1.This Act may be cited as the
Job Creation and Economic Development
Through CDC Modernization Act of 2009
.
<enum>I</enum><header>General
Provisions</header>
<section id="H065368CF68EF4EEBB2EA56E7AC62339F"><enum>101.</enum><header>Program
levels</header><text display-inline="no-display-inline">Section 20 of the Small
Business Act is amended by adding the following new subsection after subsection
(e):</text>
<quoted-block display-inline="no-display-inline" id="H6A935400AADA4CDB9017F178A2E5F21B" style="OLC">
<subsection id="H442A07E0EB0E4628BFC465EE9E33069E"><enum>(f)</enum><header>Program
levels</header>
<paragraph id="HCABFF60342E346A7A39E4B549BA4E14C"><enum>(1)</enum><header>Fiscal year
2010</header><text display-inline="yes-display-inline">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.</text>
</paragraph><paragraph id="HBA14EB6E9A06409C9ECCE2AD6812A6C"><enum>(2)</enum><header>Fiscal year
2011</header><text display-inline="yes-display-inline">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.</text>
</paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="HC61E8881C5AF43E6B599AF2694603518"><enum>102.</enum><header>Definitions</header><text display-inline="no-display-inline">Section 103 of the Small Business Investment
Act of 1958 (5 U.S.C. 662) is amended as follows:</text>
<paragraph id="HEEC0BD83EB3C4F68AF33FCC2F89809C4"><enum>(1)</enum><text>By amending
paragraph (6) to read as follows:</text>
<quoted-block id="HC88547D3C24F4AC09473351D8B2D4C0D" style="OLC">
<paragraph id="HF8846C54302945AFB0FD5573C382D108"><enum>(6)</enum><text>the term
<quote>development company</quote> means any corporation organized in order
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;</text>
</paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph><paragraph id="H739AB333896D4901ACD0B996CBF45D95"><enum>(2)</enum><text>By striking
<quote>and</quote> 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:</text>
<quoted-block id="HCC750624577E4083B2965E8CECCE5281" style="OLC">
<paragraph id="H7A96CF827CB142ACA163B3F58FB83E7B"><enum>(20)</enum><text>the term
<quote>certified development company</quote> means a development company that
the Administrator has determined meets the criteria set forth in section
501;</text>
</paragraph><paragraph id="HCC09E328A8FD4C81869C2089715E8A09"><enum>(21)</enum><text>the term
<quote>local governmental entity</quote> means—</text>
<subparagraph id="H3851C666A0554E8999BDEC56B5EFC570"><enum>(A)</enum><text display-inline="yes-display-inline">a State or a political subdivision of a
State, or</text>
</subparagraph><subparagraph id="H6BE06618EDB841AA96768DE4CA3EA8F9"><enum>(B)</enum><text>a combination of
political subdivisions which—</text>
<clause id="HFC73EF817D6344AA00CB0299CDB6B62"><enum>(i)</enum><text>has
been formed to promote economic or community development;</text>
</clause><clause id="H40F76FE805C04009A501572B2149C2D1"><enum>(ii)</enum><text>is composed of
representatives of the State or a political subdivision acting in their
official capacity; and</text>
</clause><clause id="H093A8D7EAF424019B03D001164B23EC4"><enum>(iii)</enum><text>include 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;</text>
</clause><continuation-text continuation-text-level="subparagraph">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;</continuation-text></subparagraph></paragraph><paragraph id="HCE8C2C00B2A74776980F48EE86BD9663"><enum>(22)</enum><text>the term
<quote>member</quote> 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;</text>
</paragraph><paragraph id="H7AB702FFF87348CB90D36AC2934B7661"><enum>(23)</enum><text>the terms
<quote>rural</quote> and <quote>rural area</quote> shall have the same meaning
as those terms are given in section 1991(a)(13)(A) of title 7, United States
Code; and</text>
</paragraph><paragraph id="HCA25C1FF214A4E0DA8EAC3EAAFA2C81A"><enum>(24)</enum><text>the term
<quote>small manufacturer</quote> means a small business concern—</text>
<subparagraph id="HEF1E7E55F922473FAD5A8FBB5BC575AF"><enum>(A)</enum><text>the primary
business of which is classified in sector 31, 32, or 33 of the North American
Industrial Classification System; and</text>
</subparagraph><subparagraph id="HE687ADB3532540FB8F7716B02493885B"><enum>(B)</enum><text>all of the
production facilities of which are located in the United
States.</text>
</subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block>
</paragraph></section><enum>II</enum><header>Certified
Development Companies</header>
<section id="H2D9EFB6A10524E6DB27FA62C76D5791F"><enum>201.</enum><header>Certified
development companies</header><text display-inline="no-display-inline">Section
501 of the Small Business Investment Act of 1958 (15 U.S.C. 695) is amended to
read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H5426FDCD0A244532AB9CD58B8A20D27E" style="OLC">
<section id="H237EE7457498475BB6DACB029F270ACF"><enum>501.</enum><header>Certified
development companies</header>
<subsection id="HB0A6E87ACCC34080973A1E76987F4A07"><enum>(a)</enum><header>Certified
development company debenture authority</header><text>Only development
companies certified by the Administrator shall have the authority to issue
debentures under this Act.</text>
</subsection><subsection id="H5951D7EE6FE94EEC94F27A2A9BF408F0"><enum>(b)</enum><header>Certification
standards</header><text>A development company shall be certified for the
purposes of issuing debentures if the Administrator determines that it meets
each of the following criteria:</text>
<paragraph id="H03E1C97D2EAB4E289754FC99628CA26A"><enum>(1)</enum><header>Small
concern</header>
<subparagraph id="H31CD2DCF08E345799ACC21F68942D41D"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">Except as provided in
subparagraph (C) of paragraph (2), the company, including its affiliates, shall
have no more than 200 employees.</text>
</subparagraph><subparagraph id="HCCB517A5BBB541AEAC1F5942B98F7E86"><enum>(B)</enum><header>Control</header><text>Except
as provided in paragraph (2) (B) or (C) the company shall not be under the
control of any other concern.</text>
</subparagraph><subparagraph id="HA7F0985C344B495A9ED515EE8543DCC"><enum>(C)</enum><header>Not for
profit</header><text>The development company is organized as a not-for-profit
corporation.</text>
</subparagraph></paragraph><paragraph id="H5B205ACDFD074613B89BA80FA029449E"><enum>(2)</enum><header>Exceptions</header>
<subparagraph id="H48DC7390086E48A5AFD50E8313477ADB"><enum>(A)</enum><header>For profit
status</header><text>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.</text>
</subparagraph><subparagraph id="H674D7F44AFAC465DA457A91958F4D899"><enum>(B)</enum><header>Affiliation
grandfather</header><text>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.</text>
</subparagraph><subparagraph id="HDF925B8A90B44FD08F7971142D39458B"><enum>(C)</enum><header>Affiliation with
local governmental entities</header><text display-inline="yes-display-inline">Any company that was organized after the
date of enactment of the Job Creation and Economic Development through CDC
Modernization Act of 2009 shall be eligible for certification without regard to
its status as part of or affiliation with any local governmental entity.</text>
</subparagraph></paragraph><paragraph id="HE92596D0CA054FBBB2726EFF7582B6B1"><enum>(3)</enum><header>Good
standing</header><text>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.</text>
</paragraph><paragraph id="HEAF3167D6E34468B916685D7CE8F84C7"><enum>(4)</enum><header>Membership</header>
<subparagraph id="H2936F6C7113C43539EF74517593F6114"><enum>(A)</enum><header>In
general</header><text>The development company shall have at least 25
members.</text>
</subparagraph><subparagraph id="HC307352B2C8340ABAA0DDD6BEAAD9B5A"><enum>(B)</enum><header>Voting
rights</header><text>No member shall control more than 10 percent of the total
voting power in the development company.</text>
</subparagraph><subparagraph id="H4234861C9DD442FE89D24C4C10B75EC2"><enum>(C)</enum><header>Residence</header><text>Members
must be residents of the State in which the development company is chartered or
authorized to do business.</text>
</subparagraph><subparagraph id="H962E1A971B5E451598FC1A9B26BAF016"><enum>(D)</enum><header>Diversity</header><text>The
development company must have at least one member from each of the
following:</text>
<clause id="HE87E609F6E424293831C8F8FD5A55079"><enum>(i)</enum><text>A
local governmental entity.</text>
</clause><clause id="H9F603695648347D19D4BDFE3953A88C5"><enum>(ii)</enum><text>A
financial institution subject to regulation by a Federal organization belonging
to the Federal Financial Institutions Examination Council and provides
long-term fixed asset financing in the commercial market.</text>
</clause><clause id="H86FC5D514C214D549A99789633EC866B"><enum>(iii)</enum><text>A not-for-profit
organization, other than a development company, that is dedicated to promoting
economic growth.</text>
</clause><clause id="H1E061D3605344FDB99A89B0DF0A4CA74"><enum>(iv)</enum><text>A
for-profit businesses, other than a financial institution described in clause
(ii).</text>
</clause></subparagraph><subparagraph id="H62F19C79DA474A7B8E2F98F900AB7858"><enum>(E)</enum><header>Employment
status</header><text display-inline="yes-display-inline">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.</text>
</subparagraph></paragraph><paragraph id="HDA41D9EFBA364968B042D611AFB6E128"><enum>(5)</enum><header>Board of
directors</header>
<subparagraph id="HD1C0811E71C54A41A753D274B9E6BF9A"><enum>(A)</enum><header>In
general</header><text>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.</text>
</subparagraph><subparagraph id="HF3BFE255BB5F4142A1911E7866A41B37"><enum>(B)</enum><header>Board
representation</header><text>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.</text>
</subparagraph><subparagraph id="HD01C6BBF94C54AC5808EDFCCB339229B"><enum>(C)</enum><header>Affiliated
entity representation restrictions</header><text display-inline="yes-display-inline">A development company that is described in
subsection (b)(1)(C) of this section 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.</text>
</subparagraph><subparagraph id="HAF99E4ACF5A24DF08789E2D3AD7F39EA"><enum>(D)</enum><header>Special rule for
certain development companies</header><text display-inline="yes-display-inline">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.</text>
</subparagraph></paragraph><paragraph id="HEE3E9C5C1252497C9459315E8DF4B8DC"><enum>(6)</enum><header>Professional
management and staff</header>
<subparagraph id="HD564CB59B4FA4468A8276DD5DFA0B010"><enum>(A)</enum><header>In
general</header><text>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.</text>
</subparagraph><subparagraph id="HD6DB79B6B738478E9799592A9682E0BD"><enum>(B)</enum><header>Utilization of
staff from affiliated entities</header><text>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 subsection
(b)(1)(C).</text>
</subparagraph><subparagraph id="H7053733E7C7B4B278CA2E97D6FDE7B02"><enum>(C)</enum><header>Staff under
contract</header><text>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:</text>
<clause id="H2CC1454950F6433A8DCE5C9A9FCBBF56"><enum>(i)</enum><text>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.</text>
</clause><clause id="HF8D1C5E7938448F7A8E3EB9902FC81DF"><enum>(ii)</enum><text>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.</text>
</clause></subparagraph></paragraph></subsection><subsection id="H33C51DA792624344A2D057E7833670E3"><enum>(c)</enum><header>Applications</header>
<paragraph id="H69CEE6154BAE4FDCB2AFC590896F33B7"><enum>(1)</enum><header>Development
companies issuing debentures before September 30, 2009</header>
<subparagraph id="H8D81C8C497664A5788ACD94E4715F55E"><enum>(A)</enum><header>Short form
Application</header><clause commented="no" display-inline="yes-display-inline" id="HFAD13F7AA146401BA27C9323657D4FAF"><enum>(i)</enum><text>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
<short-title>Job Creation and Economic Development Through
CDC Modernization Act of 2009</short-title>, 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.</text>
</clause><clause id="H523062456479488185538DDE4EC83663" indent="up1"><enum>(ii)</enum><text>For those companies that obtain
staff through contracts, the application shall include a copy of the
contract.</text>
</clause></subparagraph><subparagraph id="H5A51CF2ED3BF4061B26F0262A9A9A7EC"><enum>(B)</enum><header>Certification
decision</header><clause commented="no" display-inline="yes-display-inline" id="H97B9E265DA514A26B642E9438C49F09F"><enum>(i)</enum><text>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.</text>
