15 U.S.C. 636 (U.S. Code, current edition)
Summary
The U.S. Code text of 15 U.S.C. § 636, Additional powers, in Title 15—Commerce and Trade, preceded by § 635 on deposit of moneys of the Administration. Subsection (a) empowers the Administration, to the extent and in such amounts as provided in advance in appropriation Acts, to make loans to any qualified small business concern. It bars financial assistance under the subsection if the applicant can obtain credit elsewhere and lets the Administrator verify an applicant's criminal background. It sets participation in deferred-basis loans at 75 percent of the balance outstanding if it exceeds $150,000 and 85 percent if it is less than or equal to $150,000.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
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“15 U.S.C. 636 (U.S. Code, current edition).”
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Page 803 TITLE 15—COMMERCE AND TRADE § 636
(Pub. L. 94–305, title II, § 207, as added Pub. L. operation with banks or other financial institu-
111–240, title I, § 1602(b), Sept. 27, 2010, 124 Stat. tions through agreements to participate on an
2551.) immediate or deferred (guaranteed) basis. These
powers shall be subject, however, to the fol-
Editorial Notes lowing restrictions, limitations, and provisions:
CODIFICATION
(1) IN GENERAL.—
(A) CREDIT ELSEWHERE.—
Section was not enacted as part of the Small Busi- (i) IN GENERAL.—The Administrator has
ness Act which comprises this chapter. the authority to direct, and conduct over-
PRIOR PROVISIONS sight for, the methods by which lenders de-
termine whether a borrower is able to ob-
A prior section 634g, Pub. L. 94–305, title II, § 207, June
tain credit elsewhere. No financial assist-
4, 1976, 90 Stat. 671, related to authorization of appro-
priations, prior to repeal by Pub. L. 111–240, title I, ance shall be extended pursuant to this
§ 1602(b), Sept. 27, 2010, 124 Stat. 2551. subsection if the applicant can obtain
credit elsewhere. No immediate participa-
§ 635. Deposit of moneys; depositaries, tion may be purchased unless it is shown
custodians, and fiscal agents; contributions that a deferred participation is not avail-
to employees’ compensation funds able; and no direct financing may be made
unless it is shown that a participation is
(a) All moneys of the Administration not oth-
not available.
erwise employed may be deposited with the
(ii) LIQUIDITY.—On and after October 1,
Treasury of the United States subject to check
2015, the Administrator may not guarantee
by authority of the Administration. The Federal
a loan under this subsection if the lender
Reserve banks are authorized and directed to
determines that the borrower is unable to
act as depositaries, custodians, and fiscal agents
obtain credit elsewhere solely because the
for the Administration in the general perform-
liquidity of the lender depends upon the
ance of its powers conferred by this chapter.
guaranteed portion of the loan being sold
Any banks insured by the Federal Deposit Insur-
on the secondary market.
ance Corporation, when designated by the Sec-
retary of the Treasury, shall act as custodians (B) BACKGROUND CHECKS.—Prior to the ap-
and financial agents for the Administration. proval of any loan made pursuant to this
Each Federal Reserve bank, when designated by subsection, or section 503 of the Small Busi-
the Administrator as fiscal agent for the Admin- ness Investment Act of 1958 [15 U.S.C. 697],
istration, shall be entitled to be reimbursed for the Administrator may verify the appli-
all expenses incurred as such fiscal agent. cant’s criminal background, or lack thereof,
(b) The Administrator shall contribute to the through the best available means, including,
employees’ compensation fund, on the basis of if possible, use of the National Crime Infor-
annual billings as determined by the Secretary mation Center computer system at the Fed-
of Labor, for the benefit payments made from eral Bureau of Investigation.
such fund on account of employees engaged in (C) LENDING LIMITS OF LENDERS.—On and
carrying out functions financed by the revolving after October 1, 2015, the Administrator may
fund established by section 633(c) of this title. not guarantee a loan under this subsection if
The annual billings shall also include a state- the sole purpose for requesting the guar-
ment of the fair portion of the cost of the ad- antee is to allow the lender to exceed the
ministration of such fund, which shall be paid legal lending limit of the lender.
