[Federal Register Volume 76, Number 198 (Thursday, October 13, 2011)]
[Rules and Regulations]
[Pages 63542-63547]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-26236]


=======================================================================
-----------------------------------------------------------------------

SMALL BUSINESS ADMINISTRATION

13 CFR Parts 108, 120, 123, and 125

RIN 3245-AG15


Small Business Jobs Act: Implementation of Conforming and 
Technical Amendments

AGENCY: U.S. Small Business Administration.

ACTION: Direct final rule.

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

SUMMARY: This direct final rule contains various amendments conforming 
SBA regulations to changes made by the Small Business Jobs Act of 2010 
to several SBA programs, including business lending, disaster lending, 
and contract bundling. This rule also makes additional conforming 
changes to ensure that the regulations governing certain fees payable 
in the business loan programs are consistent with the related statutory 
authority in the Small Business Act.

DATES: This rule is effective on November 28, 2011 without further 
action, unless significant adverse comment is received by November 14, 
2011. If significant adverse comment is received, SBA will publish a 
timely withdrawal of the affected sections of the rule in the Federal 
Register.

ADDRESSES: You may submit comments, identified by RIN 3245-AG15, by one 
of the following methods: (1) Federal eRulemaking Portal: http://www.regulations.gov; following the instructions for submitting 
comments; or (2) Mail/Hand Delivery/Courier: John Russell, Office of 
General Counsel, 409 Third Street, SW., Mail Code 2221, Washington, DC 
20416.
    SBA will post all comments to this rule on http://www.regulations.gov. If you wish to submit confidential business 
information (CBI) as defined in the User Notice at http://www.regulations.gov, you must submit such information to U.S. Small 
Business Administration, John Russell, Office of General Counsel, 409 
Third Street, SW., Mail Code 2221, Washington, DC 20416, or send an e-
mail to [email protected]. You should highlight the information that 
you consider to be CBI and explain why you believe SBA should hold this 
information as confidential. SBA will review your information and 
determine whether it will make the information public or not.

FOR FURTHER INFORMATION CONTACT: John C. Russell, Jr., Office of 
General Counsel, (202) 205-6642, e-mail: [email protected].

SUPPLEMENTARY INFORMATION: This direct final rule contains several 
conforming amendments to SBA regulations resulting from the Small 
Business Jobs Act of 2010 (SBJA), Public Law 111-240, which was enacted 
on September 27, 2010, SBA is making these regulatory amendments and 
other technical conforming changes to mirror current statutory 
provisions and avoid public confusion or possible misinterpretations of 
SBA's programs. Since these are conforming amendments, with no 
extraneous interpretation or other expanded materials, SBA expects no 
significant adverse comments. Based on that fact, SBA has decided to 
proceed with a direct final rule giving the public 30 days to comment. 
If SBA receives a significant adverse comment during the comment 
period, SBA will withdraw the sections of the rule receiving the 
significant adverse comment, and publish them in a proposed rule.
    To minimize confusion to the reader, the Supplementary Information 
section is organized by sequential order of SBJA sections, followed by 
the additional changes that are not directly related to the SBJA 
amendments but are necessary for accuracy and consistency with the 
Small Business Act.

A. Small Business Jobs Act Amendments

Section 1111. Section 7(a) Business Loans

    Section 1111 of the SBJA temporarily increased the maximum 
guarantee percentages for 7(a) business loans until January 1, 2011. 
These temporary changes do not need to be reflected in the regulations. 
Section 1111 also permanently increased the maximum guaranteed portion 
and maximum loan amount for 7(a) business loans. As a result of this 
change, section 7(a)(3) of the Small Business Act now reads: ``No loan 
shall be made under this subsection--(A) if the total amount 
outstanding and committed (by participation or otherwise) to the 
borrower from the business loan and investment fund established by this 
Act would exceed $3,750,000 (or if the gross loan amount would exceed 
$5,000,000), except as provided for international trade loans, which 
have a different limit.'' 15 U.S.C. Sec.  636(a)(3)(A). SBA is 
conforming three SBA regulations to this statutory change as follows: 
(1) Sec.  120.151, What is the statutory limit for total loans to a 
Borrower?, to reflect that the maximum guaranteed amount is now 
$3,750,000 and the maximum loan amount is $5,000,000; (2) Sec.  
120.210, What percentage of a loan may SBA

[[Page 63543]]

guarantee?, to remove an outdated effective date of the maximum 
guaranty percentages; and (3) Sec.  120.390, Revolving Credit, to 
reflect that the maximum guarantee and loan amount are the same under 
CapLines as other 7(a) business loans and to include a cross reference 
to Sec.  120.151.

