[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3854 Engrossed in House (EH)]

111th CONGRESS
  1st Session
                                H. R. 3854

_______________________________________________________________________

                                 AN ACT


 
 To amend the Small Business Act and the Small Business Investment Act 
  of 1958 to improve programs providing access to capital under such 
                     Acts, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Small Business 
Financing and Investment Act of 2009''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
              TITLE I--SMALL BUSINESS LENDING ENHANCEMENTS

Sec. 101. Small lender outreach program.
Sec. 102. Rural lending outreach program.
Sec. 103. Community Express Program made permanent.
Sec. 104. Increased veteran participation program made permanent.
Sec. 105. Leasing policy.
Sec. 106. National lender training program.
Sec. 107. Applications for repurchase of loans.
Sec. 108. Alternative size standard.
Sec. 109. Pilot program authority.
Sec. 110. Loans to cooperatives.
Sec. 111. Capital backstop program.
Sec. 112. Loans to finance goodwill.
Sec. 113. Appellate process and ombudsman.
Sec. 114. Extension of recovery and relief loan benefits.
Sec. 115. Reduced documentation for business stabilization loans.
Sec. 116. Expanded eligibility for business stabilization loans.
Sec. 117. Increased amount of business stabilization loans.
Sec. 118. Extension of business stabilization loans.
Sec. 119. Study and report on business stabilization loans.
Sec. 120. Delayed repayment for small business concerns in areas with 
                            high unemployment.
Sec. 121. SBA secondary market lending authority made permanent.
Sec. 122. SBA secondary market lending authority expanded.
Sec. 123. Increased loan limits.
Sec. 124. Real estate appraisals.
Sec. 125. Additional support for Express Loan Program.
Sec. 126. Loans used to purchase unoccupied manufacturing centers or 
                            equipment.
Sec. 127. 100 percent guarantee for small business concerns owned and 
                            controlled by veterans.
Sec. 128. Deferred repayment for certain small business concerns.
Sec. 129. Authorization of appropriations.
            TITLE II--CDC ECONOMIC DEVELOPMENT LOAN PROGRAM

                     Subtitle A--General Provisions

Sec. 201. Program levels.
Sec. 202. Definitions.
              Subtitle B--Certified Development Companies

Sec. 211. Certified development companies.
Sec. 212. Certified development company; operational requirements.
Sec. 213. Accredited lenders program.
Sec. 214. Premier certified lender program.
Sec. 215. Multi-State operations.
Sec. 216. Guaranty of debentures.
Sec. 217. Economic development through debentures.
Sec. 218. Project funding requirements.
Sec. 219. Private debenture sales and pooling of debentures.
Sec. 220. Foreclosure and liquidation of loans.
Sec. 221. Reports and regulations.
Sec. 222. Program name.
                       Subtitle C--Miscellaneous

Sec. 231. Report on standard operating procedures.
Sec. 232. Alternative size standard.
                   TITLE III--MICROLENDING EXPANSION

Sec. 301. Microloan credit building initiative.
Sec. 302. Flexible credit terms.
Sec. 303. Increased program participation.
Sec. 304. Increased limit on intermediary borrowing.
Sec. 305. Expanded borrower education assistance.
Sec. 306. Young Entrepreneurs program.
Sec. 307. Interest rates and loan size.
Sec. 308. Reporting requirement.
Sec. 309. Surplus interest rate subsidy for businesses.
Sec. 310. Authorization of appropriations.
       TITLE IV--SMALL BUSINESS INVESTMENT COMPANY MODERNIZATION

Sec. 401. Increased investment from States.
Sec. 402. Expedited licensing for experienced applicants.
Sec. 403. Revised leverage limitations for successful SBICs.
Sec. 404. Consistency for cost control.
Sec. 405. Investment in veteran-owned small businesses.
Sec. 406. Tangible net worth.
Sec. 407. Development of agency record.
Sec. 408. Program levels.
 TITLE V--INVESTMENT IN SMALL MANUFACTURERS AND RENEWABLE ENERGY SMALL 
                               BUSINESSES

        Subtitle A--Enhanced New Markets Venture Capital Program

Sec. 501. Expansion of New Markets Venture Capital Program.
Sec. 502. Improved nationwide distribution.
Sec. 503. Increased investment in small business concerns engaged 
                            primarily in manufacturing.
Sec. 504. Expanded uses for operational assistance in manufacturing.
Sec. 505. Updating definition of low-income geographic area.
Sec. 506. Expanding operational assistance to conditionally approved 
                            companies.
Sec. 507. Limitation on time for final approval.
Sec. 508. Streamlined application for New Markets Venture Capital 
                            Program.
Sec. 509. Elimination of matching requirement.
Sec. 510. Simplified formula for operational assistance grants.
Sec. 511. Financing with respect to veterans.
Sec. 512. Authorization of appropriations and enhanced allocation for 
                            small manufacturing.
   Subtitle B--Expanded Investment in Small Business Renewable Energy

Sec. 521. Expanded investment in renewable energy.
Sec. 522. Renewable Energy Capital Investment Program made permanent.
Sec. 523. Expanded eligibility for small businesses.
Sec. 524. Expanded uses for operational assistance in manufacturing and 
                            small businesses.
Sec. 525. Expansion of Renewable Energy Capital Investment Program.
Sec. 526. Simplified fee structure to expedite implementation.
Sec. 527. Increased operational assistance grants.
Sec. 528. Authorizations of appropriations.
   TITLE VI--SMALL BUSINESS HEALTH INFORMATION TECHNOLOGY FINANCING 
                                PROGRAM

Sec. 601. Small business health information technology financing 
                            program.
        TITLE VII--SMALL BUSINESS EARLY-STAGE INVESTMENT PROGRAM

Sec. 701. Small business early-stage investment program.
Sec. 702. Prohibitions on earmarks.
                TITLE VIII--SBA DISASTER PROGRAM REFORM

Sec. 801. Revised collateral requirements.
Sec. 802. Increased limits.
Sec. 803. Revised repayment terms.
Sec. 804. Revised disbursement process.
Sec. 805. Grant program.
Sec. 806. Regional disaster working groups.
Sec. 807. Outreach grants for loan applicant assistance.
Sec. 808. Homeowners impacted by toxic drywall.
Sec. 809. Authorization of appropriations.
                         TITLE IX--REGULATIONS

Sec. 901. Regulations.
            TITLE X--TEMPORARY EMPLOYEE SERVICES FRANCHISES

Sec. 1001. Temporary employee services franchises.
               TITLE XI--STUDY ON PRIVATE SECTOR LENDING

Sec. 1101. Study on private sector lending.
             TITLE XII--STUDY ON INCREASES IN CERTAIN CAPS

Sec. 1201. Study on increases in certain caps.
                       TITLE XIII--RURAL OUTREACH

Sec. 1301. Rural outreach.
            TITLE XIV--STUDY RELATING TO MEDICAL TECHNOLOGY

Sec. 1401. Study relating to medical technology.
           TITLE XV--STUDY ON ADDITIONAL CREDIT RISK FACTORS

Sec. 1501. Study on additional credit risk factors.

              TITLE I--SMALL BUSINESS LENDING ENHANCEMENTS

SEC. 101. SMALL LENDER OUTREACH PROGRAM.

    Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is 
amended by adding at the end the following:
            ``(34) Small lender outreach program.--The Administrator 
        shall establish and carry out a program to provide support to 
        regional, district, and branch offices of the Administration to 
        assist small lenders, who do not participate in the Preferred 
        Lenders Program, to participate in the programs under this 
        subsection.''.

SEC. 102. RURAL LENDING OUTREACH PROGRAM.

    Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as 
amended by this Act, is further amended by adding at the end the 
following:
            ``(35) Rural lending outreach program.--
                    ``(A) In general.--The Administrator shall 
                establish and carry out a rural lending outreach 
                program (hereinafter referred to in this paragraph as 
                the `program') to provide loans under this subsection 
                in accordance with this paragraph.
                    ``(B) Maximum participation.--A loan under the 
                program shall include the maximum participation levels 
                by the Administrator permitted for loans made under 
                this subsection.
                    ``(C) Maximum loan amount.--The maximum amount of a 
                loan under the program shall be $250,000.
                    ``(D) Use of rural lenders.--The program shall be 
                carried out through lenders located in a rural area (as 
                such term is defined under subsection (m)(11)(C)) or, 
                if a small business concern located in a rural area 
                does not have a lender located within 30 miles of the 
                principal place of business of such concern, through 
                any lender chosen by such concern that provides loans 
                under this subsection.
                    ``(E) Time for approval.--The Administrator shall 
                approve or disapprove a loan under the program within 
                36 hours.
                    ``(F) Documentation.--The program shall use 
                abbreviated application and documentation requirements.
                    ``(G) Credit standards.--Minimum credit standards, 
                as the Administrator considers necessary to limit the 
                rate of default on loans made under the program, shall 
                apply.''.

SEC. 103. COMMUNITY EXPRESS PROGRAM MADE PERMANENT.

    Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as 
amended by this Act, is further amended by adding at the end the 
following:
            ``(36) Community express program.--
                    ``(A) In general.--The Administrator shall carry 
                out a Community Express Program to provide loans under 
                this subsection in accordance with this paragraph.
                    ``(B) Requirements.--For a loan made under the 
                Community Express Program, the following shall apply:
                            ``(i) The loan shall be in an amount not 
                        exceeding $250,000.
                            ``(ii) The loan shall be made to a small 
                        business concern the majority ownership 
                        interest of which is directly held by 
                        individuals the Administrator determines are, 
                        without regard to the geographic location of 
                        such individuals, women, members of qualified 
                        Indian tribes, socially or economically 
                        disadvantaged individuals, veterans, or members 
                        of the reserve components of the Armed Forces.
                            ``(iii) The loan shall comply with the 
                        collateral policy of the Administration.
                            ``(iv) The loan shall include terms 
                        requiring the lender to provide, at the expense 
                        of the lender, technical assistance to the 
                        borrower through the lender or a third-party 
                        provider.
                            ``(v) The Administrator shall approve or 
                        disapprove the loan within 36 hours.''.

SEC. 104. INCREASED VETERAN PARTICIPATION PROGRAM MADE PERMANENT.

    Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as 
amended by this Act, is further amended--
            (1) by redesignating the second paragraph (32), as added by 
        section 208 of the Military Reservist and Veteran Small 
        Business Reauthorization and Opportunity Act of 2008 (Public 
        Law 110-186; 122 Stat. 631), as paragraph (33); and
            (2) in paragraph (33), as so redesignated by paragraph (1) 
        of this section--
                    (A) by striking ``pilot program'' each place it 
                appears and inserting ``program'';
                    (B) by striking subparagraphs (C) and (F); and
                    (C) by redesignating subparagraphs (D) and (E) as 
                subparagraphs (C) and (D), respectively.

SEC. 105. LEASING POLICY.

    Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as 
amended by this Act, is further amended by striking paragraph (28) and 
inserting the following:
            ``(28) Leasing.--If a loan under this subsection is used to 
        acquire or construct a facility, the assisted small business 
        concern--
                    ``(A) shall permanently occupy and use not less 
                than 50 percent of the space in such facility; and
                    ``(B) may, on a temporary or permanent basis, lease 
                to others not more than 50 percent of the space in such 
                facility.''.

SEC. 106. NATIONAL LENDER TRAINING PROGRAM.

    (a) In General.--Section 7(a) of the Small Business Act (15 U.S.C. 
636(a)), as amended by this Act, is further amended by adding at the 
end the following:
            ``(37) National lender training program.--
                    ``(A) In general.--The Administrator shall 
                establish and carry out, through the regional offices 
                of the Administration, a lender training program for 
                new and existing lenders under this subsection with 
                respect to the lending systems, policies, and 
                procedures of the Administration.
                    ``(B) Fees.--The Administrator shall charge a fee 
                for the program established under subparagraph (A) to 
                reduce the cost of such program to zero.
                    ``(C) Limitation.--The program established under 
                subparagraph (A) may not be carried out by contract 
                with a nongovernmental entity.''.
    (b) Participation.--An entity may not be permitted to participate 
in any program under the Small Business Act (15 U.S.C. 631 et seq.) or 
the Small Business Investment Act of 1958 (15 U.S.C. 661 et seq.) that 
is established or amended under this Act, as a lending or investment 
entity or as an agent of the Small Business Administration, unless such 
entity satisfies at least one of the following:
            (1) The entity has as the primary mission of the entity the 
        financing or development of small business concerns.
            (2) The entity is primarily engaged in the business of 
        banking, investing, or entrepreneurial development and does not 
        engage in activities which are not incidental to the business 
        of banking, investing, or entrepreneurial development.

SEC. 107. APPLICATIONS FOR REPURCHASE OF LOANS.

    Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as 
amended by this Act, is further amended by adding at the end the 
following:
            ``(38) Applications for repurchase of loans.--
                    ``(A) In general.--Not later than 45 days after the 
                date of the receipt of a claim from a lender for proper 
                payment of the guaranteed portion of a loan under this 
                subsection due to default, the Administrator shall make 
                a final determination with respect to the approval or 
                denial of such claim.
                    ``(B) Late determinations.--If the Administrator 
                does not make a final determination under subparagraph 
                (A) in the time period specified in such subparagraph, 
                the claim shall be approved and paid promptly.
                    ``(C) If the lender demonstrates, with respect to a 
                claim for payment described in subparagraph (A), that 
                it followed the applicable requirements of the National 
                Lender Training Program as established under paragraph 
                (37) of this section, the Administrator shall pay the 
                claim unless the Administrator has clear and convincing 
                evidence demonstrating that the lender failed to comply 
                with regulatory requirements established by the 
                Administrator.''.

SEC. 108. ALTERNATIVE SIZE STANDARD.

    (a) In General.--Section 3(a) of the Small Business Act (15 U.S.C. 
632(a)) is amended by adding at the end the following:
            ``(5) In addition to any other size standard under this 
        subsection, the Administrator shall establish and permit a 
        lender making a loan under section 7(a) to use an alternative 
        size standard. The alternative size standard shall be based on 
        factors including the maximum tangible net worth and average 
        net income of a business concern.''.
    (b) Applicability.--Until the Administrator establishes under 
section 3(a)(5) of the Small Business Act, as added by subsection (a) 
of this section, an alternative size standard for use by a lender 
making a loan under section 7(a) of such Act, the alternative size 
standard in section 121.301(b) of title 13, Code of Federal 
Regulations, shall apply in such a case.

SEC. 109. PILOT PROGRAM AUTHORITY.

    Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as 
amended by this Act, is further amended by striking paragraph (25) and 
inserting the following:
            ``(25) Limitation on conducting pilot projects.--
                    ``(A) Limitation on number.--Not more than 10 
                percent of the total number of loans guaranteed in any 
                fiscal year under this subsection may be awarded as 
                part of a pilot program.
                    ``(B) Dollar limitations.--
                            ``(i) In general.--With respect to any 
                        pilot program under this subsection established 
                        on or after the date of the enactment of the 
                        Small Business Financing and Investment Act of 
                        2009, no loan shall be made under such program 
                        if such loan would result in the total amount 
                        of loans made during a fiscal year under all 
                        such programs to be in excess of 5 percent of 
                        the total amount of loans guaranteed in such 
                        fiscal year under this subsection.
                            ``(ii) Certain pre-existing programs.--With 
                        respect to any pilot program under this 
                        subsection established before the date of the 
                        enactment of the Small Business Financing and 
                        Investment Act of 2009, no loan shall be made 
                        under such program if such loan would result in 
                        the total amount of loans made during a fiscal 
                        year under all such programs to be in excess of 
                        10 percent of the total amount of loans 
                        guaranteed in such fiscal year under this 
                        subsection.
                    ``(C) Expiration.--
                            ``(i) In general.--Except as provided in 
                        clause (iii), the duration of any pilot program 
                        under this subsection may not exceed 3 years.
                            ``(ii) Designation as new program.--For 
                        purposes of this subparagraph, a pilot program 
                        shall not be treated as a new pilot program 
                        solely on the basis of a modification or change 
                        in the pilot program, including the change of 
                        its name.
                            ``(iii) Existing programs.--With respect to 
                        any pilot program in existence on the date of 
                        the enactment of the Small Business Financing 
                        and Investment Act of 2009, such program may 
                        continue in effect for a period not exceeding 3 
                        years after such date without regard to the 
                        duration of such program before such date.
                    ``(D) Regulations.--
                            ``(i) In general.--With respect to each 
                        pilot program under this subsection, including 
                        each pilot program in existence on the date of 
                        the enactment of the Small Business Financing 
                        and Investment Act of 2009, the Administrator 
                        shall--
                                    ``(I) issue regulations for such 
                                program after providing notice in the 
                                Federal Register and an opportunity for 
                                comment; and
                                    ``(II) ensure that such regulations 
                                are published in the Code of Federal 
                                Regulations.
                            ``(ii) Pilot programs established after 
                        date of enactment.--With respect to any pilot 
                        program established after the date of the 
                        enactment of the Small Business Financing and 
                        Investment Act of 2009, such program shall not 
                        take effect until the requirements under this 
                        subparagraph are satisfied.
                    ``(E) Repeal of authority to waive certain rules.--
                            ``(i) In general.--Notwithstanding section 
                        120.3 of title 13, Code of Federal Regulations, 
                        the Administrator may not from time to time 
                        suspend, modify, or waive rules for a limited 
                        period of time to test new programs or ideas 
                        with respect to this subsection, unless such 
                        suspension, modification, or waiver is 
                        explicitly authorized by Act of Congress.
                            ``(ii) Existing pilot programs.--Nothing 
                        under clause (i) may be construed to affect a 
                        pilot program in existence on the date of the 
                        enactment of the Small Business Financing and 
                        Investment Act of 2009.
                    ``(F) Pilot program.--For purposes of this 
                paragraph, the term `pilot program' means any lending 
                program initiative, project, innovation, or other 
                activity not specifically authorized by Act of 
                Congress.''.

SEC. 110. LOANS TO COOPERATIVES.

    Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as 
amended by this Act, is further amended by adding at the end the 
following:
            ``(39) Cooperatives.--The Administration may provide loans 
        under this subsection to any cooperative that--
                    ``(A) is not organized as a tax-exempt entity;
                    ``(B) is engaged in a legal business activity;
                    ``(C) obtains financial benefits for the 
                cooperative and for the members of such cooperative; 
                and
                    ``(D) is eligible under applicable size standards 
                of the Administration, including that any business 
                entity that is a member of such cooperative is eligible 
                under applicable size standards of the 
                Administration.''.

SEC. 111. CAPITAL BACKSTOP PROGRAM.

    Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as 
amended by this Act, is further amended by adding at the end the 
following:
            ``(40) Capital backstop program.--
                    ``(A) In general.--The Administrator shall 
                establish a process under which a small business 
                concern may submit an application to the Administrator 
                for the purpose of securing a loan under this 
                subsection. With respect to such application, the 
                Administrator shall collect all information necessary 
                to determine the creditworthiness and repayment ability 
                of an applicant and shall determine if such application 
                meets the eligibility and credit standards that a 
                lender would be required to apply to approve a loan 
                under this subsection.
                    ``(B) Participation of lenders.--
                            ``(i) In general.--The Administrator shall 
                        establish a process under which the 
                        Administrator makes available to lenders each 
                        loan application submitted and determined to 
                        meet basic eligibility and credit standards 
                        under subparagraph (A) for the purpose of such 
                        lenders originating, underwriting, closing, and 
                        servicing the loan for which the applicant 
                        applied.
                            ``(ii) Eligibility.--Lenders are eligible 
                        to receive a loan application described in 
                        clause (i) if they participate in the programs 
                        established under this subsection.
                            ``(iii) Local lenders.--The Administrator 
                        shall first make available a loan application 
                        described in clause (i) to lenders within 100 
                        miles of the principal office of the loan 
                        applicant.
                            ``(iv) Preferred lenders.--If a lender 
                        described in clause (iii) does not agree to 
                        originate, underwrite, close, and service the 
                        loan applied for within 5 business days of 
                        receiving a loan application described in 
                        clause (i), the Administrator shall 
                        subsequently make available such loan 
                        application to lenders in the Preferred Lenders 
                        Program under paragraph (2)(C)(ii) of this 
                        subsection.
                            ``(v) Authority of administration to 
                        lend.--If a lender described in clauses (iii) 
                        or (iv) does not agree to originate, 
                        underwrite, close, and service the loan applied 
                        for within 10 business days of receiving a loan 
                        application described in clause (i), the 
                        Administrator shall originate, underwrite, 
                        close, and service such loan.
                    ``(C) Asset sales.--The Administrator shall offer 
                to sell loans made by the Administrator under this 
                paragraph. Such sales shall be made through the semi-
                annual public solicitation (in the Federal Register and 
                in other media) of offers to purchase. The 
                Administrator may contract with vendors for due 
                diligence, asset valuation, and other services related 
                to such sales. The Administrator may not sell any loan 
                under this subparagraph for less than 90 percent of the 
                net present value of the loan, as determined and 
                certified by a qualified third party.
                    ``(D) Loans not sold.--The Administrator shall 
                maintain and service loans made by the Administrator 
                under this paragraph that are not sold through the 
                asset sales under this paragraph.
                    ``(E) Effective dates.--This paragraph shall have 
                effect on each date during the period beginning on the 
                date of enactment of this paragraph and ending on 
                September 30, 2011, and on any other date after such 
                period if--
                            ``(i) such date occurs during a period 
                        that--
                                    ``(I) begins on the date the Bureau 
                                of Economic Analysis, or any successor 
                                organization, makes a determination 
                                that the gross domestic product of the 
                                United States has decreased for three 
                                consecutive quarters; and
                                    ``(II) ends on the date the Bureau 
                                of Economic Analysis, or any successor 
                                organization, makes a determination 
                                that the gross domestic product of the 
                                United States has increased for two 
                                consecutive quarters; and
                            ``(ii) the number of loans provided under 
                        this subsection prior to such date in the 
                        fiscal year including such date is at least 30 
                        percent less than the number of such loans 
                        provided prior to the same point in the 
                        previous fiscal year.
                    ``(F) Implementation.--The Administrator shall 
                establish a group of at least 250 individuals available 
                to carry out activities under this paragraph on any 
                date on which this paragraph has effect under 
                subparagraph (E). The Administrator shall provide to 
                such group the training necessary to carry out 
                activities under this paragraph. The Administrator 
                shall ensure that each individual in such group with 
                loan application evaluation and underwriting 
                responsibilities has at least 2 years experience with 
                respect to such responsibilities.
                    ``(G) Application of other law.--Nothing in this 
                paragraph shall be construed to exempt any activity of 
                the Administrator under this paragraph from the Federal 
                Credit Reform Act of 1990 (2 U.S.C. 661 et seq.).
                    ``(H) Authorization of appropriations.--
                            ``(i) Program levels.--The Administrator is 
                        authorized to make loans under this paragraph 
                        in an amount that is equal to half the amount 
                        authorized for loans under this subsection 
                        other than loans under this paragraph.
                            ``(ii) Authorization of appropriations.--In 
                        addition to amounts made available to carry out 
                        this subsection, there are authorized to be 
                        appropriated such sums as may be necessary to 
                        carry out this paragraph.''.

SEC. 112. LOANS TO FINANCE GOODWILL.

    Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as 
amended by this Act, is further amended by adding at the end the 
following:
            ``(41) Goodwill.--The Administrator may not apply an 
        application, processing, or approval standard to a loan for the 
        purpose of financing goodwill under this subsection, unless 
        such standard applies to all loans under this subsection.''.

SEC. 113. APPELLATE PROCESS AND OMBUDSMAN.

    The Small Business Act (15 U.S.C. 631 et seq.) is amended--
            (1) by redesignating section 44 as section 45; and
            (2) by inserting after section 43 the following:

``SEC. 44. APPELLATE PROCESS AND OMBUDSMAN.