by the Administrator into the Treasury as mis- (2) LEVEL OF PARTICIPATION IN GUARANTEED
cellaneous receipts. LOANS.—
(Pub. L. 85–536, § 2[6], July 18, 1958, 72 Stat. 387.) (A) IN GENERAL.—Except as provided in
subparagraphs (B), (D), (E), and (F), in an
Editorial Notes agreement to participate in a loan on a de-
ferred basis under this subsection (including
PRIOR PROVISIONS a loan made under the Preferred Lenders
Prior similar provisions were contained in section 206 Program), such participation by the Admin-
of act July 30, 1953, ch. 282, title II, 67 Stat. 235, which istration shall be equal to—
was previously classified to this section. See Codifica- (i) 75 percent of the balance of the fi-
tion note set out under section 631 of this title. nancing outstanding at the time of dis-
§ 636. Additional powers bursement of the loan, if such balance ex-
ceeds $150,000; or
(a) Loans to small business concerns; allowable (ii) 85 percent of the balance of the fi-
purposes; qualified business; restrictions and nancing outstanding at the time of dis-
limitations bursement of the loan, if such balance is
The Administration is empowered to the ex- less than or equal to $150,000.
tent and in such amounts as provided in advance (B) REDUCED PARTICIPATION UPON RE-
in appropriation Acts to make loans for plant QUEST.—
acquisition, construction, conversion, or expan- (i) IN GENERAL.—The guarantee percent-
sion, including the acquisition of land, material, age specified by subparagraph (A) for any
supplies, equipment, and working capital, and to loan under this subsection may be reduced
make loans to any qualified small business con- upon the request of the participating lend-
cern, including those owned by qualified Indian er.
tribes, for purposes of this chapter. Such (ii) PROHIBITION.—The Administration
financings may be made either directly or in co- shall not use the guarantee percentage re-
§ 636 TITLE 15—COMMERCE AND TRADE Page 804
quested by a participating lender under vestment fund established by this chapter
clause (i) as a criterion for establishing would exceed $4,500,000 (or if the gross loan
priorities in approving loan guarantee re- amount would exceed $5,000,000), of which
quests under this subsection. not more than $4,000,000 may be used for
(C) INTEREST RATE UNDER PREFERRED LEND- working capital, supplies, or financings
ERS PROGRAM.—
under paragraph (14) for export purposes; and
(C) if effected either directly or in coopera-
(i) IN GENERAL.—The maximum interest
tion with banks or other lending institutions
rate for a loan guaranteed under the Pre-
through agreements to participate on an im-
ferred Lenders Program shall not exceed
mediate basis if the amount would exceed
the maximum interest rate, as determined
$350,000.
by the Administration, applicable to other
loans guaranteed under this subsection. (4) INTEREST RATES AND PREPAYMENT
(ii) EXPORT-IMPORT BANK LENDERS.—Any CHARGES.—
lender that is participating in the Dele- (A) INTEREST RATES.—Notwithstanding the
gated Authority Lender Program of the provisions of the constitution of any State
Export-Import Bank of the United States or the laws of any State limiting the rate or
(or any successor to the Program) shall be amount of interest which may be charged,
eligible to participate in the Preferred taken, received, or reserved, the maximum
Lenders Program. legal rate of interest on any financing made
(iii) PREFERRED LENDERS PROGRAM DE- on a deferred basis pursuant to this sub-
FINED.—For purposes of this subparagraph, section shall not exceed a rate prescribed by
the term ‘‘Preferred Lenders Program’’ the Administration, and the rate of interest
means any program established by the Ad- for the Administration’s share of any direct
ministrator, as authorized under the pro- or immediate participation loan shall not
viso in section 634(b)(7) of this title, under exceed the current average market yield on
which a written agreement between the outstanding marketable obligations of the
lender and the Administration delegates to United States with remaining periods to ma-
the lender— turity comparable to the average maturities
(I) complete authority to make and of such loans and adjusted to the nearest
close loans with a guarantee from the one-eighth of 1 per centum, and an addi-
Administration without obtaining the tional amount as determined by the Admin-
prior specific approval of the Adminis- istration, but not to exceed 1 per centum per
tration; and annum: Provided, That for those loans to as-
(II) complete authority to service and sist any public or private organization for
liquidate such loans without obtaining the handicapped or to assist any handi-
the prior specific approval of the Admin- capped individual as provided in paragraph
istration for routine servicing and liq- (10) of this subsection, the interest rate shall
uidation activities, but shall not take be 3 per centum per annum.
