[Federal Register Volume 68, Number 215 (Thursday, November 6, 2003)]
[Notices]
[Page 62862]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-27946]


-----------------------------------------------------------------------

SMALL BUSINESS ADMINISTRATION


Development Company Program Job Opportunity Requirement

    Title V of the Small Business Investment Act, section 501, defines 
the purpose of the Development Company Loan Program (504 Program) as 
fostering economic development and creating and preserving job 
opportunities in both urban and rural areas by providing long-term 
financing for small business concerns through the development company 
program. 504 loans are principally used by small businesses to build or 
to purchase long-term fixed assets (mostly acquiring land and 
constructing or renovating commercial buildings) to assist in the 
growth of the business. The 504 Program is required to create a certain 
minimum number of jobs as a result of 504 loans. A 504 loan is required 
to either create or retain a minimum number of jobs within two years of 
the disbursement of the loan as a result of the project, or to meet 
other defined economic development objectives (13 CFR 120.861-120.862). 
In the final rule published on October 7, 2003, effective November 6, 
2003, 13 CFR 120.861 states that ``A Project must create or retain one 
Job Opportunity per an amount of 504 loan funding that will be 
specified by SBA from time to time in a Federal Register notice. Such 
Job Opportunity average remains in effect until changed by subsequent 
Federal Register publication.'' The current standard which was 
established in 1990 requires a 504 project to create or retain one Job 
Opportunity for every $35,000 guaranteed by SBA. During the past twelve 
years since the Job Opportunity requirement was last modified, the cost 
of acquiring real estate has increased substantially. For example, 
construction wages have increased more than 65 percent and the consumer 
price index has increased 50 percent during the same period. Due to the 
substantial increases in costs, SBA is modifying the Job Opportunity 
requirements by approximately 43 percent effective November 6, 2003, as 
follows:
    A Project must create or retain one Job Opportunity for every 
$50,000 guaranteed by SBA.

James E. Rivera,
Associate Administrator for Financial Assistance.
[FR Doc. 03-27946 Filed 11-5-03; 8:45 am]
BILLING CODE 8025-01-P