Section 1112. Maximum Loan Amounts Under 504 Program

    Section 1112 of the SBJA amended several maximum loan amounts for 
the Certified Development Company Program (also known as the 504 
Program). Due to these amendments, the Small Business Investment Act 
provision now reads: ``(A) In General. Loans made by the Administration 
under this section shall be limited to--(i) $5,000,000 for each small 
business concern if the loan proceeds will not be directed toward a 
goal or project described in clause (ii), (iii), (iv) or (v); (ii) 
$5,000,000 for each small business concern if the loan proceeds will be 
directed toward 1 or more of the public policy goals described under 
section 501(d)(3); (iii) $5,500,000 for each project of a small 
manufacturer; (iv) $5,500,000 for each project that reduces the 
borrower's energy consumption by at least 10 percent; and (v) 
$5,500,000 for each project that generates renewable energy or 
renewable fuels, such as biodiesel or ethanol production.'' 15 U.S.C. 
696(2)(A)(i-v). With respect to (iii) above, a small manufacturer, as 
defined in the Small Business Act, must have all of its production 
facilities located in the United States. 15 U.S.C. 696(2)(B). SBA is 
conforming Sec.  120.931, 504 Loan Limits, to this statutory change, 
which substantially increases the loan limits for all 504 Program 
loans.
    In implementing the loan limit for renewable energy or renewable 
fuels projects, SBA noted that 15 U.S.C. 696(2)(A)(v) was enacted at 
the same time as 15 U.S.C. 695(d)(3)(K), which describes one of the 
public policy objectives of the 504 Program as projects that achieve 
``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.'' It is 
SBA's view that the loan limit set by 15 U.S.C. 696(2)(A)(v) was 
intended by Congress to accord with the corresponding public policy 
goal set forth in 15 U.S.C. 695(d)(3)(K). Accordingly, the regulatory 
provision implementing the loan limit for renewable energy or renewable 
fuels incorporates the parameters of the more fully articulated public 
policy goal.

Section 1113. Maximum Loan Amounts Under Microloan Program

    Section 1113 of the SBJA amended the maximum loan limits for the 
Microloan Program by raising the amount of a loan that a Microloan 
Intermediary can make to a borrower from $35,000 to $50,000, as well as 
the amount of a loan that the Microloan Intermediary can receive from 
the SBA from $3,500,000 to $5,000,000. SBA is revising seven of its 
regulations to conform to these statutory changes: (1) Sec.  120.2, 
Description of the Business Loan Programs; (2) Sec.  120.10, 
Definitions; (3) Sec.  120.701, Definitions; (4) Sec.  120.702, Are 
there limitations on who can be an Intermediary or on where an 
Intermediary may operate?; (5) Sec.  120.706, What are the terms and 
conditions of an SBA loan to an Intermediary?; (6) Sec.  120.707, What 
conditions apply to loans by Intermediaries to Microloan borrowers?; 
and (7) Sec.  120.714, How are grants made to non-lending technical 
assistance providers (NTAP)?.
    In addition, SBA is making one technical change to the regulations 
governing eligibility for grants to Microloan Intermediaries. The 
second sentence of paragraph (b)(2) of Sec.  120.712 states: 
``Intermediaries may not enter into third party contracts for the 
provision of technical assistance to program clients.'' This language 
is inconsistent with paragraph (e) of that section, which states: ``An 
Intermediary may use no more than 25 percent of the grant funds it 
receives from SBA for contracts with third parties for the latter to 
provide technical assistance to Microloan borrowers.'' Paragraph (e), 
which was added to Sec.  120.712 in 2001 to implement statutory 
changes, reflects current SBA policy to allow Intermediaries to use up 
to 25 percent of grant funds for contracts with third parties. 
Therefore, SBA is removing the inconsistent sentence in paragraph 
(b)(2).