</clause><clause id="HAFA090DEDD5A43A3950CF4C0C6A42D0A" indent="up1"><enum>(ii)</enum><text>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.</text>
</clause></subparagraph><subparagraph id="HFCF22D956D5A49B78032B381269B8B0D"><enum>(C)</enum><header>Application
resubmittal</header><text>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 the
address the concerns of the Administrator and the certification procedures set
forth in subparagraph (B) shall recommence.</text>
</subparagraph><subparagraph id="H60B140582BF749638791BAD5EE0A0F15"><enum>(D)</enum><header>Appeals</header><text>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, title 5 United States
Code.</text>
</subparagraph><subparagraph id="H99A3B70AB4254B19B09016DF76065DB2"><enum>(E)</enum><header>Grandfathering</header>
<clause id="H62C2E3C7D5234F3AB7D31BE2F924FF74"><enum>(i)</enum><header>In
general</header><text display-inline="yes-display-inline">For the period 2
years after date of enactment of the Job Creation and Economic Development
through CDC Modernization Act of 2009, 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.</text>
</clause><clause id="HAC3BD1829F4A4B338BD6B8ED1B42B0CC"><enum>(ii)</enum><header>Completion of
application process</header><text>The procedures set forth in this paragraph
for determining certification shall apply to any development company meeting
the qualifications of clause (i).</text>
</clause><clause id="HE527C138325E410197DE3B83D8B3CDC7"><enum>(iii)</enum><header>Effect of
denial</header><text>The denial or rejection of an application for
certification as set forth in this subsection shall have no affect 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.</text>
</clause><clause id="HF8B11852E2CD42AEAE4FD5F0926CE78B"><enum>(iv)</enum><header>Failure to
obtain certification</header><text>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).</text>
</clause></subparagraph><subparagraph id="H9408CF3BBC28474CA4079593B269C99D"><enum>(F)</enum><header>Automatic
qualification provision</header><text>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.</text>
</subparagraph><subparagraph id="H1CEB091C180C4D2FA7A62B6416A4E214"><enum>(G)</enum><header>Savings
clause</header><text>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
<short-title>Job Creation and Economic Development Through
CDC Modernization Act of 2009</short-title>.</text>
</subparagraph></paragraph><paragraph id="HE44A50FFF1FB4C56BCB4AD8D5EB831EE"><enum>(2)</enum><header>Application
process for new development companies</header>
<subparagraph id="H07744F7F43724179A51807BCB0CD31CC"><enum>(A)</enum><header>In
general</header><text>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
<short-title>Job Creation and Economic Development Through
CDC Modernization Act of 2009</short-title>, 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.</text>
</subparagraph><subparagraph id="H5AC07EAF5539419389E0330DBD2AE48C"><enum>(B)</enum><header>Appeals</header><text>A
development company shall be able to appeal the disapproval of an application
under the procedures set forth in paragraph
(1)(D).</text>
</subparagraph></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="HDC9E0BF0C37F4668B5A9EA0258F85E8B"><enum>202.</enum><header>Certified
Development Company; Operational Requirements</header>
<subsection id="H9C619A9F771E4B839051D3AF7185F48C"><enum>(a)</enum><header>Operational
requirements</header><text>Section 502 of the Small Business Investment Act of
1958 (15 U.S.C. 696) is amended to read as follows:</text>
<quoted-block id="H59527C81D2B14323BBF72B88A701363E" style="OLC">
<section id="H01B2008C6238455B8E9F6C0F0798BD39"><enum>502.</enum><header>Operational
requirements for certified development companies</header>
<subsection id="HD2CA53122225416D8E94C229342AAFAE"><enum>(a)</enum><header>Maintenance of
Standards for Certification</header><text display-inline="yes-display-inline">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.</text>
</subsection><subsection id="H4DEE7FF2C2D04A9BA75E24C8CF4D0DEF"><enum>(b)</enum><header>Ethics and
conflict of interests</header><text>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.</text>
<paragraph id="HBDD244D159674AB4971ECE96D6651BC5"><enum>(1)</enum><header>By
associates</header><text>An associate may not be an officer, director, or
manager of more than 1 certified development company. The term
<quote>associate</quote> shall have the same meaning given the term
<quote>Associate of a CDC</quote> 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 Regulation uses 20 percent.</text>
</paragraph><paragraph id="H5810AF700FD043F4B6D50EC3E2365D0D"><enum>(2)</enum><header>By
entities</header><text>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:</text>
<subparagraph id="H164B0B4C35F14C4CABCED165468FD5A3"><enum>(A)</enum><text>The ability to
appoint or remove members of the company or member of its board of
directors.</text>
</subparagraph><subparagraph id="HB7E107DD0B834716B257DD4905B40763"><enum>(B)</enum><text>The ability to
modify or approve rate or fee changes affecting revenues of the certified
development.</text>
</subparagraph><subparagraph id="HA285BA913D0243AE8EE92698F1FFA933"><enum>(C)</enum><text>The ability to
veto, overrule, or modify decisions of the certified development company’s
body.</text>
</subparagraph><subparagraph id="H273F46162D8D410CB1996C6A89D1D2D7"><enum>(D)</enum><text>The ability to,
either directly or contractually, to appoint, hire, reassign, or dismiss those
managers and employees responsible for the daily operations of the certified
development company.</text>
</subparagraph><subparagraph id="H4BD88D07169E4259A89C68262CA8BA3D"><enum>(E)</enum><text>The ability to
access the certified development company’s resources or amend its
budget.</text>
</subparagraph><subparagraph id="H6DA9EBC4A5C1475BB45DA706FCAD9226"><enum>(F)</enum><text>The ability to
control another certified development company pursuant to provisions in a
contract.</text>
</subparagraph></paragraph></subsection><subsection id="HA6990DB489A84A02BCEDA822680811C9"><enum>(c)</enum><header>Meetings</header><text>The
board of directors of the certified development company shall meet on a regular
basis to make policy decisions for the company.</text>
</subsection><subsection id="H9F7BFB7434E647EDA16AEB0D49D9D03C"><enum>(d)</enum><header>Loan
committees</header><text>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.</text>
</subsection><subsection id="H3BDDC49E98044E64B5CAAD84736BDCE2"><enum>(e)</enum><header>Prohibited
Conflict in Project Loans</header>
<paragraph id="H90C4A3B1B8B943CB85388B589A304073"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">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.</text>
</paragraph><paragraph id="H8060DB58E30B4E4990344E3538B87C19"><enum>(2)</enum><header>Exception</header><text>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.</text>
</paragraph></subsection><subsection id="HE6CAAD33EF044D81AB09E2194E6435A9"><enum>(f)</enum><header>Affiliation with
lenders operating under section 7 of the Small Business Act</header>
<paragraph id="H15F41C461D064F59B8DAE2DEC3634489"><enum>(1)</enum><header>Prohibition</header><text>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).</text>
</paragraph><paragraph id="H453D2B4DA6F54D4790303AE3ED307810"><enum>(2)</enum><header>Exception</header><text display-inline="yes-display-inline">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.</text>
</paragraph><paragraph id="H00938DC3C7DC4A5FAF8BAB22E9BEC28A"><enum>(3)</enum><header>Credit union
affiliation</header><text>A certified development company shall not lose its
status due 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.</text>
</paragraph></subsection><subsection id="HB8F80087DED44C1084CDD76D2B33CA50"><enum>(g)</enum><header>Servicing and
packaging guaranteed loans</header><text>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), to service such loans, and to charge a
reasonable fee for servicing such loans.</text>
</subsection><subsection id="HED4B70D406994B5EB10C208EB0B09A55"><enum>(h)</enum><header>Use of excess
funds</header><text>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—</text>
<paragraph id="H4D920279278B4383A656538C961AC318"><enum>(1)</enum><text>operating
reserves;</text>
</paragraph><paragraph id="HCECEA9C4BA9C4DFC997F610304D71FC2"><enum>(2)</enum><text>expanding the area
in which the certified development company operates through the methods
authorized in section 505 (relating to multi-State operation);</text>
</paragraph><paragraph id="H38648755ED5D492F97E439FFB1E0BAD3"><enum>(3)</enum><text>investment in
other community and local economic development activity or community
development primarily in the State from which such funds were generated;
or</text>
</paragraph><paragraph id="HDA7D54B6FD3F4A68BC6F6EFEA8B5141E"><enum>(4)</enum><text>investment in
small business investment companies subject to the limitations in subsection
(i).</text>
</paragraph></subsection><subsection id="H3A5327B2B657419B8862A3510B613A31"><enum>(i)</enum><header>Limitations with
respect to small business investment companies</header><text>A certified
development company shall not—</text>
<paragraph id="H4B3FEE451BFE42708D60937230298557"><enum>(1)</enum><text>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 Regulation, 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</text>
</paragraph><paragraph id="H39F081DCFE7245418FE02B08A38B0606"><enum>(2)</enum><text>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.</text>
</paragraph></subsection><subsection id="HBBD655F844A44C1F84005A3C27D67CDB"><enum>(j)</enum><header>Economic
development activities</header><text display-inline="yes-display-inline">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:</text>
<paragraph id="HCA1B4390EBD94D299F69B4B239E5334D"><enum>(1)</enum><text>The company shall
provide long-term financing to small business concerns through debentures
described in section 506.</text>
</paragraph><paragraph id="HFF0285B021EB4577B85278003D4556BF"><enum>(2)</enum><text display-inline="yes-display-inline">The company shall operate any other program
to assist small business concerns or communities that promote local economic
development and job creation or preservation.</text>
</paragraph></subsection><subsection id="HD253FE5740D24832904543C1CB906438"><enum>(k)</enum><header>Restrictions on
assistance</header>
<paragraph id="H944B665D0678496C9F66F22AD389A8D1"><enum>(1)</enum><header>In
general</header><text>After the date of enactment of the
<short-title>Job Creation and Economic Development Through
CDC Modernization Act of 2009</short-title>, 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—</text>
<subparagraph id="HB50BA34AE5BC4349B0103553B71FC62B"><enum>(A)</enum><text>conditions on the
types of small business concerns that a certified development company may
provide assistance to under this title; or</text>
</subparagraph><subparagraph id="H9D17D9DFB0BA4ADDA999C62A2EB2C22A"><enum>(B)</enum><text>conditions or
requirements, directly or indirectly, upon any small business concern receiving
assistance under this title.</text>
</subparagraph></paragraph><paragraph id="H18E5EE4995F24A6DA4B2A151B2EFCFED"><enum>(2)</enum><header>Exception</header><text>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.</text>
</paragraph></subsection><subsection id="H2CBC87AF33134ACBBDF9596A9DF86DA7"><enum>(l)</enum><header>Revocation and
suspension</header><text>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 section 554, 556, and 557 of title 5, United
States Code, that the certified development company no longer—</text>
<paragraph id="H21DFD44FB01A4C97AC7EAC981B4BEE39"><enum>(1)</enum><text>meets the
eligibility criteria established under section 501;</text>
</paragraph><paragraph id="HDE74EECE764F4F7F91E1D22DC2311558"><enum>(2)</enum><text>satisfies the
operational standards in this section; or</text>
</paragraph><paragraph id="H39E43660F8AC4576A4377984FB8335B6"><enum>(3)</enum><text>complies with the
Administrator’s rules, regulations, or provisions of law.</text>
</paragraph></subsection><subsection id="HE644F1E9F9D5439CA838F29506EAE3A7"><enum>(m)</enum><header>Effect of
suspension or revocation</header><text>A suspension or revocation under
subsection (l) shall not affect any outstanding debenture
guarantee.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection></section><section id="H975C08AD047E48A58185F8F78CB0640F"><enum>203.</enum><header>Accredited
lenders program</header><text display-inline="no-display-inline">Section 503 of