    ``(a) Appellate Process.--
            ``(1) In general.--Not later than 270 days after the date 
        of the enactment of the Small Business Financing and Investment 
        Act of 2009, the Administrator shall establish an independent 
        appellate process within the Administration. The process shall 
        be available to review material determinations made by the 
        Administration that affect a lender or investment company that 
        participates or is applying to participate in a program 
        administered by the Administration.
            ``(2) Review process.--In establishing the independent 
        appellate process under paragraph (1), the Administrator shall 
        ensure that--
                    ``(A) any appeal of a material determination by the 
                Administration is heard and resulting recommendations 
                are provided expeditiously; and
                    ``(B) appropriate safeguards exist for protecting 
                the appellant from retaliation by Administration 
                employees.
            ``(3) Comment period.--Not later than 180 days after the 
        date of the enactment of the Small Business Financing and 
        Investment Act of 2009, the Administrator shall provide an 
        opportunity for notice and comment on proposed guidelines for 
        the establishment of an independent appellate process under 
        this section.
    ``(b) Agency Ombudsman.--
            ``(1) Establishment.--Not later than 180 days after the 
        date of the enactment of the Small Business Financing and 
        Investment Act of 2009, the Administrator shall appoint an 
        ombudsman.
            ``(2) Duties.--The ombudsman appointed in accordance with 
        paragraph (1) shall--
                    ``(A) act as a liaison between the Administration 
                and any lender or investment company that participates 
                or is applying to participate in a program administered 
                by the Administration with respect to a problem such 
                entity may have in dealing with the Administration 
                resulting from a material determination made by the 
                Administration; and
                    ``(B) ensure that safeguards exist to encourage 
                complainants to come forward and preserve 
                confidentiality.
    ``(c) Other Authority.--An individual carrying out the independent 
appellate process established under subsection (a) or the position of 
ombudsman established under subsection (b) is authorized to--
            ``(1) examine records and documents relating to a matter 
        under review pursuant to such subsections; and
            ``(2) initiate the review of a matter under such 
        subsections if such individual believes that Administration 
        procedures have not been followed as intended with respect to 
        such matter, without regard to whether an appeal or complaint 
        has been made.
    ``(d) Limitations.--
            ``(1) In general.--An individual carrying out the 
        independent appellate process established under subsection (a) 
        or the position of ombudsman established under subsection (b) 
        may not, as a result of the authority provided under this 
        section--
                    ``(A) make, change, or set aside a law, policy, or 
                administrative decision;
                    ``(B) make binding decisions or determine rights;
                    ``(C) directly compel an entity to implement the 
                recommendations of such individual; or
                    ``(D) accept jurisdiction over an issue that is 
                pending in a legal forum.
            ``(2) Rule of construction.--Activities carried out under 
        this section may not be construed--
                    ``(A) as a formal investigation, formal hearing, or 
                binding decision;
                    ``(B) as limiting any remedy or right of appeal;
                    ``(C) as affecting any procedure concerning 
                grievances, appeals, or administrative matters under 
                law; or
                    ``(D) as a substitute for an administrative or 
                judicial proceeding.
    ``(e) Report.--Not later than one year after the date of the 
enactment of the Small Business Financing and Investment Act of 2009 
and annually thereafter, the Administrator shall submit to the 
Committee on Small Business of the House of Representatives and the 
Committee on Small Business and Entrepreneurship of the Senate a report 
describing and providing the status of appeals made under subsection 
(a) and complaints made under subsection (b).
    ``(f) Definitions.--In this section, the following apply:
            ``(1) Material determination.--The term `material 
        determination' includes determinations relating to--
                    ``(A) applications for payment relating to a loan 
                guarantee; and
                    ``(B) the ability of an entity to participate in an 
                Administration loan or investing program.
            ``(2) Independent appellate process.--The term `independent 
        appellate process' means a review by an Administration official 
        who does not directly or indirectly report to the 
        Administration official who made the material determination 
        under review.''.

SEC. 114. EXTENSION OF RECOVERY AND RELIEF LOAN BENEFITS.

    (a) Fee Reductions.--Section 501 of title V of division A of the 
American Recovery and Reinvestment Act of 2009 (Public Law 111-5) is 
amended--
            (1) in subsection (a) by striking ``September 30, 2010'' 
        and inserting ``September 30, 2011''; and
            (2) in subsection (c) by repealing paragraph (2).
    (b) Economic Stimulus Lending Program for Small Businesses.--
Section 502(f) of title V of division A of the American Recovery and 
Reinvestment Act of 2009 (Public Law 111-5) is amended by striking 
``the date 12 months after the date of enactment of this Act'' and 
inserting ``September 30, 2011''.

SEC. 115. REDUCED DOCUMENTATION FOR BUSINESS STABILIZATION LOANS.

    Section 506(a) of title V of division A of the American Recovery 
and Reinvestment Act of 2009 (Public Law 111-5) is amended by adding at 
the end the following: ``The Administrator shall give priority under 
such program to small business concerns in a city with an unemployment 
rate that is at least 125 percent of the unemployment rate of the State 
that includes such city. In carrying out such program, the 
Administrator shall establish and utilize a one-page application for 
loans under this section and shall authorize lenders to utilize the 
same documentation and procedural requirements for loans under this 
section as such lenders utilize for other loans of a similar size and 
type.''.

SEC. 116. EXPANDED ELIGIBILITY FOR BUSINESS STABILIZATION LOANS.

    Section 506(c) of title V of division A of the American Recovery 
and Reinvestment Act of 2009 (Public Law 111-5) is amended by striking 
``but shall not include'' and all that follows through ``enactment of 
this Act''.

SEC. 117. INCREASED AMOUNT OF BUSINESS STABILIZATION LOANS.

    Section 506(d) of title V of division A of the American Recovery 
and Reinvestment Act of 2009 (Public Law 111-5) is amended by striking 
``$35,000'' and inserting ``$50,000 (except as provided under 
subsection (l))''.

SEC. 118. EXTENSION OF BUSINESS STABILIZATION LOANS.

    Section 506(j) of title V of division A of the American Recovery 
and Reinvestment Act of 2009 (Public Law 111-5) is amended by striking 
``September 30, 2010'' and inserting ``September 30, 2011''.

SEC. 119. STUDY AND REPORT ON BUSINESS STABILIZATION LOANS.

    (a) Study.--The Administrator of the Small Business Administration 
shall conduct a study on the business stabilization program established 
under section 506 of title V of division A of the American Recovery and 
Reinvestment Act of 2009 (Public Law 111-5), including--
            (1) how the program has been implemented;
            (2) the amount of time involved in processing applications;
            (3) the volume of applications received and the effect on 
        application processing;
            (4) impediments to participation in the program by small 
        business concerns and lenders;
            (5) courses of action that might expedite action by the 
        Administrator on applications;
            (6) courses of action that might expand participation by 
        such concerns and lenders; and
            (7) a cost benefit analysis with regard to changes to the 
        program, including--
                    (A) increases in loan limits;
                    (B) expanding eligibility requirements;
                    (C) changes to interest rates to lenders; and
                    (D) any other change the Administrator determines 
                appropriate.
    (b) Report.--Not later than 90 days after the date of enactment of 
this Act, the Administrator of the Small Business Administration shall 
submit to Congress a report that includes--
            (1) the results of the study under subsection (a); and
            (2) recommendations on how to change the program--
                    (A) to expand participation by small business 
                concerns and lenders; and
                    (B) to decrease the amount of time involved in 
                processing applications.
    (c) Outreach.--In conducting the study under subsection (a) and 
preparing the report under subsection (b), the Administrator of the 
Small Business Administration shall meet with and solicit the views of 
relevant stakeholders, including lenders.

SEC. 120. DELAYED REPAYMENT FOR SMALL BUSINESS CONCERNS IN AREAS WITH 
              HIGH UNEMPLOYMENT.

    Section 506 of title V of division A of the American Recovery and 
Reinvestment Act of 2009 (Public Law 111-5) is amended by adding at the 
end the following:
    ``(l) Small Business Concerns in Areas With High Unemployment.--
            ``(1) Increase loan limits.--Notwithstanding subsection 
        (d), a loan made under this section to a small business concern 
        in what the Administrator determines to be an area with high 
        unemployment may not exceed $75,000.
            ``(2) Delayed repayment.--Notwithstanding subsection (g), 
        repayment for a loan made under this section after the date of 
        the enactment of the Small Business Financing and Investment 
        Act of 2009 to a small business concern described in paragraph 
        (1) shall not begin until 18 months after the final 
        disbursement of funds is made.''.

SEC. 121. SBA SECONDARY MARKET LENDING AUTHORITY MADE PERMANENT.

    Section 509 of title V of division A of the American Recovery and 
Reinvestment Act of 2009 (Public Law 111-5) is amended--
            (1) by striking subsection (e); and
            (2) by redesignating subsections (f), (h), and (i) as 
        subsections (e), (f), and (g), respectively.

SEC. 122. SBA SECONDARY MARKET LENDING AUTHORITY EXPANDED.

    Section 509 of title V of division A of the American Recovery and 
Reinvestment Act of 2009 (Public Law 111-5), as amended by this Act, is 
further amended--
            (1) in subsection (c)(1) by adding at the end the 
        following: ``Such process shall include the designation of each 
        lender participating in a program under section 7(a) of the 
        Small Business Act as a Systematically Important Secondary 
        Market Broker-Dealer for purposes of this section.''; and
            (2) in subsection (e), as so redesignated by section 120 of 
        this Act, by adding at the end the following: ``To the extent 
        that the cost of an elimination or reduction of fees is offset 
        by appropriations, the Administrator shall in lieu of the fee 
        otherwise applicable under this subsection collect no fee or 
        reduce fees to the maximum extent possible.''.

SEC. 123. INCREASED LOAN LIMITS.

    Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as 
amended by this Act, is further amended--
            (1) in paragraph (2)(A)--
                    (A) in clause (i)--
                            (i) by inserting after ``$150,000'' the 
                        following: ``and is less than or equal to 
                        $2,000,000''; and
                            (ii) by striking ``or'' at the end;
                    (B) in clause (ii) by striking the period at the 
                end and inserting ``; or''; and
                    (C) by adding at the end the following:
                            ``(iii) 50 percent of the balance of the 
                        financing outstanding at the time of 
                        disbursement of the loan, if such balance 
                        exceeds $2,000,000.''; and
            (2) in paragraph (3)(A) by striking ``$2,000,000'' and 
        inserting ``$3,000,000''.

SEC. 124. REAL ESTATE APPRAISALS.

    Section 7(a)(29) of the Small Business Act (15 U.S.C. 636(a)(29)) 
is amended--
            (1) in the matter preceding subparagraph (A) by striking 
        ``a State licensed or certified appraiser'' and inserting ``an 
        appraiser licensed or certified by the State in which such 
        property is located'';
            (2) in subparagraph (A) by striking ``$250,000'' and 
        inserting ``$400,000''; and
            (3) in subparagraph (B) by striking ``$250,000'' and 
        inserting ``$400,000''.

SEC. 125. ADDITIONAL SUPPORT FOR EXPRESS LOAN PROGRAM.

    Section 7(a)(18)(B) of the Small Business Act (15 U.S.C. 
636(a)(18)(B)) is amended by adding after ``under subparagraph (A)(i)'' 
the following: ``, except that a lender making a loan under paragraph 
(31) may not retain any percentage of a fee collected under such 
subparagraph''.

SEC. 126. LOANS USED TO PURCHASE UNOCCUPIED MANUFACTURING CENTERS OR 
              EQUIPMENT.

    Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as 
amended by this Act, is further amended by adding at the end the 
following:
            ``(42) Loans used to purchase unoccupied manufacturing 
        centers or equipment.--The Administration may provide loans 
        under this subsection for the purchase of what the 
        Administrator determines to be unoccupied manufacturing centers 
        or equipment.''.

SEC. 127. 100 PERCENT GUARANTEE FOR SMALL BUSINESS CONCERNS OWNED AND 
              CONTROLLED BY VETERANS.

    Section 7(a) of the Small Business Act (15 U.S.C. 636(a)), as 
amended by this Act, is further amended--
            (1) in paragraph (3)(A) by striking the semicolon at the 
        end and inserting the following: ``or in paragraph (42);''; and
            (2) by adding at the end the following:
            ``(42) 100 percent guarantee for small business concerns 
        owned and controlled by veterans.--Notwithstanding paragraph 
        (2), in an agreement to participate in a loan on a deferred 
        basis under this subsection with respect to a small business 
        concern owned and controlled by veterans, participation by the 
        Administrator may be equal to 100 percent. The total amount 
        outstanding and committed (by participation or otherwise) with 
        respect to a loan to such a small business concern from the 
        business loan and investment fund established by this Act may 
        not exceed $3,000,000.''.

SEC. 128. DEFERRED REPAYMENT FOR CERTAIN SMALL BUSINESS CONCERNS.

    Section 7(a)(7) of the Small Business Act (15 U.S.C. 636(a)(7)) is 
amended by adding at the end the following: ``If a small business 
concern classified in sector 23 of the North American Industry 
Classification System receives a loan under this subsection after the 
date of the enactment of the Small Business Financing and Investment 
Act of 2009, such concern may defer repayment on such loan for a period 
of not more than 12 months beginning on the date that such concern 
receives the final disbursement of such loan.''.

SEC. 129. AUTHORIZATION OF APPROPRIATIONS.

    Section 20 of the Small Business Act (15 U.S.C. 631 note) is 
amended by inserting after subsection (e) the following:
    ``(f) Fiscal Years 2010 and 2011 With Respect to Section 7(a).--
            ``(1) Program levels.--For the programs authorized by this 
        Act, in each of fiscal years 2010 and 2011 commitments for 
        general business loans authorized under section 7(a) may not 
        exceed $20,000,000,000.
            ``(2) Authorization of appropriations.--There are 
        authorized to be appropriated such sums as may be necessary to 
        carry out paragraph (1).''.

            TITLE II--CDC ECONOMIC DEVELOPMENT LOAN PROGRAM

                     Subtitle A--General Provisions

SEC. 201. PROGRAM LEVELS.

    Section 20 of the Small Business Act (15 U.S.C. 631 note), as 
amended by this Act, is further amended by inserting after subsection 
(f) the following:
    ``(g) Program Levels With Respect to CDC Economic Development Loan 
Program.--
            ``(1) Fiscal year 2010.--For financings authorized by 
        section 7(a)(13) of this Act and title V of the Small Business 
        Investment Act of 1958, the Administrator is authorized to make 
        $9,000,000,000 in guarantees of debentures for fiscal year 
        2010.
            ``(2) Fiscal year 2011.--For financings authorized by 
        section 7(a)(13) of this Act and title V of the Small Business 
        Investment Act of 1958, the Administrator is authorized to make 
        $10,000,000,000 in guarantees of debentures for fiscal year 
        2011.''.

SEC. 202. DEFINITIONS.

    Section 103 of the Small Business Investment Act of 1958 (5 U.S.C. 
662) is amended as follows:
            (1) By amending paragraph (6) to read as follows:
            ``(6) the term `development company' means any corporation 
        organized in order to promote economic development and the 
        growth of small business concerns and includes companies 
        chartered under a special State law authorizing them to operate 
        on a statewide basis;''.
            (2) By striking ``and'' at the end of paragraph (18), by 
        striking the period at the end of paragraph (19) and inserting 
        a semicolon, and by adding at the end the following new 
        paragraphs:
            ``(20) the term `certified development company' means a 
        development company that the Administrator has determined meets 
        the criteria set forth in section 501;
            ``(21) the term `local governmental entity' means--
                    ``(A) a State or a political subdivision of a 
                State; or
                    ``(B) a combination of political subdivisions 
                which--
                            ``(i) has been formed to promote economic 
                        or community development;
                            ``(ii) is composed of representatives of 
                        the State or a political subdivision acting in 
                        their official capacity; and
                            ``(iii) includes an area in an adjacent 
                        State if it is part of a local economic area, a 
                        rural area, or has a population determined by 
                        the Administrator to be insufficient to support 
                        the formation of a separate development 
                        company;
                such term includes entities meeting the requirements of 
                clauses (i) through (iii), such as, but not limited to, 
                a council of governments, regional development 
                corporation, regional planning commission, or economic 
                development district;
            ``(22) the term `member' means any person authorized to 
        vote for a director of a corporation or the dissolution or 
        merger of a company (for purposes of this definition, a 
        shareholder of a for-profit corporation shall be considered a 
        member);
            ``(23) the terms `rural' and `rural area' shall have the 
        same meaning as those terms are given in section 1991(a)(13)(A) 
        of title 7, United States Code; and
            ``(24) the term `small manufacturer' means a small business 
        concern--
                    ``(A) the primary business of which is classified 
                in sector 31, 32, or 33 of the North American 
                Industrial Classification System; and
                    ``(B) all of the production facilities of which are 
                located in the United States.''.

              Subtitle B--Certified Development Companies

SEC. 211. CERTIFIED DEVELOPMENT COMPANIES.

    Section 501 of the Small Business Investment Act of 1958 (15 U.S.C. 
695) is amended to read as follows:

``SEC. 501. CERTIFIED DEVELOPMENT COMPANIES.

    ``(a) Certified Development Company Debenture Authority.--Only 
development companies certified by the Administrator shall have the 
authority to issue debentures under this Act.
    ``(b) Certification Standards.--A development company shall be 
certified for the purposes of issuing debentures if the Administrator 
determines that it meets each of the following criteria:
            ``(1) Small concern.--
                    ``(A) In general.--Except as provided in 
                subparagraph (C) of paragraph (2), the company, 
                including its affiliates, shall have no more than 200 
                employees.
                    ``(B) Control.--Except as provided in paragraph (2) 
                (B) or (C) the company shall not be under the control 
                of any other concern.
                    ``(C) Not for profit.--The development company is 
                organized as a not-for-profit corporation.
            ``(2) Exceptions.--
                    ``(A) For profit status.--If a development company 
                was chartered as a for-profit corporation and issued 
                debentures prior to January 1, 1987, the company shall 
                not be required to change its status to not-for-profit 
                in order to be certified.
                    ``(B) Affiliation grandfather.--Any company that 
                was authorized by the Administrator to issue debentures 
                before December 31, 2005, shall be eligible for 
                certification without regard to its status as part of, 
                or its affiliation with, any other not-for-profit 
                corporation or local governmental entity unless that 
                not-for-profit corporation or local governmental entity 
                is another entity that issues debentures under this 
                title.
                    ``(C) Affiliation with local governmental 
                entities.--Any company that was organized after the 
                date of enactment of the Small Business Financing and 
                Investment Act of 2009 shall be eligible for 
                certification without regard to its status as part of 
                or affiliation with any local governmental entity.
            ``(3) Good standing.--A development company shall be in 
        good standing and comply with all laws, in every State in which 
        it is incorporated or authorized to conduct business.
            ``(4) Membership.--
                    ``(A) In general.--The development company shall 
                have at least 25 members.
                    ``(B) Voting rights.--No member shall control more 
                than 10 percent of the total voting power in the 
                development company.
                    ``(C) Residence.--Members must be residents of the 
                State in which the development company is chartered or 
                authorized to do business.
                    ``(D) Diversity.--The development company must have 
                at least one member from each of the following:
                            ``(i) A local governmental entity.
                            ``(ii) A financial institution subject to 
                        regulation by a Federal organization belonging 
                        to the Federal Financial Institutions 
                        Examination Council and that provides long-term 
                        fixed asset financing in the commercial market.
                            ``(iii) A not-for-profit organization, 
                        other than a development company, that is 
                        dedicated to promoting economic growth.
                            ``(iv) A for-profit business, other than a 
                        financial institution described in clause (ii).
                    ``(E) Employment status.--Membership in a 
                development company shall not be predicated on 
                employment status and an individual who retired from or 
                was terminated (for reasons other than fraud or the 
                commission of a crime) from an entity described in 
                subparagraph (D) shall be deemed to be from the 
                organization described in that subparagraph.
            ``(5) Board of directors.--
                    ``(A) In general.--The development company's board 
                consists of members and each director receives a 
                majority vote of the members unless the development 
                company is a for-profit corporation in which case the 
                board need not consist entirely of members.
                    ``(B) Board representation.--There shall be at 
                least one director from not fewer than 3 of the 4 types 
                of organizations specified in paragraph (4)(D) but no 
                single type of organization shall have more than 50 
                percent representation on the board of the development 
                company. If the development company is a for-profit 
                corporation, financial institution representatives may 
                make up more than 50 percent of the board.
                    ``(C) Affiliated entity representation 
                restrictions.--A development company that is described 
                in paragraph (1)(C) may have any or all of its board 
                members appointed by entities affiliated with the 
                company and may include common members who also serve 
                on the affiliate's board of directors if the 
                appointment of board members was exercised by an 
                affiliate prior to December 31, 2005.
                    ``(D) Special rule for certain development 
                companies.--The board of directors for any development 
                company issuing debentures before December 31, 2005, 
                and incorporated under a State law requiring, or which 
                is interpreted by the State's legal department as 
                imposing specific requirements on, the number and 
                selection of members, board members, or both, and the 
                rights and privileges conferred by such State law, may 
                adhere to such provisions.
            ``(6) Professional management and staff.--
                    ``(A) In general.--The development company shall 
                have full-time independent professional management, 
                including a chief executive officer to manage the daily 
                operations and a full-time professional staff qualified 
                to carry out the functions authorized under this title.
                    ``(B) Utilization of staff from affiliated 
                entities.--A development company shall not be denied 
                certification under this section if its chief executive 
                or full-time professional staff is from an affiliated 
                entity as described in paragraph (1)(C).
                    ``(C) Staff under contract.--The Administrator 
                shall not deny certification to a development company 
                that contracts for its full time staff if one of the 
                following conditions is met:
                            ``(i) The development company is located in 
                        a rural area, obtains its staff through 
                        contract from another development company that 
                        is certified by the Administrator and that 
                        development company operates in the same or a 
                        contiguous State.
                            ``(ii) The development company had issued 
                        debentures under this title prior to December 
                        31, 2005, and had contracted with a for-profit 
                        business concern to provide staffing and 
                        management services.
    ``(c) Applications.--
            ``(1) Development companies issuing debentures before 
        september 30, 2009.--
                    ``(A) Short form application.--(i) For any 
                development company that issued debentures pursuant to 
                this title before September 30, 2009, the Administrator 
                shall develop, after an opportunity for notice and 
                comment, no later than 90 days after the date of 
                enactment of the Small Business Financing and 
                Investment Act of 2009, a short-form application that 
                contains sufficient information for the Administrator 
                to determine that the development company currently 
                meets the standards set forth in subsection (b). In 
                developing such application, the Administrator shall be 
                required to limit the amount of paperwork necessary to 
                determine whether the development company meets the 
                standards for certification and may limit the 
                application to the filing of reports previously 
                submitted to the Administrator.
                    ``(ii) For those companies that obtain staff 
                through contracts, the application shall include a copy 
                of the contract.
                    ``(B) Certification decision.--(i) The 
                Administrator shall certify the development company if 
                the application demonstrates that the applicant meets 
                the standards in subsection (b). The decision to 
                certify or not approve the request for certification 
                shall be made within 7 business days from the date the 
                initial submission of the application is received by 
                the Administrator. If the Administrator takes no action 
                to approve or disapprove within 7 business days, the 
                application for certification is deemed approved and no 
                further action is required by the Administrator or the 
                development company to obtain certification. If the 
                Administrator disapproves the application, the 
                Administrator shall provide in writing within 3 
                business days the reasons for the disapproval. If such 
                document is not provided within the time specified, the 
                application is deemed approved and no further action is 
                required by the Administrator or the development 
                company to obtain certification.
                    ``(ii) For those development companies that submit 
                contracts under subparagraph (A)(ii), the Administrator 
                is limited in rejecting the application only if the 
                Administrator finds that the entity servicing the 
                applicant is no longer able to provide the employees or 
                services needed by the applicant to perform the 
                functions that would be authorized under this title.
                    ``(C) Application resubmittal.--If the 
                Administrator disapproves the application for 
                certification and provides a written statement as set 
                forth in subparagraph (B), the development company may 
                file a new application limited solely to addressing the 
                concerns of the Administrator and the certification 
                procedures set forth in subparagraph (B) shall 
                recommence.
                    ``(D) Appeals.--If the Administrator disapproves an 
                application in accordance with the procedures of 
                subparagraphs (B) or (C), the applicant may, within 10 
                calendar days after receipt of the disapproval, appeal 
                such disapproval. The Administrator shall conduct a 
                hearing to determine such appeal pursuant to sections 
                554, 556, and 557 of title 5, United States Code, and 
                shall issue a decision not later than 45 days after the 
                appeal is filed. The decision on appeal shall 
                constitute final agency action for purposes of chapter 
                7 of title 5, United States Code.
                    ``(E) Grandfathering.--
                            ``(i) In general.--For the period 2 years 
                        after date of enactment of the Small Business 
                        Financing and Investment Act of 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.
                            ``(ii) Completion of application process.--
                        The procedures set forth in this paragraph for 
                        determining certification shall apply to any 
                        development company meeting the qualifications 
                        of clause (i).
                            ``(iii) Effect of denial.--The denial or 
                        rejection of an application for certification 
                        as set forth in this subsection shall have no 
                        effect on the ability of a development company 
                        meeting the qualifications in clause (i) from 
                        continuing to issue debentures during the 
                        entire two-year period established in that 
                        clause.
                            ``(iv) Failure to obtain certification.--
                        Any development company that fails to obtain 
                        certification in accordance with the procedures 
                        set forth in this paragraph during the period 
                        set forth in clause (i) shall be considered to 
                        be a new development company and the procedures 
                        of paragraph (2) shall apply. The authority to 
                        issue debentures shall cease for any 
                        development company covered by this 
                        subparagraph that has failed to obtain 
                        certification from the Administrator during the 
                        time period set forth in clause (i).
                    ``(F) Automatic qualification provision.--If the 
                Administrator fails to implement the certification 
                process set forth in this paragraph, any development 
                company that was issuing debentures before September 
                30, 2009, pursuant to this title shall be considered 
                certified until such time as the Administrator develops 
                the certification procedures set forth in this 
                paragraph.
                    ``(G) Savings clause.--Any action taken by a 
                development company or the Administrator pursuant to 
                this paragraph shall have no impact on any guarantee of 
                a debenture issued prior to the date of enactment of 
                the Small Business Financing and Investment Act of 
                2009.
            ``(2) Application process for new development companies.--
                    ``(A) In general.--For any development company that 
                has not issued debentures prior to September 30, 2009, 
                the Administrator shall develop no later than 180 days 
                after the date of enactment of the Small Business 
                Financing and Investment Act of 2009, after an 
                opportunity for notice and comment, an application form 
                for certification that provides the Administrator with 
                sufficient information to insure that the applicant 
                meets the standards set forth in subsection (b). The 
                Administrator shall certify such development company or 
                reject the application within 60 calendar days from the 
                date the initial submission was received by the 
                Administrator. If the Administrator rejects the 
                application, the Administrator shall provide in writing 
                within 7 business days after the decision, the reason 
                for rejecting the application.
                    ``(B) Appeals.--A development company shall be able 
                to appeal the disapproval of an application under the 
                procedures set forth in paragraph (1)(D).''.