Section 1115. New Markets Venture Capital Company Investment 
Limitations

    Section 1115 of the SBJA provides that ``except to the extent 
approved by the Administrator, a covered New Markets Venture Capital 
Company may not acquire or issue commitments for securities under this 
title for any single enterprise in an aggregate amount equal to more 
than 10 percent of the sum of--(A) the regulatory capital of the 
covered New Markets Venture Capital Company; and (B) the total amount 
of leverage projected in the participation agreement of the covered New 
Markets Venture Capital.'' 15 U.S.C. 689. The SBJA defines the term 
``covered New Markets Venture Capital Company'' as a company granted 
approval by the SBA Administrator on or after March 1, 2002, that has 
obtained financing from the Administrator. We are conforming the 
regulation to this statutory change by amending current SBA regulation, 
Sec.  108.740, Portfolio Diversification (``overline'' limitation). 
Based on the leverage ratio currently applicable in the New Markets 
Venture Capital (NMVC) program, the SBJA effectively increased the 
overline limit for existing NMVC companies from 20% to 25% of 
regulatory capital, which will allow these companies to invest a higher 
percentage of their capital in a single company or group of affiliated 
companies. SBA intends that an NMVC company's calculation of an 
overline limitation will retain the same adjustments to regulatory 
capital that are present in the current NMVC program regulations.

Section 1117. Sale of 7(a) Loans in Secondary Market

    Section 1117 of the SBJA amends SBA's 7(a) loan program secondary 
market authority by providing: ``If the amount of the guaranteed 
portion of any loan under section 7(a) is more than $500,000, the 
Administrator shall, upon request of a pool assembler, divide the loan 
guarantee into increments of $500,000 and 1 increment of any remaining 
amount less than $500,000, in order to permit the maximum amount of any 
loan in a pool to be not more than $500,000. Only 1 increment of any 
loan guarantee divided under this paragraph may be included in the same 
pool. Increments of loan guarantees to different borrowers that are 
divided under this paragraph may be included in the same pool.'' 15 
U.S.C. 634(g)(6). SBA is revising three regulations to conform to this 
statutory change: Sec.  120.600(a), Definitions; Sec.  120.601, SBA 
Secondary Market; and Sec.  120.611, Pools backing Pool Certificates. 
The purpose of this statutory provision is to allow participants in the 
secondary market, specifically pool assemblers, to split the guaranteed 
portion of individual 7(a) loans into increments of $500,000 and one 
increment of less than $500,000. SBA is in the process of revising SBA 
Forms 1086 and 1088, as well as the form of Individual Certificate, to 
reflect this new provision.

[[Page 63544]]

Section 1119. SBA Secondary Market Guarantee Authority

    Section 1119 of the SBJA extends the authorization for the SBA 
Secondary Market Guarantee Program for First Lien Position 504 Loan 
Pools from February 17, 2011 to the date ``two years after the date of 
the first sale of a pool of first lien 504 loans guaranteed under this 
section to a third-party investor''. The new expiration date is, 
therefore, September 23, 2012. We are conforming one SBA regulation to 
this statutory change: Sec.  120.1701, Program purpose.

Section 1132. Public Policy Goals

    Section 1132 of the SBJA adds a new public policy goal for the 
Certified Development Company Program. The new public policy goal is 
``reduction of rates of unemployment in labor surplus areas, as such 
areas are determined by the Secretary of Labor.'' 15 U.S.C. 
695(d)(3)(L). We are conforming one regulation to this statutory 
change: Sec.  120.862, Other economic development objectives. This 
means that a project meeting this new public policy goal objective can 
qualify for a 504 loan in an amount up to $5,000,000. It also means 
that the project can be financed by the 504 loan even if the subject 
project does not create or retain jobs pursuant to Sec.  120.861 
provided that the CDC's overall portfolio, including the subject loan, 
meets or exceeds the CDC's required Job Opportunity average.