the Small Business Investment of 1958 (15 U.S.C. 697) is amended to read as
follows:</text>
<quoted-block display-inline="no-display-inline" id="H6D7D2DC16773443FAEDAEE8A684E96A5" style="OLC">
<section id="HDEECCB3BD2C14D09A6EAD526BD8EA494"><enum>503.</enum><header>Accredited
Lenders Program</header>
<subsection id="H667D21B517B1484EB667B7E2B22BE383"><enum>(a)</enum><header>Establishment</header><text>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).</text>
<paragraph id="H686531E73BD346BC9113139010592A7B"><enum>(1)</enum><header>Application</header><text>The
Administrator shall, after opportunity for notice and comment, develop an
application for certified development companies seeking to become accredited
certified development companies.</text>
</paragraph><paragraph id="HCF7A71467AE44EAAB72A2BB4743F3937"><enum>(2)</enum><header>Processing of
Application</header><text>The Administrator shall make a determination within
30 days after a complete application has been filed by the certified
development company.</text>
</paragraph><paragraph id="H6CCAC9CF8E224CEDB3A8160645B477B0"><enum>(3)</enum><header>Reapplication</header><text display-inline="yes-display-inline">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 (2), 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.</text>
</paragraph></subsection><subsection id="H011BA3CCC29C4D41BC681FF61DD21640"><enum>(b)</enum><header>Standards for
accredited certified development company program</header><text>The
Administrator shall designate a certified development company as accredited if
it meets the following standards:</text>
<paragraph id="H0C2953D0FD06438FA37E04B826541459"><enum>(1)</enum><text>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;</text>
</paragraph><paragraph id="HD4CFF96DFC29445FB6C23BE6B9DCCAD8"><enum>(2)</enum><text>has well-trained,
qualified personnel who are knowledgeable in the lending policies and
procedures for certified development companies;</text>
</paragraph><paragraph id="H67C8FE048B364586BC48FAF182B80637"><enum>(3)</enum><text>has the ability to
process, close, and service the loan issued under this title;</text>
</paragraph><paragraph id="H24E25DEAA48C415F99E2074EEEE4A682"><enum>(4)</enum><text>has a loss rate on
the company’s debentures that is reasonable and acceptable to the
Administrator;</text>
</paragraph><paragraph id="H0B28BD2DA1824A6A80947E66B3F0AE13"><enum>(5)</enum><text>has a history of
submitting to the Administrator complete and accurate debenture guaranty
application packages; and</text>
</paragraph><paragraph id="H952F1D9709764B299EE82F4BC6F87B72"><enum>(6)</enum><text>has the ability to
serve small business credit needs for financing plant and equipment as a
certified development company.</text>
</paragraph></subsection><subsection id="H2608075957C04560839B68ACDE5A4E5D"><enum>(c)</enum><header>Expedited
processing of guarantee Applications</header><text>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.</text>
</subsection><subsection id="H93F454AC46BC4675A7A4CC23D9899AB5"><enum>(d)</enum><header>Suspension or
revocation of accredited status</header><text display-inline="yes-display-inline">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 section 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.</text>
</subsection><subsection id="H183ECACA2716424CAC860D407A402B61"><enum>(e)</enum><header>Effect of
suspension or revocation on existing guarantees</header><text>A suspension or
revocation of accredited status shall not affect any outstanding debenture
guarantee.</text>
</subsection><subsection id="H3DFB6E173C7E4AE589F4B7B0E65EABD2"><enum>(f)</enum><header>Grandfather
provision</header><text display-inline="yes-display-inline">Any certified
development company that was accredited by the date of enactment of the Job
Creation and Economic Development Through CDC Modernization Act 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.</text>
</subsection><subsection id="HA9FD5904C7B94CD4BBE068FA52DA7F90"><enum>(g)</enum><header>Automatic
Qualification</header>
<paragraph id="H65B893BA136742CAB100E07549A6005"><enum>(1)</enum><header>In
general</header><text>Until the Administrator develops procedures for granting
accredited status, any certified development company that was accredited as of
the date of enactment of the Job Creation and Economic Development through CDC
Modernization Act of 2009 shall be deemed to be accredited.</text>
</paragraph><paragraph id="HC1FA30951AC04A758BB15987F10945D2"><enum>(2)</enum><header>Applications</header><text>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.</text>
</paragraph><paragraph id="H6A7067DE712041FF9C3D00366DB694B2"><enum>(3)</enum><header>Effect while
application pending</header><text>The denial or rejection of an application for
accredited status as set forth in this section shall have no affect 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.</text>
</paragraph></subsection><subsection id="HB193B42397164EA4820546FF39B4C814"><enum>(h)</enum><header>Promulgation of
accrediting standards</header><text>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.</text>
</subsection><subsection id="H352D992D992343F7845996F3B8D70F38"><enum>(i)</enum><header>Rule of
construction</header><text>Any reference to the term <quote>accredited
lender</quote> in any provision of law enacted, or any regulation adopted,
prior to the enactment of the <short-title>Job Creation
and Economic Development Through CDC Modernization Act of 2009</short-title>
shall be deemed to be a reference to the term <quote>accredited certified
development
company</quote>.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="H245C6B9A59BA41139BD01BCF4667FF74"><enum>204.</enum><header>Premier
certified lender program</header><text display-inline="no-display-inline">Section 504 of the Small Business Investment
Act of 1958 (15 U.S.C. 697a) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H09AC45E09B2649D288E47DC4E693D574" style="OLC">
<section id="H63273207B712481A8A7754959159FED8"><enum>504.</enum><header>Premier
certified lender program</header>
<subsection id="H6C9285E0E5A0459CA0B4AD744B8913A5"><enum>(a)</enum><header>Establishment</header><text>A
certified development company accredited under section 503 may apply for status
to become a premier certified development company.</text>
<paragraph id="H112EAF951F324AE0B5E7E0D76DD91AAB"><enum>(1)</enum><header>Application</header><text>The
Administrator shall, after opportunity for notice and comment, develop an
application for accredited certified development companies seeking to become
premier certified development companies.</text>
</paragraph><paragraph id="H3FF503B02145403880CFB5A1DB998FC0"><enum>(2)</enum><header>Processing of
Application</header><text>The Administrator shall make a determination within
60 days after a complete application has been filed by an accredited certified
development company.</text>
</paragraph><paragraph id="H320709EFFD9F4B83909CD76B8E4CFB72"><enum>(3)</enum><header>Reapplication</header><text display-inline="yes-display-inline">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 (2), 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.</text>
</paragraph></subsection><subsection id="HCE37B813E2A642A4BA76D79701B7DD15"><enum>(b)</enum><header>Standards for
obtaining premier certified development company status</header><text>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:</text>
<paragraph id="H8517C6807811495CB6C3C6895B018298"><enum>(1)</enum><text>Has been an
accredited certified development company for at least 12 months.</text>
</paragraph><paragraph id="H83809C00C09043B787C3DB6DD6CFEE7D"><enum>(2)</enum><text>Has submitted to
the Administrator adequately analyzed debenture guarantee applications.</text>
</paragraph><paragraph id="HE5FDC4CD662E44C3B5464A95D417FA3D"><enum>(3)</enum><text>Has closed, in a
proper manner following the Administrator regulations, loans under this
title.</text>
</paragraph><paragraph id="H62F27E8E9EA64C0FB9A7DAADC6A2AF32"><enum>(4)</enum><text>Has serviced its
loan portfolio in accordance with the standards set by the
Administrator.</text>
</paragraph><paragraph id="H800A50E641044B038AA1D46B2C90543A"><enum>(5)</enum><text>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.</text>
</paragraph><paragraph id="HC9CE3BAA438F49EAB957DC254E7C3523"><enum>(6)</enum><text display-inline="yes-display-inline">Has agreed, as part of the application and
in order to protect the Federal Government against the risk of loss, to the
following:</text>
<subparagraph id="HA5C4E54E03804CB5A63D69DC3262F3CC"><enum>(A)</enum><text>on account of a
debenture, the proceeds of which were used to fund a loan approved prior to the
date of enactment of the Job Creation and Economic Development through CDC
Modernization Act of 2009, 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;</text>
</subparagraph><subparagraph id="H3FC77919DF074953BF47E9F0E4F1E73"><enum>(B)</enum><text display-inline="yes-display-inline">on account of a debenture, the proceeds of
which were used to fund a loan approved prior to the date of enactment of the
Job Creation and Economic Development through CDC Modernization Act of 2009 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</text>
</subparagraph><subparagraph id="H4D30993FEBB844D2A58FED83C0610926"><enum>(C)</enum><text>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 Job Creation and Economic Development through CDC
Modernization Act of 2009, upon closing, pay to the Administrator a one-time
participation fee in the amount equal to the higher of the following:</text>
<clause id="HE65CBBC576354F63A62420CEC3B81F00"><enum>(i)</enum><text>0.25 percent of
the amount of the debenture.</text>
</clause><clause id="HCBACAFD968484189B6EE2D23FD18F4C5"><enum>(ii)</enum><text>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 30th 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 Job Creation and Economic
Development through CDC Modernization Act of 2009, 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.</text>
</clause></subparagraph></paragraph></subsection><subsection id="H63677E6A302342859183F3A6174462D2"><enum>(c)</enum><header>Suspension or
revocation of premier status</header><text>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 section
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.</text>
</subsection><subsection id="H0A661ADEA74D42EF83BA3519194FC7EE"><enum>(d)</enum><header>Loan loss
reserve</header>
<paragraph id="HE82F133EA6244F368B040EC5281F2245"><enum>(1)</enum><header>Assets</header><text display-inline="yes-display-inline">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—</text>
<subparagraph id="H575DEC8A771D414DB99F0D584ED076AB"><enum>(A)</enum><text display-inline="yes-display-inline">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);</text>
</subparagraph><subparagraph id="HA7AC17D436304CC5B1C3A1FB13FA595F"><enum>(B)</enum><text>irrevocable letter
or letters of credit, with a collateral assignment in favor of, and a
commercially reasonable format acceptable to, the Administrator; or</text>
</subparagraph><subparagraph id="H464842DA1C3241CFB3125F52462D5D37"><enum>(C)</enum><text>any combination of
the assets described in subparagraphs (A) and (B).</text>
</subparagraph></paragraph><paragraph id="H3E854D42F48B4AEEB67325DBFC6CC7D9"><enum>(2)</enum><header>Contributions</header><text>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:</text>
<subparagraph id="H600898AAEC1F486C9B61218C42B212EE"><enum>(A)</enum><text>50 percent when a
debenture is closed.</text>
</subparagraph><subparagraph id="H815451F435CE40F6B960BFA15B992DDB"><enum>(B)</enum><text>25 percent
additional not later than 1 year after a debenture is closed.</text>
</subparagraph><subparagraph id="H2A63201A40DE4146A897EE9E0E5CB05F"><enum>(C)</enum><text>25 percent
additional not later than 2 years after a debenture is closed.</text>
</subparagraph></paragraph><paragraph id="HA58880A892F94DB2BF44FEFD0D70C785"><enum>(3)</enum><header>Replenishment</header><text>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.</text>
</paragraph><paragraph id="H71553F9F94B843EDAE3F749FFD2E87FC"><enum>(4)</enum><header>Disbursements</header>
<subparagraph id="H7E7346A2573F44F1981FA448CFDCDEB3"><enum>(A)</enum><header>In
general</header><text>The Administrator shall allow the premier certified
development company to withdraw from the loss reserve amounts attributable to
any debenture that has been repaid.</text>
</subparagraph><subparagraph id="H6E0D9FD3FE6041B1918555DF75384445"><enum>(B)</enum><header>Reduction</header><text>The