SEC. 212. CERTIFIED DEVELOPMENT COMPANY; OPERATIONAL REQUIREMENTS.

    Section 502 of the Small Business Investment Act of 1958 (15 U.S.C. 
696) is amended to read as follows:

``SEC. 502. OPERATIONAL REQUIREMENTS FOR CERTIFIED DEVELOPMENT 
              COMPANIES.

    ``(a) Maintenance of Standards for Certification.--Any company 
certified pursuant to section 501 shall continue to comply with the 
requirements of that section to remain certified. The Administrator 
shall develop a reporting form, which to the extent possible, 
incorporates other documents and reports already kept by certified 
development companies, demonstrating their continued compliance. The 
form shall be developed in a manner that the estimated time for 
completion shall take no more than 2 hours.
    ``(b) Ethics and Conflict of Interests.--
            ``(1) In general.--A certified development company, its 
        officers, employees, and contractors shall act ethically and 
        avoid activities which constitute a conflict of interest or 
        appear to constitute a conflict of interest. For purposes of 
        this subsection, conduct that is unethical includes, but is not 
        limited to, the actions specified in section 120.140 of title 
        13, Code of Federal Regulations, as in effect on January 1, 
        2009.
            ``(2) By associates.--An associate may not be an officer, 
        director, or manager of more than 1 certified development 
        company. The term `associate' shall have the same meaning given 
        the term `Associate of a CDC' in section 120.10 of title 13, 
        Code of Federal Regulations, as in effect on January 1, 2009. 
        For the purposes of this subsection, 10 percent shall be 
        substituted wherever section 120.10 of title 13, Code of 
        Federal Regulation uses 20 percent.
            ``(3) By entities.--Except as provided in sections 
        501(b)(5) and 501(b)(6), no person, sole proprietorship, 
        partnership, or corporation shall control or have managerial 
        control of more than one certified development company. Control 
        means any of the following:
                    ``(A) The ability to appoint or remove a member of 
                the company or member of its board of directors.
                    ``(B) The ability to modify or approve rate or fee 
                changes affecting revenues of the certified development 
                company.
                    ``(C) The ability to veto, overrule, or modify 
                decisions of the certified development company's body.
                    ``(D) The ability, either directly or 
                contractually, to appoint, hire, reassign, or dismiss 
                those managers and employees responsible for the daily 
                operations of the certified development company.
                    ``(E) The ability to access the certified 
                development company's resources or amend its budget.
                    ``(F) The ability to control another certified 
                development company pursuant to provisions in a 
                contract.
    ``(c) Meetings.--The board of directors of the certified 
development company shall meet on a regular basis to make policy 
decisions for the company.
    ``(d) Loan Committees.--The board of directors of a certified 
development company may use a loan committee to process loans in the 
State in which it operates as well as adjacent local economic areas. 
Members of the loan committee shall be residents of the certified 
development company's State of operation or the adjacent local economic 
area. Such loan committees shall meet on a periodic basis as set forth 
by the board of directors.
    ``(e) Prohibited Conflict in Project Loans.--
            ``(1) In general.--Certified development companies shall 
        not recommend or approve a guarantee of a debenture that will 
        be collateralized by property being constructed or acquired on 
        which an institution, as provided in section 508(c)(1)(A), will 
        have a first lien position.
            ``(2) Exception.--The prohibition in paragraph (1) shall 
        not apply to any certified development company that was 
        affiliated with or part of any entity that took a first lien 
        position between October 1, 2003, and September 30, 2005.
    ``(f) Affiliation With Lenders Operating Under Section 7 of the 
Small Business Act.--
            ``(1) Prohibition.--No certified development company may 
        invest in, or be an affiliate of, a lender who participates in 
        the loan programs authorized in sections 7(a) and 7(c) of the 
        Small Business Act (15 U.S.C. 636(a) and (c)).
            ``(2) Exception.--The prohibition in paragraph (1) shall 
        not apply to any certified development company that is 
        affiliated with an entity authorized by the Administrator to 
        operate under section 7(a) of the Small Business Act if such 
        affiliation occurred on or before November 6, 2003.
            ``(3) Credit union affiliation.--A certified development 
        company shall not lose its status due to an affiliation with an 
        institution regulated by the National Credit Union 
        Administration if the development company was affiliated with 
        such an institution prior to January 1, 2007.
    ``(g) Servicing and Packaging Guaranteed Loans.--A certified 
development company is authorized to prepare applications for loans 
under sections 7(a) or 7(c) of the Small Business Act (15 U.S.C. 636(a) 
or (c)), to service such loans, and to charge a reasonable fee for 
servicing such loans.
    ``(h) Use of Excess Funds.--Any funds generated by a certified 
development company from the issuance of debentures under this title, 
the sale of debentures in the private secondary market, or fees 
described in subsection (g) that remain unexpended after payment of 
staff, operating, and overhead expenses shall be used by the certified 
development company for--
            ``(1) operating reserves;
            ``(2) expanding the area in which the certified development 
        company operates through the methods authorized in section 505 
        (relating to multi-State operation);
            ``(3) investment in other community and local economic 
        development activity or community development primarily in the 
        State from which such funds were generated; or
            ``(4) investment in small business investment companies 
        subject to the limitations in subsection (i).
    ``(i) Limitations With Respect to Small Business Investment 
Companies.--A certified development company shall not--
            ``(1) invest excess funds in a small business investment 
        company that the Administrator determines to be capitally 
        impaired as set forth in section 107.1830 of title 13, Code of 
        Federal Regulations, as in effect on January 1, 2009, or any 
        successor regulation to that regulation, but may maintain its 
        investment in such company if such investment was made prior to 
        the determination of capital impairment; and
            ``(2) provide a debenture under this title to a small 
        business concern that has financing with a small business 
        investment company in which the certified development company 
        has invested excess funds.
    ``(j) Economic Development Activities.--A company certified 
pursuant to this section shall carry out each of the following economic 
development activities that create or preserve jobs in urban and rural 
areas:
            ``(1) The company shall provide long-term financing to 
        small business concerns through debentures described in section 
        506.
            ``(2) The company shall operate any other program to assist 
        small business concerns or communities that promote local 
        economic development and job creation or preservation.
    ``(k) Restrictions on Assistance.--
            ``(1) In general.--After the date of enactment of the Small 
        Business Financing and Investment Act of 2009, no certified 
        development company may accept funding from any source, 
        including any Federal agency (as that term is defined in 
        section 551 of title 5, United States Code) if the source 
        imposes--
                    ``(A) conditions on the types of small business 
                concerns that a certified development company may 
                provide assistance to under this title; or
                    ``(B) conditions or requirements, directly or 
                indirectly, upon any small business concern receiving 
                assistance under this title.
            ``(2) Exception.--The conditions of subparagraphs (A) and 
        (B) of paragraph (1) shall not apply if the source provides all 
        of the financing that will be provided by the certified 
        development company to the small business concern, provided 
        further that any conditions or restrictions are limited solely 
        to the financing provided by the source of funding.
    ``(l) Revocation and Suspension.--The Administrator may suspend or 
revoke a certified development company's status if the Administrator 
determines, after a hearing on the record as set forth in sections 554, 
556, and 557 of title 5, United States Code, that the certified 
development company no longer--
            ``(1) meets the eligibility criteria established under 
        section 501 of this title;
            ``(2) satisfies the operational standards in this section; 
        or
            ``(3) complies with the Administrator's rules, regulations, 
        or provisions of law.
    ``(m) Effect of Suspension or Revocation.--A suspension or 
revocation under subsection (l) shall not affect any outstanding 
debenture guarantee.''.

SEC. 213. ACCREDITED LENDERS PROGRAM.

    Section 503 of the Small Business Investment of 1958 (15 U.S.C. 
697) is amended to read as follows:

``SEC. 503. ACCREDITED LENDERS PROGRAM.

    ``(a) Establishment.--
            ``(1) In general.--A certified development company may 
        apply for status to become an accredited certified development 
        company if it meets the operational standards of section 502 
        and the criteria in subsection (b).
            ``(2) Application.--The Administrator shall, after 
        opportunity for notice and comment, develop an application for 
        certified development companies seeking to become accredited 
        certified development companies.
            ``(3) Processing of application.--The Administrator shall 
        make a determination within 30 days after a complete 
        application has been filed by the certified development 
        company.
            ``(4) Reapplication.--If the Administrator rejects the 
        application, the Administrator shall provide in writing the 
        reasons for the rejection. Any certified development company 
        may reapply which will recommence the processing time limits 
        set forth in paragraph (3), and such reapplication shall be 
        limited to addressing the reasons for rejection. If the 
        Administrator rejects a second application, that shall be 
        considered final agency action for purposes of chapter 7 of 
        title 5, United States Code.
    ``(b) Standards for Accredited Certified Development Company 
Program.--The Administrator shall designate a certified development 
company as accredited if it meets the following standards:
            ``(1) Has been a certified development company for not less 
        than the preceding 12 months and has issued debentures as 
        authorized under this title during that time period.
            ``(2) Has well-trained, qualified personnel who are 
        knowledgeable in the lending policies and procedures for 
        certified development companies.
            ``(3) Has the ability to process, close, and service the 
        loan issued under this title.
            ``(4) Has a loss rate on the company's debentures that is 
        reasonable and acceptable to the Administrator.
            ``(5) Has a history of submitting to the Administrator 
        complete and accurate debenture guaranty application packages.
            ``(6) Has the ability to serve small business credit needs 
        for financing plant and equipment as a certified development 
        company.
    ``(c) Expedited Processing of Guarantee Applications.--The 
Administrator shall develop an expedited procedure for processing a 
guarantee application or servicing action submitted by an accredited 
certified development company. For purposes of this subsection, an 
expedited procedure is one that takes at least two business days less 
than the processing performed for certified development companies that 
have not been accredited.
    ``(d) Suspension or Revocation of Accredited Status.--The 
Administrator may suspend or revoke a certified development company's 
accredited status if the Administrator determines, after a hearing on 
the record as set forth in sections 554, 556, and 557 of title 5, 
United States Code, that the certified development company no longer 
meets the eligibility criteria established under this section (which 
shall not include a time limit on the term of the certified development 
company's accredited status) or failed to adhere to the Administrator's 
rules, regulations, or is violating some other provision of law. Such 
suspension or revocation shall have no effect on the development 
company's status as certified.
    ``(e) Effect of Suspension or Revocation on Existing Guarantees.--A 
suspension or revocation of accredited status shall not affect any 
outstanding debenture guarantee.
    ``(f) Grandfather Provision.--Any certified development company 
that was accredited by the date of enactment of the Small Business 
Financing and Investment Act of 2009 shall remain accredited for 24 
months after that date. If the certified development company does not 
have an application for accreditation approved by the Administrator 
within the 24 months, its accreditation standard shall lapse.
    ``(g) Automatic Qualification.--
            ``(1) In general.--Until the Administrator develops 
        procedures for granting accredited status, any certified 
        development company that was accredited as of the date of 
        enactment of the Small Business Financing and Investment Act of 
        2009 shall be deemed to be accredited.
            ``(2) Applications.--Any certified development company that 
        satisfies the provision of paragraph (1) shall have 24 months 
        in which to submit the application established by this section 
        for accredited status.
            ``(3) Effect while application pending.--The denial or 
        rejection of an application for accredited status as set forth 
        in this section shall have no effect on the ability of a 
        development company that meets the standard set forth in 
        paragraph (1) from maintaining its status during the 24 months 
        specified in this subsection.
    ``(h) Promulgation of Accrediting Standards.--The Administrator 
shall develop standards for accrediting, suspension, and revocation 
under the program established by this section only after notice and an 
opportunity for comment as set forth in section 553(b) of title 5, 
United States Code. After the development of such standards, the 
Administrator shall publish such standards in the Code of Federal 
Regulations.
    ``(i) Rule of Construction.--Any reference to the term `accredited 
lender' in any provision of law enacted, or any regulation adopted, 
prior to the enactment of the Small Business Financing and Investment 
Act of 2009 shall be deemed to be a reference to the term `accredited 
certified development company'.''.

SEC. 214. PREMIER CERTIFIED LENDER PROGRAM.

    Section 504 of the Small Business Investment Act of 1958 (15 U.S.C. 
697a) is amended to read as follows:

``SEC. 504. PREMIER CERTIFIED LENDER PROGRAM.

    ``(a) Establishment.--
            ``(1) In general.--A certified development company 
        accredited under section 503 may apply for status to become a 
        premier certified development company.
            ``(2) Application.--The Administrator shall, after 
        opportunity for notice and comment, develop an application for 
        accredited certified development companies seeking to become 
        premier certified development companies.
            ``(3) Processing of application.--The Administrator shall 
        make a determination within 60 days after a complete 
        application has been filed by an accredited certified 
        development company.
            ``(4) Reapplication.--If the Administrator rejects the 
        application, the Administrator shall provide in writing the 
        reasons for the rejection. Any accredited certified development 
        company may reapply which will recommence the processing time 
        limits set forth in paragraph (3), and such reapplication shall 
        be limited to addressing the reasons for rejection. If the 
        Administrator rejects a second application, that shall be 
        considered final agency action for purposes of chapter 7 of 
        title 5, United States Code.
    ``(b) Standards for Obtaining Premier Certified Development Company 
Status.--The Administrator shall designate an accredited certified 
development company as a premier certified development company if the 
application submitted pursuant to subsection (a) demonstrates that the 
accredited certified development company meets the following standards:
            ``(1) Has been an accredited certified development company 
        for at least 12 months.
            ``(2) Has submitted to the Administrator adequately 
        analyzed debenture guarantee applications.
            ``(3) Has closed, in a proper manner following the 
        Administrator regulations, loans under this title.
            ``(4) Has serviced its loan portfolio in accordance with 
        the standards set by the Administrator.
            ``(5) Has established a loan loss reserve established in 
        accordance with this section that the Administrator determines 
        is sufficient to meet its obligations to protect the Federal 
        Government from the risk of loss on each debenture guaranteed 
        under this section.
            ``(6) Has agreed, as part of the application and in order 
        to protect the Federal Government against the risk of loss, to 
        the following--
                    ``(A) on account of a debenture, the proceeds of 
                which were used to fund a loan approved prior to the 
                date of enactment of the Small Business Financing and 
                Investment Act of 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;
                    ``(B) on account of a debenture, the proceeds of 
                which were used to fund a loan approved prior to the 
                date of enactment of the Small Business Financing and 
                Investment Act of 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
                    ``(C) on account of a debenture, the proceeds of 
                which are used to fund a loan approved on or after the 
                date of enactment of the Small Business Financing and 
                Investment Act of 2009, upon closing, pay to the 
                Administrator a one-time participation fee in the 
                amount equal to the higher of the following:
                            ``(i) 0.25 percent of the amount of the 
                        debenture.
                            ``(ii) A percent of the amount of the 
                        debenture equal to 10 percent of the amount of 
                        the company's historic loss rate on debentures 
                        guaranteed under this section as determined by 
                        the Administrator. The rate specified by this 
                        clause shall be determined annually based upon 
                        the company's loan losses as of close of 
                        business on June 30 and notice of the 
                        determination shall be provided to each company 
                        not later than August 31. Such rate shall be 
                        applicable to loans approved during the fiscal 
                        year commencing after the determination is made 
                        and shall expire and have no further 
                        application after the end of such fiscal year. 
                        If no timely determination has been made prior 
                        to the commencement of a fiscal year, including 
                        the year of enactment of the Small Business 
                        Financing and Investment Act of 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.
    ``(c) Suspension or Revocation of Premier Status.--The 
Administrator may suspend or revoke an accredited certified development 
company's premier status if the Administrator determines, after a 
hearing on the record as set forth in sections 554, 556, and 557 of 
title 5, United States Code, that the accredited certified development 
company no longer meets the eligibility criteria for premier status as 
established under this section or failed to adhere to the 
Administrator's rules, regulations, or is violating some other 
provision of law. Such revocation or suspension shall have no effect on 
its status as an accredited certified development company.
    ``(d) Loan Loss Reserve.--
            ``(1) Assets.--Each loan loss reserve maintained by the 
        premier certified development company for loans made pursuant 
        to the authority in subsection (g)(1) shall be comprised of--
                    ``(A) segregated funds on deposit in an account or 
                accounts with a federally insured depository 
                institution or institutions selected by the company, 
                subject to a collateral assignment in favor of, and in 
                a format acceptable to, the Administrator that shall 
                amount to 10 percent of the company's exposure as 
                determined pursuant to subsection (b)(6);
                    ``(B) irrevocable letter or letters of credit, with 
                a collateral assignment in favor of, and a commercially 
                reasonable format acceptable to, the Administrator; or
                    ``(C) any combination of the assets described in 
                subparagraphs (A) and (B).
            ``(2) Contributions.--The company shall make contributions 
        to the loss reserve, either cash or letters of credit as 
        provided above, in the following amounts and at the following 
        intervals:
                    ``(A) 50 percent when a debenture is closed.
                    ``(B) 25 percent additional not later than 1 year 
                after a debenture is closed.
                    ``(C) 25 percent additional not later than 2 years 
                after a debenture is closed.
            ``(3) Replenishment.--If a loss has been sustained by the 
        Administrator, any portion of the loss reserve, and other funds 
        provided by the premier certified development company as 
        necessary, may be used to reimburse the Administrator for the 
        premier certified development company's share of the loss as 
        provided for in subsection (b)(6). If the premier certified 
        development company utilizes the reserve, it shall, within 30 
        calendar days, replace an equivalent amount of funds.
            ``(4) Disbursements.--
                    ``(A) In general.--The Administrator shall allow 
                the premier certified development company to withdraw 
                from the loss reserve amounts attributable to any 
                debenture that has been repaid.
                    ``(B) Reduction.--The Administrator shall allow the 
                premier certified development company to withdraw from 
                the loss reserve such amounts as are in excess of 1 
                percent of the aggregate outstanding balances of 
                debentures to which such loss reserve relates. The 
                reduction authorized by this subparagraph shall not 
                apply with respect to any debenture before 100 percent 
                of the contribution described in paragraph (2) with 
                respect to such debenture has been made.
            ``(5) Applicability.--This subsection shall apply only to a 
        premier certified development company designated as a premier 
        certified development company by the Administrator under this 
        section on or after the date of the enactment of the Small 
        Business Financing and Investment Act of 2009. The loan loss 
        reserve requirements relating to any premier certified 
        development company certified prior to the date of the 
        enactment of such Act shall continue to be governed by 
        regulations in effect on the date of the enactment of such Act.
    ``(e) Bureau of Premier Certified Development Company Lender 
Oversight.--
            ``(1) In general.--There is hereby established a Bureau of 
        Premier Certified Development Company Lender Oversight in the 
        Office of Lender Oversight at the Administration which shall 
        have responsibility and capability for carrying out oversight 
        of premier certified development companies and such other 
        responsibilities as the Administrator designates.
            ``(2) Annual review.--The Bureau established in paragraph 
        (1) annually shall review the financing made by each premier 
        certified development company. Such review shall include the 
        premier certified development company's credit decisions and 
        general compliance with the eligibility requirements for each 
        financing approved as a result of its status as a premier 
        certified development company.
            ``(3) Random audits.--The Bureau shall develop and 
        implement a method for sampling the debentures issued by 
        premier certified development companies. Such sampling shall be 
        similar to the random file audits of development companies that 
        utilize the Abridged Submission Method described in chapter 4 
        of subpart C of Standard Operating Procedure 50 10 (5)(A) as 
        was in effect on March 2, 2009.
            ``(4) Review of lenders providing senior financing.--
                    ``(A) Calculation of loan loss rate.--The Bureau 
                shall periodically calculate the loss rate of all 
                debentures approved under this section and shall 
                calculate a loss rate on the basis of the total 
                debentures attributable to projects approved by premier 
                certified development companies in which each lender is 
                a participating lender.
                    ``(B) Notification.--If the Bureau determines that 
                the loss rate on debentures involving an individual 
                lender exceeds the average for all debentures approved 
                under this section, it shall advise the Administrator.
            ``(5) Use of reviews and audits.--The Administrator shall 
        consider the findings under paragraphs (2), (3), and (4) in 
        carrying out the responsibilities under subsection (h).
    ``(f) Sale of Certain Defaulted Loans.--
            ``(1) Notice.--If, upon default in repayment, the 
        Administrator acquires a debenture issued by a premier 
        certified development company and identifies such loan for 
        inclusion in a bulk asset sale of defaulted or repurchased 
        loans or other financing, the Administrator shall give prior 
        notice thereof to any premier certified development company 
        which has a contingent liability under this section. The notice 
        shall be given to the premier certified development company as 
        soon as possible after the financing is identified, but not 
        less than 90 days before the date the Administrator first makes 
        any records on such financing available for examination by 
        prospective purchasers prior to its offering in a package of 
        loans for bulk sale.
            ``(2) Limitations.--The Administrator shall not offer any 
        loan described in paragraph (1) as part of a bulk sale unless 
        the Administrator--
                    ``(A) provides prospective purchasers with the 
                opportunity to examine the Administration's records 
                with respect to such loan; and
                    ``(B) provides the notice required by paragraph 
                (1).
    ``(g) Loan Approval Authority.--
            ``(1) In general.--A premier certified development company 
        may, under conditions determined by the Administrator in 
        regulations published in the Code of Federal Regulations, issue 
        guarantees on debentures, approve, authorize, close, service, 
        foreclose, litigate (except that the Administrator may monitor 
        conduct of any such litigation), and liquidate loans that are 
        funded with proceeds of a debenture issued by a premier 
        certified development company unless the Administrator advises 
        the company that loans involving a specific institutional 
        lender are to be submitted to the Administrator for further 
        consideration, and approval by the Administrator.
            ``(2) Program goals.--Each premier certified development 
        company shall establish a goal of processing no less than 50 
        percent of the applications for assistance under this title 
        that the premier certified development company receives. 
        Failure to meet this goal shall have no affect on the company's 
        status as a premier certified development company under this 
        section.
            ``(3) Scope of review.--The approval of a loan and 
        guarantee of a debenture by a premier certified development 
        company shall be subject to final approval as to the 
        eligibility of any guarantee by the Administrator as set forth 
        in section 506, but such final approval shall not include 
        review of decisions by the premier certified development 
        company involving creditworthiness, loan closing, or compliance 
        with legal requirements imposed by law or regulation.
    ``(h) Suspension or Revocation.--The Administrator may suspend or 
revoke an accredited certified development company's premier status if 
the Administrator determines, after a hearing on the record as set 
forth in sections 554, 556, and 557 of title 5, United States Code, 
that the accredited certified development company no longer meets the 
eligibility criteria established under this section, fails to maintain 
adequate loan loss reserves mandated in this section even if it meets 
the other eligibility requirements for premier status, or violates the 
Administrator's rules, regulations, or some other provision of law. The 
Administrator shall consider the review of the premier certified 
development company conducted pursuant to subsection (e) in determining 
whether to suspend or revoke an accredited development company's 
premier status. Such suspension or revocation shall have no effect on 
the development company's status as an accredited certified development 
company.
    ``(i) Effect of Suspension or Revocation.--A suspension or 
revocation of premier status shall not affect any outstanding debenture 
guarantee.
    ``(j) Rule of Construction.--Any reference to the term `premier 
certified lender' or `PCL' in legislation enacted, or regulations 
adopted, prior to the enactment of the Small Business Financing and 
Investment Act of 2009 shall be deemed to be a reference to the term 
`premier certified development company'.''.