any actions creating an actual or appar- (B) PAYMENT OF ACCRUED INTEREST.—
ent conflict of interest. (i) IN GENERAL.—Any bank or other lend-
ing institution making a claim for pay-
(D) PARTICIPATION UNDER EXPORT WORKING ment on the guaranteed portion of a loan
CAPITAL PROGRAM.—In an agreement to par- made under this subsection shall be paid
ticipate in a loan on a deferred basis under the accrued interest due on the loan from
the Export Working Capital Program estab- the earliest date of default to the date of
lished pursuant to paragraph (14)(A), such payment of the claim at a rate not to ex-
participation by the Administration shall be ceed the rate of interest on the loan on the
90 percent. date of default, minus one percent.
(E) PARTICIPATION IN INTERNATIONAL TRADE (ii) LOANS SOLD ON SECONDARY MARKET.—
LOAN.—In an agreement to participate in a If a loan described in clause (i) is sold on
loan on a deferred basis under paragraph the secondary market, the amount of in-
(16), the participation by the Administration terest paid to a bank or other lending in-
may not exceed 90 percent. stitution described in that clause from the
(F) PARTICIPATION IN THE PAYCHECK PRO- earliest date of default to the date of pay-
TECTION PROGRAM.—In an agreement to par- ment of the claim shall be no more than
ticipate in a loan on a deferred basis under the agreed upon rate, minus one percent.
paragraph (36), the participation by the Ad- (iii) APPLICABILITY.—Clauses (i) and (ii)
ministration shall be 100 percent. shall not apply to loans made on or after
(3) No loan shall be made under this sub- October 1, 2000.
section— (C) PREPAYMENT CHARGES
(A) if the total amount outstanding and (i) IN GENERAL.—A borrower who prepays
committed (by participation or otherwise) to any loan guaranteed under this subsection
the borrower from the business loan and in- shall remit to the Administration a sub-
vestment fund established by this chapter sidy recoupment fee calculated in accord-
would exceed $3,750,000 (or if the gross loan ance with clause (ii) if—
amount would exceed $5,000,000), except as (I) the loan is for a term of not less
provided in subparagraph (B); than 15 years;
(B) if the total amount outstanding and (II) the prepayment is voluntary;
committed (on a deferred basis) solely for (III) the amount of prepayment in any
the purposes provided in paragraph (16) to calendar year is more than 25 percent of
the borrower from the business loan and in- the outstanding balance of the loan; and
Page 805 TITLE 15—COMMERCE AND TRADE § 636
(IV) the prepayment is made within (i) to provide full payment deferment re-
the first 3 years after disbursement of lief (including payment of principal and in-
the loan proceeds. terest) for a period of not more than 1 year;
(ii) SUBSIDY RECOUPMENT FEE.—The sub- and
sidy recoupment fee charged under clause (ii) to provide an additional deferment pe-
(i) shall be— riod if the borrower provides documentation
(I) 5 percent of the amount of prepay- justifying such additional deferment.
ment, if the borrower prepays during the (C) SECONDARY MARKET.—
first year after disbursement; (i) IN GENERAL.—Except as provided in
(II) 3 percent of the amount of prepay- clause (ii), if an investor declines to approve
ment, if the borrower prepays during the a deferral or additional deferment requested
second year after disbursement; and by a lender under subparagraph (B), the Ad-
(III) 1 percent of the amount of prepay- ministrator shall exercise the authority to
ment, if the borrower prepays during the purchase the loan so that the borrower may
third year after disbursement. receive full payment deferment relief (in-
(5) No such loans including renewals and ex- cluding payment of principal and interest)
tensions thereof may be made for a period or or an additional deferment as described in
periods exceeding twenty-five years, except subparagraph (B).
that such portion of a loan made for the pur- (ii) EXCEPTION.—If, in a fiscal year, the Ad-
pose of acquiring real property or con- ministrator determines that the cost of im-
structing, converting, or expanding facilities plementing clause (i) is greater than zero,
may have a maturity of twenty-five years plus the Administrator shall not implement that
such additional period as is estimated may be clause.