Administrator shall allow the premier certified development 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.</text>
</subparagraph><subparagraph id="HD4DCAA26ABD34C36B84B43C3742D63E0"><enum>(C)</enum><header>Rule of
construction</header><text display-inline="yes-display-inline">The provision
contained in subparagraph (B) shall be read as if enacted prior to a date 2
years and 90 days after the date of enactment of the Job Creation and Economic
Development through CDC Modernization Act of 2009.</text>
</subparagraph></paragraph></subsection><subsection id="H31CB3C64A129402385C7C5C7C5726BC4"><enum>(e)</enum><header>Bureau of
Premier Certified Development Company Lender Oversight</header>
<paragraph id="HF7AC6F11744E4FA69F14FA9048C47417"><enum>(1)</enum><header>In
general</header><text>There is hereby established a Bureau of Premier Certified
Development Company Lender Oversight in the Office of Lender Oversight at the
United States Small Business Administration which shall have responsibility and
capability for carrying out oversight of premier certified development
companies and such other responsibilities as the Administrator
designates.</text>
</paragraph><paragraph id="H15E43D9E436947C3B79B2F1A684F5541"><enum>(2)</enum><header>Annual
review</header><text>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.</text>
</paragraph><paragraph id="H69619540F43346A98C5908301E9FF408"><enum>(3)</enum><header>Random
audits</header><text display-inline="yes-display-inline">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.</text>
</paragraph><paragraph id="HED66B03C0467485FA1A14B07157A62C"><enum>(4)</enum><header>Review of lenders
providing senior financing</header>
<subparagraph id="HC096B221FB76450698199039D5408871"><enum>(A)</enum><header>Calculation of
loan loss rate</header><text>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.</text>
</subparagraph><subparagraph id="H7482DD84D6AE464DB817054F2E6DD474"><enum>(B)</enum><header>Notification</header><text>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.</text>
</subparagraph></paragraph><paragraph id="H84934496A329404C8D0054575D3BD105"><enum>(5)</enum><header>Use of reviews
and audits</header><text>The Administrator shall consider the findings under
paragraphs (2), (3), and (4) in carrying out the responsibilities under
subsection (h).</text>
</paragraph></subsection><subsection id="H1515729771C84664ACC56804519D5EF2"><enum>(f)</enum><header>Sale of Certain
Defaulted Loans</header>
<paragraph id="H924D0BBE5E2440BC9164F2D23E7CE63A"><enum>(1)</enum><header>Notice</header><text>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, it
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.</text>
</paragraph><paragraph id="HE12D98E0995E42EE955E4334D23B61A8"><enum>(2)</enum><header>Limitations</header><text>The
Administrator shall not offer any loan described in paragraph (1) as part of a
bulk sale unless it—</text>
<subparagraph id="H1FCEAD5B7BF0483B8E95AA253B239513"><enum>(A)</enum><text>provides
prospective purchasers with the opportunity to examine the Small Business
Administration’s records with respect to such loan; and</text>
</subparagraph><subparagraph id="HF63F76FF7F2147C09DDD08E1CB5175C5"><enum>(B)</enum><text>provides the
notice required by paragraph (1).</text>
</subparagraph></paragraph></subsection><subsection id="H51C232AA798A4475B28DABFF11450400"><enum>(g)</enum><header>Loan Approval
Authority</header>
<paragraph id="H4F6C72E4D7AD462DBA55E3B59EC0D7BB"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">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.</text>
</paragraph><paragraph id="HCDE36DCE20144580ABF5C40A166A9803"><enum>(2)</enum><header>Program
goals</header><text display-inline="yes-display-inline">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.</text>
</paragraph><paragraph id="HB9E0B776362A4DEC9452D60E3A2F6143"><enum>(3)</enum><header>Scope of
review</header><text>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.</text>
</paragraph></subsection><subsection id="HB357EF6A00434EF782D3969A04242300"><enum>(h)</enum><header>Suspension or
revocation</header><text>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 section 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.</text>
</subsection><subsection id="H7A0481AC9EB740528AAF406B55DBE89E"><enum>(i)</enum><header>Effect of
suspension or revocation</header><text>A suspension or revocation of premier
status shall not affect any outstanding debenture guarantee.</text>
</subsection><subsection id="H31743CD9A367482598F5EF2AD6BEAA2B"><enum>(j)</enum><header>Rule of
construction</header><text>Any reference to the term <quote>premier certified
lender</quote> or <quote>PCL</quote> in legislation enacted, or regulations
adopted, prior to the enactment of the <short-title>Job
Creation and Economic Development Through CDC Modernization Act of
2009</short-title> shall be deemed to be a reference to the term <quote>premier
certified development
company</quote>.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="HFA5D9AA81D6B4CCB8A20F460FA0BCE61"><enum>205.</enum><header>Multi state
operations</header><text display-inline="no-display-inline">Section 505 of the
Small Business Investment Act of 1958 (15 U.S.C. 697b) is amended to read as
follows:</text>
<quoted-block display-inline="no-display-inline" id="H2B70FC0CA6904EAB98ABE74395449395" style="OLC">
<section id="H99C70901E0F842A9A5E7142699581AB7"><enum>505.</enum><header>Multi state
operations</header>
<subsection id="H90AF8F213BD241B58370B93BCB7163BA"><enum>(a)</enum><header>Authorization</header><text>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—</text>
<paragraph id="H17E543F9481746F989D67701542F7277"><enum>(1)</enum><text>has members, from
each of the States in which it operates with not fewer than 25 members who
reside in such States;</text>
</paragraph><paragraph id="H2B905DD2543E49E785DD725F2F90ED9F"><enum>(2)</enum><text>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;</text>
</paragraph><paragraph id="HAB0B69A0DA26400BA3F5CBC7701F5B37"><enum>(3)</enum><text>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</text>
</paragraph><paragraph id="HE8CF1DDCFBD44716964997406208BFF5"><enum>(4)</enum><text>files an
application developed by the Administrator which provides—</text>
<subparagraph id="H4A1AA68A6407466FBDD9F5D8C991481C"><enum>(A)</enum><text>notice of the
intention to make loans in multiple States;</text>
</subparagraph><subparagraph id="HC66A2BF839E44566BDDC9F6AA66825FD"><enum>(B)</enum><text>specifies the
States in which the company intends to make loans;</text>
</subparagraph><subparagraph id="H4AA54F4B28554B47B56367F5AE5B605B"><enum>(C)</enum><text>a list of members
in each expansion State; and</text>
</subparagraph><subparagraph id="H1B89C98F4B3F49AAAFC311AA4981B3BD"><enum>(D)</enum><text>a detailed
statement on how the company will comply with the requirements of this
subsection.</text>
</subparagraph></paragraph></subsection><subsection id="HD0924997145549199AB231576B1C4232"><enum>(b)</enum><header>Loan
committees</header><text>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.</text>
</subsection><subsection id="H66BA9504E7A144BD8B0C81CD646EDE10"><enum>(c)</enum><header>Review</header>
<paragraph id="H7168FE0698514B5DA0B1DA46BF26C74F"><enum>(1)</enum><header>In
general</header><text>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).</text>
</paragraph><paragraph id="HF3560FB1BDE64196A678520E9867649B"><enum>(2)</enum><header>Deadline for
decision</header><text>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.</text>
</paragraph><paragraph id="HCB5AB80A04BC43D3B59DB62D714A74E3"><enum>(3)</enum><header>Application
resubmittal</header><text>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.</text>
</paragraph><paragraph id="HA5244C05AB7A4603B112B52FEBE055F5"><enum>(4)</enum><header>Appeal</header><text>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 decisions not later
than 45 days after the appeal is filed. The decision on appeal shall constitute
final agency action for purposes of chapter 7, title 5 United States
Code.</text>
</paragraph></subsection><subsection id="HB7FF622BCB0B457193F8513E4197F9CB"><enum>(d)</enum><header>Failure To
develop Application</header><text>If the Administrator fails to develop an
application as required in subsection (a)(4) within 60 days of the enactment of
<short-title>Job Creation and Economic Development Through
CDC Modernization Act of 2009</short-title>, 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.</text>
</subsection><subsection id="HC567FF6BD0664FC39197906B8CDF0E40"><enum>(e)</enum><header>Aggregate
accounting</header><text>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.</text>
</subsection><subsection id="H2909DD154B41419893F4E5418C2A0040"><enum>(f)</enum><header>Local Job
Creation Requirements</header>
<paragraph id="HFE89F0273E834197AC25E9D54E573BDB"><enum>(1)</enum><header>In
general</header><text>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.</text>
</paragraph><paragraph id="H986605D8B1FC4FAD99C6184D7B0326C7"><enum>(2)</enum><header>Applicability</header><text>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.</text>
</paragraph></subsection><subsection id="H6384B2ED0AC5459CAE2A1FB9B89EE369"><enum>(g)</enum><header>Contiguous
states</header><text>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.</text>
</subsection><subsection id="HEBA3EBEF860A47E08E3C8388D46FEEFF"><enum>(h)</enum><header>Exemption for
local economic areas</header><text>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.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="H07B34B3A10AA474FA253000FD681CC6B"><enum>206.</enum><header>Guaranty of
debentures</header><text display-inline="no-display-inline">Section 506 of the
Small Business Investment Act of 1958 (15 U.S.C. 697c) is amended to read as
follows:</text>
<quoted-block display-inline="no-display-inline" id="HB808638E994F466ABBD9C087B60F5D69" style="OLC">
<section id="HDC03B6BCB27A4948A20F7C968C3F4B93"><enum>506.</enum><header>Guaranty of
debentures</header>
<subsection id="H413D9EB072E0449198AA9960988BA263"><enum>(a)</enum><header>Authority To
guarantee</header><text>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.</text>
</subsection><subsection id="H2FFEC4D147BD48848C4F1E18255F4734"><enum>(b)</enum><header>Terms and
conditions of the guarantee</header><text>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.</text>
</subsection><subsection id="HA314A5BDFC3D421E9F618AF18F904A16"><enum>(c)</enum><header>Full faith and
credit</header><text>The full faith and credit of the United States is pledged
to the payment of all amounts guaranteed under this section.</text>
</subsection><subsection id="HA16ED9CEC56346C2ADF3A2CA2D6D9A11"><enum>(d)</enum><header>Subordination</header><text>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.</text>
</subsection><subsection id="H0B31A3315C9347E5899DF27D933CDA52"><enum>(e)</enum><header>Standards for
administrator guarantees</header><text>No guarantee may be made with respect to
any debenture under this section unless—</text>
<paragraph id="H485408FF0485481DB33777CB82C391C9"><enum>(1)</enum><text>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;</text>
</paragraph><paragraph id="H8BFD65EE87B64CBB936AF78B74020CFF"><enum>(2)</enum><text>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) of the Small Business
Investment Act of 1958;</text>
</paragraph><paragraph id="H872B089585C74BE1A1C048D0AFCA85F7"><enum>(3)</enum><text>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;</text>
</paragraph><paragraph id="H83C634EFBCDA4BB59A3D62688036CD10"><enum>(4)</enum><text>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;</text>
</paragraph><paragraph id="H2F88D96185E04DB5811E522962C648A6"><enum>(5)</enum><text>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</text>
</paragraph><paragraph id="H1EC2AF7B778649A7A8747A5D93BF01A3"><enum>(6)</enum><text>with respect to
each loan made from the proceeds of such debenture, the Administrator—</text>
<subparagraph id="H720057A1D9454AA89B6B375768521286"><enum>(A)</enum><text>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—</text>
<clause id="H5528701E4BC647858F05D3CE833D80FB"><enum>(i)</enum><text>the lesser
of—</text>
<subclause id="H39C47269D7E84587A4573EC760FB71CE"><enum>(I)</enum><text>0.9375 percent per
year of the outstanding balance of the loan; or</text>
</subclause><subclause id="H50907A3FA761407F847E8F9B2BDD081B"><enum>(II)</enum><text>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</text>