SEC. 215. MULTI-STATE OPERATIONS.

    Section 505 of the Small Business Investment Act of 1958 (15 U.S.C. 
697b) is amended to read as follows:

``SEC. 505. MULTI-STATE OPERATIONS.

    ``(a) Authorization.--The Administrator shall permit an accredited 
or premier certified development company to make loans or issue 
debentures in any State that is contiguous to the State of 
incorporation of that company only if the company--
            ``(1) has members, from each of the States in which it 
        operates with not fewer than 25 members who reside in such 
        States;
            ``(2) has a board of directors that contains not fewer than 
        2 members from each State in which the company makes loans and 
        issues debentures and are residents of that State;
            ``(3) maintains a separate loan committee to process loans 
        in each expansion State and the members of the loan committee 
        are solely residents of the expansion State; and
            ``(4) files an application developed by the Administrator 
        which provides--
                    ``(A) notice of the intention to make loans in 
                multiple States;
                    ``(B) a specification of the States in which the 
                company intends to make loans;
                    ``(C) a list of members in each expansion State; 
                and
                    ``(D) a detailed statement on how the company will 
                comply with the requirements of this subsection.
    ``(b) Loan Committees.--The requirements of paragraph (3) of 
subsection (a) shall not require a development company to establish a 
loan committee in its State of incorporation or in a local economic 
area outside the State of incorporation unless such area is part of an 
expansion State.
    ``(c) Review.--
            ``(1) In general.--The Administrator shall review each 
        application for expansion under subsection (a), but such review 
        shall be limited to that information needed to determine 
        whether the company will comply with the requirements of 
        subsection (a).
            ``(2) Deadline for decision.--The Administrator shall make 
        a decision on each application under subsection (a) within 15 
        calendar days after the receipt of the application. If no such 
        decision is granted, the application is deemed to be approved 
        and no further action is required by the applicant or the 
        Administrator for the company to expand into the States 
        specified in the application.
            ``(3) Application resubmittal.--If the Administrator 
        rejects the application for expansion, the Administrator shall 
        provide in writing the reasons for denial within 10 calendar 
        days of the decision. The applicant then may resubmit the 
        application but the review of such resubmitted applications 
        will be limited only to the areas in which the Administrator 
        found the original application deficient. The deadlines in 
        paragraph (2) shall apply to resubmitted applications.
            ``(4) Appeal.--If a resubmitted application is denied, the 
        applicant may, within 10 calendar days after receipt of the 
        disapproval, appeal such disapproval. The Administrator shall 
        conduct a hearing to determine such appeal pursuant to sections 
        554, 556, and 557 of title 5, United States Code, and shall 
        issue a decision not later than 45 days after the appeal is 
        filed. The decision on appeal shall constitute final agency 
        action for purposes of chapter 7 of title 5, United States 
        Code.
    ``(d) Failure To Develop Application.--If the Administrator fails 
to develop an application as required in subsection (a)(4) within 60 
days of the enactment of the Small Business Financing and Investment 
Act of 2009, an accredited or premier certified development company 
only need submit the information required in subsection (a) to the 
Administrator to be deemed eligible to commence operations authorized 
by this section. Such eligibility shall not be terminated if the 
Administrator develops an application after the 60-day period set forth 
in this subsection.
    ``(e) Aggregate Accounting.--An accredited or premier certified 
development company authorized to operate in multiple States pursuant 
to this section may maintain an aggregate accounting of all revenue and 
expenses of the company for purposes of this title.
    ``(f) Local Job Creation Requirements.--
            ``(1) In general.--Any company making loans in multiple 
        States as authorized in this section shall not count jobs 
        created or retained in one State towards any applicable job 
        creation or retention requirements mandated by this title in 
        another State.
            ``(2) Applicability.--Any company operating under the 
        authority of this section shall be required to meet any job 
        creation or retention requirement of this title on the date 
        that is 2 years after the certified development company closed 
        its first loan in its new State of operation.
    ``(g) Contiguous States.--For the purposes of this section, the 
States of Alaska and Hawaii shall be deemed to be contiguous to any 
State abutting the Pacific Ocean. Territories of the United States 
located in the Pacific Ocean shall be deemed to be contiguous to any 
State abutting the Pacific Ocean, including Alaska and Hawaii, and 
territories of the United States located in the Caribbean Sea shall be 
deemed contiguous to any State abutting the Gulf of Mexico.
    ``(h) Exemption for Local Economic Areas.--Except as provided in 
subsection (a)(3) with respect to loan committees, any certified, 
accredited, or premier development company or applicant operating in a 
local economic development area that crosses the border of another 
State shall not be considered to be operating under the provisions of 
this section and shall not be required to comply with the requirements 
of this section for multi-State operation.''.

SEC. 216. GUARANTY OF DEBENTURES.

    Section 506 of the Small Business Investment Act of 1958 (15 U.S.C. 
697c) is amended to read as follows:

``SEC. 506. GUARANTY OF DEBENTURES.

    ``(a) Authority To Guarantee.--Except as provided in subsection 
(c), the Administrator may guarantee the timely payment of all 
principal and interest as scheduled on any debenture issued by a 
certified development company.
    ``(b) Terms and Conditions of the Guarantee.--Such guarantees may 
be made on such terms and conditions as the Administrator may by 
regulation, published in the Code of Federal Regulations, determine to 
be appropriate, except that the Administrator shall not decline to 
issue such guarantee when the ownership interests of the small business 
concern and the ownership interests of the property to be financed with 
the proceeds of the loan made pursuant to subsection (e)(1) are not 
identical because one or more of the following classes of relatives 
have an ownership interest in either the small business concern or the 
property: father, mother, son, daughter, wife, husband, brother, or 
sister, if the Administrator or his designee has determined on a case-
by-case basis that such ownership interest, such guarantee, and the 
proceeds of such loan, will substantially benefit the small business 
concern.
    ``(c) Full Faith and Credit.--The full faith and credit of the 
United States is pledged to the payment of all amounts guaranteed under 
this section.
    ``(d) Subordination.--Any debenture issued by a certified 
development company with respect to which a guarantee is made under 
this section may be subordinated by the Administrator to any other 
debenture, promissory note, or other debt or obligation of such 
company.
    ``(e) Standards for Administrator Guarantees.--No guarantee may be 
made with respect to any debenture under this section unless--
            ``(1) the debenture is issued for the purpose of making one 
        or more loans to small business concerns the proceeds of which 
        shall be used for the purposes set forth in section 507;
            ``(2) the interest rate on such debentures is not less than 
        the rate of interest determined by the Secretary of the 
        Treasury for purposes of section 303(b);
            ``(3) the aggregate amount of such debenture does not 
        exceed the amount of the loans to be made from the proceeds of 
        such debenture plus, at the election of the borrower, other 
        amounts attributable to the administrative and closing costs of 
        such loans, except for the attorney fees of the borrower;
            ``(4) the amount of any loan to be made from such proceeds 
        does not exceed an amount equal to 50 percent of the cost of 
        the project with respect to which such loan is made;
            ``(5) the Administrator, except to the extent provided in 
        section 504 with respect to premier certified development 
        companies, approves each loan to be made from such proceeds; 
        and
            ``(6) with respect to each loan made from the proceeds of 
        such debenture, the Administrator--
                    ``(A) assesses and collects a fee, which shall be 
                payable by the borrower, in an amount established 
                annually by the Administration, which amount shall not 
                exceed--
                            ``(i) the lesser of--
                                    ``(I) 0.9375 percent per year of 
                                the outstanding balance of the loan; or
                                    ``(II) the minimum amount necessary 
                                to reduce the cost (as defined in 
                                section 502 of the Federal Credit 
                                Reform Act of 1990) to the 
                                Administrator of purchasing and 
                                guaranteeing debentures under this 
                                title to zero; and
                            ``(ii) 50 percent of the amount established 
                        under clause (i) in the case of a loan made 
                        during the 2-year period beginning on October 
                        1, 2002, for the life of the loan; and
                    ``(B) uses the proceeds of such fee to offset the 
                cost (as such term is defined in section 502 of the 
                Federal Credit Reform Act of 1990) to the Administrator 
                of making guarantees under this section.
    ``(f) Interest Rates on Commercial Loans.--Notwithstanding the 
provisions of the constitution or laws of any State limiting the rate 
or amount of interest which may be charged, taken, received, or 
reserved, the maximum legal rate of interest on any commercial loan 
which funds any portion of the cost of the project financed pursuant to 
this title which is not funded by a debenture guaranteed under this 
section shall be a rate which is established by the Administrator who 
shall publish such rate quarterly in, at a minimum, the Federal 
Register and on the Administration's website.
    ``(g) Debenture Repayment.--Any debenture that is issued under this 
section shall provide for the payment of principal and interest on a 
semiannual basis.
    ``(h) Charges for Administrator's Expenses.--The Administrator may 
impose an additional charge for administrative expenses with respect to 
each debenture for which payment of principal and interest is 
guaranteed under this section. Such administrative expenses may 
include--
            ``(1) development company fees for processing, closing, 
        servicing, late payment, or loan assumption;
            ``(2) agent or trustee fees for central servicing, 
        underwriters, or debenture funding; and
            ``(3) fees charged by the Administrator for the debenture 
        guaranty and from the certified development company to reduce 
        the subsidy cost.
    ``(i) Participation Fee.--The Administrator shall collect a one-
time fee in an amount equal to 50 basis points on the total 
participation in any project of any State or local government, bank, 
other financial institution, or foundation or not-for-profit 
institution. Such fee shall be imposed only when the participation of 
the entity described in the previous sentence will occupy a senior 
credit position to that of the development company. All proceeds of the 
fee shall be used to offset the cost (as that term is defined in 
section 502 of the Credit Reform Act of 1990) to the Administrator of 
making guarantees under this section.
    ``(j) Certified Development Company Fee.--The Administrator shall 
collect annually from each development company a fee of 0.125 percent 
of the outstanding principal balance of any guaranteed debenture 
authorized by the Administrator after September 30, 1996. Such fee 
shall be derived from the servicing fees collected by the certified 
development company pursuant to regulation, and shall not be derived 
from any additional fees imposed on small business concerns. All 
proceeds of the fee shall be used to offset the cost (as that term is 
defined in section 502 of the Credit Reform Act of 1990) to the 
Administrator of making guarantees under this section.
    ``(k) Effective Date.--The fees authorized by this section shall 
apply to any financing approved under this title on or after October 1, 
1996.
    ``(l) Calculation of Subsidy Rate.--All fees, interest, and profits 
received and retained by the Administrator under this section shall be 
included in the calculations made by the Director of the Office of 
Management and Budget to offset the cost (as that term is defined in 
section 502 of the Federal Credit Reform Act of 1990) to the 
Administrator of purchasing and guaranteeing debentures under this 
title.
    ``(m) Actions Upon Default.--
            ``(1) Initial actions.--Not later than the 45th day after 
        the date on which a payment on a loan funded through a 
        debenture guaranteed under this section is due and not 
        received, the Administrator shall--
                    ``(A) take all necessary steps to bring such loan 
                current; or
                    ``(B) implement a formal written deferral 
                agreement.
            ``(2) Purchase or acceleration of debenture.--Not later 
        than the 65th day after the date on which a payment on a loan 
        described in paragraph (1) is due and not received, and absent 
        a formal written deferral agreement, the Administrator shall 
        take all necessary steps to purchase or accelerate the 
        debenture.
            ``(3) Prepayment penalties.--With respect to the portion of 
        any project derived from funds not provided by a debenture 
        issued by a certified development company or borrower, the 
        Administrator--
                    ``(A) shall negotiate the elimination of any 
                prepayment penalties or late fees on defaulted loans 
                made prior to September 30, 1996;
                    ``(B) shall not pay any prepayment penalty or late 
                fee on the default based purchase of loans issued after 
                September 30, 1996; and
                    ``(C) shall not pay a default interest rate higher 
                than the interest rate on the note prior to the date of 
                default for any project financed after September 30, 
                1996.
            ``(4) Collection and servicing.--
                    ``(A) In general.--In the event of the default of 
                any loan and the repurchase of a debenture guaranteed 
                by the Administrator under this title, the 
                Administrator shall continue to delegate to the central 
                servicing agent that was contracted for that service as 
                of January 1, 2009, or successor contractor the 
                authority to collect and disburse all funds or payments 
                received on such defaulted loans, including payments 
                from guarantors or on notes in compromise of the 
                original note. The central servicing agent shall 
                continue to provide an accounting of income and 
                expenses for any such loan on the same basis it does 
                for any other loan issued under this title. The central 
                servicing agent shall make the accounting of income and 
                expenses and reports thereon available as requested by 
                the certified development company that issued the 
                debenture or the Administrator.
                    ``(B) Effective date.--The requirements of 
                subparagraph (A) shall become effective 180 days after 
                the date of enactment of the Small Business Financing 
                and Investment Act of 2009.''.

SEC. 217. ECONOMIC DEVELOPMENT THROUGH DEBENTURES.

    Section 507 of the Small Business Investment Act of 1958 (15 U.S.C. 
697d) is amended to read as follows:

``SEC. 507 ECONOMIC DEVELOPMENT AND DEBENTURES.

    ``(a) In General.--A certified development company shall be 
prohibited from issuing a debenture under this title unless the project 
funded with the debenture meets one of the following economic 
development objectives:
            ``(1) The creation of job opportunities within two years of 
        the completion of the project or the preservation or retention 
        of jobs attributable to the project.
            ``(2) Improving the economy of the locality, such as 
        stimulating other business development in the community, 
        bringing new income into the area, or assisting the community 
        in diversifying and stabilizing its economy.
            ``(3) The achievement of one or more of the following 
        public policy goals:
                    ``(A) Business district revitalization or expansion 
                of businesses in low-income communities which would be 
                eligible for a new markets tax credit under section 
                45D(a) of the Internal Revenue Code of 1986, or 
                implementing regulations issued under that section.
                    ``(B) Expansion of exports.
                    ``(C) Expansion of minority business development or 
                women-owned business development.
                    ``(D) Rural development.
                    ``(E) Expansion of small business concerns owned 
                and controlled by veterans, as defined in section 3(q) 
                of the Small Business Act (15 U.S.C. 632(q)), 
                especially service-disabled veterans, as defined in 
                such section.
                    ``(F) Enhanced economic competition, including the 
                advancement of technology, plan retooling, conversion 
                to robotics, or competition with imports.
                    ``(G) Changes necessitated by Federal budget 
                cutbacks, including defense related industries.
                    ``(H) Business restructuring arising from federally 
                mandated standards or policies affecting the 
                environment or the safety and health of employees.
                    ``(I) Reduction of energy consumption by at least 
                10 percent.
                    ``(J) Increased use of sustainable design, 
                including designs that reduce the use of greenhouse gas 
                emitting fossil fuels, or low-impact design to produce 
                buildings that reduce the use of nonrenewable resources 
                and minimize environmental impact.
                    ``(K) Plant, equipment, and process upgrades of 
                renewable energy sources such as the small-scale 
                production of energy for individual buildings or 
                communities consumption, commonly known as micropower, 
                or renewable fuels producers including biodiesel and 
                ethanol producers.
            ``(4) Debt refinancing to the extent permitted by 
        subsection (d).
    ``(b) Job Creation and Retention Requirements.--
            ``(1) In general.--A project meets the job creation or 
        retention objective set forth in subsection (a)(1) if the 
        project creates or retains one job for every $65,000 guaranteed 
        by the Administrator, except that the amount shall be $100,000 
        in the case of a project of a small manufacturer.
            ``(2) Exceptions.--
                    ``(A) Paragraph (1) shall not apply to a project 
                for which eligibility is based on the objectives set 
                forth in subsection (a)(2) or (a)(3) if the certified 
                development company's portfolio of outstanding 
                debentures creates or retains one job for every $65,000 
                guaranteed by the Administrator.
                    ``(B) For projects in Alaska, Hawaii, State-
                designated enterprise zones, empowerment zones, 
                enterprise communities, or labor surplus areas 
                designated by the Administrator, the certified 
                development company's portfolio may average not more 
                than $75,000 per job created or retained.
                    ``(C) Loans for projects of small manufacturers 
                shall be excluded from the calculations in 
                subparagraphs (A) and (B).
    ``(c) Combination of Certain Goals.--A small business concern that 
is unconditionally owned by more than 1 individual, or a corporation, 
the stock of which is owned by more than 1 individual, shall be deemed 
to have achieved a goal under subsection (a)(3) if a combined ownership 
share of not less than 51 percent is held by individuals who are in 1 
of, or a combination of, the groups described in subparagraphs (C) or 
(E) of subsection (a)(1).
    ``(d) Composition of the Project.--
            ``(1) In general.--The projects described in this section 
        shall include, but not be limited to, plant acquisition, 
        construction, conversion, expansion (including the acquisition 
        of land), equipment and related project costs, or to acquire 
        the stock of a corporation (as long as the value of the loan 
        for the acquisition of the stock does not exceed the fixed 
        asset value attributable to such assets as would be eligible 
        for financing under subsection (a)).
            ``(2) Debt refinancing.--Any financing approved under this 
        title may include a limited amount of debt refinancing if the 
        project involves the expansion of a small business concern.
            ``(3) Limitation.--The amount of the existing indebtedness 
        may be refinanced and added to the expansion cost if--
                    ``(A) the existing indebtedness does not exceed 50 
                percent of the project cost of the expansion;
                    ``(B) the proceeds of the indebtedness were used to 
                acquire land, including a building situated thereon, to 
                construct a building thereon, or to purchase equipment;
                    ``(C) the existing indebtedness is collateralized 
                by fixed assets;
                    ``(D) the existing indebtedness was incurred for 
                the benefit of the small business concern;
                    ``(E) the financing under this title will be used 
                only for refinancing existing indebtedness or costs 
                relating to the project financed under this title;
                    ``(F) the financing under this title will provide a 
                substantial benefit to the borrower when prepayment 
                penalties, financing fees, and other financing costs 
                are accounted for;
                    ``(G) the borrower has been current on all payments 
                due on the existing debt for not less than 1 year 
                preceding the date of refinancing; and
                    ``(H) the financing under this title will provide 
                better terms or rate of interest than the existing 
                indebtedness at the time of refinancing.
    ``(e) Definition.--For purposes of subparagraphs (J) and (K) of 
subsection (a)(3), the terms included have the meanings given those 
terms under the Leadership in Energy and Environmental Design (more 
generally referred to as LEED) standard for green building 
certification, as determined by the Administrator through regulation to 
be published in the Code of Federal Regulations.''.

SEC. 218. PROJECT FUNDING REQUIREMENTS.

    Section 508 of the Small Business Investment Act of 1958 (15 U.S.C. 
697e) is amended to read as follows:

``SEC. 508. PROJECT FUNDING REQUIREMENTS.