required to complete such construction, con- (8) The Administration may make loans
version, or expansion. under this subsection to small business con-
(6) All loans made under this subsection cerns owned and controlled by disabled vet-
shall be of such sound value or so secured as erans (as defined in section 4211(3) of title 38).
reasonably to assure repayment: Provided, (9) The Administration may provide loans
however, That— under this subsection to finance residential or
(A) for loans to assist any public or private commercial construction or rehabilitation for
organization or to assist any handicapped in- sale: Provided, however, That such loans shall
dividual as provided in paragraph (10) of this not be used primarily for the acquisition of
subsection any reasonable doubt shall be re- land.
solved in favor of the applicant; (10) The Administration may provide guar-
(B) recognizing that greater risk may be anteed loans under this subsection to assist
associated with loans for energy measures as any public or private organization for the
provided in paragraph (12) of this subsection, handicapped or to assist any handicapped indi-
factors in determining ‘‘sound value’’ shall vidual, including service-disabled veterans, in
include, but not be limited to, quality of the establishing, acquiring, or operating a small
product or service; technical qualifications business concern.
of the applicant or his employees; sales pro- (11) The Administration may provide loans
jections; and the financial status of the busi- under this subsection to any small business
ness concern: Provided further, That such sta- concern, or to any qualified person seeking to
tus need not be as sound as that required for establish such a concern when it determines
general loans under this subsection; and 1 that such loan will further the policies estab-
(C) Repealed. Pub. L. 97–35, title XIX, lished in section 631(c) 2 of this title, with par-
§ 1910, Aug. 13, 1981, 95 Stat. 778. ticular emphasis on the preservation or estab-
On that portion of the loan used to refinance lishment of small business concerns located in
existing indebtedness held by a bank or other urban or rural areas with high proportions of
lending institution, the Administration shall unemployed or low-income individuals or
limit the amount of deferred participation to owned by low-income individuals.
80 per centum of the amount of the loan at the (12)(A) The Administration may provide
time of disbursement: Provided further, That loans under this subsection to assist any small
any authority conferred by this subparagraph business concern, including start up, to enable
on the Administration shall be exercised sole- such concern to design architecturally or engi-
ly by the Administration and shall not be del- neer, manufacture, distribute, market, install,
egated to other than Administration per- or service energy measures: Provided, however,
sonnel. That such loan proceeds shall not be used pri-
(7)(A) IN GENERAL.—The Administrator may marily for research and development.
defer payments on the principal and interest (b) 3 The Administration may provide de-
of such loans for a grace period and use such ferred participation loans under this sub-
other methods as it deems necessary and ap- section to finance the planning, design, or in-
propriate to assure the successful establish- stallation of pollution control facilities for the
ment and operation of such concern. purposes set forth in section 404 of the Small
(B) DEFERRAL REQUIREMENTS.—With respect Business Investment Act of 1958 [15 U.S.C.
to a deferral provided under this paragraph, 694–1]. Notwithstanding the limitation ex-
the Administrator may allow lenders under pressed in paragraph (3) of this subsection, a