</subclause></clause><clause id="H024A7A64125B455AB96954F4E2BB75EC"><enum>(ii)</enum><text>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</text>
</clause></subparagraph><subparagraph id="H6D6B37CD3BF54AF88051E939A132D2F3"><enum>(B)</enum><text>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.</text>
</subparagraph></paragraph></subsection><subsection id="HAF4FC156F07D46F0844827FC64A28CD5"><enum>(f)</enum><header>Interest rates
on commercial loans</header><text>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.</text>
</subsection><subsection id="HB1811A3459224BC8B7C0A9FA8BD42A04"><enum>(g)</enum><header>Debenture
repayment</header><text>Any debenture that is issued under this section shall
provide for the payment of principal and interest on a semiannual basis.</text>
</subsection><subsection id="H9BD0E53C0EC049588F8EC4ED5ABBEF1C"><enum>(h)</enum><header>Charges for
Administrator’s Expenses</header><text>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—</text>
<paragraph id="HE8E6C18FD3E643C8B6A36DCBCB4E7FE2"><enum>(1)</enum><text>development
company fees for processing, closing, servicing, late payment or loan
assumption;</text>
</paragraph><paragraph id="H8F3B3154237C4F0FB7CA3C3FDD77D822"><enum>(2)</enum><text>agent or trustee
fees for central servicing, underwriters, or debenture funding; and</text>
</paragraph><paragraph id="H9BE247D67810441BB91DDC522363A2F9"><enum>(3)</enum><text>fees charged by
the Administrator for the debenture guaranty and from the certified development
company to reduce the subsidy cost.</text>
</paragraph></subsection><subsection id="HBB0A6EF5712C48219525955CE7A5FD9E"><enum>(i)</enum><header>Participation
fee</header><text>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.</text>
</subsection><subsection id="H00AEB70371454453827C1FC192BA8F19"><enum>(j)</enum><header>Certified
development company fee</header><text>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.</text>
</subsection><subsection id="H8D5C87D5F6084E589D89CEAE35FA879B"><enum>(k)</enum><header>Effective
date</header><text>The fees authorized by this section shall apply to any
financing approved under this title on or after October 1, 1996.</text>
</subsection><subsection id="H0F820F0B42D0439E8184FCC458990B82"><enum>(l)</enum><header>Calculation of
subsidy rate</header><text>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.</text>
</subsection><subsection id="HBF918941BA94414A920AB91B480A02EC"><enum>(m)</enum><header>Actions upon
default</header>
<paragraph id="HA15189519BD4455F81A104987D24B23D"><enum>(1)</enum><header>Initial
actions</header><text>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—</text>
<subparagraph id="H42F3069BD0484F809091E83E535A496D"><enum>(A)</enum><text>take all necessary
steps to bring such loan current; or</text>
</subparagraph><subparagraph id="HC8DCCD462F064067899C2024F8C9336D"><enum>(B)</enum><text>implement a formal
written deferral agreement.</text>
</subparagraph></paragraph><paragraph id="H1E5811D859CC4ADDA5DCD6A31D9154EE"><enum>(2)</enum><header>Purchase or
acceleration of debenture</header><text>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.</text>
</paragraph><paragraph id="H4020438C73984CD896AB084CFBACD498"><enum>(3)</enum><header>Prepayment
penalties</header><text>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—</text>
<subparagraph id="H6E78745CB6C54B1BA6F90388A182D7AA"><enum>(A)</enum><text>shall negotiate
the elimination of any prepayment penalties or late fees on defaulted loans
made prior to September 30, 1996;</text>
</subparagraph><subparagraph id="H400BB76D55FB44C3A29283E9E412AC31"><enum>(B)</enum><text>shall not pay any
prepayment penalty or late fee on the default based purchase of loans issued
after September 30, 1996; and</text>
</subparagraph><subparagraph id="H15B9FD4B82C645A2B21D01F51CBD8567"><enum>(C)</enum><text>shall not pay
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.</text>
</subparagraph></paragraph><paragraph id="HA319A0EBEC9F4FD3B23602CFEB82E1B6"><enum>(4)</enum><header>Collection and
servicing</header>
<subparagraph id="H233F4FEFC3A6402BA471F90F94B0F715"><enum>(A)</enum><header>In
general</header><text>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.</text>
</subparagraph><subparagraph id="HB805CD5B3A9E40CD89B135812B3E297C"><enum>(B)</enum><header>Effective
date</header><text>The requirements of subparagraph (A) shall become effective
180 days after the date of enactment of the <short-title>Job Creation and Economic Development Through CDC
Modernization Act of
2009</short-title>.</text>
</subparagraph></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="HA3AC902511F944B0BDAB1B7DC950213E"><enum>207.</enum><header>Economic
development through debentures</header><text display-inline="no-display-inline">Section 507 of the Small Business Investment
Act of 1958 (15 U.S.C. 697d) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H2B8884923ED2453291A282074DCE65FC" style="OLC">
<section id="H62134F51C43E42D1BAAF40A635078970"><enum>507</enum><header>Economic
development and debentures</header>
<subsection id="H49651FD1BF9B4BF295CD3FB711395B1C"><enum>(a)</enum><header>In
general</header><text>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:</text>
<paragraph id="HFCEAED5036AB4CA1AAD926FA8BDC9E75"><enum>(1)</enum><text>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.</text>
</paragraph><paragraph id="H7D715AEF9C6C49C0A89F40127A6493CC"><enum>(2)</enum><text>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.</text>
</paragraph><paragraph id="HBEDF5DF688544DE2A77FF5CA22D4F97D"><enum>(3)</enum><text>The achievement of
one or more of the following public policy goals:</text>
<subparagraph id="H44B8A6095A424C1FA7A0FE2186DD2634"><enum>(A)</enum><text>Business district
revitalization or expansion of businesses in low-income communities which would
be eligible for a new markets tax credit under section 45(D)(a) of the Internal
Revenue Code of 1986, or implementing regulations issued under that
section.</text>
</subparagraph><subparagraph id="H4720B5BFFC2545DAB2DA76EC5BF00737"><enum>(B)</enum><text>Expansion of
exports.</text>
</subparagraph><subparagraph id="H1959AA11384549149E34CD4CC624741A"><enum>(C)</enum><text>Expansion of
minority business development or women-owned business development.</text>
</subparagraph><subparagraph id="H1D8E2B82E08D4269AC070DC1548FB8E1"><enum>(D)</enum><text>Rural
development.</text>
</subparagraph><subparagraph id="H0F1371D5141640F3A4F6BC0C35A77FD9"><enum>(E)</enum><text>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 3(q).</text>
</subparagraph><subparagraph id="HEC31056C1AFF4298A736AF7A200BCF45"><enum>(F)</enum><text>Enhanced economic
competition, including the advancement of technology, plan retooling,
conversion to robotics, or competition with imports.</text>
</subparagraph><subparagraph id="HA2A849591CBB4FD39DEB4803ED7C82F4"><enum>(G)</enum><text>Changes
necessitated by Federal budget cutbacks, including defense related
industries.</text>
</subparagraph><subparagraph id="H26E6EEC1A3034032AE68F2E1C7A77E32"><enum>(H)</enum><text>Business
restructuring arising from federally mandated standards or policies affecting
the environment or the safety and health of employees.</text>
</subparagraph><subparagraph id="HABF11E3A31BA4AE89A41E3C5A37DDD5D"><enum>(I)</enum><text>Reduction of
energy consumption by at least 10 percent.</text>
</subparagraph><subparagraph id="HA4D177F0855545B399407061531F6F9B"><enum>(J)</enum><text>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.</text>
</subparagraph><subparagraph id="H1223CB3D32CA40F89010FC1C28250791"><enum>(K)</enum><text>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.</text>
</subparagraph></paragraph><paragraph id="H18C9F7C8FE7F4433AE9DE28358077292"><enum>(4)</enum><text display-inline="yes-display-inline">Debt refinancing to the extent permitted by
section 508(d).</text>
</paragraph></subsection><subsection id="HF0E194D7216A49E79E10995736865205"><enum>(b)</enum><header>Job creation and
retention requirements</header>
<paragraph id="H609E02F7A7A24E6D865C9640A35FD537"><enum>(1)</enum><header>In
general</header><text>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.</text>
</paragraph><paragraph id="H1D97C8322C844B70818D43262A200838"><enum>(2)</enum><header>Exceptions</header>
<subparagraph id="H86C21041AFD443B5832A366A4CC0E012"><enum>(A)</enum><text>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.</text>
</subparagraph><subparagraph id="H76BE5201B2634D77B66F4D784DFAF339"><enum>(B)</enum><text>For projects in
Alaska, Hawaii, State-designated enterprise zones, empowerment zones,
enterprise communities, 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.</text>
</subparagraph><subparagraph id="H7BE76B86A3E04C22A03F1D34A7C5681A"><enum>(C)</enum><text>Loans for projects
of small manufacturers shall be excluded from the calculations in subparagraphs
(A) and (B).</text>
</subparagraph></paragraph></subsection><subsection id="H8E7320D3CDD34B5E9F0876F0C6CD83DB"><enum>(c)</enum><header>Combination of
certain goals</header><text>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).</text>
</subsection><subsection id="HE7F108D1E80F4CEEA9C1C7B2849EA3B2"><enum>(d)</enum><header>Composition of
the project</header>
<paragraph id="H9E65105F4CEC41508FD703874EAA03DE"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">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).</text>
</paragraph><paragraph id="H1E442B4CF2624288A0B9036E7EB7C599"><enum>(2)</enum><header>Debt
refinancing</header><text>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.</text>
</paragraph><paragraph id="HA557087A282E487BB0C5DA8B141421A4"><enum>(3)</enum><header>Limitation</header><text>The
amount of the existing indebtedness may be refinanced and added to the
expansion cost if—</text>
<subparagraph id="H1C02B3BF03824E07B8BB522C48B5C0C5"><enum>(A)</enum><text>the existing
indebtedness does not exceed 50 percent of the project cost of the
expansion;</text>
</subparagraph><subparagraph id="HFF831D3820694ED793C83C006B686F04"><enum>(B)</enum><text>the proceeds of
the indebtedness were used to acquire land, including a building situated
thereon, to construct a building thereon, or to purchase equipment;</text>
</subparagraph><subparagraph id="H893B462F19E14223A9F299A15B5288AB"><enum>(C)</enum><text>the existing
indebtedness is collateralized by fixed assets;</text>
</subparagraph><subparagraph id="HD3FC4D214D384413A1A02DA7588C283D"><enum>(D)</enum><text>the existing
indebtedness was incurred for the benefit of the small business concern;</text>
</subparagraph><subparagraph id="H054BEB2140F948E6AEBD7ECB58C97AE"><enum>(E)</enum><text>the financing under
this title will be used only for refinancing existing indebtedness or costs
relating to the project financed under this title;</text>
</subparagraph><subparagraph id="H3D205A00DE064C9C9E91FF54F9622B88"><enum>(F)</enum><text>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;</text>
</subparagraph><subparagraph id="H6BC5BD2CC7AB445C96322B54E47FE4CE"><enum>(G)</enum><text>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</text>
</subparagraph><subparagraph id="H7865848B185A4DC7817600547F57D843"><enum>(H)</enum><text>the financing
under this title will provide better terms or rate of interest than the
existing indebtedness at the time of refinancing.</text>
</subparagraph></paragraph></subsection><subsection id="H8962437B91B640C1BD8B4C98C4B76DEC"><enum>(e)</enum><header>Definition</header><text>For
purposes of subparagraphs (J) and (K) of subsection (a)(1), 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
Regulation.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="HEF4D84BA55D347DB837A34989BA5AA7A"><enum>208.</enum><header>Project funding
requirements</header><text display-inline="no-display-inline">Section 508 of
the Small Business Investment Act of 1958 (15 U.S.C. 697e) is amended to read
as follows:</text>
<quoted-block display-inline="no-display-inline" id="H10DE5134025A4A0FAA5312F49F01047D" style="OLC">
<section id="H9D625BB16B69495297D7F5B0EAB7CC0A"><enum>508.</enum><header>Project Funding
requirements</header>
<subsection id="H0BAA8E4D12174C8E86497D7435366878"><enum>(a)</enum><header>In
general</header><text>Any project described in section 507 must meet the
funding standards set forth in this section.</text>
</subsection><subsection id="H7772B35BC602465ABC5354E5A28CE2FA"><enum>(b)</enum><header>Size of
debenture</header><text>The Administrator shall only be permitted to guarantee
debenture issued by a certified development company up to the following
amounts:</text>