    ``(a) In General.--Any project described in section 507 must meet 
the funding standards set forth in this section.
    ``(b) Size of Debenture.--The Administrator shall only be permitted 
to guarantee debenture issued by a certified development company up to 
the following amounts:
            ``(1) $3,000,000 for any project of a small business 
        concern.
            ``(2) $4,000,000 for any project that meets the public 
        policy goals set forth in section 507(a)(3).
            ``(3) $4,000,000 for any project to be located in a low-
        income community as that term is described in section 
        507(a)(3)(A).
            ``(4) $8,000,000 for each project of a small manufacturer.
            ``(5) $8,000,000 for each project that reduces the 
        borrower's energy consumption by at least 10 percent.
            ``(6) $8,000,000 for each project that generates renewable 
        energy or renewable fuels, such as, but not limited to, 
        biodiesel or ethanol production.
            ``(7) $10,000,000 for each project for a small business 
        concern that constitutes a major source of employment as that 
        term is used in section 7(b)(3)(E) of the Small Business Act 
        (15 U.S.C. 636(b)(3)(E)).
    ``(c) Funding From Sources Other Than Debentures Issued by 
Certified Development Companies.--
            ``(1) In general.--Any project financed pursuant to this 
        title must have the following contributions from parties other 
        than the debenture issued by the certified development company:
                    ``(A) Funding from institutions.--If a small 
                business concern provides--
                            ``(i) the minimum contribution required by 
                        subparagraph (B), not less than 50 percent of 
                        the total cost of any project financed shall 
                        come from State or local governments, banks or 
                        other financial institutions, or foundations or 
                        other not-for-profit institutions; and
                            ``(ii) more than the minimum contribution 
                        required under subparagraph (B), any excess 
                        contribution may be used to reduce the amount 
                        required from institutions described in clause 
                        (i), except that the amount provided by such 
                        institution may not be reduced to an amount 
                        that is less than the amount of the loan made 
                        by the Administrator.
                    ``(B) Funding from small business concerns.--The 
                small business concern (or its owners, stockholders, or 
                affiliates) that will have a project financed pursuant 
                to this title shall provide--
                            ``(i) at least 15 percent of the total cost 
                        of the project financed if the small business 
                        concern has been in operation for a period of 2 
                        years or less;
                            ``(ii) at least 15 percent of the total 
                        cost of the project financed if the project 
                        involves construction of a limited or single 
                        purposed building or structure;
                            ``(iii) at least 20 percent of the total 
                        cost of the project financed if the project 
                        involves both of the conditions in clauses (i) 
                        and (ii); or
                            ``(iv) at least 10 percent of the total 
                        cost of the project financed and not covered by 
                        clauses (i), (ii), or (iii), at the discretion 
                        of the certified development company.
            ``(2) Seller financing.--Seller-provided financing may be 
        used to meet the requirements of paragraph (1)(B), if the 
        seller subordinates the interest of the seller in the property 
        to the debenture guaranteed by the Administrator.
            ``(3) Collateralization.--
                    ``(A) In general.--The collateral provided by the 
                small business concern shall generally include a 
                subordinate lien position on the property being 
                financed under this title, and is only one of the 
                factors to be evaluated in the credit determination. 
                Additional collateral shall be required only if the 
                Administrator determines, on a case-by-case basis, that 
                additional security is necessary to protect the 
                interest of the Government.
                    ``(B) Appraisals.--With respect to commercial real 
                property provided by the small business concern as 
                collateral, an appraisal of the property by a State 
                licensed or certified appraiser--
                            ``(i) shall be required by the 
                        Administrator before disbursement of the loan 
                        if the estimated value of that property is more 
                        than $400,000; or
                            ``(ii) may be required by the Administrator 
                        or the lender before disbursement of the loan 
                        if the estimated value of that property is 
                        $400,000 or less, and such appraisal is 
                        necessary for appropriate evaluation of 
                        creditworthiness.
                    ``(C) Adjustment.--The Administrator shall 
                periodically adjust the amount under subparagraph (B) 
                to account for the effects of inflation, provided that 
                no such adjustment shall be less than $50,000.
            ``(4) Limitation on leasing.--
                    ``(A) If the project funded under this section 
                includes the acquisition of a facility or the 
                construction of a new facility, the small business 
                concern--
                            ``(i) shall permanently occupy and use not 
                        less than 50 percent of the project property; 
                        and
                            ``(ii) may, on a temporary or permanent 
                        basis, lease to others not more than 50 percent 
                        of the project property.
                    ``(B) For purposes of this paragraph, the term 
                `project property' means--
                            ``(i) the building and any exterior areas 
                        used in connection with the building or a part 
                        thereof and includes all of the parcels of real 
                        property included in the project in the 
                        aggregate; and
                            ``(ii) occupancy and use of the project 
                        property by the operating company shall be 
                        deemed to be occupancy and use by the small 
                        business concern that received funding under 
                        this section.
    ``(d) Regulations.--(1) The Administrator shall promulgate 
regulations, after notice and comment, to implement the provisions of 
this section within 60 days after enactment of the Small Business 
Financing and Investment Act of 2009. The Administrator may limit the 
comment period to 15 days to meet this deadline.
    ``(2) If the Administrator fails to promulgate the regulations as 
provided in paragraph (1), all leases entered into, absent clear and 
convincing evidence of fraud, shall be deemed to be in compliance with 
the limitations on leasing in this subparagraph for purposes of 
honoring the guarantee on the debenture issued by the certified 
development company.
    ``(3) Any regulation of the Administrator or interpretation of any 
regulation by the Administrator or the Office of Hearings and Appeals 
that restricts the use of proceeds for leased projects that was in 
effect on the date of enactment of the Small Business Financing and 
Investment Act of 2009 shall hereby cease to apply.
    ``(4) Any interpretation of the leasing provisions issued by the 
Administrator prior to the issuance of regulations required by 
paragraph (1) shall be considered null and void and may be not be used 
in any court of competent jurisdiction, be it Federal or State court, 
to dishonor any guarantee of a debenture issued by a certified 
development company for a project funded pursuant to this section.
    ``(e) Ownership Calculation.--Ownership requirements to determine 
the eligibility of a small business concern that applies for funding 
under this title shall be determined without regard to any ownership 
interest of a spouse arising solely from the application of the 
community property laws of a State for purposes of determining marital 
interests.
    ``(f) Combination Financing.--Financing under this title may be 
provided to a borrower in the maximum amount provided in this section, 
and a loan guarantee under section 7(a) of the Small Business Act (15 
U.S.C. 636(a)) may be provided to the same borrower in the maximum 
amount provided in section 7(a)(3)(A) of such Act, to the extent that 
the borrower otherwise qualifies for such assistance.
    ``(g) Rules for Debentures Funding Projects in Low-Income Areas.--
            ``(1) Size standards.--For purposes of determining the size 
        of a small business concern seeking funds for a project 
        described in subsection (b)(3), the size standard promulgated 
        by the Administrator in section 121.201 of title 13, Code of 
        Federal Regulations, as in effect on January, 1, 2009, or any 
        successor regulation, shall be increased by 25 percent.
            ``(2) Personal liquidity.--
                    ``(A) In general.--The amount of personal resources 
                of an owner for a project described in subsection 
                (b)(3) that are excluded from the amount required to 
                reduce the portion of the project funded by the 
                Administrator shall be not less than 25 percent more 
                than that required for funding of any other project 
                described in subsection (b).
                    ``(B) Definition.--For purposes of subparagraph 
                (A), the term `owner' means any person that owns not 
                less than 20 percent of the equity or has not less than 
                20 percent of the voting rights (in the case of a small 
                business organized as a partnership) of a small 
                business concern seeking funds under this section.
    ``(h) Applicability of Credit Elsewhere and Personal Resources 
Regulations.--Except as provided in subsection (c)(1)(B) with respect 
to project funding, the Administrator shall be prohibited from applying 
the regulations set forth in sections 120.101 and 120.102 of title 13, 
Code of Federal Regulations, as in effect on January 1, 2009, or any 
successor regulation that applies a credit elsewhere or personal 
resources test to any application for a loan under this title pending 
or filed after the date of enactment of the Small Business Financing 
and Investment Act of 2009.''.

SEC. 219. PRIVATE DEBENTURE SALES AND POOLING OF DEBENTURES.

    Section 509 of the Small Business Investment Act of 1958 (15 U.S.C. 
697f) is amended to read as follows:

``SEC. 509. PRIVATE DEBENTURE SALES AND POOLING OF DEBENTURES.

    ``(a) Private Debenture Sales.--Notwithstanding any other law, 
rule, or regulation, the Administrator shall sell to investors, either 
publicly or by private placement, debentures issued by certified 
development companies pursuant to this title for the full amount of the 
program levels authorized in each fiscal year and if there is not 
authorization of a level, the amount of debentures actually issued.
    ``(b) Federal Financing Bank.--Nothing in any provision of law 
shall be construed to authorize the Federal Financing Bank to acquire--
            ``(1) any obligation the payment of principal or interest 
        on which at any time has been guaranteed in whole or in part 
        under this title and which is being sold pursuant to the 
        provisions of this section;
            ``(2) any obligation which is an interest in any obligation 
        which is an interest in any obligation described in paragraph 
        (1); or
            ``(3) any obligation which is secured by, or substantially 
        all of the value of which is attributable to, any obligation 
        described in paragraph (1) or (2).
    ``(c) Pooling of Debentures.--
            ``(1) In general.--The Administrator is authorized to issue 
        trust certificates representing ownership of all or a 
        fractional part of debentures issued by certified development 
        companies and guaranteed under this title if such trust 
        certificates are based on and backed by a trust or pool 
        approved by the Administrator and composed solely of guaranteed 
        debentures.
            ``(2) Guarantee of trust certificates.--The Administrator 
        is authorized, upon such terms and conditions as are deemed 
        appropriate, to guarantee the timely payment of the principal 
        of and interest on trust certificates issued by the 
        Administrator or its agent for purposes of this section. Such 
        guarantee shall be limited to the extent of principal and 
        interest on the guaranteed debentures which compose the trust 
        or pool. In the event that a debenture in such trust or pool is 
        prepaid, either voluntarily or in the event of default, the 
        guarantee of timely payment of principal and interest on the 
        trust certificates shall be reduced in proportion to the amount 
        of principal and interest such prepaid debenture represents in 
        the trust or pool. Interest on prepaid or defaulted debentures 
        shall accrue and be guaranteed by the Administrator only 
        through the date of payment on the guarantee. During the term 
        of the trust certificate, it may be called for redemption due 
        to prepayment or default of all debentures constituting the 
        pool.
            ``(3) Full faith and credit.--The full faith and credit of 
        the United States is pledged to the payment of all amounts 
        which may be required to be paid under any guarantee of such 
        trust certificates issued by the Administrator or its agent 
        pursuant to this section.
            ``(4) Prohibition on guarantee fee for pools.--The 
        Administrator shall not collect any fee for any guarantee under 
        this section, provided that nothing herein shall preclude any 
        agent of the Administrator from collecting a fee approved by 
        the Administrator for the functions performed in paragraph 
        (6)(F).
            ``(5) Subrogation.--
                    ``(A) In general.--In the event the Administrator 
                pays a claim under a guarantee issued under this 
                section, it shall be subrogated fully to the rights 
                satisfied by such payment.
                    ``(B) Administrator exercise of rights.--No 
                Federal, State, or local law shall preclude or limit 
                the exercise by the Administrator of its ownership 
                rights in the debentures constituting the trust or pool 
                against which the trust certificates are issued.
            ``(6) Central registration.--
                    ``(A) In general.--The Administrator shall provide 
                for a central registration of all trust certificates 
                sold pursuant to this section.
                    ``(B) Contract.--The Administrator shall contract 
                with an agent to carry out on behalf of the 
                Administrator the central registration functions of 
                this section and the issuance of trust certificates to 
                facilitate pooling.
                    ``(C) Bond.--The Administrator shall require the 
                contractor to provide a fidelity bond or insurance in 
                such amounts as is deemed necessary to fully protect 
                the interests of the Government.
                    ``(D) Disclosure requirements.--The Administrator 
                shall, prior to any sale, require the seller to 
                disclose to a purchaser of a trust certificate issued 
                pursuant to this section, information on terms, 
                conditions, and yield of such instruments.
                    ``(E) Authority to regulate.--The Administrator 
                shall have the authority to regulate brokers and 
                dealers in trust certificates sold pursuant to this 
                section.
                    ``(F) Book entry permitted.--Nothing in this 
                paragraph shall prohibit the utilization of a book-
                entry or other electronic form of registration for 
                trust certificates.''.

SEC. 220. FORECLOSURE AND LIQUIDATION OF LOANS.

    Section 510 of the Small Business Investment Act of 1958 (15 U.S.C. 
697g) is amended to read as follows:

``SEC. 510. FORECLOSURE AND LIQUIDATION OF LOANS.

    ``(a) Delegation of Authority.--In accordance with this section, 
the Administrator shall delegate to any certified development company 
that meets the eligibility requirements of subsection (b)(1), the 
authority to foreclose and liquidate, or to otherwise treat in 
accordance with this section, defaulted loans in its portfolio that are 
funded with the proceeds of debentures guaranteed by the Administrator 
pursuant to this title.
    ``(b) Eligibility for Delegation.--
            ``(1) Requirements.--A certified development company shall 
        be eligible for a delegation of authority under subsection (a) 
        if--
                    ``(A) the certified development company--
                            ``(i) has participated in the loan 
                        liquidation pilot program established by the 
                        Small Business Programs Improvement Act of 1996 
                        (15 U.S.C. 695 note), before the enactment of 
                        the Small Business Financing and Investment Act 
                        of 2009;
                            ``(ii) is an accredited or premier 
                        certified development company; or
                            ``(iii) during the 3 fiscal years 
                        immediately prior to seeking such a delegation, 
                        has made an average of not less than 10 loans 
                        per year that are funded with the proceeds of 
                        debentures guaranteed under this title; and
                    ``(B) the certified development company--
                            ``(i) has one or more employees--
                                    ``(I) with not less than 2 years of 
                                substantive, decisionmaking experience 
                                in administering the liquidation and 
                                workout of problem loans secured in a 
                                manner substantially similar to loans 
                                funded with the proceeds of debentures 
                                guaranteed under this title; and
                                    ``(II) who have completed a 
                                training program on loan liquidation 
                                developed by the Administrator in 
                                conjunction with a certified 
                                development company that meet the 
                                requirements of this paragraph; or
                            ``(ii) submits to the Administrator 
                        documentation demonstrating that the company 
                        has contracted with a qualified third party to 
                        perform any liquidation activities and secures 
                        the approval of the contract by the 
                        Administrator with respect to the 
                        qualifications of the contractor and the terms 
                        and conditions of liquidation activities.
            ``(2) Confirmation.--On the request, the Administrator 
        shall examine the qualifications of any certified development 
        company described in subsection (a) to determine if such 
        company is eligible for the delegation of authority under this 
        section. If the Administrator determines that a company is not 
        eligible, the Administrator shall provide the company, in 
        writing, with the reasons for such ineligibility. The certified 
        development company shall be entitled to request delegated 
        authority and the Administrator shall review the request only 
        to address whether the certified development company has 
        rectified the reasons for the Administrator's original 
        determination of ineligibility.
    ``(c) Scope of Delegated Authority.--
            ``(1) In general.--Each certified development company to 
        which the Administrator delegates authority under subsection 
        (a) may with respect to any loan described in subsection (a)--
                    ``(A) perform all liquidation and foreclosure 
                functions, including the purchase in accordance with 
                this subsection of any other indebtedness secured by 
                the property securing the loan, in a reasonable and 
                sound manner according to commercially accepted 
                practices, pursuant to a liquidation plan approved in 
                advance by the Administrator under paragraph (2)(A);
                    ``(B) litigate any matter relating to the 
                performance of the functions described in subparagraph 
                (A), except that the Administrator may--
                            ``(i) defend or bring any claim if--
                                    ``(I) the outcome of the litigation 
                                may adversely affect the 
                                Administrator's management of the 
                                program established under this title; 
                                or
                                    ``(II) the Administrator is 
                                entitled to legal remedies not 
                                available to a certified development 
                                company and such remedies will benefit 
                                either the Administrator or the 
                                certified development company; and
                            ``(ii) oversee the conduct of any such 
                        litigation; and
                    ``(C) take other appropriate actions to mitigate 
                loan losses in lieu of total liquidation or 
                foreclosures, including the restructuring of a loan in 
                accordance with prudent loan servicing practices and 
                pursuant to a workout plan approved in advance by the 
                Administrator under paragraph (2).
            ``(2) Administrator approval of plans.--
                    ``(A) Certified development company submission of 
                plans.--Before carrying out functions described in 
                paragraph (1)(A) or (1)(C), the certified development 
                company shall submit to the Administrator a proposed 
                liquidation plan, any proposal for the Administrator to 
                the purchase of any other indebtedness secured by the 
                property securing a defaulted loan, or a workout plan 
                or any combination thereof.
                    ``(B) Administrator approval procedures.--
                            ``(i) Timing.--Not later than 15 business 
                        days after the plans described in subparagraph 
                        (A) are received by the Administrator, the 
                        Administrator shall approve or reject the plan.
                            ``(ii) Notice of no decision.--With respect 
                        to any plan that cannot be approved or denied 
                        within the 15-day period required by clause 
                        (i), the Administrator shall within such period 
                        provide in accordance with subparagraph (E) 
                        notice to the company that submitted the plan.
                    ``(C) Routine actions.--In carrying out the 
                functions described in paragraph (1)(A), a certified 
                development company may undertake routine actions not 
                addressed in a liquidation or workout plan without 
                obtaining additional approval from the Administrator.
                    ``(D) Compromise of indebtedness.--In carrying out 
                functions described in paragraph (1)(A), a certified 
                development company may--
                            ``(i) consider an offer made by an obligor 
                        to compromise the debt for less than the full 
                        amount owing; and
                            ``(ii) pursuant to such offer, release any 
                        obligor or other party contingently liable, if 
                        the company secures the written approval of the 
                        Administrator.
                    ``(E) Contents of notice of no decision.--Any 
                notice provided by the Administrator pursuant to 
                subparagraph (B)(ii) shall--
                            ``(i) be in writing stating the specific 
                        reasons for which the Administrator was unable 
                        to act on the request submitted pursuant to 
                        subparagraph (A);
                            ``(ii) provide an estimate of the 
                        additional time needed for the Administrator to 
                        reach a decision on the request; and
                            ``(iii) specify any additional information 
                        or documentation that the Administrator needs 
                        to make a decision but was not provided in the 
                        plan submitted by the certified development 
                        company.
            ``(3) Conflict of interest.--In carrying out functions 
        described in paragraph (1), a certified development company 
        shall take no action that would result in an actual or apparent 
        conflict of interest between the company (or any employee of 
        the company) and any third-party lender, associate of a third-
        party lender, or any other person participating in a 
        liquidation, foreclosure, or loss mitigation action.
    ``(d) Suspension or Revocation of Authority.--
            ``(1) In general.--The Administrator may revoke or suspend 
        a delegation of authority under this section to a certified 
        development company if the Administrator determines that the 
        company--
                    ``(A) does not meet the requirements of subsection 
                (b)(1);
                    ``(B) violated any applicable law or rule or 
                regulation of the Administrator that in the estimation 
                of the Administrator requires revocation; or
                    ``(C) fails to comply with any reporting that may 
                be established by the Administrator relating to the 
                establishment of eligibility in subsection (b)(1) or 
                carrying out the functions described in subsection 
                (c)(1).
            ``(2) Written notice.--The Administrator shall provide in 
        writing detailed reason why the delegation of authority was 
        suspended or revoked.
    ``(e) Participation in Liquidation.--
            ``(1) In general.--
                    ``(A) Contract with qualified third party.--A 
                certified development company which elects not to apply 
                for authority to foreclose and liquidate defaulted 
                loans under this section, or which the Administrator 
                determines to be ineligible for such authority, shall 
                contract with a qualified third party to perform 
                foreclosure and liquidation of defaulted loans in its 
                portfolio.
                    ``(B) Contract approval.--The contract entered into 
                by the certified development company specified in 
                subparagraph (A) shall be contingent upon approval by 
                the Administrator with respect to the qualifications of 
                the contractor and the terms and conditions of 
                liquidation activities. The Administrator shall not 
                unreasonably withhold such approval.
                    ``(C) Notification of rejection.--If the 
                Administrator rejects the contract, the Administrator 
                shall provide a notice to the certified development 
                company, in writing, explaining the reasons for such 
                rejection within ten business days after submission of 
                the contract.
                    ``(D) Resubmittal.--The certified development 
                company shall be permitted to resubmit the contract and 
                the Administrator's review of any such resubmittal 
                shall be limited to insufficiencies described in the 
                notification of rejection.
                    ``(E) Regulations.--The Administrator shall 
                promulgate regulations, after notice and opportunity 
                for comment, adopting standards for the approval of 
                qualified third-party contractors within 90 days after 
                the date of enactment of the Small Business Financing 
                and Investment Act of 2009.
                    ``(F) Failure to promulgate regulations.--If the 
                Administrator fails to promulgate such regulations, any 
                contract for liquidation entered into by a certified 
                development company under this subsection shall be 
                considered valid for the purposes of this subsection 
                and subsection (f).
                    ``(G) Effect of administrator's promulgation of 
                regulations.--If the Administrator promulgates 
                regulations after the deadline specified in 
                subparagraph (E), those regulations shall not have any 
                retroactive application with respect to contracts that 
                are described in subparagraph (F).
            ``(2) Commencement.--This subsection shall not require any 
        certified development company to liquidate defaulted loans 
        until the Administrator implements a system to compensate and 
        reimburse certified development companies for liquidation of 
        any defaulted loans.
    ``(f) Compensation and Reimbursement.--
            ``(1) Reimbursement of expenses.--The Administrator shall 
        reimburse each certified development company for all expenses 
        paid by such company as part of the foreclosure and liquidation 
        activities taken to carry out this section, if the expenses--
                    ``(A) were--
                            ``(i) approved in advance by the 
                        Administrator, either specifically in a plan 
                        submitted pursuant to subsection (c) or 
                        generally, such as, but not limited to, actions 
                        approved by the Administrator in regulations or 
                        other interpretative issuances; or
                            ``(ii) incurred by the development company 
                        on an emergency basis without prior approval 
                        from the Administrator, if the Administrator 
                        determines that the expenses were reasonable 
                        and appropriate; and
                    ``(B) are submitted by the certified development 
                company to the Administrator not later than 3 years 
                after the date the expense was incurred or the bill 
                therefore is submitted to the certified development 
                company, whichever is later.
            ``(2) Alternative reimbursement.--As an alternative to the 
        procedure in paragraph (1), a certified development company may 
        elect to obtain reimbursement for all such expenses from the 
        proceeds of any collateral provided by the borrower that was 
        liquidated by the certified development company if the expenses 
        comply with the requirements of paragraph (1). Within 6 months 
        of the reimbursement, the certified development company shall 
        provide the Administrator with the same information and 
        documentation it would be required to submit to obtain payment 
        from the Administrator.
            ``(3) Regulations.--The Administrator shall promulgate 
        regulations, after notice and comment to carry out the 
        provisions of paragraphs (1) and (2). If the Administrator does 
        not promulgate such regulations within one year, certified 
        development companies shall be authorized, notwithstanding the 
        requirements of subsection (e)(2), to liquidate defaulted loans 
        and such costs and expenses incurred, absent clear and 
        convincing evidence of fraud, shall be deemed to be approved.
            ``(4) Compensation for results.--
                    ``(A) Development.--In regulations promulgated 
                pursuant to paragraph (3), the Administrator also shall 
                develop a schedule of compensation that provides 
                monetary incentives for certified development companies 
                in order to increase recoveries on defaulted loans.
                    ``(B) Criteria.--The schedule shall--
                            ``(i) be based on a percentage of the net 
                        amount recovered, but shall not exceed a 
                        maximum amount; and
                            ``(ii) not apply to any foreclosure which 
                        is conducted under a contract between a 
                        certified development company and a qualified 
                        third party to perform the foreclosure and 
                        liquidation.
                    ``(C) Payment.--The Administrator shall transmit 
                the compensation provided herein to the development 
                company from the proceeds of liquidated collateral, 
                unless the Administrator utilizes another source for 
                funds, within 30 days from the date when the 
                liquidation case has been closed and documentation 
                received.''.

SEC. 221. REPORTS AND REGULATIONS.

    Title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 
et seq.) is amended by adding at the end the following:

``SEC. 511. REPORTS.

    ``(a) Premier Certified Development Companies.--The Administrator 
shall report annually to the Committee on Small Business of the House 
of Representatives and the Committee on Small Business and 
Entrepreneurship of the Senate on the implementation of section 504. 
Each report shall include--
            ``(1) the number of premier certified development 
        companies;
            ``(2) the debenture volume of each premier certified 
        development company;
            ``(3) a comparison of the loss rate for premier certified 
        development companies to the loss rate for accredited or 
        certified development companies; and
            ``(4) such other information as the Administrator deems 
        appropriate.
    ``(b) Reports on Liquidation and Foreclosures.--
            ``(1) In general.--Based on information provided by 
        certified development companies and the Administrator, the 
        Administrator shall submit annually to the Committee on Small 
        Business and Entrepreneurship of the Senate and the Committee 
        on Small Business of the House of Representatives a report on 
        the results of delegation of authority under section 510.
            ``(2) Contents.--Each report submitted under paragraph (1) 
        shall include the following information:
                    ``(A) With respect to each loan foreclosed or 
                liquidated by a certified development company, or for 
                which losses were otherwise mitigated by pursuant to a 
                workout plan--
                            ``(i) the total cost of the project 
                        financed with the loan;
                            ``(ii) the total original dollar amount 
                        guaranteed by the Administration;
                            ``(iii) the total dollar amount of the loan 
                        at the time of liquidation, foreclosure, or 
                        mitigation of loss;
                            ``(iv) the total dollar losses resulting 
                        from the liquidation, foreclosure, or 
                        mitigation of loss; and
                            ``(v) the total recoveries resulting from 
                        the liquidation, foreclosure, or mitigation of 
                        loss, both as a percentage of the amount 
                        guaranteed and the total cost of the project 
                        financed.
                    ``(B) With respect to each certified development 
                company to which authority is delegated under section 
                510, the totals of each of the amounts described in 
                clauses (i) through (v) of subparagraph (A).
                    ``(C) With respect to each certified development 
                company that contracts with a qualified third-party 
                contractor pursuant to section 510(e), the total of 
                each of the amounts described in clauses (i) through 
                (v) of subparagraph (A).
                    ``(D) With respect to all loans subject to 
                foreclosure, liquidation, or mitigation under section 
                510, the totals of each of the amounts described in 
                clauses (i) through (v) of subparagraph (A).
                    ``(E) A comparison between--
                            ``(i) the information provided under 
                        subparagraph (D) with respect to the 12-month 
                        period preceding the date on which the report 
                        is submitted; and
                            ``(ii) the same information with respect to 
                        loans foreclosed and liquidated, or otherwise 
                        treated, by the Administrator during the same 
                        period.
                    ``(F) The number of times that the Administrator 
                has failed to approve or reject a liquidation plan, 
                workout plan, request to purchase indebtedness, or 
                failed to approve a third-party contractor under 
                section 510, including specific information regarding 
                the reasons for the Administrator's failure and any 
                delays that resulted.
    ``(c) Reports on Combination Financing.--Not later than 90 days 
after the date of enactment of the Small Business Financing and 
Investment Act of 2009, and annually thereafter, the Administrator 
shall submit a report to the Committee on Small Business and 
Entrepreneurship of the Senate and the Committee on Small Business of 
the House of Representatives that--
            ``(1) includes the number of small business concerns that 
        have financing under both section 7(a) of the Small Business 
        Act (15 U.S.C. 636(a)) and title V of the Small Business 
        Investment Act of 1958 (15 U.S.C. 695 et seq.) during the year 
        before the year of that report; and
            ``(2) describes the total amount and general performance of 
        the financing described in paragraph (1).
    ``(d) Report on Other Economic Development Activity.--The 
Administrator shall compile and submit to the Committee on Small 
Business of the House of Representatives and the Committee on Small 
Business and Entrepreneurship of the Senate on an annual basis, 
commencing in the year that the Small Business Financing and Investment 
Act of 2009 is enacted, a report that describes the economic and 
community development activities, other than loan making under this 
title, of each certified development company during the prior fiscal 
year. The Administrator may contract with another party, including non-
governmental entities, to collect information or otherwise assist in 
the preparation of the report required by this subsection.

