIZATION OF APPROPRIATIONS.
Section 20 of the Small Business Act (15 U.S.C. 631 note), as
amended by this Act, is further amended--
(1) by redesignating subsection (j) as subsection (k); and
(2) by inserting after subsection (i) the following:
``(j) Fiscal Years 2010 and 2011 With Respect to Section 7(b).--
There is authorized to be appropriated such sums as may be necessary
for administrative expenses and loans under section 7(b).''.
Subtitle I--Regulations
SEC. 661. REGULATIONS.
Except as otherwise provided in this Act or in amendments made by
this Act, after an opportunity for notice and comment, but not later
than 180 days after the date of the enactment of this Act, the
Administrator shall issue regulations to carry out this Act and the
amendments made by this Act.
Subtitle J--Temporary Employee Services Franchises
SEC. 671. TEMPORARY EMPLOYEE SERVICES FRANCHISES.
In determining whether a franchisee is affiliated with a franchiser
in the temporary employee services industry for the purposes of Small
Business Administration lending programs, the Administrator of the
Small Business Administration shall--
(1) continue to apply its historically considered
affiliation factors in determining whether a business is
affiliated with another business or the franchiser in the
temporary staffing industry;
(2) promulgate such other rules and regulations as
necessary to determine affiliation within the temporary
employee services industry as the Administrator determines
consistent with the Small Business Act; and
(3) consider the processing of payroll and billing by a
franchiser as customary and common practice in the temporary
employee services industry that does not provide probative
weight on affiliation, to the extent that the temporary
staffing personnel are interviewed, hired, trained, assigned,
and subject to discharge by the franchisee.
Subtitle K--Study on Private Sector Lending
SEC. 681. STUDY ON PRIVATE SECTOR LENDING.
(a) In General.--Not later than 90 days after the date of the
enactment of this Act, the Administrator of the Small Business
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 that describes lending to small
business concerns by the private sector, including the following:
(1) The total amount of lending to small business concerns
by private sector financial institutions during each of fiscal
years 2006 through 2009.
(2) The total amount of lending to small business concerns
by the 10 largest private sector financial institutions (as
determined by the Administrator in terms of amounts lent during
fiscal year 2006) during each of fiscal years 2006 through
2009.
(b) Coordination.--The Administrator of the Small Business
Administration shall, if necessary, coordinate with the heads of other
Federal departments and agencies to complete the report under
subsection (a).
(c) Small Business Concerns Defined.--In this section, the term
``small business concern'' has the meaning given such term under
section 3(a) of the Small Business Act (15 U.S.C. 632(a)).
Subtitle L--Study on Increases in Certain Caps
SEC. 691. STUDY ON INCREASES IN CERTAIN CAPS.
Not later than 90 days after the date of enactment of this Act, the
Administrator of the Small Business Administration shall submit to
Congress a report that describes the anticipated effects of the
following potential changes to programs, including whether such changes
adequately meet the financing needs of small businesses:
(1) Increasing--
(A) the maximum amount of a loan that may be
guaranteed under section 7(a) of the Small Business Act
(15 U.S.C. 636(a)) to $3,000,000; and
(B) participation by the Administrator with regard
to such a loan.
(2) Increasing--
(A) the maximum amount of a debenture that may be
guaranteed under title V of the Small Business
Investment Act of 1958 (15 U.S.C. 695 et seq.); and
(B) the maximum amount of a loan that may be made
with the proceeds of such debenture.
(3) Increasing the maximum amount of a microloan that may
be made under section 7(m) of the Small Business Act (15 U.S.C.
636(m)).
Subtitle M--Rural Outreach
SEC. 701. RURAL OUTREACH.
The Small Business Act (15 U.S.C. 631 et seq.), as amended by this
Act, is further amended--
(1) by redesignating section 46 as section 47; and
(2) by inserting after section 45 the following:
``SEC. 46. RURAL OUTREACH.
``The Administrator shall ensure that each district office of the
Administration that includes a rural area--
``(1) establishes a plan to provide small business concerns
in rural areas with information on the financing and investment
programs of the Administration of use to such concerns;
``(2) designates an employee of the office as a rural
business financing outreach specialist, who is responsible for
providing advice concerning the lending and investment programs
of the Administration to small business concerns; and
``(3) hosts at least one outreach seminar in a rural area
each year to provide information described under paragraph (1)
to small business concerns in rural areas.''.
Subtitle N--Study Relating to Medical Technology
SEC. 711. STUDY RELATING TO MEDICAL TECHNOLOGY.
Not later than one year after the date of the enactment of this
Act, the Administrator of the Small Business Administration shall
submit to Congress a report describing recommendations for and the
feasibility of a program--
(1) to increase investment in the research, development,
and commercialization of medical technology by small business
concerns; and
(2) that is administered in a manner similar to the program
under part C of title III of the Small Business Investment Act
of 1958 (15 U.S.C. 690 et seq.).
Subtitle O--Study on Additional Credit Risk Factors
SEC. 721. STUDY ON ADDITIONAL CREDIT RISK FACTORS.
(a) In General.--With respect to loans made under programs
established or amended under this Act, the Administrator of the Small
Business Administration shall conduct a study on whether the failure of
such loans to achieve one or more of the public policy goals specified
in subsection (b) negatively impacts the ability of businesses
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 resulting from
the imposition of a surtax on the income of small business
owners.
(2) Offsetting the costs to such concerns resulting 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 resulting 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.
(7) Offsetting the increased costs to such concerns
resulting from a change in Federal law that allows unions to be
organized through a card check process.
(8) Offsetting the reduction in capital available for such
concerns resulting from new regulations on financial products.
(9) Offsetting the increased costs to such concerns
resulting from the imposition of net neutrality rules on the
Internet.
(c) Use of Study.--Not later than 180 days after the date of the
enactment of this Act, the Administrator of the Small Business
Administration shall submit to Congress a report on the results of the
study conducted under subsection (a) and shall use such results to
evaluate and adjust, as appropriate, the potential credit risk to the
Government through the provision of loans under programs established or
amended under this Act.
TITLE VI--OFFSETS
SEC. 801. TRANSFER OF UNOBLIGATED STIMULUS FUNDS.
(a) Rescission.--Effective on the date of the enactment of this
Act, any unobligated balances available on such date of funds made
available by division A of the American Recovery and Reinvestment Act
of 2009 (Public Law 111-5), other than under the heading ``Federal
Highway Administration--Highway Infrastructure Investment'' in title
XII of such division, are rescinded and such provisions are repealed.
(b) Repeal.--The provisions of division B of the American Recovery
and Reinvestment Act of 2009 (Public Law 111-5), other than titles I
and II of such division, are repealed.
(c) Transfer of Funds.--The total amount rescinded by this section
shall be deposited in the Federal Treasury.
<all>
Introduced in House
Introduced in House
Referred to House Small Business
Referred to the Committee on Small Business, and in addition to the Committees on Ways and Means, Appropriations, Energy and Commerce, and Financial Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to House Ways and Means
Referred to House Appropriations
Referred to House Energy and Commerce
Referred to House Financial Services
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