Section 1206. International Trade Finance Programs

    Section 1206 of the SBJA made changes to SBA's International Trade, 
Export Working Capital, and Export Express Loan Programs. This direct 
final rule addresses the changes made by Section 1206 to these 
programs, except for the Export Express Loan Program, which will be the 
subject of a separate rulemaking incorporating the now permanent Export 
Express Loan Program in the regulations for the first time. SBA's 
International Trade Loan Program was amended by changing the maximum 
loan amount, so that the provision now reads: ``No loan shall be made 
under this subsection--(B) if the total amount outstanding and 
committed (on a deferred basis) solely for the purposes provided in 
paragraph (16) to the borrower from the business loan and investment 
fund established by this Act would exceed $4,500,000 (or if the gross 
loan amount would exceed $5,000,000), of which not more than $4,000,000 
may be used for working capital, supplies or financings under Sec.  
7(a)(14) for export purposes.'' 15 U.S.C. 636(a)(3)(B). Section 1206 
also added a provision: ``Participation in International Trade Loan--In 
an agreement to participate in a loan on a deferred basis under 
paragraph (16), the participation by the Administration may not exceed 
90 percent.'' 15 U.S.C. 636(a)(2)(E). The International Trade Loan 
Program also was amended to allow such loans to be used to assist 
concerns engaged in or adversely affected by international trade to 
improve their competitive position ``by providing working capital'' and 
to expand the use of loan proceeds for refinancing to ``include any 
debt that qualifies for refinancing under any other provision of this 
subsection.'' 15 U.S.C. 636(a)(16)(A)(ii-iii). The collateral required 
to be provided by borrowers of International Trade Loans was also 
changed. The law now allows for such loans to ``be secured by a second 
lien on the property or equipment financed by the loan or on other 
assets of the small business concern, if the Administrator determines 
the lien provides adequate assurance of the payment of the loan.'' 15 
U.S.C. 636(a)(16)(B)(ii). SBA is amending four existing regulations for 
the International Trade Loan program and adding one new regulation to 
reflect these statutory changes: (1) Sec.  120.346, Eligiblity, to 
delete restrictive language regarding the use of IT loan proceeds that 
is no longer applicable; (2) Sec.  120.347, Use of Proceeds, to reflect 
that IT loan proceeds may now be used for working capital and to 
refinance additional debt; (3) Sec.  120.348, Amount of Loan and 
Guarantee, to reflect the new maximum loan amount and the new maximum 
guaranty amount for IT loans; and (4) new Sec.  120.349, Collateral, to 
reflect the new collateral requirements for IT loans.
    Finally, section 1206 of the SBJA amended The Export Working 
Capital (EWCP) Loan Program by increasing the maximum loan amount to 
$5,000,000 (15 U.S.C. 636(a)(14)(B)(i)) and by providing that the 
guaranty amount for EWCP loans shall be 90 percent (15 U.S.C. 
636(a)(2)(D)). SBA is conforming Sec.  120.340, What is the Export 
Working Capital Program?, to reflect the new maximum loan amount and 
the new required guaranty amount for EWCP loans. Additionally, SBA is 
conforming Sec.  120.130, Restrictions on uses of proceeds, to reflect 
that SBA has statutory authority to allow EWCP loan proceeds to be used 
for revolving lines of credit for export purposes. 15 U.S.C. 
636(a)(14)(A).

Section 1312. Leadership and Oversight

    Section 1312(a) of the SBJA provides that: ``Rationale for Contract 
Bundling--Not later than 30 days after the date on which the head of a 
Federal agency submits data certifications to the Administrator for 
Federal Procurement Policy, the head of the Federal agency shall 
publish on the Web site of the Federal agency a list and rationale for 
any bundled contract for which the Federal agency solicited bids or 
that was awarded by the Federal agency.'' 15 U.S.C. 644(q)(2)(B). SBA 
is conforming one regulation to this statutory change: Sec.  125.2, 
Prime Contracting Assistance. The purpose of this statutory provision 
is to help reduce the practice of contract bundling. Requiring agencies 
to post a list of all bundled acquisitions and the rationale for 
bundling the acquisition holds the agency accountable to the public for 
its actions.

Section 1501. Aquaculture Business Disaster Assistance

    Section 1501 of the SBJA provides SBA new authority to make certain 
types of disaster loans to aquaculture enterprises. Prior to this 
statutory change, aquaculture enterprises were ineligible for all SBA 
disaster loans. Section 1501 provides that SBA may provide economic 
injury disaster loans to aquaculture enterprises that are small 
businesses. SBA is conforming one regulation to this statutory change: 
Sec.  123.300, Is my business eligible to apply for an economic injury 
disaster loan?

