[Federal Register Volume 68, Number 215 (Thursday, November 6, 2003)]
[Notices]
[Pages 62862-62863]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-27947]


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

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

[[Page 62863]]

the final rule published on October 7, 2003, effective November 6, 
2003, 13 CFR 120.829(a) states that ``A CDC's portfolio must maintain a 
minimum average of 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 CDC's portfolio to 
reflect an average of one Job Opportunity per $35,000 of 504 loan 
funding. The AA/FA may permit a CDC to average up to one per $45,000 
for good cause in Alaska; Hawaii; State-designated urban or rural jobs 
and enterprise zones; Empowerment Zones and Enterprise Communities; and 
Labor Surplus Areas. 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 requirements by approximately 
43 percent effective November 6, 2003, as follows:
    A CDC's portfolio must reflect an average of one Job Opportunity 
per $50,000 of 504 loan funding. The AA/FA may permit a CDC to average 
up to one per $65,000 for good cause for all 504 projects located in
    (1) Alaska;
    (2) Hawaii;
    (3) State-designated urban or rural jobs and enterprise zones;
    (4) Empowerment Zones and Enterprise Communities; and
    (5) Labor Surplus Areas as listed by the Department of Labor.

James E. Rivera,
Associate Administrator for Financial Assistance.
[FR Doc. 03-27947 Filed 11-5-03; 8:45 am]
BILLING CODE 8025-01-P