this subsection—
2 See References in Text note below.
1 So in original. The ‘‘; and’’ probably should be a period. 3 So in original. Probably should be ‘‘(B)’’.
§ 636 TITLE 15—COMMERCE AND TRADE Page 806
loan made under this paragraph may not re- with its application for the guarantee. Such
sult in a total amount outstanding and com- plan shall include an agreement with the Ad-
mitted to a borrower from the business loan ministrator which is binding on such trust and
and investment fund of more than $1,000,000. on the small business concern and which pro-
(13) The Administration may provide fi- vides that—
nancings under this subsection to State and (i) not later than the date the loan guaran-
local development companies for the purposes teed under subparagraph (A) is repaid (or as
of, and subject to the restrictions in, title V of soon thereafter as is consistent with the re-
the Small Business Investment Act of 1958 [15 quirements of section 401(a) of title 26), at
U.S.C. 695 et seq.]. least 51 per centum of the total stock of such
(14) EXPORT WORKING CAPITAL PROGRAM.— concern shall be allocated to the accounts of
(A) IN GENERAL.—The Administrator may at least 51 per centum of the employees of
provide extensions of credit, standby letters such concern who are entitled to share in
of credit, revolving lines of credit for export such allocation,
purposes, and other financing to enable (ii) there will be periodic reviews of the
small business concerns, including small role in the management of such concern of
business export trading companies and small employees to whose accounts stock is allo-
business export management companies, to cated,
develop foreign markets. A bank or partici- (iii) there will be adequate management to
pating lending institution may establish the assure management expertise and con-
rate of interest on such financings as may be tinuity, and
legal and reasonable. (iv) with respect to a loan made to a trust,
(B) TERMS.— or to a cooperative in accordance with para-
(i) LOAN AMOUNT.—The Administrator graph (35)—
may not guarantee a loan under this para- (I) a seller of the small business concern
graph of more than $5,000,000. may remain involved as an officer, direc-
(ii) FEES.— tor, or key employee of the small business
(I) IN GENERAL.—For a loan under this concern when a qualified employee trust
paragraph, the Administrator shall col- or cooperative has acquired 100 percent of
lect the fee assessed under paragraph (23) ownership of the small business concern;
not more frequently than once each and
year. (II) any seller of the small business con-
(II) UNTAPPED CREDIT.—The Adminis- cern who remains as an owner of the small
trator may not assess a fee on capital business concern, regardless of the per-
that is not accessed by the small busi- centage of ownership interest, shall be re-
ness concern. quired to provide a personal guarantee by
(C) CONSIDERATIONS.—When considering the Administration.
loan or guarantee applications, the Adminis- (C) In determining whether to guarantee any
tration shall give weight to export-related loan under this paragraph, the individual busi-
benefits, including opening new markets for ness experience or personal assets of em-
United States goods and services abroad and ployee-owners shall not be used as criteria, ex-
encouraging the involvement of small busi- cept inasmuch as certain employee-owners
nesses, including agricultural concerns, in may assume managerial responsibilities, in
the export market. which case business experience may be consid-
(D) MARKETING.—The Administrator shall ered.
aggressively market its export financing (D) For purposes of this paragraph, a cor-
program to small businesses. poration which is controlled by any other per-
(15)(A) The Administration may guarantee son shall be treated as a small business con-
loans under this subsection— cern if such corporation would, after the plan
(i) to qualified employee trusts with re- described in subparagraph (B) is carried out,
spect to a small business concern for the be treated as a small business concern.
purpose of purchasing, and for any trans- (E) The Administration shall compile a sepa-
action costs associated with purchasing, rate list of applications for assistance under
stock of the concern under a plan approved this paragraph, indicating which applications
by the Administrator which, when carried were accepted and which were denied, and
out, results in the qualified employee trust shall report periodically to the Congress on
owning at least 51 per centum of the stock of the status of employee-owned firms assisted
the concern; and by the Administration, which shall include—
(ii) to a small business concern under a (i) the total number of loans made to em-
plan approved by the Administrator, if the ployee-owned business concerns that were
proceeds from the loan are only used to guaranteed by the Administrator under this
make a loan to a qualified employee trust, subsection or section 502 of the Small Busi-
and for any transaction costs associated ness Investment Act of 1958 (15 U.S.C. 696),
with making that loan, that results in the including the number of loans made—
qualified employee trust owning at least 51 (I) to small business concerns owned and
percent of the small business concern. controlled by socially and economically
(B) The plan requiring the Administrator’s disadvantaged individuals; and
approval under subparagraph (A) shall be sub- (II) to cooperatives;
mitted to the Administration by the trustee of (ii) the total number of financings made to
such trust or by the small business concern employee-owned business concerns by com-
Page 807 TITLE 15—COMMERCE AND TRADE § 636
panies licensed under section 301(c) of the (D) ADVERSELY AFFECTED BY INTER-
Small Business Investment Act of 1958 (15 NATIONAL TRADE.—For purposes of this para-
U.S.C. 696(c)) [15 U.S.C. 681(c)], including the graph, a small business concern is adversely
number of financings made— affected by international trade if, as deter-
(I) to small business concerns owned and mined by the Administrator, the small busi-
controlled by socially and economically ness concern—
disadvantaged individuals; and (i) is confronting increased competition
(II) to cooperatives; and with foreign firms in the relevant market;
(iii) any outreach and educational activi- and
ties conducted by the Administration with (ii) is injured by such competition.