``SEC. 512. PROMULGATION OF REGULATIONS UNDER THIS TITLE.

    ``(a) Deadlines for Implementing Regulations.--Except as expressly 
provided elsewhere in the Small Business Financing and Investment Act 
of 2009, the Administrator shall promulgate regulations under this 
title, after providing notice and the opportunity for comment, within 
180 days after the date of enactment of that Act.
    ``(b) Notice and Comment Requirements in General.--Except as 
otherwise provided elsewhere in this title, the Administrator shall 
provide, after the date of enactment of the Small Business Financing 
and Investment Act of 2009, notice of any proposed change to a 
regulation implementing this title (whether in existence on the date of 
enactment of the Small Business Financing and Investment Act of 2009 or 
subsequently adopted), publish such notification in the Federal 
Register, and provide a comment period of not less than 60 days.''.

SEC. 222. PROGRAM NAME.

    Title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 
et seq.), as amended by this Act, is further amended by adding at the 
end the following:

``SEC. 513 PROGRAM NAME.

    ``(a) In General.--The program created by this title shall be 
referred to as the CDC Economic Development Loan Program.
    ``(b) Modification of Materials Used.--Not later than 60 days after 
the date of enactment of the Small Business Financing and Investment 
Act of 2009, the Administrator shall modify all documents and websites 
to conform to the name change made by this section.''.

                       Subtitle C--Miscellaneous

SEC. 231. REPORT ON STANDARD OPERATING PROCEDURES.

    (a) Report.--The Administrator of the Small Business Administration 
shall submit to the Committee on Small Business of the House of 
Representatives and the Committee on Small Business and 
Entrepreneurship of the Senate a report within 180 days after enactment 
of this Act identifying each Standard Operating Procedure issued after 
January 1, 1996, that relates to the operation of a development company 
(in any manner) under title V of the Small Business Investment Act of 
1958, that is still in effect on the date of enactment of this Act, and 
the regulation codified in title 13 of the Code of Federal Regulations 
that authorizes the issuance of the Standard Operating Procedure and 
separately identifies the regulation that the Standard Operating 
Procedure purports to interpret.
    (b) Inapplicability.--If the Administrator fails to complete the 
report by the time specified in subsection (a), the Administrator 
shall, unless there is clear and convincing evidence of fraud, honor 
the terms and conditions of any debenture to the entity that issued the 
debenture pursuant to title V of the Small Business Investment Act of 
1958 without regard to whether the entity complied with any of the 
Standard Operating Procedures described in subsection (a) until such 
time as the Administrator submits the report required under subsection 
(a).
    (c) Definition.--For purposes of this section, the term ``Standard 
Operating Procedure'' has the meaning given that term in section 120.10 
of title 13, Code of Federal Regulations, as in effect on January 1, 
2009, and includes any reference to the acronym ``SOP''.

SEC. 232. ALTERNATIVE SIZE STANDARD.

    (a) Review and Study.--
            (1) In general.--The Administrator of the Small Business 
        Administration shall study and review the optional size 
        standard set forth in section 121.301(b) of title 13, Code of 
        Federal Regulations, as in effect on January 1, 2009, for 
        eligibility of a small business concern for financing under 
        title V of the Small Business Investment Act of 1958.
            (2) Contents.--The review shall analyze whether the 
        alternative size standard includes the business concerns 
        defined in section 3(a)(1) of the Small Business Act and what, 
        if any, regulatory changes are needed in the alternative size 
        standard.
            (3) Submission to congress.--The Administrator shall submit 
        its study and conclusions within 180 days after the date of 
        enactment of the Small Business Financing and Investment Act of 
        2009 to the Committee on Small Business and Entrepreneurship of 
        the Senate and the Committee on Small Business of the House of 
        Representatives.
    (b) Issuance of Regulations.--Any changes in the optional size 
standard described in subsection (a)(1) shall be promulgated within 180 
days of the submission of the report to committees referred to in 
paragraph (3) of subsection (a).
    (c) Interim Alternative Size Standard.--Until the Administrator 
promulgates regulations either readopting the size standard referred to 
in subsection (a)(1) or adopts a new alternative size standard, the 
alternative size standard shall be a maximum tangible net worth of not 
more than $15,000,000 and an average net income after the payment of 
Federal taxes (but excluding any carryover losses) for the preceding 
two fiscal years not more than $5,000,000.

                   TITLE III--MICROLENDING EXPANSION

SEC. 301. MICROLOAN CREDIT BUILDING INITIATIVE.

    Section 7(m) of the Small Business Act (15 U.S.C. 636(m)) is 
amended by adding at the end the following:
            ``(14) Credit reporting information.--The Administrator 
        shall establish a process, for use by an intermediary making a 
        loan to a borrower under this subsection, under which the 
        intermediary shall provide to the major credit reporting 
        agencies the information about the borrower, both positive and 
        negative, that is relevant to credit reporting, such as the 
        payment activity of the borrower on the loan. Such process 
        shall allow an intermediary the option of providing information 
        to the major credit reporting agencies through the 
        Administration or independently.''.

SEC. 302. FLEXIBLE CREDIT TERMS.

    Section 7(m) of the Small Business Act (15 U.S.C. 636(m)), as 
amended by this Act, is further amended--
            (1) in paragraph (1)(B)(i) by striking ``short-term,'';
            (2) in paragraph (6)(A) by striking ``short-term,''; and
            (3) in paragraph (11)(B) by striking ``short-term,''.

SEC. 303. INCREASED PROGRAM PARTICIPATION.

    Section 7(m)(2) of the Small Business Act (15 U.S.C. 636(m)(2)) is 
amended--
            (1) in subparagraph (A) by striking ``paragraph (10)'' and 
        inserting ``paragraph (11)''; and
            (2) by amending subparagraph (B) to read as follows:
                    ``(B) has--
                            ``(i) at least--
                                    ``(I) 1 year of experience making 
                                microloans to startup, newly 
                                established, or growing small business 
                                concerns; or
                                    ``(II) 1 full-time employee who has 
                                not less than 3 years of experience 
                                making microloans to startup, newly 
                                established, or growing small business 
                                concerns; and
                            ``(ii) at least--
                                    ``(I) 1 year of experience 
                                providing, as an integral part of its 
                                microloan program, intensive marketing, 
                                management, and technical assistance to 
                                its borrowers; or
                                    ``(II) 1 full-time employee who has 
                                not less than 1 year of experience 
                                providing intensive marketing, 
                                management, and technical assistance to 
                                borrowers.''.

SEC. 304. INCREASED LIMIT ON INTERMEDIARY BORROWING.

    Section 7(m)(3)(C) of the Small Business Act (15 U.S.C. 
636(m)(3)(C)) is amended--
            (1) by striking ``$750,000'' and inserting ``$1,000,000'';
            (2) by striking ``$3,500,000'' and inserting 
        ``$7,000,000''; and
            (3) by adding at the end the following: ``The Administrator 
        may treat the amount of $7,000,000 in this subparagraph as if 
        such amount is $10,000,000 if the Administrator determines, 
        with respect to an intermediary, that such treatment is 
        appropriate.''.

SEC. 305. EXPANDED BORROWER EDUCATION ASSISTANCE.

    Section 7(m)(4)(E) of the Small Business Act (15 U.S.C. 
636(m)(4)(E)) is amended--
            (1) in clause (i) by striking ``25 percent'' and inserting 
        ``35 percent''; and
            (2) in clause (ii) by striking ``25 percent'' and inserting 
        ``35 percent''.

SEC. 306. YOUNG ENTREPRENEURS PROGRAM.

    Section 7(m)(4) of the Small Business Act (15 U.S.C. 636(m)(4)) is 
amended by adding at the end the following:
                    ``(G) Young entrepreneurs program.--
                            ``(i) In general.--An intermediary that 
                        receives a grant under paragraph (1)(B)(ii) may 
                        establish a program for the geographic area 
                        served by such intermediary that provides to 
                        young entrepreneurs technical assistance 
                        regarding the following:
                                    ``(I) Establishing or operating a 
                                small business concern in the 
                                geographic area served by the 
                                intermediary.
                                    ``(II) Acquiring or securing 
                                financing to carry out the activities 
                                described in subclause (I).
                            ``(ii) Young entrepreneur defined.--For 
                        purposes of this subparagraph, a young 
                        entrepreneur is an individual who--
                                    ``(I) is 25 years of age or 
                                younger; and
                                    ``(II) has resided in the 
                                geographic area served by the 
                                intermediary for not less than 2 years.
                            ``(iii) Good faith effort requirement.--If 
                        a young entrepreneur who receives technical 
                        assistance under this subparagraph from an 
                        intermediary establishes or operates a small 
                        business concern, the young entrepreneur shall 
                        make a good faith effort to establish or 
                        operate such concern in the geographic area 
                        served by the intermediary.
                            ``(iv) Deferred repayment.--If a small 
                        business concern established or operated by a 
                        young entrepreneur receives a loan under this 
                        subsection, such concern may defer repayment on 
                        such loan for a period of not more than 6 
                        months beginning on the date that such concern 
                        receives the final disbursement of such 
                        loan.''.

SEC. 307. INTEREST RATES AND LOAN SIZE.

    Section 7(m) of the Small Business Act (15 U.S.C. 636(m)), as 
amended by this Act, is further amended--
            (1) in paragraph (3)(F)(iii) by striking ``$7,500'' and 
        inserting ``$10,000'';
            (2) in paragraph (6)(C)(i) by striking ``$7,500'' and 
        inserting ``$10,000''; and
            (3) in paragraph (6)(C)(ii) by striking ``$7,500'' and 
        inserting ``$10,000''.

SEC. 308. REPORTING REQUIREMENT.

    Section 7(m) of the Small Business Act (15 U.S.C. 636(m)), as 
amended by this Act, is further amended by adding at the end the 
following:
            ``(15) Reporting requirement.--Not later than 90 days after 
        the end of each fiscal year, the Administrator shall submit to 
        the Committee on Small Business of the House of Representatives 
        and the Committee on Small Business and Entrepreneurship of the 
        Senate a report that includes, with respect to such fiscal year 
        of the microloan program, the following:
                    ``(A) The names and locations of each intermediary 
                that received funds to make microloans or provide 
                marketing, management, and technical assistance.
                    ``(B) The amounts of each loan and each grant 
                provided to each such intermediary in such fiscal year 
                and in prior fiscal years.
                    ``(C) A description of the contributions from non-
                Federal sources of each such intermediary.
                    ``(D) The number and amounts of microloans made by 
                each such intermediary to all borrowers and to each of 
                the following:
                            ``(i) Women entrepreneurs and business 
                        owners.
                            ``(ii) Low-income entrepreneurs and 
                        business owners.
                            ``(iii) Veteran entrepreneurs and business 
                        owners.
                            ``(iv) Disabled entrepreneurs and business 
                        owners.
                            ``(v) Minority entrepreneurs and business 
                        owners.
                    ``(E) A description of the marketing, management, 
                and technical assistance provided by each such 
                intermediary to all borrowers and to each of the 
                following:
                            ``(i) Women entrepreneurs and business 
                        owners.
                            ``(ii) Low-income entrepreneurs and 
                        business owners.
                            ``(iii) Veteran entrepreneurs and business 
                        owners.
                            ``(iv) Disabled entrepreneurs and business 
                        owners.
                            ``(v) Minority entrepreneurs and business 
                        owners.
                    ``(F) The number of jobs created and retained as a 
                result of microloans and marketing, management, and 
                technical assistance provided by each such 
                intermediary.
                    ``(G) The repayment history of each such 
                intermediary.
                    ``(H) The number of businesses that achieved 
                success after receipt of a microloan.''.

SEC. 309. SURPLUS INTEREST RATE SUBSIDY FOR BUSINESSES.

    Section 7(m) of the Small Business Act (15 U.S.C. 636(m)), as 
amended by this Act, is further amended by adding at the end the 
following:
            ``(16) Interest assistance.--The Administrator is 
        authorized to make grants to intermediaries for the purposes of 
        reducing interest rates charged to borrowers that receive 
        financing under this subsection.''.

SEC. 310. AUTHORIZATION OF APPROPRIATIONS.

    Section 20 of the Small Business Act (15 U.S.C. 631 note), as 
amended by this Act, is further amended by inserting after subsection 
(g) the following:
    ``(h) Fiscal Years 2010 and 2011 With Respect to Section 7(m).--
            ``(1) Program levels.--For the programs authorized by this 
        Act, the Administration is authorized to make during each of 
        fiscal years 2010 and 2011--
                    ``(A) $80,000,000 in technical assistance grants, 
                as provided in section 7(m); and
                    ``(B) $110,000,000 in direct loans, as provided in 
                section 7(m).
                    ``(C) $10,000,000 in interest assistance grants, as 
                provided in section 7(m)(16).
            ``(2) Authorization of appropriations.--There is authorized 
        to be appropriated such sums as may be necessary to carry out 
        paragraph (1).''.

       TITLE IV--SMALL BUSINESS INVESTMENT COMPANY MODERNIZATION

SEC. 401. INCREASED INVESTMENT FROM STATES.

    Section 103(13)(C) of the Small Business Investment Act of 1958 (15 
U.S.C. 662(13)(C)) is amended by striking ``33 percent'' and inserting 
``45 percent''.

SEC. 402. EXPEDITED LICENSING FOR EXPERIENCED APPLICANTS.

    Section 301 of the Small Business Investment Act of 1958 (15 U.S.C. 
681) is amended by inserting after subsection (c) the following:
    ``(d) Licenses for Experienced Applicants.--
            ``(1) In general.--Notwithstanding any other provision of 
        this section, not later than 60 days after the initial receipt 
        by the Administrator of any request (which shall be deemed to 
        be the application) for a license to operate as a small 
        business investment company under this Act, the Administrator 
        shall approve the request and issue such license if each of the 
        following requirements is satisfied:
                    ``(A) At least 50 percent of the principal managers 
                of the applicant consist of at least two-thirds of the 
                principal managers of a small business investment 
                company that has been licensed under this Act.
                    ``(B) The licensed small business investment 
                company specified under subparagraph (A) has operated 
                under such license for at least 3 years prior to the 
                receipt of the request specified in this paragraph.
                    ``(C) The licensed small business investment 
                company specified under subparagraph (A)--
                            ``(i) either has invested at least 70 
                        percent of its private capital and drawn at 
                        least 50 percent of its projected leverage at 
                        the time of the receipt of the request 
                        specified in this paragraph or reserved for 
                        investment and expenses or some combination of 
                        both at least 70 percent of its private capital 
                        in the one-year period prior to the date on 
                        which the application referred to in this 
                        paragraph was received by the Administrator;
                            ``(ii) has maintained 6 consecutive 
                        quarters of profitable net investment income; 
                        and
                            ``(iii) has made at least 3 exits from 
                        investments in small businesses that have 
                        realized profits from those respective 
                        investments.
                    ``(D) The applicant submits to the Administrator, 
                in writing, an application consisting of all of the 
                following:
                            ``(i) A certification, in the form 
                        prescribed by the Administrator, that such 
                        applicant satisfies the requirements of this 
                        subsection and that all information contained 
                        in the application is true and complete.
                            ``(ii) A copy of the organizational 
                        documents of the applicant.
                            ``(iii) A copy of the operating plan of the 
                        applicant demonstrating that at least 50 
                        percent of the amount of the planned 
                        investments of the applicant will be in the 
                        same or substantially similar investment stage 
                        and use the same or substantially similar type 
                        of investment instruments as the investments of 
                        the licensed small business investment company 
                        specified under subparagraph (A).
                            ``(iv) A certification, in a form 
                        prescribed by the Administrator, that the 
                        applicant satisfies the requirements of 
                        subsections (a) and (c) of section 302 of this 
                        Act.
                    ``(E) The applicant is in good standing as set 
                forth in paragraph (2).
                    ``(F) The applicant pays all fees prescribed by the 
                Administrator under subsection (e).
            ``(2) Good standing.--For purposes of this subsection, an 
        applicant is in good standing if--
                    ``(A) a licensed leveraged or non-leveraged small 
                business investment company specified under paragraph 
                (1)(A) is actively operating under this Act on the date 
                of the initial receipt of the application by the 
                Administrator to which this subsection applies;
                    ``(B) no principal manager of the applicant has 
                been found liable in a civil action for fraud if the 
                Administrator makes a reasonable determination based on 
                evidence in the agency record that such liability has a 
                material adverse effect on the ability of the applicant 
                to perform obligations required by a license issued 
                pursuant to this Act; and
                    ``(C) no principal manager is under investigation 
                by a governmental agency or authority for, is under 
                indictment for, or has been convicted of a felony for a 
                violation of Federal or State securities laws, fraud, 
                or another criminal violation if such investigation, 
                indictment, or conviction has a material adverse effect 
                on the ability of the applicant to perform obligations 
                under a license issued under this Act.
            ``(3) Limitation.--
                    ``(A) In general.--The Administrator may remove an 
                application from the approval process under this 
                subsection if the Administrator determines based on 
                evidence in the agency record that the approval of the 
                license would present an unacceptable risk to the 
                Federal Government.
                    ``(B) In writing.--Such determination shall be made 
                in writing and provided to the applicant no later than 
                10 calendar days after such determination is made. 
                Failure to provide this determination to the applicant 
                shall be deemed to be a permanent waiver of the 
                Administrator's authority to remove an application 
                pursuant to this subsection.
                    ``(C) Non-delegability.--The Administrator may rely 
                on agency personnel to collect data or other material 
                relevant to establishing a record, but the decision to 
                remove the application may not be delegated by the 
                Administrator to any subordinate personnel in the 
                agency.
            ``(4) Notice and opportunity to cure non-conformance.--
                    ``(A) Notice of non-conformance.--Except for a 
                determination made pursuant to paragraph (3), the 
                Administrator shall provide an applicant described in 
                paragraph (1) within 60 days after receipt of the 
                application a written notice and description of any 
                nonconformance with any requirement of this subsection 
                based on evidence in the agency record.
                    ``(B) Opportunity to cure.--The applicant shall 
                have 30 days following the receipt of notice of 
                nonconformance or the receipt of removal as set forth 
                in paragraph (3) to cure such nonconformance.
                    ``(C) Failure to provide notice.--Failure to 
                provide the notice within the time limit set forth in 
                subparagraph (A) shall be deemed to be acceptance by 
                the Administrator of the applicant's conformance with 
                the requirements of this subsection.
            ``(5) Background reviews.--The Administrator shall ensure 
        that a timely background check of the principal managers of 
        each applicant is completed with respect to paragraphs (2)(B) 
        and (2)(C).
            ``(6) Fees.--The Administrator may charge an applicant 
        additional fees for carrying out the background reviews 
        mandated by paragraph (5). Such fees shall not exceed $10,000.
            ``(7) Effect of non-qualification.--The failure of an 
        applicant to qualify for expedited licensure under this 
        subsection shall have no effect on an existing license or the 
        ability for the applicant or any of its individual managers to 
        apply for or receive a license to operate a small business 
        investment company under the procedures established elsewhere 
        in this Act or its implementing regulations.
            ``(8) Regulations.--The Administrator shall develop forms 
        and promulgate regulations to implement this subsection after 
        providing an opportunity for notice and comment. Regulations 
        promulgated pursuant to this paragraph shall be published in 
        the Code of Federal Regulations.''.

SEC. 403. REVISED LEVERAGE LIMITATIONS FOR SUCCESSFUL SBICS.

    (a) Maximum Leverage.--Section 303(b)(2) of the Small Business 
Investment Act of 1958 (15 U.S.C. 683(b)(2)) is amended by striking so 
much of paragraph (2) as precedes subparagraph (C) and inserting the 
following:
            ``(2) Maximum leverage.--
                    ``(A) In general.--(i) The maximum amount of 
                outstanding leverage made available to any one company 
                licensed under section 301(c) of this Act may not 
                exceed the lesser of--
                                    ``(I) 300 percent of such company's 
                                private capital; or
                                    ``(II) $150,000,000.
                    ``(ii) In applying clause (i)(I) in the case of a 
                debenture licensee which is in good standing without 
                the imposition of additional regulatory standards and 
                whose financings at cost are comprised of at least 50 
                percent of loans and debt securities, such licensee may 
                be leveraged as follows:
                            ``(I) The first one-third of private 
                        capital to 300 percent.
                            ``(II) The second one-third of private 
                        capital to 200 percent.
                            ``(III) The last third of private capital 
                        to 100 percent.
                    ``(iii) Notwithstanding clause (i), in the case of 
                any company operating as a business development company 
                (as such term is defined under section 2(a)(48) of the 
                Investment Company Act of 1940) or a majority-owned 
                subsidiary of such a company that is in good standing 
                without the imposition of additional regulatory 
                requirements, the maximum amount of outstanding 
                leverage made available to such company shall be 
                $250,000,000.
                    ``(B) Multiple licensees under common control.--The 
                maximum amount of outstanding leverage made available 
                to two or more debenture companies licensed under 
                section 301(c) of this Act that are commonly controlled 
                (as determined by the Administrator) and not under 
                capital impairment may not exceed $350,000,000.''.
    (b) Regulations.--Section 303(b)(2) of the Small Business 
Investment Act of 1958 (15 U.S.C. 683(b)(2)), as amended by this Act, 
is further amended by adding at the end the following:
                    ``(E) Regulations.--The Administrator shall 
                promulgate regulations, after notice and opportunity 
                for comment, establishing quantifiable objective 
                criteria under which a licensee's private capital in 
                its entirety may be leveraged up to 300 percent. Such 
                regulations shall be published in the Code of Federal 
                Regulations.''.
    (c) Investments in Low-Income Geographic Areas.--Section 
303(b)(2)(C)(ii) of the Small Business Investment Act of 1958 (15 
U.S.C. 683(b)(2)(C)(ii)) is amended by striking ``$250,000,000'' in 
subclause (II) and inserting ``$400,000,000''.

SEC. 404. CONSISTENCY FOR COST CONTROL.

    Section 305(c) of the Small Business Investment Act of 1958 (15 
U.S.C. 685(c)) is amended by adding at the end the following:
    ``In addition to the foregoing, with respect to a loan made, or 
debt with equity features acquired, under this section, the minimum 
coupon rate of interest (cost of money ceiling) imposed by the 
Administrator shall not be less than 19 percent per annum for a loan or 
a debt security, except that nothing herein shall alter or affect 
provisions permitting higher coupon rates of interest (cost of money 
ceilings) and a company may charge up to an additional 7 percent more 
than the interest rate set forth in the loan or debt security in the 
event of a default. For purposes of this subsection a default means the 
occurrence of any of the following:
            ``(1) Failure to pay an amount when due.
            ``(2) Failure to provide in a timely manner material 
        information required under the applicable financing documents.
            ``(3) Failure to observe any material term, covenant, or 
        other agreement contained in the applicable financing 
        documents.
            ``(4) A representation, warranty, certification, or 
        statement of fact made by or on behalf of a borrower in any 
        applicable financing document or in any document delivered in 
        connection therewith, that was materially incorrect or 
        misleading when made.
            ``(5) Any material event of default specified in the 
        applicable financing documents.''.