B. Other Technical Amendments

    In addition to the SBJA amendments, SBA believes that additional 
changes should be made to the business loan program regulations in 
Sec.  120.220, Fees that Lender Pays SBA, to conform to the statutory 
provisions in section 7(a)(18)(A) and section 7(a)(23)(A) of the Small 
Business Act. 15 U.S.C. 636(a)(18)(A) and (23)(A). First, with respect 
to the guarantee fees authorized by section 7(a)(18(A)(i) through 
(iii), SBA is amending the regulations at Sec.  120.220(a)(1)(i) 
through (a)(1)(iii) to accurately reflect the limitations provided in 
the Small Business Act. The statutory subsections authorize the 
collection of guarantee fees in amounts not to exceed certain 
percentages of the guaranteed portion of the loan. The regulations, 
however, do not reflect the degree of flexibility provided in the 
statute; rather the regulations state that the fees are fixed at the 
percentages listed. Specifically, for loans that are $150,000 or less, 
section 7(a)(18)(a)(i) will now require the lender to pay a guarantee 
fee ``not to exceed 2 percent'' of the guaranteed portion of the loan. 
Similarly, section 7(a)(18)(A)(ii) will now require lenders to pay a 
guarantee fee ``not to exceed 3 percent'' of the

[[Page 63545]]

guaranteed portion of a loan that is more than $150,000, but not more 
than $700,000. Finally, under section 7(a)(18)(A)(iii) the guarantee 
fee to be paid by the lender is ``not to exceed 3.5 percent'' of the 
guaranteed portion of a loan that is more than $700,000.
    SBA is also amending Sec.  120.220(a)(1) to add the guarantee fee 
authorized by section 7(a)(18)(A)(1)(iv). This subsection provides that 
in addition to the fee payable under section 7(a)(18)(A)(iii), SBA must 
collect a ``guarantee fee equal to 0.25 percent of any portion of the 
deferred participation share that is more than $1,000,000.'' This 
particular guarantee fee is currently being assessed on the applicable 
loans consistent with the statutory authority but was not previously 
codified in the regulations.
    SBA is also amending Sec.  120.220(f)(1) to accurately reflect the 
amount of the annual service fee that is authorized by section 
7(a)(23)(A) of the Small Business Act. This statutory provision states 
in part that SBA ``shall assess, collect and retain a fee not to exceed 
0.55 percent per year of the outstanding participation balance of the 
deferred participation share of the loan * * *.'' However, the 
regulations state that this annual service fee must be equal to 0.5 
percent of the outstanding balance of the guaranteed portion of each 
loan. The amendment in this rule will bring the regulations into 
conformity with the statutory authority, and obviate possible 
misunderstanding and confusion regarding the amount that is due 
annually on the service fee.
    For Fiscal Year 2012, the fees authorized by Sec.  120.220(a)(1) 
and Sec.  120.220(f) are set at the maximum authorized levels. SBA will 
issue notices to announce any changes in these fees in the future.

Compliance With Executive Orders 12866, 12988, and 13132, the Paperwork 
Reduction Act (44 U.S.C. Ch. 35) and the Regulatory Flexibility Act (5 
U.S.C. 601-612)

Executive Order 12866

    The Office of Management and Budget (OMB) has determined that this 
direct final rule does not constitute a significant regulatory action 
under Executive Order 12866. This direct final rule is also not a major 
rule under the Congressional Review Act.

Executive Order 12988

    This action meets applicable standards set forth in Sections 3(a) 
and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize 
litigation, eliminate ambiguity, and reduce burden. The action does not 
have retroactive or preemptive effect.

Executive Order 13132

    For the purposes of Executive Order 13132, this direct final rule 
will not have substantial, direct effects on the States, on the 
relationship between the national government and the States, or on the 
distribution of power and responsibilities among the various levels of 
government. Therefore, SBA has determined that this direct final rule 
has no federalism implications warranting preparation of a federalism 
assessment.

Paperwork Reduction Act, 44 U.S.C., Ch. 35

    SBA has determined that this direct final rule does not impose 
additional reporting or recordkeeping requirements under the Paperwork 
Reduction Act, 44 U.S.C., Chapter 35.

Regulatory Flexibility Act, 5 U.S.C. 601-612

    The Regulatory Flexibility Act (RFA), 5 U.S.C. 601, requires 
administrative agencies to consider the effect of their actions on 
small entities, including small businesses. According to the RFA, when 
an agency issues a rule, the agency must prepare an analysis to 
determine whether the impact of the rule will have a significant 
economic impact on a substantial number of small entities. However, the 
RFA allows an agency to certify a rule in lieu of preparing an 
analysis, if the rulemaking is not expected to have a significant 
impact on a substantial number of small entities. This rule only makes 
conforming amendments to SBA regulations to reflect recent legislation, 
and does not implement new agency policies. Some of these amendments 
will affect small entities; however SBA certifies that these amendments 
will not have a significant economic impact on a substantial number of 
such entities.