<paragraph id="HF349FE2E17F3424EB02D50F43793C08F"><enum>(1)</enum><text>$3,000,000 for any
project of a small business concern.</text>
</paragraph><paragraph id="H69C3EFE38C4A4259A9472E9A3DC62723"><enum>(2)</enum><text>$4,000,000 for any
project that meets the public policy goals set forth in section
507(a)(3).</text>
</paragraph><paragraph id="H55103293B6354103BE179AAF13CF3419"><enum>(3)</enum><text>$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).</text>
</paragraph><paragraph id="H93406E8A82E14F67ADF58EBC6C8C7A9C"><enum>(4)</enum><text>$8,000,000 for
each project of a small manufacturer.</text>
</paragraph><paragraph id="HAFDE12CE0CB94B089C7FB77DC540A79C"><enum>(5)</enum><text>$8,000,000 for
each project that reduces the borrower’s energy consumption by at least 10
percent.</text>
</paragraph><paragraph id="HF97206933D4C4B53AA353921EB31EB92"><enum>(6)</enum><text>$8,000,000 for
each project that generates renewable energy or renewable fuels, such as, but
not limited to, biodiesel or ethanol production.</text>
</paragraph><paragraph id="H62865309FBDE4FCAB35342F56CEFA6F5"><enum>(7)</enum><text>$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)).</text>
</paragraph></subsection><subsection id="HA6CC011867A9497F81D22B73933BFE59"><enum>(c)</enum><header>Funding from
Sources other than Debentures Issued by Certified Development
Companies</header>
<paragraph id="HF30165980F2A4E1384B5398485D3AD44"><enum>(1)</enum><header>In
general</header><text>Any project financed pursuant to this title must have the
following contributions from parties other than the debenture issued by the
certified development company:</text>
<subparagraph id="HB0E04754EA8C404199922E8F3324CE50"><enum>(A)</enum><header>Funding from
institutions</header>
<clause id="HA353A110FB0F4B51B3D84D73E3332F06"><enum>(i)</enum><text>If
a small business concern provides—</text>
<subclause id="H749CE222F08842BE9B52CA49BEBF4FD1"><enum>(I)</enum><text>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</text>
</subclause><subclause id="H6F1D9F8806694666B526D41DA05FE5AC"><enum>(II)</enum><text display-inline="yes-display-inline">more than the minimum contribution required
under subparagraph (B), any excess contribution may be used to reduce the
amount required from institutions in described in subclause (I), except that
the amount provided by such institution may not be reduced to an amount that is
less than the amount of the loan made by the Administrator.</text>
</subclause></clause></subparagraph><subparagraph id="H45181200F9C64231A4CDD3D612E4F84D"><enum>(B)</enum><header>Funding from
small business concerns</header><text>The small business concern (or its
owners, stockholders, or affiliates) that will have a project financed pursuant
to this title shall provide—</text>
<clause id="H94D301AE97B04D84AC4F36CB3909CD66"><enum>(i)</enum><text>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;</text>
</clause><clause id="H2C790036518341F988AC0988F3223AB3"><enum>(ii)</enum><text>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;</text>
</clause><clause id="H1C124797E0D44B9EB4601AED448F2BD0"><enum>(iii)</enum><text>at least 20
percent of the total cost of the project financed if the project involves both
of the conditions in clauses (i) or (ii); or</text>
</clause><clause id="H055008F0E92B48698242CBA0E25DB585"><enum>(iv)</enum><text>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.</text>
</clause></subparagraph></paragraph><paragraph id="H4E75581188364EA59858DBF82E3A673A"><enum>(2)</enum><header>Seller
financing</header><text>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.</text>
</paragraph><paragraph id="H9A1970FF7A40453CB0E19D8BC014CBBE"><enum>(3)</enum><header>Collateralization</header>
<subparagraph id="H29816E148DC04F6081DFA375CE566714"><enum>(A)</enum><header>In
general</header><text>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.</text>
</subparagraph><subparagraph id="HA0F286FC4BD84031B1832A7037172636"><enum>(B)</enum><header>Appraisals</header><text>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—</text>
<clause id="H466BB422139A4D32B23887B8682CDA58"><enum>(i)</enum><text>shall be required
by the Administrator before disbursement of the loan if the estimated value of
that property is more than $400,000; or</text>
</clause><clause id="H2391D7CB232E41B39BFD84DF699FEEB0"><enum>(ii)</enum><text>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.</text>
</clause></subparagraph><subparagraph id="HD0074A84C62342C2A180C211C2790E0E"><enum>(C)</enum><header>Adjustment</header><text>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.</text>
</subparagraph></paragraph><paragraph id="H1D2BDB56783B40F697D1F2ABC41F9C40"><enum>(4)</enum><header>Limitation on
leasing</header>
<subparagraph id="H2D62FD163F6C4BE8A10EAC86DAF39297"><enum>(A)</enum><text>If the project
funded under this section includes the acquisition of a facility or the
construction of a new facility, the small business concern—</text>
<clause id="HCAA97097590A49B3B27E86D3E738EBFA"><enum>(i)</enum><text>shall permanently
occupy and use not less than 50 percent of the project property; and</text>
</clause><clause id="H18D49399140740228A7E078AFD7AE8C3"><enum>(ii)</enum><text>may, on a
temporary or permanent basis, lease to others not more than 50 percent of the
project property.</text>
</clause></subparagraph><subparagraph id="H953DBD3FA47D4272A97C926B8AAA379B"><enum>(B)</enum><text>For purposes of
this paragraph, the term <quote>project property</quote> means—</text>
<clause id="H60C4A080647E4226ABEA262C2916E8F7"><enum>(i)</enum><text>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</text>
</clause><clause id="H6F0ACD2D7430415AB570AB039F091699"><enum>(ii)</enum><text>occupancy and use
of the project property by the operating company shall be deemed to be
occupancy and used by the small business concern that received funding under
this section.</text>
</clause></subparagraph></paragraph></subsection><subsection id="H95A836F462804E9DAFD4F1A730AC0788"><enum>(d)</enum><header>Regulations</header><paragraph commented="no" display-inline="yes-display-inline" id="H9B97E4C9B5D44BCFBCFE2D5C628F0137"><enum>(1)</enum><text>The Administrator shall
promulgate regulations, after notice and comment, rules to implement the
provisions of this section within 60 days after enactment of the
<short-title>Job Creation and Economic Development Through
CDC Modernization Act of 2009</short-title>. The Administrator may limit the
comment period to 15 days to meet this deadline.</text>
</paragraph><paragraph id="HFD77074881314947BF2B1FA85F95E23F" indent="up1"><enum>(2)</enum><text>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.</text>
</paragraph><paragraph id="HEEC42C4A1BF046FA9536326BD4DA5354" indent="up1"><enum>(3)</enum><text>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
<short-title>Job Creation and Economic Development Through
CDC Modernization Act of 2009</short-title> shall hereby cease to apply.</text>
</paragraph><paragraph id="H89244CC6BABF4A509FDE697A8489E7A1" indent="up1"><enum>(4)</enum><text>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.</text>
</paragraph></subsection><subsection id="HA6C89E781F2442839A140F74C49CFCCD"><enum>(e)</enum><header>Ownership
calculation</header><text>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.</text>
</subsection><subsection id="HDA4A18DAEF744426866776FE8D518DEF"><enum>(f)</enum><header>Combination
financing</header><text>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.</text>
</subsection><subsection id="H06CDD48BDAEE43B28F0FF025D83A146F"><enum>(g)</enum><header>Rules for
Debentures Funding Projects in Low-Income Areas</header>
<paragraph id="H9CFB5E122A0A48AF9CDC31B57CE89B81"><enum>(1)</enum><header>Size
standards</header><text>For purposes of determining the size of small business
concern seeking funds for a project described in subsection (b)(3), the size
standard promulgated by the Administrator in section 121.201 of title 13, Code
of Federal Regulations as in effect on January, 1, 2009, or any successor
regulation, shall be increased by 25 percent.</text>
</paragraph><paragraph id="HFEB02080A24F48079276AF9E458E3CAA"><enum>(2)</enum><header>Personal
liquidity</header>
<subparagraph id="HA94BD8FDCAFC4E2EB22E362DCD559515"><enum>(A)</enum><header>In
general</header><text>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).</text>
</subparagraph><subparagraph id="H74D900A633494E018F9F27DA4E124105"><enum>(B)</enum><header>Definition</header><text>For
purposes of subparagraph (A), the term <quote>owner</quote> 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.</text>
</subparagraph></paragraph></subsection><subsection id="H8C99DB0C3A17436FBB04B5E03F3889ED"><enum>(h)</enum><header>Applicability of
credit elsewhere and personal resources regulations</header><text display-inline="yes-display-inline">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 section 120.101 and 120.102 of title 13,
Code of Federal Regulation as in effect on January 1, 200,9 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 Job Creation and Economic Development through CDC
Modernization Act of
2009.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="HF22D470E2F884BE39A47FF5F84416150"><enum>209.</enum><header>Private
debenture sales and pooling of debentures</header><text display-inline="no-display-inline">Section 509 of the Small Business Investment
Act of 1958 (15 U.S.C. 697f) is amended to read as follows:</text>
<quoted-block display-inline="no-display-inline" id="HE51D7E0B29C742B7B31351164BA2F475" style="OLC">
<section id="HDB68A3610D5F4BF8A4C1F626E640A450"><enum>509.</enum><header>Private
debenture sales and pooling of debentures</header>
<subsection id="H6B7B04C082634F68B6322484356D9DA3"><enum>(a)</enum><header>Private
debenture sales</header><text>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.</text>
</subsection><subsection id="HDE04C6AFCC2C46368BE9D3EB9907C7A6"><enum>(b)</enum><header>Federal
financing bank</header><text>Nothing in any provision of law shall be construed
to authorize the Federal Financing Bank to acquire—</text>
<paragraph id="H9F3F80D0E04C4125AB7DBBC03289B5B0"><enum>(1)</enum><text>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;</text>
</paragraph><paragraph id="H14C2E1843DD644F79D31B92EF2A28BDB"><enum>(2)</enum><text>any obligation
which is an interest in any obligation which is an interest in any obligation
described in paragraph (1); or</text>
</paragraph><paragraph id="H0D01D0CF576042F4ADF240100F959217"><enum>(3)</enum><text>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).</text>
</paragraph></subsection><subsection id="H160904D5B2D14A40A35A367E7D1FBFF2"><enum>(c)</enum><header>Pooling of
Debentures</header>
<paragraph id="HD3EABE76469E4876843EC9BBF051ADC5"><enum>(1)</enum><header>In
general</header><text>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.</text>
</paragraph><paragraph id="HC70C78A1E93F40F2AD4097117F4498FE"><enum>(2)</enum><header>Guarantee of
trust certificates</header><text>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.</text>
</paragraph><paragraph id="H4476770CB4AB438D9ADFBF697AD35946"><enum>(3)</enum><header>Full faith and
credit</header><text>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.</text>
</paragraph><paragraph id="HCB60DF86CAA641F2816AD962AE7D17E7"><enum>(4)</enum><header>Prohibition on
guarantee fee for pools</header><text>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).</text>
</paragraph><paragraph id="H53BF60BC318F4491BC33ABCA85175326"><enum>(5)</enum><header>Subrogation</header>
<subparagraph id="H8691786B2C0B467A846B1A9E3F35677E"><enum>(A)</enum><header>In
general</header><text>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.</text>
</subparagraph><subparagraph id="H1EDA98A3DA9448879AB778077508A883"><enum>(B)</enum><header>Administrator
exercise of rights</header><text>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.</text>
</subparagraph></paragraph><paragraph id="H17D7DBEFB1E04E1AA7CEBE21C514A2EF"><enum>(6)</enum><header>Central
Registration</header>
<subparagraph id="H70E2AFFF638F4E0D81E3A52FE679A7B7"><enum>(A)</enum><header>In
general</header><text>The Administrator shall provide for a central
registration of all trust certificates sold pursuant to this section.</text>
</subparagraph><subparagraph id="HD92509DCDFA343CB9C3664D708883405"><enum>(B)</enum><header>Contract</header><text>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.</text>
</subparagraph><subparagraph id="H0DA1B69B89EB41F1ABCE36D8B5E5CBBD"><enum>(C)</enum><header>Bond</header><text>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.</text>