SEC. 405. INVESTMENT IN VETERAN-OWNED SMALL BUSINESSES.

    Section 303(b)(2)(C) of the Small Business Investment Act of 1958 
(15 U.S.C. 683(b)(2)(C)) is amended as follows:
            (1) In the heading, by inserting after ``areas'' the 
        following: ``and veterans''.
            (2) In clause (i), by inserting after ``351)'' the 
        following: ``or in a small business concern owned and 
        controlled by veterans (as such term is defined in section 
        3(q)(3) of the Small Business Act)''.
            (3) In clause (iii), by inserting after ``351)'' the 
        following: ``or in small business concerns owned and controlled 
        by veterans (as such term is defined in section 3(q)(3) of the 
        Small Business Act)''.

SEC. 406. TANGIBLE NET WORTH.

    Section 103 of the Small Business Investment Act of 1958 (15 U.S.C. 
662), as amended by this Act, is further amended by striking ``and'' at 
the end of paragraph (23), by striking the period at the end of 
paragraph (24) and inserting ``; and'', and by adding at the end the 
following:
            ``(25) for purposes of the terms `small-business concern' 
        in paragraph (5) and `smaller enterprise' in paragraph (12), 
        tangible net worth shall, to the extent used, mean the total 
        net worth of the small business, in accordance with General 
        Accepted Accounting Principles, minus all intangibles in 
        accordance with General Accepted Accounting Principles.''.

SEC. 407. DEVELOPMENT OF AGENCY RECORD.

    Part A of title III of the Small Business Investment Act of 1958 
(15 U.S.C. 681 et seq.), as amended by this Act, is further amended by 
adding at the end the following:

``SEC. 321. AGENCY RECORD FOR LICENSING OF SMALL BUSINESS INVESTMENT 
              COMPANIES.

    ``(a) Record.--The Associate Administrator for Investment shall 
establish an agency record of evidence referring or relating to each 
application for a license to become a small business investment 
company.
    ``(b) Written Notification.--The Administrator shall provide a 
written explanation of any denial of a license application based upon 
evidence in the agency record. Absent an order by a Federal or State 
court of general jurisdiction, access to applications and the agency 
record shall be limited to the applicant and to the Administrator and 
subordinate personnel of the Administrator.''.

SEC. 408. PROGRAM LEVELS.

    Section 20 of the Small Business Act (15 U.S.C. 631 note), as 
amended by this Act, is further amended by inserting after subsection 
(h) the following:
    ``(i) Part A of Title III of the Small Business Investment Act of 
1958.--
            ``(1) Program levels 2010.--For fiscal year 2010, in 
        carrying out the program authorized by part A of title III of 
        the Small Business Investment Act of 1958, the Administrator is 
        authorized to make $5,000,000,000 in guarantees of debentures.
            ``(2) Program levels 2011.--For fiscal year 2011, in 
        carrying out the program authorized by part A of title III of 
        the Small Business Investment Act of 1958, the Administrator is 
        authorized to make $5,5000,000,000 in guarantees of 
        debentures.''.

 TITLE V--INVESTMENT IN SMALL MANUFACTURERS AND RENEWABLE ENERGY SMALL 
                               BUSINESSES

        Subtitle A--Enhanced New Markets Venture Capital Program

SEC. 501. EXPANSION OF NEW MARKETS VENTURE CAPITAL PROGRAM.

    (a) Administration Participation Required.--Section 353 of the 
Small Business Investment Act of 1958 (15 U.S.C. 689b) is amended by 
striking ``under which the Administrator may'' and inserting ``under 
which the Administrator shall''.
    (b) Report to Congress.--Not later than 1 year after the date of 
the enactment of this Act, the Administrator of the Small Business 
Administration shall submit to Congress a report describing any 
expansion of the New Markets Venture Capital Program as a result of 
this section.

SEC. 502. IMPROVED NATIONWIDE DISTRIBUTION.

    Section 354 of the Small Business Investment Act of 1958 (15 U.S.C. 
689c) is amended by adding at the end the following:
    ``(f) Geographic Expansion.--From among companies submitting 
applications under subsection (b), the Administrator shall consider the 
selection criteria and promotion of nationwide distribution under 
subsection (c) and shall, to the extent practicable, approve at least 
one company from each geographic region of the Small Business 
Administration.''.

SEC. 503. INCREASED INVESTMENT IN SMALL BUSINESS CONCERNS ENGAGED 
              PRIMARILY IN MANUFACTURING.

    (a) Developmental Venture Capital and Participation Agreements.--
Section 351 of the Small Business Investment Act of 1958 (15 U.S.C. 
689) is amended--
            (1) in paragraph (1) by inserting after ``geographic 
        areas'' the following: ``or encouraging the growth or 
        continuation of small business concerns located in low-income 
        geographic areas and engaged primarily in manufacturing''; and
            (2) in paragraph (6)(B) by inserting after ``geographic 
        areas'' the following: ``or in small business concerns located 
        in low-income geographic areas at least 80 percent of which are 
        engaged primarily in manufacturing''.
    (b) Purposes.--Section 352(2) of the Small Business Investment Act 
of 1958 (15 U.S.C. 689a(2)) is amended--
            (1) in the matter preceding subparagraph (A) by inserting 
        after ``geographic areas'' the following: ``and small business 
        concerns located in low-income geographic areas and engaged 
        primarily in manufacturing'';
            (2) in subparagraph (B) by inserting after ``geographic 
        areas'' the following: ``or in small business concerns located 
        in low-income geographic areas and engaged primarily in 
        manufacturing''; and
            (3) in subparagraph (C) by inserting after ``smaller 
        enterprises'' the following: ``and small business concerns''.
    (c) Eligibility, Applications, and Requirements for Final 
Approval.--Section 354 of the Small Business Investment Act of 1958 (15 
U.S.C. 689c), as amended by this Act, is further amended--
            (1) in subsection (a)(3) by inserting after ``geographic 
        areas'' the following: ``or investing in small business 
        concerns located in low-income geographic areas and engaged 
        primarily in manufacturing'';
            (2) in subsection (b)--
                    (A) in paragraph (1) by inserting after 
                ``geographic areas'' the following: ``or in small 
                business concerns located in low-income geographic 
                areas and engaged primarily in manufacturing''; and
                    (B) in paragraph (4) by inserting after ``smaller 
                enterprises'' the following: ``or small business 
                concerns''; and
            (3) in subsection (d)--
                    (A) in paragraph (1)--
                            (i) by striking ``Each'' and inserting the 
                        following:
                    ``(A) In general.--Except as provided in 
                subparagraph (B), each''; and
                            (ii) by adding at the end the following:
                    ``(B) Small business concerns engaged primarily in 
                manufacturing.--Each conditionally approved company 
                engaged primarily in development of and investment in 
                small business concerns located in low-income 
                geographic areas and engaged primarily in manufacturing 
                shall raise not less than $3,000,000 of private capital 
                or binding capital commitments from one or more 
                investors (other than agencies or departments of the 
                Federal Government) who met criteria established by the 
                Administrator.''; and
                    (B) in paragraph (2)(A) by inserting after 
                ``smaller enterprises'' the following: ``or small 
                business concerns''.
    (d) Operational Assistance Grants.--Section 358 of the Small 
Business Investment Act of 1958 (15 U.S.C. 689g) is amended--
            (1) in subsection (a)(1) by inserting after ``smaller 
        enterprises'' the following: ``and small business concerns''; 
        and
            (2) in subsection (b)(1) by inserting after ``smaller 
        enterprises'' the following: ``and small business concerns''.

SEC. 504. EXPANDED USES FOR OPERATIONAL ASSISTANCE IN MANUFACTURING.

    Section 351 of the Small Business Investment Act of 1958 (15 U.S.C. 
689), as amended by this Act, is further amended in paragraph (5) by 
inserting after ``business development'' the following: ``or assistance 
that assists a small business concern located in a low-income 
geographic area and engaged primarily in manufacturing with retooling, 
updating, or replacing machinery or equipment''.

SEC. 505. UPDATING DEFINITION OF LOW-INCOME GEOGRAPHIC AREA.

    Section 351 of the Small Business Investment Act of 1958 (15 U.S.C. 
689), as amended by this Act, is further amended--
            (1) by striking paragraphs (2) and (3);
            (2) by inserting after paragraph (1) the following:
            ``(2) Low-income geographic area.--The term `low-income 
        geographic area' has the meaning given the term `low-income 
        community' in section 45D(e) of the Internal Revenue Code of 
        1986, except that, without regard to such meaning, such term 
        includes an area that the Administrator determines to be an 
        area with high unemployment.''; and
            (3) by redesignating paragraphs (4) through (8) as 
        paragraphs (3) through (7), respectively.

SEC. 506. EXPANDING OPERATIONAL ASSISTANCE TO CONDITIONALLY APPROVED 
              COMPANIES.

    Section 358(a) of the Small Business Investment Act of 1958 (15 
U.S.C. 689g(a)) is amended by adding at the end the following:
            ``(6) Grants to conditionally approved companies.--
                    ``(A) In general.--Subject to the provisions of 
                this paragraph, upon the request of a company 
                conditionally approved under section 354(c), the 
                Administrator shall make a grant to the company under 
                this subsection.
                    ``(B) Repayment by companies not approved.--If a 
                company receives a grant under this paragraph and does 
                not receive final approval under section 354(e), the 
                company shall repay the amount of the grant to the 
                Administrator.
                    ``(C) Deduction from grant to approved company.--If 
                a company receives a grant under this paragraph and 
                receives final approval under section 354(e), the 
                Administrator shall deduct the amount of such grant 
                from the amount of any immediately succeeding grant the 
                company receives for operational assistance.
                    ``(D) Amount of grant.--No company may receive a 
                grant of more than $50,000 under this paragraph.''.

SEC. 507. LIMITATION ON TIME FOR FINAL APPROVAL.

    Section 354(d) of the Small Business Investment Act of 1958 (15 
U.S.C. 689c(d)) is amended in the matter preceding paragraph (1) by 
striking ``a period of time, not to exceed 2 years,'' and inserting ``2 
years''.

SEC. 508. STREAMLINED APPLICATION FOR NEW MARKETS VENTURE CAPITAL 
              PROGRAM.

    Not later than 60 days after the date of the enactment of this Act, 
the Administrator of the Small Business Administration shall prescribe 
standard documents for a New Markets Venture Capital company final 
approval application under section 354(e) of the Small Business 
Investment Act of 1958 (15 U.S.C. 689c(e)). The Administrator shall 
ensure that the standard documents are designed to substantially reduce 
the cost burden of the application process for companies.

SEC. 509. ELIMINATION OF MATCHING REQUIREMENT.

    Section 354(d)(2)(A)(i) of the Small Business Investment Act of 
1958 (15 U.S.C. 689c(d)(2)(A)(i)) is amended--
            (1) in subclause (I) by adding ``and'' at the end;
            (2) in subclause (II) by striking ``and'' at the end; and
            (3) by striking subclause (III).

SEC. 510. SIMPLIFIED FORMULA FOR OPERATIONAL ASSISTANCE GRANTS.

    Section 358(a)(4)(A) of the Small Business Investment Act of 1958 
(15 U.S.C. 689g(a)(4)(A)) is amended--
            (1) by striking ``shall be equal to'' and all that follows 
        through the period at the end and inserting ``shall be equal to 
        the lesser of--''; and
            (2) by adding at the end the following:
                            ``(i) 10 percent of the resources (in cash 
                        or in-kind) raised by the company under section 
                        354(d)(2); or
                            ``(ii) $1,000,000.''.

SEC. 511. FINANCING WITH RESPECT TO VETERANS.

    Section 354 of the Small Business Investment Act of 1958 (15 U.S.C. 
689c), as amended by this Act, is further amended by adding at the end 
the following:
    ``(g) Financing With Respect to Veterans.--A New Markets Venture 
Capital company shall, to the extent practicable, provide financing to 
small business concerns owned and controlled by veterans, as defined in 
section 3(q) of the Small Business Act (15 U.S.C. 632(q)), located in 
low-income geographic areas.''.

SEC. 512. AUTHORIZATION OF APPROPRIATIONS AND ENHANCED ALLOCATION FOR 
              SMALL MANUFACTURING.

    Section 368(a) of the Small Business Investment Act of 1958 (15 
U.S.C. 689q(a)) is amended--
            (1) in the matter preceding paragraph (1) by striking 
        ``fiscal years 2001 through 2006'' and inserting ``fiscal years 
        2010 and 2011'';
            (2) in paragraph (1)--
                    (A) by striking ``$150,000,000'' and inserting 
                ``$100,000,000''; and
                    (B) by inserting before the period at the end the 
                following: ``, of which not less than 50 percent shall 
                be used to guarantee debentures of companies engaged 
                primarily in development of and investment in small 
                business concerns located in low-income geographic 
                areas and engaged primarily in manufacturing''; and
            (3) in paragraph (2)--
                    (A) by striking ``$30,000,000'' and inserting 
                ``$20,000,000''; and
                    (B) by inserting before the period at the end the 
                following: ``, of which not less than 50 percent shall 
                be used to make grants to companies engaged primarily 
                in development of and investment in small business 
                concerns located in low-income geographic areas and 
                engaged primarily in manufacturing''.

   Subtitle B--Expanded Investment in Small Business Renewable Energy

SEC. 521. EXPANDED INVESTMENT IN RENEWABLE ENERGY.

    Part C of title III of the Small Business Investment Act of 1958 
(15 U.S.C. 690 et seq.) is amended--
            (1) in the heading by striking ``renewable fuel capital 
        investment'' and inserting ``renewable energy capital 
        investment'';
            (2) in the heading of paragraph (4) of section 381 by 
        striking ``Renewable fuel capital investment'' and inserting 
        ``Renewable energy capital investment'';
            (3) in the heading of section 384 by striking ``renewable 
        fuel capital investment'' and inserting ``renewable energy 
        capital investment''; and
            (4) by striking ``Renewable Fuel Capital Investment'' each 
        place it appears and inserting ``Renewable Energy Capital 
        Investment''.

SEC. 522. RENEWABLE ENERGY CAPITAL INVESTMENT PROGRAM MADE PERMANENT.

    Part C of title III of the Small Business Investment Act of 1958 
(15 U.S.C. 690 et seq.), as amended by this Act, is further amended--
            (1) in the heading by striking ``pilot''; and
            (2) by striking section 398.

SEC. 523. EXPANDED ELIGIBILITY FOR SMALL BUSINESSES.

    Part C of title III of the Small Business Investment Act of 1958 
(15 U.S.C. 690 et seq.), as amended by this Act, is further amended by 
striking ``smaller enterprises'' each place it appears and inserting 
``small business concerns''.

SEC. 524. EXPANDED USES FOR OPERATIONAL ASSISTANCE IN MANUFACTURING AND 
              SMALL BUSINESSES.

    Section 381(1) of the Small Business Investment Act of 1958 (15 
U.S.C. 690(1)) is amended by inserting after ``business development'' 
the following: ``, assistance that assists a small business concern to 
reduce energy consumption, or assistance that assists a small business 
concern engaged primarily in manufacturing with retooling, updating, or 
replacing machinery or equipment''.

SEC. 525. EXPANSION OF RENEWABLE ENERGY CAPITAL INVESTMENT PROGRAM.

    (a) Administration Participation Required.--Section 383 of the 
Small Business Investment Act of 1958 (15 U.S.C. 690b) is amended by 
striking ``under which the Administrator may'' and inserting ``under 
which the Administrator shall''.
    (b) Reports to Congress.--At quarterly intervals after the date of 
the enactment of this Act, the Administrator of the Small Business 
Administration shall submit to Congress a report describing the 
Administrator's progress towards the expansion of the Renewable Energy 
Capital Investment Program as a result of amendments made by this 
title.
    (c) Regulations.--The Administrator of the Small Business 
Administration shall promulgate such regulations as are necessary to 
carry out the Renewable Energy Capital Investment Program established 
pursuant to this title within 180 days after the enactment of this Act.

SEC. 526. SIMPLIFIED FEE STRUCTURE TO EXPEDITE IMPLEMENTATION.

    Section 387(a) of the Small Business Investment Act of 1958 (15 
U.S.C. 690f(a)) is amended by striking ``or grant''.

SEC. 527. INCREASED OPERATIONAL ASSISTANCE GRANTS.

    Section 397(a) of the Small Business Investment Act of 1958 (15 
U.S.C. 690p(a)) is amended by inserting after ``and 2009'' the 
following: ``and $30,000,000 in such grants for each of fiscal years 
2010 and 2011''.

SEC. 528. AUTHORIZATIONS OF APPROPRIATIONS.

    Section 397 of the Small Business Investment Act of 1958 (15 U.S.C. 
690p) is amended--
            (1) in the heading by inserting after ``appropriations'' 
        the following: ``and program levels''; and
            (2) by adding at the end the following:
    ``(c) Program Levels.--For the programs authorized by this part, 
the Administration is authorized to make $1,000,000,000 in guarantees 
of debentures for each of fiscal years 2010 and 2011.''.

   TITLE VI--SMALL BUSINESS HEALTH INFORMATION TECHNOLOGY FINANCING 
                                PROGRAM

SEC. 601. SMALL BUSINESS HEALTH INFORMATION TECHNOLOGY FINANCING 
              PROGRAM.

    The Small Business Act (15 U.S.C. 631 et seq.), as amended by this 
Act, is further amended by redesignating section 45 as section 46 and 
by inserting the following new section after section 44:

``SEC. 45. LOAN GUARANTEES FOR HEALTH INFORMATION TECHNOLOGY.

    ``(a) Definitions.--As used in this section:
            ``(1) The term `health information technology' means 
        computer hardware, software, and related technology that 
        supports the meaningful EHR use requirements set forth in 
        section 1848(o)(2)(A) of the Social Security Act (42 U.S.C. 
        1395w-4(o)(2)(A)) and is purchased by an eligible professional 
        to aid in the provision of health care in a health care 
        setting, including, but not limited to, electronic medical 
        records, and that provides for--
                    ``(A) enhancement of continuity of care for 
                patients through electronic storage, transmission, and 
                exchange of relevant personal health data and 
                information, such that this information is accessible 
                at the times and places where clinical decisions will 
                be or are likely to be made;
                    ``(B) enhancement of communication between patients 
                and health care providers;
                    ``(C) improvement of quality measurement by 
                eligible professionals enabling them to collect, store, 
                measure, and report on the processes and outcomes of 
                individual and population performance and quality of 
                care;
                    ``(D) improvement of evidence-based decision 
                support; or
                    ``(E) enhancement of consumer and patient 
                empowerment.
        Such term shall not include information technology whose sole 
        use is financial management, maintenance of inventory of basic 
        supplies, or appointment scheduling.
            ``(2) The term `eligible professional' means any of the 
        following:
                    ``(A) A physician (as defined in section 1861(r) of 
                the Social Security Act (42 U.S.C. 1395x(r))).
                    ``(B) A practitioner described in section 
                1842(b)(18)(C) of that Act.
                    ``(C) A physical or occupational therapist or a 
                qualified speech-language pathologist.
                    ``(D) A qualified audiologist (as defined in 
                section 1861(ll)(3)(B)) of that Act.
                    ``(E) A qualified medical transcriptionist who is 
                either certified by or registered with the Association 
                for Healthcare Documentation Integrity, or a successor 
                association thereto.
                    ``(F) A State-licensed pharmacist.
                    ``(G) A State-licensed supplier of durable medical 
                equipment, prosthetics, orthotics, or supplies.
                    ``(H) A State-licensed, a State-certified, or a 
                nationally accredited home health care provider.
            ``(3) The term `qualified eligible professional' means an 
        eligible professional whose office can be classified as a small 
        business concern by the Administrator for purposes of this Act 
        under size standards established under section 3 of this Act.
            ``(4) The term `qualified medical transcriptionist' means a 
        specialist in medical language and the healthcare documentation 
        process who interprets and transcribes dictation by physicians 
        and other healthcare professionals to ensure accurate, 
        complete, and consistent documentation of healthcare 
        encounters.
    ``(b) Loan Guarantees for Qualified Eligible Professionals.--
            ``(1) In general.--Subject to paragraph (2), the 
        Administrator may guarantee up to 90 percent of the amount of a 
        loan made to a qualified eligible professional to be used for 
        the acquisition of health information technology for use in 
        such eligible professional's medical practice and for the costs 
        associated with the installation of such technology. Except as 
        otherwise provided in this section, the terms and conditions 
        that apply to loans made under section 7(a) of this Act shall 
        apply to loan guarantees made under this section.
            ``(2) Limitations on guarantee amounts.--The maximum amount 
        of loan principal guaranteed under this subsection may not 
        exceed--
                    ``(A) $350,000 with respect to any single qualified 
                eligible professional; and
                    ``(B) $2,000,000 with respect to a single group of 
                affiliated qualified eligible professionals.
    ``(c) Fees.--(1) The Administrator may impose a guarantee fee on 
the borrower for the purpose of reducing the cost (as defined in 
section 502(5) of the Federal Credit Reform Act of 1990) of the 
guarantee to zero in an amount not to exceed 2 percent of the total 
guaranteed portion of any loan guaranteed under this section. The 
Administrator may also impose annual servicing fees on lenders not to 
exceed 0.5 percent of the outstanding balance of the guarantees on 
lenders' books.
    ``(2) No service fees, processing fees, origination fees, 
application fees, points, brokerage fees, bonus points, or other fees 
may be charged to a loan applicant or recipient by a lender in the case 
of a loan guaranteed under this section.
    ``(d) Deferral Period.--Loans guaranteed under this section shall 
carry a deferral period of not less than 1 year and not more than 3 
years. The Administrator shall have the authority to subsidize interest 
during the deferral period.
    ``(e) Effective Date.--No loan may be guaranteed under this section 
until the meaningful EHR use requirements have been determined by the 
Secretary of Health and Human Services.
    ``(f) Sunset.--No loan may be guaranteed under this section after 
the date that is 7 years after meaningful EHR use requirements have 
been determined by the Secretary of Health and Human Services.
    ``(g) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as are necessary for the cost (as defined in 
section 502(5) of the Federal Credit Reform Act of 1990) of 
guaranteeing $10,000,000,000 in loans under this section. The 
Administrator shall determine such program cost separately and 
distinctly from other programs operated by the Administrator.''.

        TITLE VII--SMALL BUSINESS EARLY-STAGE INVESTMENT PROGRAM

SEC. 701. SMALL BUSINESS EARLY-STAGE INVESTMENT PROGRAM.

    Title III of the Small Business Investment Act of 1958 (15 U.S.C. 
681 et seq.) is amended by adding at the end the following:

        ``PART D--SMALL BUSINESS EARLY-STAGE INVESTMENT PROGRAM

``SEC. 399A. ESTABLISHMENT OF PROGRAM.

    ``The Administrator shall establish and carry out an early-stage 
investment program (hereinafter referred to in this part as the 
`program') to provide equity investment financing to support early-
stage small businesses in targeted industries in accordance with this 
part.

``SEC. 399B. ADMINISTRATION OF PROGRAM.

    ``The program shall be administered by the Administrator acting 
through the Associate Administrator described under section 201.

``SEC. 399C. APPLICATIONS.

    ``(a) In General.--Any incorporated body, limited liability 
company, or limited partnership organized and chartered or otherwise 
existing under Federal or State law for the purpose of performing the 
functions and conducting the activities contemplated under the program 
and any small business investment company may submit to the 
Administrator an application to participate in the program.
    ``(b) Requirements for Application.--An application to participate 
in the program shall include the following:
            ``(1) A business plan describing how the applicant intends 
        to make successful venture capital investments in early-stage 
        small businesses in targeted industries.
            ``(2) Information regarding the relevant venture capital 
        investment qualifications and backgrounds of the individuals 
        responsible for the management of the applicant.
            ``(3) A description of the extent to which the applicant 
        meets the selection criteria under section 399D.
    ``(c) Applications From Small Business Investment Companies.--The 
Administrator shall establish an abbreviated application process for 
small business investment companies that have received a license under 
section 301 and that are applying to participate in the program. Such 
abbreviated process shall incorporate a presumption that such small 
business investment companies satisfactorily meet the selection 
criteria under paragraphs (3) and (5) of section 399D(b).