List of Subjects

13 CFR Part 108

    Community development, Grant programs--business, Small businesses.

13 CFR Part 120

    Community development, Exports, Loan programs--business, Small 
businesses.

13 CFR Part 123

    Disaster assistance, Loan programs--business, Small businesses.

13 CFR Part 125

    Government contracts, Government procurement, Small businesses, 
Technical assistance.

    For the reasons stated in the preamble, the Small Business 
Administration amends 13 CFR parts 108, 120, 123, and 125 as follows:

PART 108--NEW MARKETS VENTURE CAPITAL (''NMVC'') PROGRAM

0
1. The authority citation for 13 CFR part 108 continues to read as 
follows:

    Authority:  15 U.S.C. 689-689q.


0
2. Amend Sec.  108.740 as follows:
0
a. Revise paragraph (a) introductory text;
0
b. Redesignate paragraph (a)(2) as (a) (3); and
0
c. Add new paragraph (a)(2) to read as follows:


Sec.  108.740  Portfolio diversification (``overline'' limitation).

    (a) Without SBA's prior written approval, you may provide Financing 
or a Commitment to a Small Business only if the resulting amount of 
your aggregate outstanding Financings and Commitments to such Small 
Business and its Affiliates does not exceed 10 percent of the sum of:
* * * * *
    (2) The total amount of leverage projected in your participation 
agreement with SBA; plus
* * * * *

PART 120--BUSINESS LOANS

0
3. The authority citation for 13 CFR Part 120 continues to read as 
follows:

    Authority:  15 U.S.C. 634(b)(6), (b)(7), (b)(14), (h), and note, 
636(a), (h) and (m), 650, 687(f), 696(3), and 697(a) and (e); Public 
Law 111-5, 123 Stat. 115, Public Law 111-240, 124 Stat. 2504.


Sec.  120.2  [Amended]

0
4. Amend Sec.  120.2(b) by removing the number ``25,000,'' and adding 
in its place the number, ``$50,000.''


Sec.  120.10  [Amended]

0
5. Amend Sec.  120.10 by removing the number ``$25,000'' from the 
definition of ``Intermediary'' and replacing it with the number 
``$50,000.''

0
6. Amend Sec.  120.130 by revising paragraph (c) to read as follows:


Sec.  120.130  Restrictions on uses of proceeds.

* * * * *
    (c) Floor plan financing or other revolving line of credit, except 
under Sec.  120.340 or Sec.  120.390;
* * * * *

[[Page 63546]]

Sec.  120.151  [Amended]

0
7. Amend Sec.  120.151 as follows:
0
(a) Remove the number ``$1,000,000'' and add in its place the number 
``$3,750,000''; and
0
(b) Remove the number ``$2,000,000'' and add in its place the number 
``$5,000,000''.


Sec.  120.210  [Amended]

0
8. Amend Sec.  120.210 by removing the words ``Effective December 21, 
2000, loans'' from the third sentence and adding in its place 
``Loans''.

0
9. Amend Sec.  120.220 as follows:
0
a. Revise the last sentence in paragraph (a)(1), introductory text, to 
read as set forth below;
0
b. Revise paragraphs (a)(1)(i), (a)(1)(ii), and (a)(1)(iii), and add 
new paragraph (a)(1)(iv), to read as set forth below; and
0
c. Revise the first sentence of paragraph (f)(1) to read as set forth 
below.


Sec.  120.220  Fees that Lender pays SBA.

* * * * *
    (a) * * * For a loan with a maturity of more than twelve (12) 
months, the guarantee fee is payable as follows:
    (i) Not more than 2 percent of the guaranteed portion of a loan if 
the total amount of the loan is not more than $150,000;
    (ii) Not more than 3 percent of the guaranteed portion of a loan if 
the total amount of the loan is more than $150,000 but not more than 
$700,000;
    (iii) Except as provided in paragraph (a)(1)(iv) of this section, 
not more than 3.5 percent of the guaranteed portion of a loan if the 
total amount of the loan is more than $700,000; and
    (iv) An additional 0.25 percent of the guaranteed portion of a loan 
if the total amount of the loan is more than $1,000,000.
* * * * *
    (f) * * *
    (1) In general. Except to the extent paragraph (f)(2) of this 
section applies, the lender shall pay SBA an annual service fee in an 
amount not to exceed 0.55 percent of the outstanding balance of the 
guaranteed portion of each loan. * * *
* * * * *
0
10. Amend Sec.  120.340 by adding two new sentences at the end of the 
paragraph to read as follows:


Sec.  120.340  What is the Export Working Capital Program?