</subparagraph><subparagraph id="H292C9628CFC64C2AB8F48A09CA158D27"><enum>(D)</enum><header>Disclosure
requirements</header><text>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.</text>
</subparagraph><subparagraph id="HB770310B6D5B43D7B2CD4D76EB691E1B"><enum>(E)</enum><header>Authority to
regulate</header><text>The Administrator shall have the authority to regulate
brokers and dealers in trust certificates sold pursuant to this section.</text>
</subparagraph><subparagraph id="HEDB88F9D9E40469BAF4E25D818045C42"><enum>(F)</enum><header>Book entry
permitted</header><text>Nothing in this paragraph shall prohibit the
utilization of a book-entry or other electronic form of registration for trust
certificates.</text>
</subparagraph></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="H8355CB47E9344D9F8F6C2074EA710CF7"><enum>210.</enum><header>Foreclosure and
liquidation of loans</header><text display-inline="no-display-inline">Section
510 of the Small Business Investment Act of 1958 (15 U.S.C. 697g) is amended to
read as follows:</text>
<quoted-block display-inline="no-display-inline" id="H2961AAA464A14C1195BCCCAA2C5D49C6" style="OLC">
<section id="H580A0DDBDFD541B0AA098C4C530E6CE7"><enum>510.</enum><header>Foreclosure and
liquidation of loans</header>
<subsection id="H56323D0286064D5C8DBCFC02E0CD3760"><enum>(a)</enum><header>Delegation of
authority</header><text>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.</text>
</subsection><subsection id="HC43E2F8CE05C4FE489805AAA2F8E8122"><enum>(b)</enum><header>Eligibility for
delegation</header>
<paragraph id="H8DC484F99FDD4450942600008F399E97"><enum>(1)</enum><header>Requirements</header><text>A
certified development company shall be eligible for a delegation of authority
under subsection (a) if—</text>
<subparagraph id="HCC57615D84C440C3A3795630A42AB7A5"><enum>(A)</enum><text>the certified
development company—</text>
<clause id="H7382F7CC68A4493EAC5D6037D09E88B8"><enum>(i)</enum><text>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 <short-title>Job Creation and Economic Development
Through CDC Modernization Act of 2009</short-title>;</text>
</clause><clause id="H0773C169450D4F3B9BA69880760751FF"><enum>(ii)</enum><text>is an accredited
or premier certified development company; or</text>
</clause><clause id="H1F765A9DFDEE4A5ABC1014FE7F9274F1"><enum>(iii)</enum><text>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</text>
</clause></subparagraph><subparagraph id="H7DFB3DA162214A4B89DD304F5138C371"><enum>(B)</enum><text>the certified
development company—</text>
<clause id="H227AE35F03AE423592F7B980FA1913C4"><enum>(i)</enum><text>has one or more
employees—</text>
<subclause id="H95CD8A3DBC5E48AA88320166E07DF729"><enum>(I)</enum><text>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</text>
</subclause><subclause id="H1C70E3D1DE894575BB7D439A1DC118EC"><enum>(II)</enum><text>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</text>
</subclause></clause><clause id="H2AFFAF0AC4AF4248950E78F873022235"><enum>(ii)</enum><text>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.</text>
</clause></subparagraph></paragraph><paragraph id="HA00FFE438EB2474283686B0DC6D96C3F"><enum>(2)</enum><header>Confirmation</header><text>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.</text>
</paragraph></subsection><subsection id="HFA6AED469CBE43368073D53F1CFF4853"><enum>(c)</enum><header>Scope of
Delegated Authority</header>
<paragraph id="H95B01B7FF74944FFAA66B0B7FE986B8F"><enum>(1)</enum><header>In
general</header><text>Each certified development company to which the
Administrator delegates authority under section (a) may with respect to any
loan described in subsection (a)—</text>
<subparagraph id="H3BA2A2A9A5504C05A2EB55DB1834B35A"><enum>(A)</enum><text>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);</text>
</subparagraph><subparagraph id="H49E7305231EC48088B9E81D67076DD82"><enum>(B)</enum><text>litigate any
matter relating to the performance of the functions described in subparagraph
(A), except that the Administrator may—</text>
<clause id="HCB96A4DF38AA4EADAC5320539F552C4F"><enum>(i)</enum><text>defend or bring
any claim if—</text>
<subclause id="H0FA7AF7440064393AF0FF537C60F2D4F"><enum>(I)</enum><text>the outcome of the
litigation may adversely affect the Administrator’s management of the program
established under this title; or</text>
</subclause><subclause id="H9FD5ABAE5FF64CC2B07FECC940F818D6"><enum>(II)</enum><text>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</text>
</subclause></clause><clause id="HAD1FE079B48A4AF5864132E505DAA7F6"><enum>(ii)</enum><text>oversee the
conduct of any such litigation; and</text>
</clause></subparagraph><subparagraph id="H605B344B19FD45708872D26173011A7F"><enum>(C)</enum><text>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)(C).</text>
</subparagraph></paragraph><paragraph id="HD57D9CA4E9B4471880259A852AD48A5E"><enum>(2)</enum><header>Administrator
approval of plans</header>
<subparagraph id="H14DA57253F124F1B88B33C0D7FA40F61"><enum>(A)</enum><header>Certified
development company submission of plans</header><text>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.</text>
</subparagraph><subparagraph id="H2D4F541E26BE44969CC4C9BB9742E269"><enum>(B)</enum><header>Administrator
approval procedures</header>
<clause id="HD0A8792C2DF34818A6C1D8C883620129"><enum>(i)</enum><header>Timing</header><text>Not
late than 15 business days after the plans described in subparagraph (A) are
received by the Administrator, the Administrator shall approve or reject the
plan.</text>
</clause><clause id="HE15ACB598D2841AD951A16B6D825E630"><enum>(ii)</enum><header>Notice of no
decision</header><text>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.</text>
</clause></subparagraph><subparagraph id="H224477481B7C419289C4C1A4D2094A5F"><enum>(C)</enum><header>Routine
actions</header><text>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.</text>
</subparagraph><subparagraph id="H93D3E5D2290A482983E329FCAFB2AC76"><enum>(D)</enum><header>Compromise of
indebtedness</header><text>In carrying out functions described in paragraph
(1)(A), a certified development company may—</text>
<clause id="H29CC25F86C044B419EE97F3F5EEA78A3"><enum>(i)</enum><text>consider an offer
made by an obligor to compromise the debt for less than the full amount owing;
and</text>
</clause><clause id="H8B14AE8C791A4402BB551929EA4A3EC6"><enum>(ii)</enum><text>pursuant to such
offer, release any obligor or other party contingently liable, if the company
secures the written approval of the Administrator.</text>
</clause></subparagraph><subparagraph id="HB83C8F1F52F74932BAEB1E2B8E374F43"><enum>(E)</enum><header>Contents of
notice of no decision</header><text>Any notice provided by the Administrator
pursuant to subparagraph (B)(ii) shall—</text>
<clause id="H091E277FA5B54FB0A7A54CB21ADA4901"><enum>(i)</enum><text>be
in writing stating the specific reasons for which the Administrator was unable
to act on the request submitted pursuant to subparagraph (A);</text>
</clause><clause id="H84AB53CC49A1483D88EB3A7E1C6466EE"><enum>(ii)</enum><text>provide an
estimate of the additional time needed for the Administrator to reach a
decision on the request; and</text>
</clause><clause id="H7165C572A32F4EDEB29FBFAD8F1F1DD6"><enum>(iii)</enum><text>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.</text>
</clause></subparagraph></paragraph><paragraph id="H3BF92D3FD0E547238D611B3E110877B8"><enum>(3)</enum><header>Conflict of
interest</header><text>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.</text>
</paragraph></subsection><subsection id="H4E899DC41181437795BBC6B893784ADC"><enum>(d)</enum><header>Suspension or
Revocation of Authority</header>
<paragraph id="H456F57E023F946F0A894C219B890185A"><enum>(1)</enum><header>In
general</header><text>The Administrator may revoke or suspend a delegation of
authority under this section to certified development company if the
Administrator determines that the company—</text>
<subparagraph id="H9094B120D50B4219A5F4BAE739362C90"><enum>(A)</enum><text>does not meet the
requirements of subsection (b)(1);</text>
</subparagraph><subparagraph id="H717D0ABF33C549868E1FE7F276BBF6E1"><enum>(B)</enum><text>violated any
applicable law or rule or regulation of the Administrator that in the
estimation of the Administrator requires revocation; or</text>
</subparagraph><subparagraph id="HBFB6C3ECDA914E38A345B38286E5BEF5"><enum>(C)</enum><text>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).</text>
</subparagraph></paragraph><paragraph id="H6E69867598634D378906AC30837E53F0"><enum>(2)</enum><header>Written
notice</header><text>The Administrator shall provide in writing detailed reason
why the delegation of authority was suspended or revoked.</text>
</paragraph></subsection><subsection id="H2275FE08B59A47BC94C9FEEE74633917"><enum>(e)</enum><header>Participation in
liquidation</header>
<paragraph id="HB62EDABD1F2245D2A0BE94F71269512F"><enum>(1)</enum><header>In
general</header><text>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.</text>
<subparagraph id="HE9295D6F2AD2433B84840ABD62DF71D4"><enum>(A)</enum><header>Contract
approval</header><text>The contract entered into by the certified development
company specified in paragraph (1) 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.</text>
</subparagraph><subparagraph id="H8ACF6E66C3334BF7BA69DB6A5EC8B506"><enum>(B)</enum><header>Notification of
rejection</header><text>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.</text>
</subparagraph><subparagraph id="H0023604DC93E419FBF0D8D831562BB48"><enum>(C)</enum><header>Resubmittal</header><text>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.</text>
</subparagraph><subparagraph id="H078274D01C764D7281F42F35685511AD"><enum>(D)</enum><header>Regulations</header><text>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
<short-title>Job Creation and Economic Development Through
CDC Modernization Act of 2009</short-title>.</text>
</subparagraph><subparagraph id="H3E4616153D0C43939FA338DA4B58DFB5"><enum>(E)</enum><header>Failure to
promulgate regulations</header><text>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 to valid for the
purposes of this subsection and subsection (f).</text>
</subparagraph><subparagraph id="HA15D9EE644734CC6AB912BE448AB703F"><enum>(F)</enum><header>Effect of
administrator’s promulgation of regulations</header><text>If the Administrator
promulgates regulations after the deadline specified in subparagraph (D), those
regulations shall not have any retroactive application with respect to
contracts that are described in subparagraph (E).</text>
</subparagraph></paragraph><paragraph id="H7046B882DA194F9592A186FA9E7B0F0E"><enum>(2)</enum><header>Commencement</header><text>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.</text>
</paragraph></subsection><subsection id="H26BF3A831BCD446AA10C9301B0C7BDD3"><enum>(f)</enum><header>Compensation and
Reimbursement</header>
<paragraph id="HDC1FD5C294C144C4B9993D082B5259FD"><enum>(1)</enum><header>Reimbursement of
expenses</header><text>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—</text>
<subparagraph id="H7050EE460039472EACB963908A56B4B6"><enum>(A)</enum><text>were—</text>
<clause id="H40CE7E331632463CB1802545AC1F9609"><enum>(i)</enum><text>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</text>
</clause><clause id="H82BBF64B4A854727AE7728BB352195E4"><enum>(ii)</enum><text>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</text>
</clause></subparagraph><subparagraph id="H4E743F08A0F54C6F916F845A9451CC3B"><enum>(B)</enum><text>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.</text>
</subparagraph></paragraph><paragraph id="H48976DF61BB44E4AB189B91410C22F38"><enum>(2)</enum><header>Alternative
reimbursement</header><text>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.</text>
</paragraph><paragraph id="HF22F43BF7E6C4597938AC051D7C6FF35"><enum>(3)</enum><header>Regulations</header><text>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.</text>
</paragraph><paragraph id="H32A4F0B1613C4F80B7508A5E6F7FB20F"><enum>(4)</enum><header>Compensation for
results</header>
<subparagraph id="H57B63FD1792348138DA9FB5E323F61DD"><enum>(A)</enum><header>Development</header><text>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.</text>
</subparagraph><subparagraph id="HA42172B70C354FC48A22548640DBEE00"><enum>(B)</enum><header>Criteria</header><text>The
schedule shall—</text>
<clause id="H89F688010DBE4C8796A1BCBD175ED64F"><enum>(i)</enum><text>be
based on a percentage of the net amount recovered, but shall not exceed a