``SEC. 399D. SELECTION OF PARTICIPATING INVESTMENT COMPANIES.

    ``(a) In General.--Not later than 90 days after the date on which 
the Administrator receives an application from an applicant under 
section 399C, the Administrator shall make a final determination to 
approve or disapprove such applicant to participate in the program and 
shall transmit such determination to the applicant in writing.
    ``(b) Selection Criteria.--In making a determination under 
subsection (a), the Administrator shall consider each of the following:
            ``(1) The likelihood that the applicant will meet the goals 
        specified in the business plan of the applicant.
            ``(2) The likelihood that the investments of the applicant 
        will create or preserve jobs, both directly and indirectly.
            ``(3) The character and fitness of the management of the 
        applicant.
            ``(4) The experience and background of the management of 
        the applicant.
            ``(5) The extent to which the applicant will concentrate 
        investment activities on early-stage small businesses in 
        targeted industries.
            ``(6) The likelihood that the applicant will achieve 
        profitability.
            ``(7) The experience of the management of the applicant 
        with respect to establishing a profitable investment track 
        record.

``SEC. 399E. GRANTS.

    ``(a) In General.--The Administrator may make one or more grants to 
a participating investment company.
    ``(b) Grant Amounts.--
            ``(1) Non-federal capital.--A grant made to a participating 
        investment company under the program may not be in an amount 
        that exceeds the amount of the capital of such company that is 
        not from a Federal source and that is available for investment 
        on or before the date on which a grant is drawn upon. Such 
        capital may include legally binding commitments with respect to 
        capital for investment.
            ``(2) Limitation on aggregate amount.--The aggregate amount 
        of all grants made to a participating investment company under 
        the program may not exceed $100,000,000.
    ``(c) Grant Process.--In making a grant under the program, the 
Administrator shall commit a grant amount to a participating investment 
company and the amount of each such commitment shall remain available 
to be drawn upon by such company--
            ``(1) for new-named investments during the 5-year period 
        beginning on the date on which each such commitment is first 
        drawn upon; and
            ``(2) for follow-on investments and management fees during 
        the 10-year period beginning on the date on which each such 
        commitment is first drawn upon, with not more than 2 additional 
        1-year periods available at the discretion of the 
        Administrator.

``SEC. 399F. INVESTMENTS IN EARLY-STAGE SMALL BUSINESSES IN TARGETED 
              INDUSTRIES.

    ``(a) In General.--As a condition of receiving a grant under the 
program, a participating investment company shall make all of the 
investments of such company in small business concerns, of which at 
least 50 percent shall be early-stage small businesses in targeted 
industries.
    ``(b) Evaluation of Compliance.--With respect to a grant amount 
committed to a participating investment company under section 399E, the 
Administrator shall evaluate the compliance of such company with the 
requirements under this section if such company has drawn upon 50 
percent of such commitment.

``SEC. 399G. PRO RATA INVESTMENT SHARES.

    ``Each investment made by a participating investment company under 
the program shall be treated as comprised of capital from grants under 
the program according to the ratio that capital from grants under the 
program bears to all capital available to such company for investment.

``SEC. 399H. GRANT INTEREST.

    ``(a) Grant Interest.--
            ``(1) In general.--As a condition of receiving a grant 
        under the program, a participating investment company shall 
        convey a grant interest to the Administrator in accordance with 
        paragraph (2).
            ``(2) Effect of conveyance.--The grant interest conveyed 
        under paragraph (1) shall have all the rights and attributes of 
        other investors attributable to their interests in the 
        participating investment company, but shall not denote control 
        or voting rights to the Administrator. The grant interest shall 
        entitle the Administrator to a pro rata portion of any 
        distributions made by the participating investment company 
        equal to the percentage of capital in the participating 
        investment company that the grant comprises. The Administrator 
        shall receive distributions from the participating investment 
        company at the same times and in the same amounts as any other 
        investor in the company with a similar interest. The investment 
        company shall make allocations of income, gain, loss, 
        deduction, and credit to the Administrator with respect to the 
        grant interest as if the Administrator were an investor.
    ``(b) Manager Profits.--As a condition of receiving a grant under 
the program, the manager profits interest payable to the managers of a 
participating investment company under the program shall not exceed 20 
percent of profits, exclusive of any profits that may accrue as a 
result of the capital contributions of any such managers with respect 
to such company. Any excess of this amount, less taxes payable thereon, 
shall be returned by the managers and paid to the investors and the 
Administrator in proportion to the capital contributions and grants 
paid in. No manager profits interest (other than a tax distribution) 
shall be paid prior to the repayment to the investors and the 
Administrator of all contributed capital and grants made.
    ``(c) Distribution Requirements.--As a condition of receiving a 
grant under the program, a participating investment company shall make 
all distributions to all investors in cash and shall make distributions 
within a reasonable time after exiting investments, including following 
a public offering or market sale of underlying investments.

``SEC. 399I. FUND.

    ``There is hereby created within the Treasury a separate fund for 
grants which shall be available to the Administrator subject to annual 
appropriations as a revolving fund to be used for the purposes of the 
program. All amounts received by the Administrator, including any 
moneys, property, or assets derived by the Administrator from 
operations in connection with the program, shall be deposited in the 
fund. All expenses and payments, excluding administrative expenses, 
pursuant to the operations of the Administrator under the program shall 
be paid from the fund.

``SEC. 399J. APPLICATION OF OTHER SECTIONS.

    ``To the extent not inconsistent with requirements under this part, 
the Administrator may apply sections 309, 311, 312, 313, and 314 to 
activities under this part and an officer, director, employee, agent, 
or other participant in a participating investment company shall be 
subject to the requirements under such sections.

``SEC. 399K. DEFINITIONS.

    ``In this part, the following definitions apply:
            ``(1) Early-stage small business in a targeted industry.--
        The term `early-stage small business in a targeted industry' 
        means a small business concern that--
                    ``(A) is domiciled in a State;
                    ``(B) has not generated gross annual sales revenues 
                exceeding $15,000,000 in any of the previous 3 years; 
                and
                    ``(C) is engaged primarily in researching, 
                developing, manufacturing, producing, or bringing to 
                market goods, products, or services with respect to any 
                of the following business sectors:
                            ``(i) Agricultural technology.
                            ``(ii) Energy technology.
                            ``(iii) Environmental technology.
                            ``(iv) Life science.
                            ``(v) Information technology.
                            ``(vi) Digital media.
                            ``(vii) Clean technology.
                            ``(viii) Defense technology.
                            ``(ix) Photonics technology.
            ``(2) Participating investment company.--The term 
        `participating investment company' means an applicant approved 
        under section 399D to participate in the program.
            ``(3) Small business concern.--The term `small business 
        concern' has the same meaning given such term under section 
        3(a) of the Small Business Act (15 U.S.C. 632(a)).

``SEC. 399L. AUTHORIZATION OF APPROPRIATIONS.

    ``There is authorized to be appropriated to carry out the program 
$200,000,000 for the first full fiscal year beginning after the date of 
the enactment of this part.''.

SEC. 702. PROHIBITIONS ON EARMARKS.

    None of the funds appropriated for the program established under 
part D of title III of the Small Business Investment Act of 1958, as 
added by this title, may be used for a Congressional earmark as defined 
in clause 9(d) of rule XXI of the Rules of the House of 
Representatives.

                TITLE VIII--SBA DISASTER PROGRAM REFORM

SEC. 801. REVISED COLLATERAL REQUIREMENTS.

    Section 7 of the Small Business Act (15 U.S.C. 636) is amended--
            (1) by striking ``(e) [RESERVED].'' and ``(f) 
        [RESERVED].''; and
            (2) in subsection (f), as added by section 12068(a)(2) of 
        the Small Business Disaster Response and Loan Improvements Act 
        of 2008 (subtitle B of title XII of the Food, Conservation, and 
        Energy Act of 2008; Public Law 110-246), by adding at the end 
        the following:
            ``(2) Revised collateral requirements.--In making a loan 
        with respect to a business under subsection (b), if the total 
        approved amount of such loan is less than or equal to $250,000, 
        the Administrator may not require the borrower to use the 
        borrower's home as collateral.''.

SEC. 802. INCREASED LIMITS.

    Section 7(b) of the Small Business Act (15 U.S.C. 636(b)) is 
amended--
            (1) in paragraph (3)(E) by striking ``$1,500,000'' each 
        place it appears and inserting ``$3,000,000''; and
            (2) in paragraph (8)(A) by striking ``$2,000,000'' and 
        inserting ``$3,000,000''.

SEC. 803. REVISED REPAYMENT TERMS.

    Section 7(f) of the Small Business Act (15 U.S.C. 636(f)) is 
amended by adding at the end the following:
            ``(3) Revised repayment terms.--In making loans under 
        subsection (b), the Administrator--
                    ``(A) may not require repayment to begin until the 
                date that is 12 months after the date on which the 
                final disbursement of approved amounts is made; and
                    ``(B) shall calculate the amount of repayment based 
                solely on the amounts disbursed.''.

SEC. 804. REVISED DISBURSEMENT PROCESS.

    Section 7(f) of the Small Business Act (15 U.S.C. 636(f)), as 
amended by this Act, is further amended by adding at the end the 
following:
            ``(4) Revised disbursement process.--In making a loan under 
        subsection (b), the Administrator shall disburse loan amounts 
        in accordance with the following:
                    ``(A) If the total amount approved with respect to 
                such loan is less than or equal to $150,000--
                            ``(i) the first disbursement with respect 
                        to such loan shall consist of 40 percent of the 
                        total loan amount, or a lesser percentage of 
                        the total loan amount if the Administrator and 
                        the borrower agree on such a lesser percentage;
                            ``(ii) the second disbursement shall 
                        consist of 50 percent of the loan amounts that 
                        remain after the first disbursement, and shall 
                        be made when the borrower has produced 
                        satisfactory receipts to demonstrate the proper 
                        use of 50 percent of the first disbursement; 
                        and
                            ``(iii) the third disbursement shall 
                        consist of the loan amounts that remain after 
                        the preceding disbursements, and shall be made 
                        when the borrower has produced satisfactory 
                        receipts to demonstrate the proper use of the 
                        first disbursement and 50 percent of the second 
                        disbursement.
                    ``(B) If the total amount approved with respect to 
                such loan is more than $150,000 but less than or equal 
                to $500,000--
                            ``(i) the first disbursement with respect 
                        to such loan shall consist of 20 percent of the 
                        total loan amount, or a lesser percentage of 
                        the total loan amount if the Administrator and 
                        the borrower agree on such a lesser percentage;
                            ``(ii) the second disbursement shall 
                        consist of 30 percent of the loan amounts that 
                        remain after the first disbursement, and shall 
                        be made when the borrower has produced 
                        satisfactory receipts to demonstrate the proper 
                        use of 50 percent of the first disbursement;
                            ``(iii) the third disbursement shall 
                        consist of 25 percent of the loan amounts that 
                        remain after the first and second 
                        disbursements, and shall be made when the 
                        borrower has produced satisfactory receipts to 
                        demonstrate the proper use of the first 
                        disbursement and 50 percent of the second 
                        disbursement; and
                            ``(iv) the fourth disbursement shall 
                        consist of the loan amounts that remain after 
                        the preceding disbursements, and shall be made 
                        when the borrower has produced satisfactory 
                        receipts to demonstrate the proper use of the 
                        first and second disbursements and 50 percent 
                        of the third disbursement.
                    ``(C) If the total amount approved with respect to 
                such loan is more than $500,000--
                            ``(i) the first disbursement with respect 
                        to such loan shall consist of at least 
                        $100,000, or a lesser amount if the 
                        Administrator and the borrower agree on such a 
                        lesser amount; and
                            ``(ii) the number of disbursements after 
                        the first, and the amount of each such 
                        disbursement, shall be in the discretion of the 
                        Administrator, but the amount of each such 
                        disbursement shall be at least $100,000.''.

SEC. 805. GRANT PROGRAM.

    Section 7(b) of the Small Business Act (15 U.S.C. 636(b)), as 
amended by this Act, is further amended by inserting after paragraph 
(9) the following:
            ``(10) Grants to disaster-affected small businesses.--
                    ``(A) In general.--If the Administrator declares 
                eligibility for additional disaster assistance under 
                paragraph (9), the Administrator may make a grant, in 
                an amount not exceeding $100,000, to a small business 
                concern that--
                            ``(i) is located in an area affected by the 
                        applicable major disaster;
                            ``(ii) submits to the Administrator a 
                        certification by the owner of the concern that 
                        such owner intends to reestablish the concern 
                        in the same county in which the concern was 
                        originally located;
                            ``(iii) has applied for, and was rejected 
                        for, a conventional disaster assistance loan 
                        under this subsection; and
                            ``(iv) was in existence for at least 2 
                        years before the date on which the applicable 
                        disaster declaration was made.
                    ``(B) Priority.--In making grants under this 
                paragraph, the Administrator shall give priority to a 
                small business concern that the Administrator 
                determines is economically viable but unable to meet 
                short-term financial obligations.
                    ``(C) Program level and authorization of 
                appropriations.--
                            ``(i) Program level.--The Administrator is 
                        authorized to make $100,000,000 in grants under 
                        this paragraph for each of fiscal years 2010 
                        and 2011.
                            ``(ii) Authorization of appropriations.--
                        There are authorized to be appropriated to the 
                        Administrator such sums as may be necessary to 
                        carry out this paragraph.''.

SEC. 806. REGIONAL DISASTER WORKING GROUPS.

    Section 40 of the Small Business Act (15 U.S.C. 657l) is amended--
            (1) in subsection (a), in the matter preceding paragraph 
        (1), by striking ``or'' and inserting ``and'';
            (2) by redesignating subsection (d) as subsection (e); and
            (3) by inserting after subsection (c) the following:
    ``(d) Regional Disaster Working Groups.--In carrying out the 
responsibilities pertaining to loan making activities under subsection 
(a), the Administrator, acting through the regional administrators of 
the regional offices of the Administration, shall develop a disaster 
preparedness and response plan for each region of the Administration. 
Each such plan shall be developed in cooperation with Federal, State, 
and local emergency response authorities and representatives of 
businesses located in the region to which such plan applies. Each such 
plan shall identify and include a plan relating to the 3 disasters, 
natural or manmade, most likely to occur in the region to which such 
plan applies.''.

SEC. 807. OUTREACH GRANTS FOR LOAN APPLICANT ASSISTANCE.

    Section 7(b) of the Small Business Act (15 U.S.C. 636(b)), as 
amended by this Act, is further amended by inserting after paragraph 
(10) the following:
            ``(11) Outreach grants for loan applicant assistance.--
                    ``(A) In general.--From amounts made available for 
                administrative expenses relating to activities under 
                this subsection, the Administrator is authorized to 
                make grants to the following:
                            ``(i) A women's business center in an area 
                        affected by a disaster.
                            ``(ii) A small business development center 
                        in an area affected by a disaster.
                            ``(iii) A Veteran Business Outreach Center 
                        in an area affected by a disaster.
                            ``(iv) A chamber of commerce in an area 
                        affected by a disaster.
                    ``(B) Use of grant.--An entity specified under 
                subparagraph (A) shall use a grant received under this 
                paragraph to provide application preparation assistance 
                to applicants for a loan under this subsection.
                    ``(C) Program level.--The Administrator is 
                authorized to make $50,000,000 in grants under this 
                paragraph for each of fiscal years 2010 and 2011.''.

SEC. 808. HOMEOWNERS IMPACTED BY TOXIC DRYWALL.

    Section 7(b) of the Small Business Act (15 U.S.C. 636(b)), as 
amended by this Act, is further amended by inserting after paragraph 
(11) the following:
            ``(12) Homeowners impacted by toxic drywall.--The 
        Administrator may make a loan under this subsection to any 
        homeowner if the primary residence of such homeowner has been 
        adversely impacted by the installation of toxic drywall 
        manufactured in China. A loan under this paragraph may be used 
        only for the repair or replacement of such toxic drywall.''.

SEC. 809. AUTHORIZATION OF APPROPRIATIONS.

    Section 20 of the Small Business Act (15 U.S.C. 631 note), as 
amended by this Act, is further amended--
            (1) by redesignating subsection (j) as subsection (k); and
            (2) by inserting after subsection (i) the following:
    ``(j) Fiscal Years 2010 and 2011 With Respect to Section 7(b).--
There is authorized to be appropriated such sums as may be necessary 
for administrative expenses and loans under section 7(b).''.

                         TITLE IX--REGULATIONS

SEC. 901. REGULATIONS.

    Except as otherwise provided in this Act or in amendments made by 
this Act, after an opportunity for notice and comment, but not later 
than 180 days after the date of the enactment of this Act, the 
Administrator shall issue regulations to carry out this Act and the 
amendments made by this Act.

            TITLE X--TEMPORARY EMPLOYEE SERVICES FRANCHISES

SEC. 1001. TEMPORARY EMPLOYEE SERVICES FRANCHISES.

    In determining whether a franchisee is affiliated with a franchiser 
in the temporary employee services industry for the purposes of Small 
Business Administration lending programs, the Administrator of the 
Small Business Administration shall--
            (1) continue to apply its historically-considered 
        affiliation factors in determining whether a business is 
        affiliated with another business or the franchiser in the 
        temporary staffing industry;
            (2) promulgate such other rules and regulations as 
        necessary to determine affiliation within the temporary 
        employee services industry as the Administrator determines 
        consistent with the Small Business Act; and
            (3) consider the processing of payroll and billing by a 
        franchiser as customary and common practice in the temporary 
        employee services industry that does not provide probative 
        weight on affiliation, to the extent that the temporary 
        staffing personnel are interviewed, hired, trained, assigned, 
        and subject to discharge by the franchisee.

               TITLE XI--STUDY ON PRIVATE SECTOR LENDING

SEC. 1101. STUDY ON PRIVATE SECTOR LENDING.

    (a) In General.--Not later than 90 days after the date of the 
enactment of this Act, the Administrator of the Small Business 
Administration shall submit to the Committee on Small Business of the 
House of Representatives and the Committee on Small Business and 
Entrepreneurship of the Senate a report that describes lending to small 
business concerns by the private sector, including the following:
            (1) The total amount of lending to small business concerns 
        by private sector financial institutions during each of fiscal 
        years 2006 through 2009.
            (2) The total amount of lending to small business concerns 
        by the 10 largest private sector financial institutions (as 
        determined by the Administrator in terms of amounts lent during 
        fiscal year 2006) during each of fiscal years 2006 through 
        2009.
    (b) Coordination.--The Administrator of the Small Business 
Administration shall, if necessary, coordinate with the heads of other 
Federal departments and agencies to complete the report under 
subsection (a).
    (c) Small Business Concerns Defined.--In this section, the term 
``small business concern'' has the meaning given such term under 
section 3(a) of the Small Business Act (15 U.S.C. 632(a)).

             TITLE XII--STUDY ON INCREASES IN CERTAIN CAPS

SEC. 1201. STUDY ON INCREASES IN CERTAIN CAPS.

    Not later than 90 days after the date of enactment of this Act, the 
Administrator of the Small Business Administration shall submit to 
Congress a report that describes the anticipated effects of the 
following potential changes to programs, including whether such changes 
adequately meet the financing needs of small businesses:
            (1) Increasing--
                    (A) the maximum amount of a loan that may be 
                guaranteed under section 7(a) of the Small Business Act 
                (15 U.S.C. 636(a)) to $3,000,000; and
                    (B) participation by the Administrator with regard 
                to such a loan.
            (2) Increasing--
                    (A) the maximum amount of a debenture that may be 
                guaranteed under title V of the Small Business 
                Investment Act of 1958 (15 U.S.C. 695 et seq.); and
                    (B) the maximum amount of a loan that may be made 
                with the proceeds of such debenture.
            (3) Increasing the maximum amount of a microloan that may 
        be made under section 7(m) of the Small Business Act (15 U.S.C. 
        636(m)).

                       TITLE XIII--RURAL OUTREACH

SEC. 1301. RURAL OUTREACH.

    The Small Business Act (15 U.S.C. 631 et seq.), as amended by this 
Act, is further amended--
            (1) by redesignating section 46 as section 47; and
            (2) by inserting after section 45 the following:

``SEC. 46. RURAL OUTREACH.

    ``The Administrator shall ensure that each district office of the 
Administration that includes a rural area--
            ``(1) establishes a plan to provide small business concerns 
        in rural areas with information on the financing and investment 
        programs of the Administration of use to such concerns;
            ``(2) designates an employee of the office as a rural 
        business financing outreach specialist, who is responsible for 
        providing advice concerning the lending and investment programs 
        of the Administration to small business concerns; and
            ``(3) hosts at least one outreach seminar in a rural area 
        each year to provide information described under paragraph (1) 
        to small business concerns in rural areas.''.

            TITLE XIV--STUDY RELATING TO MEDICAL TECHNOLOGY

SEC. 1401. STUDY RELATING TO MEDICAL TECHNOLOGY.

    Not later than one year after the date of the enactment of this 
Act, the Administrator of the Small Business Administration shall 
submit to Congress a report describing recommendations for and the 
feasibility of a program--
            (1) to increase investment in the research, development, 
        and commercialization of medical technology by small business 
        concerns; and
            (2) that is administered in a manner similar to the program 
        under part C of title III of the Small Business Investment Act 
        of 1958 (15 U.S.C. 690 et seq.).

           TITLE XV--STUDY ON ADDITIONAL CREDIT RISK FACTORS

SEC. 1501. STUDY ON ADDITIONAL CREDIT RISK FACTORS.

    (a) In General.--With respect to loans made under programs 
established or amended under this Act, the Administrator of the Small 
Business Administration shall conduct a study on whether the failure of 
such loans to achieve one or more of the public policy goals specified 
in subsection (b) negatively impacts the ability of businesses 
receiving such loans to make timely repayment of such loans.
    (b) Public Policy Goals.--The public policy goals referred to in 
subsection (a) are the provision of adequate access to capital to 
assist small business concerns with one or more of the following:
            (1) Offsetting the costs to such concerns resulting from 
        the imposition of a surtax on the income of small business 
        owners.
            (2) Offsetting the costs to such concerns resulting from 
        the enactment of a requirement that such concerns offer health 
        care of a minimum acceptable coverage level.
            (3) Offsetting the costs to such concerns resulting from an 
        increase in the marginal tax rates of small business owners.
            (4) Offsetting the reduction in capital available for such 
        concerns resulting from an increase in the tax on capital 
        gains.
            (5) Offsetting the reduction in capital available for such 
        concerns resulting from an increase in the taxes on carried 
        interest.
            (6) Offsetting the increased energy costs for such concerns 
        resulting from the enactment of a cap on carbon dioxide 
        emissions.
            (7) Offsetting the increased costs to such concerns 
        resulting from a change in Federal law that allows unions to be 
        organized through a card check process.
            (8) Offsetting the reduction in capital available for such 
        concerns resulting from new regulations on financial products.
            (9) Offsetting the increased costs to such concerns 
        resulting from the imposition of net neutrality rules on the 
        Internet.
    (c) Use of Study.--Not later than 180 days after the date of the 
enactment of this Act, the Administrator of the Small Business 
Administration shall submit to Congress a report on the results of the 
study conducted under subsection (a) and shall use such results to 
evaluate and adjust, as appropriate, the potential credit risk to the 
Government through the provision of loans under programs established or 
amended under this Act.

            Passed the House of Representatives October 29, 2009.

            Attest:

                                                                 Clerk.
111th CONGRESS

  1st Session

                               H. R. 3854

_______________________________________________________________________

                                 AN ACT

 To amend the Small Business Act and the Small Business Investment Act 
  of 1958 to improve programs providing access to capital under such 
                     Acts, and for other purposes.