    * * * The maximum loan amount for any one EWCP loan is $5,000,000. 
EWCP loans shall receive a guaranty of 90 percent, not to exceed 
$4,500,000.

0
11. Amend Sec.  120.346 by revising paragraph (a)(3) to read as 
follows:


Sec.  120.346  Eligibility.

    (a) * * *
    (3) The loan will improve the applicant's competitive position.
* * * * *

0
12. Amend Sec.  120.347 by adding a new sentence at the end to read as 
follows:


Sec.  120.347  Use of proceeds.

    * * * The Borrower may also use proceeds in the refinancing of 
existing indebtedness that is not structured with reasonable terms and 
conditions, including any debt that qualifies for refinancing under 
7(a) Loan Program Requirements, and to provide working capital.

0
13. Revise Sec.  120.348 to read as follows:


Sec.  120.348  Amount of guarantee.

    The maximum loan amount for any one International Trade (IT) loan 
is $5,000,000. IT loans may receive a maximum guaranty of 90 percent or 
$4,500,000, except that the maximum guaranty amount for any working 
capital component of an IT loan is limited to $4,000,000. To the extent 
that the Borrower has a separate EWCP loan or any other 7(a) loan for 
working capital, the guaranty amount for the other loan is counted 
against the $4,000,000 guaranty limit for the IT loan.

0
14. Add new Sec.  120.349 to read as follows:


Sec.  120.349  Collateral.

    Each IT loan must be secured either by a first lien position or 
first mortgage on the property or equipment financed by the IT loan or 
on other assets of the Borrower, except that an IT loan may be secured 
by a second lien position on the property or equipment financed by the 
IT loan or on other assets of the Borrower, if the SBA determines the 
second lien position provides adequate assurance of the payment of the 
IT loan.

0
15. Amend Sec.  120.390(a) by revising the third sentence to read as 
follows:


Sec.  120.390  Revolving credit.

    (a) * * * The maximum guaranteed amount and the maximum loan amount 
are the same under CapLines as other 7(a) loans, as stated in Sec.  
120.151.
* * * * *

0
16. Amend Sec.  120.600 by revising paragraph (a) to read as follows:


Sec.  120.600  Definitions.

    (a) Certificate is the document the FTA issues representing either 
a beneficial fractional undivided interest in a Pool (Pool 
Certificate), or a fractional undivided interest in some or all of the 
guaranteed portion of an individual 7(a) guaranteed loan (Individual 
Certificate).
* * * * *

0
17. Revise Sec.  120.601 to read as follows:


Sec.  120.601  SBA Secondary Market.

    The SBA secondary market (``Secondary Market'') consists of the 
sale of Certificates, representing either a fractional undivided 
interest in some or all of the guaranteed portion of an individual 7(a) 
guaranteed loan or a fractional undivided interest in a Pool consisting 
of the SBA guaranteed portions of a number of 7(a) guaranteed loans. 
Transactions involving interests in Pools or the sale of individual 
guaranteed portions of loans are governed by the contracts entered into 
by the parties, SBA's Secondary Market Program Guide, and this subpart. 
See sections 5(f), (g), and (h) of the Small Business Act (15 U.S.C. 
634(f), (g), and (h)).

0
18. Amend Sec.  120.611 by adding a new paragraph (c) to read as 
follows:


Sec.  120.611  Pools backing Pool Certificates.

* * * * *
    (c) Increments of guaranteed portion. If the amount of the 
guaranteed portion of an individual 7(a) guaranteed loan is more than 
$500,000, a Pool Assembler may elect to divide the guaranteed portion 
into increments of $500,000 and one increment of any remaining amount 
less than $500,000, in order to permit the maximum amount of any 
guaranteed portion in a Pool to be not more than $500,000. Only one 
increment from a loan to a specific borrower may be included in a Pool.


Sec.  120.701  [Amended]

0
19. Amend Sec.  120.701 as follows:
0
a. Remove the word ``Demonstration'' from the definition of 
``Intermediary'' in paragraph (e); and
0
b. Remove the number ``$35,000'' from the definition of ``Microloan'' 
in paragraph (f) and add in its place the number ``$50,000.''


Sec.  120.702  [Amended]

0
20. Amend Sec.  120.702 by removing the number ``$35,000'' in paragraph 
(a)(1) and adding in its place the number ``$50,000.''.