maximum amount; and</text>
</clause><clause id="H517A1906E1F344B4B5416F07CC3D62E3"><enum>(ii)</enum><text>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.</text>
</clause></subparagraph><subparagraph id="HE724A21DC0024DAAB5864913D73ABD72"><enum>(C)</enum><header>Payment</header><text>The
Administrator shall transmit the compensation provided herein to the
development company from the proceeds of liquidated collateral, unless he
utilizes another source for funds, within 30 days from the date when the
liquidation case has been closed and documentation
received.</text>
</subparagraph></paragraph></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="HB8411F5543634E5F9495C768C62C953C"><enum>211.</enum><header>Reports and
regulations</header><text display-inline="no-display-inline">Title V of the
Small Business Investment Act of 1958 (15 U.S.C. 661 and following) is amended
by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="H5D9EFE50DA4C4E09A2FD52DC92642F7F" style="OLC">
<section id="H01A07A9D009E48F393ABC679A773634F"><enum>511.</enum><header>Reports</header>
<subsection id="HA1697B95CC414DCDBCB37CB082A36921"><enum>(a)</enum><header>Premier
certified development companies</header><text>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—</text>
<paragraph id="HCF6BC7948C6B46C1BF125613F7CA7C55"><enum>(1)</enum><text>the number of
premier certified development companies;</text>
</paragraph><paragraph id="H4297BC9D3974456D8F3A3E0A3378D6AD"><enum>(2)</enum><text>the debenture
volume of each premier certified development company;</text>
</paragraph><paragraph id="H948273288D0F4230A7D6E95A55F02C2D"><enum>(3)</enum><text>a comparison of
the loss rate for premier certified development companies to the loss rate for
accredited or certified development companies; and</text>
</paragraph><paragraph id="H1206DDAA93DF4FD0BA1CEBDE172143C2"><enum>(4)</enum><text>such other
information as the Administrator deems appropriate.</text>
</paragraph></subsection><subsection id="HE53CDF8C7D5D48A6BABB1230AB2507D6"><enum>(b)</enum><header>Reports on
Liquidation and Foreclosures</header>
<paragraph id="HA09848B10BBC4B44BCE42B12A2B8BB95"><enum>(1)</enum><header>In
general</header><text>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.</text>
</paragraph><paragraph id="H3F063DE685074BF89F2A9BA3389BD1E5"><enum>(2)</enum><header>Contents</header><text>Each
report submitted under paragraph (1) shall include the following
information:</text>
<subparagraph id="H046E565F6ECD4FDB819C17C71FA8D1FF"><enum>(A)</enum><text>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—</text>
<clause id="H9745E0FD03654494874F389DC5CA6B59"><enum>(i)</enum><text>the total cost of
the project financed with the loan;</text>
</clause><clause id="H4EB19AC24ABB4508BA7A9E935E289238"><enum>(ii)</enum><text>the total
original dollar amount guaranteed by the Administration;</text>
</clause><clause id="H432C51E8969945459014B2369241294A"><enum>(iii)</enum><text>the total dollar
amount of the loan at the time of liquidation, foreclosure, or mitigation of
loss;</text>
</clause><clause id="H5C2834F7009E4D5293B097C81883B87A"><enum>(iv)</enum><text>the total dollar
losses resulting from the liquidation, foreclosure, or mitigation of loss;
and</text>
</clause><clause id="H7C73A4FCE2BF4FA5BCAC759D66EB03B2"><enum>(v)</enum><text>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.</text>
</clause></subparagraph><subparagraph id="H4F39DF5C85C3443292E483BAFB97D982"><enum>(B)</enum><text>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).</text>
</subparagraph><subparagraph id="H321C7354F62E4601BA1D6B6A495A6C9A"><enum>(C)</enum><text>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).</text>
</subparagraph><subparagraph id="HCB5325E3AD634DCAA2B3E982FD944947"><enum>(D)</enum><text>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).</text>
</subparagraph><subparagraph id="H6DBC0FBBAF0640BAA38E7FA2CFA52A45"><enum>(E)</enum><text>A comparison
between—</text>
<clause id="H67F8841A80B24429A1275C38DAC0FC09"><enum>(i)</enum><text>the information
provided under subparagraph (D) with respect to the 12-month period preceding
the date on which the report is submitted; and</text>
</clause><clause id="H17E9B1273F184C37A01B2440A6AFC0BE"><enum>(ii)</enum><text>the same
information with respect to loans foreclosed and liquidated, or otherwise
treated, by the Administrator during the same period.</text>
</clause></subparagraph><subparagraph id="HD2ACCD74A2EB47B8B85A6F5C37B59B37"><enum>(F)</enum><text>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.</text>
</subparagraph></paragraph></subsection><subsection id="H9165438CE3664BBF99E5FD30CB103D9A"><enum>(c)</enum><header>Reports on
Combination Financing</header>
<paragraph id="H95D15532D71F4E0F8FCABEE871C753B9"><enum>(1)</enum><header>Reporting
requirement</header><text>Not later than 90 days after the date of enactment of
the <short-title>Job Creation and Economic Development
Through CDC Modernization Act of 2009</short-title>, 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—</text>
<subparagraph id="H29966CF9BE064ECF9029C8E7D0A30B45"><enum>(A)</enum><text>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</text>
</subparagraph><subparagraph id="HCDA591AB3ACC43C4BC2B79420DAAE73C"><enum>(B)</enum><text>describes the
total amount and general performance of the financing described in subparagraph
(A).</text>
</subparagraph></paragraph></subsection><subsection id="HCBE9E085033B45F7B0A0A907E98B2D7B"><enum>(d)</enum><header>Report on Other
Economic Development Activity</header><text display-inline="yes-display-inline">The Administrator shall compile and submit
to 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 Job Creation and Economic Development
Through CDC Modernization Act of 2009 was enacted, a report that describes the
economic and community development activities, other than loan making 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.</text>
</subsection></section><section id="HFB1429BD754540D4B1A3B093ADE24341"><enum>512.</enum><header>Promulgation of
regulations under this title</header>
<subsection id="HE3C41353A731484D9F2E0EAC9EF5B691"><enum>(a)</enum><header>Deadlines for
implementing regulations</header><text>Except as expressly provided elsewhere
in the <short-title>Job Creation and Economic Development
Through CDC Modernization Act of 2009</short-title>, 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.</text>
</subsection><subsection id="H51918567EF2141708F8491598B27A197"><enum>(b)</enum><header>Notice and
comment requirements in general</header><text display-inline="yes-display-inline">Except as otherwise provided elsewhere in
this title, the Administrator shall provide, after the date of enactment of the
<short-title>Job Creation and Economic Development Through
CDC Modernization Act of 2009</short-title>, notice of any proposed change to a
regulation implementing this title V (whether in existence on the date of
enactment of the <short-title>Job Creation and Economic
Development Through CDC Modernization Act of 2009</short-title> or subsequently
adopted), publish such notification in the Federal Register, and provide a
comment period of not less than 60
days.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</section><section id="H4AAEEB526F5647E5A37E62B39700B99B"><enum>212.</enum><header>Program
name</header><text display-inline="no-display-inline">Title V of the Small
Business Investment Act is amended by adding the following new section after
section 512:</text>
<quoted-block display-inline="no-display-inline" id="HA10FF3882C3F4E50901E8656C43C3106" style="OLC">
<section id="H6C3A1A55DB374A83B2C170D454E45DEE"><enum>513</enum><header>Program
name</header>
<subsection id="H2F048D50F91E4D4285CCFF594267BE61"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">The program created
by this title shall be referred to as the CDC Economic Development Loan
Program.</text>
</subsection><subsection id="H26CFFE10122449FD8EA0B69C831D9B31"><enum>(b)</enum><header>Modification of
materials used</header><text>Within 60 days after the date of enactment of the
Job Creation and Economic Development Through CDC Modernization Act of 2009,
the Administrator shall modify all documents and websites to conform to the
name change made by this
section.</text>
</subsection></section><after-quoted-block>.</after-quoted-block></quoted-block>
</section><enum>III</enum><header>Miscellaneous</header>
<section id="H1E44EC2B93094002AE2B6600FF32BE3C"><enum>301.</enum><header>Termination of
pilot program regulation</header>
<subsection id="H09C8CF35A6824039AE1C85C8FE4D1F1B"><enum>(a)</enum><header>Termination</header><text>Section
120.3 of title 13, Code of Federal Regulations, as in effect on January 1,
2009, shall cease to have any force and effect as of the date of enactment of
this Act, and the Administrator is prohibited from adopting a new regulation
that authorizes the Administrator to waive any regulation for the purpose of
conducting a pilot program unless such waiver is specifically granted by
statute.</text>
</subsection><subsection id="HC4ADEB3E531645FB95552AEE0379EEA4"><enum>(b)</enum><header>Effect on
Existing Program</header><text>Subsection (a) shall have no effect on any pilot
program currently conducted by the Administrator.</text>
</subsection><subsection id="H3EE92B4073D944AAA4DA53975B0CBB97"><enum>(c)</enum><header>Future pilot
programs</header><text>Any future pilot program conducted under the
Administrator’s own initiative or pursuant to statutory authority granted in
the Small Business Investment Act of 1958 or section 7 of the Small Business
Act must be implemented only after notice in the Federal Register and the
opportunity for comment.</text>
</subsection></section><section id="H9D6CD4FB88014444A7D35C3EFD8BAFB0"><enum>302.</enum><header>Report on
Standard Operating Procedures</header>
<subsection id="H86D847EF5840416EAC64D23B1ABBFA60"><enum>(a)</enum><header>Report</header><text>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 <quote>Standard Operating
Procedure</quote> 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.</text>
</subsection><subsection id="HF88D14AA279E4186816E9ADC6B8E95D5"><enum>(b)</enum><header>Inapplicability</header><text>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).</text>
</subsection><subsection id="HE64D5FDC7B4A4498881F7B8D1801169B"><enum>(c)</enum><header>Definition</header><text>For
purposes of this section, the term <quote>Standard Operating Procedure</quote>
has the meaning given that term in section 120.10 of title 13, Code of Federal
Regulations as that was in effect on January 1, 2009, and includes any
reference to the acronym <quote>SOP</quote>.</text>
</subsection></section><section id="H7934E92CC6F04DA39F6E4990E2F4CAA4"><enum>303.</enum><header>Alternative
size standard</header>
<subsection id="H3CF4980D90F94B6D9C41CF64F05447A8"><enum>(a)</enum><header>Review and
study</header>
<paragraph id="HE735D2786A4D46D3B998D1F3D4A97B75"><enum>(1)</enum><header>In
general</header><text>The Administrator of the United States Small Business
Administration shall study and review the optional size standard set forth in
section 121.301(b) of title 13, Code of Federal Regulations as was in effect on
January 1, 2009, for eligibility of a small business concern for financing
under title V of the Small Business Investment Act of 1958.</text>
</paragraph><paragraph id="H7DD7447C652B485F8F1957B539099E4F"><enum>(2)</enum><header>Contents</header><text>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.</text>
</paragraph><paragraph id="H999E9E344081422FB953D90293B100C7"><enum>(3)</enum><header>Submission to
Congress</header><text>The Administrator shall submit its study and conclusions
within 180 days after the date of enactment of the Job Creation and Economic
Development through CDC Modernization Act of 2009 to the Committee on Small
Business and Entrepreneurship of the Senate and the Committee on Small Business
of the House of Representatives.</text>
</paragraph></subsection><subsection id="H75FFE450C226479BB079E85235330061"><enum>(b)</enum><header>Issuance of
regulations</header><text display-inline="yes-display-inline">Any changes in
the optional size standard described in subsection (a)(1) shall be promulgated
within 180 days of the submission of the report to committes referred to in
paragraph (3) of subsection (a).</text>
</subsection><subsection id="H28F1C73462E64C3FBCD49BCF00785BA2"><enum>(c)</enum><header>Interim
alternative size standard</header><text>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.</text>
</subsection></section>