Sec.  120.706  [Amended]

0
21. Amend Sec.  120.706 by removing the number ``$3.5 million'' in 
paragraph (a) and adding in its place the number ``$5 million.''

[[Page 63547]]

Sec.  120.707  [Amended]

0
22. Amend Sec.  120.707 by removing the number ``$35,000'' each time it 
appears in paragraph (b) and adding in its place the number 
``$50,000.''

0
23. Amend Sec.  120.712 by revising paragraph (b)(2) to read as 
follows:


Sec.  120.712  How does an Intermediary get a grant to assist Microloan 
borrowers?

* * * * *
    (b) * * *
    (2) Grant monies may be used to attend training required by SBA.
* * * * *


Sec.  120.714  [Amended]

0
24. Amend Sec.  120.714 by removing the number ``$35,000''in paragraph 
(a) and adding in its place the number ``$50,000''
0
25. Amend Sec.  120.862 as follows:

0
a. Remove the word ``or'' at the end of paragraph (b)(8);
0
b. Remove the ``.'' at the end of paragraph (b)(9) and add ``; or'' in 
its place; and
0
c. Add a new paragraph (b)(10) to read as follows:


Sec.  120.862  Other economic development objectives.

* * * * *
    (b) * * *
    (10) Reduction of rates of unemployment in labor surplus areas, as 
such areas are determined by the Secretary of Labor.
0
26. Revise Sec.  120.931 to read as follows:


Sec.  120.931  504 Lending limits.

    504 loan amounts shall be limited to:
    (a) An outstanding balance of $5,000,000 for each Borrower and its 
affiliates if the loan proceeds will not be directed towards a Project 
in paragraph (c) of this section,
    (b) An outstanding balance of $5,000,000 for each Borrower and its 
affiliates if one or more of the public policy goals enumerated in 
Sec.  120.862(b) applies to the Project; and
    (c) $5,500,000 for each Project for:
    (1) Small Manufacturers (NAICS Codes 31-33) with all production 
facilities located in the United States;
    (2) Reduction of the Borrower's, or if the Borrower is an Eligible 
Passive Company, the Operating Company's energy consumption by at least 
10%; or
    (3) 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 fuel producers including biodiesel and ethanol producers.

0
27. Amend Sec.  120.1701 by revising the third sentence to read as 
follows:


Sec.  120.1701  Program purpose.

    * * * The Program's authorization expires on September 23, 2012 and 
the Administrator may guarantee not more than $3,000,000,000 of pools 
under this authority pursuant to section 503(c)(B)(iii) of the Recovery 
Act, as amended by section 1119 of the Small Business Jobs Act of 2010.

PART 123--DISASTER LOAN PROGRAM

0
28. The authority citation for 13 CFR part 123 is revised to read as 
follows:

    Authority:  15 U.S.C. 632, 634(b)(6), 636(b), 636(d), 657n; Pub. 
L. 102-395, 106 Stat. 1828, 1864; and Pub. L. 103-75, 107 Stat. 739; 
and Pub. L. 106-50, 113 Stat. 245.


0
29. Amend Sec.  123.300 by removing the word ``and'' at the end of 
paragraph (c)(2); and adding a new paragraph (c)(4) to read as follows:


Sec.  123.300  Is my business eligible to apply for an economic injury 
disaster loan?

* * * * *
    (c) * * *
    (4) Small aquaculture enterprises.
* * * * *

PART 125--GOVERNMENT CONTRACTING PROGRAMS

0
30. The authority citation for 13 CFR part 125 continues to read as 
follows:

    Authority:  15 U.S.C. 632(p), (q); 634(b)(6); 637; 644 and 
657(f).


0
31. Amend Sec.  125.2 by adding new paragraph (d)(9) to read as 
follows:


Sec.  125.2  Prime contracting assistance.

* * * * *
    (d) * * *
    (9) Identifying and justifying bundled contracts. Not later than 30 
days after the date on which the head of a Federal agency submits data 
certifications to the Administrator for Federal Procurement Policy, the 
head of the Federal agency shall publish on the Web site of the Federal 
agency a list and rationale for any bundled contract for which the 
Federal agency solicited bids or that was awarded by the Federal 
agency.
* * * * *

Karen G. Mills,
Administrator.
[FR Doc. 2011-26236 Filed 10-12-11; 8:45 am]
BILLING CODE 8025-01-P