respect to employee-owned business con- (E) FINDINGS BY CERTAIN FEDERAL AGEN-
cerns. CIES.—For purposes of subparagraph (D)(ii)
(F) A small business concern that makes a the Administrator shall accept any finding
loan to a qualified employee trust under sub- of injury by the International Trade Com-
paragraph (A)(ii) is not required to contain the mission or any finding of injury by the Sec-
same terms and conditions as the loan made retary of Commerce pursuant to chapter 3 of
to the small business concern that is guaran- title II of the Trade Act of 1974 [19 U.S.C.
teed by the Administration under such sub- 2341 et seq.].
paragraph. (F) LIST OF EXPORT FINANCE LENDERS.—
(G) With respect to a loan made to a quali- (i) PUBLICATION OF LIST REQUIRED.—The
fied employee trust under this paragraph, or Administrator shall publish an annual list
to a cooperative in accordance with paragraph of the banks and participating lending in-
(35), the Administrator may, as deemed appro- stitutions that, during the 1-year period
priate, elect to not require any mandatory eq- ending on the date of publication of the
uity to be provided by the qualified employee list, have made loans guaranteed by the
trust or cooperative to make the loan. Administration under—
(16) INTERNATIONAL TRADE.— (I) this paragraph;
(A) IN GENERAL.—If the Administrator de- (II) paragraph (14); or
termines that a loan guaranteed under this (III) paragraph (34).
subsection will allow an eligible small busi- (ii) AVAILABILITY OF LIST.—The Adminis-
ness concern that is engaged in or adversely trator shall—
affected by international trade to improve (I) post the list published under clause
its competitive position, the Administrator (i) on the website of the Administration;
may make such loan to assist such concern— and
(i) in the financing of the acquisition, (II) make the list published under
construction, renovation, modernization, clause (i) available, upon request, at
improvement, or expansion of productive each district office of the Administra-
facilities or equipment to be used in the tion.
United States in the production of goods
(17) The Administration shall authorize
and services involved in international
lending institutions and other entities in addi-
trade;
tion to banks to make loans authorized under
(ii) in the refinancing of existing indebt-
this subsection.
edness that is not structured with reason-
(18) GUARANTEE FEES.—
able terms and conditions, including any (A) IN GENERAL.—With respect to each loan
debt that qualifies for refinancing under guaranteed under this subsection (other
any other provision of this subsection; or than a loan that is repayable in 1 year or
(iii) by providing working capital.
less), the Administration shall collect a
(B) SECURITY.— guarantee fee, which shall be payable by the
(i) IN GENERAL.—Except as provided in participating lender, and may be charged to
clause (ii), each loan made under this para- the borrower, as follows:
graph shall be secured by a first lien posi- (i) A guarantee fee not to exceed 2 per-
tion or first mortgage on the property or cent of the deferred participation share of
equipment financed by the loan or on a total loan amount that is not more than
other assets of the small business concern. $150,000.
(ii) EXCEPTION.—A loan under this para- (ii) A guarantee fee not to exceed 3 per-
graph may be secured by a second lien po- cent of the deferred participation share of
sition on the property or equipment fi- a total loan amount that is more than
nanced by the loan or on other assets of $150,000, but not more than $700,000.
the small business concern, if the Adminis- (iii) A guarantee fee not to exceed 3.5
trator determines the lien provides ade- percent of the deferred participation share
quate assurance of the payment of the of a total loan amount that is more than
loan. $700,000.
(C) ENGAGED IN INTERNATIONAL TRADE.— (iv) In addition to the fee under clause
For purposes of this paragraph, a small busi- (iii), a guarantee fee equal to 0.25 percent
ness concern is engaged in international of any portion of the deferred participa-
trade if, as determined by the Adminis- tion share that is more than $1,000,000.
trator, the small business concern is in a po- (B) RETENTION OF CERTAIN FEES.—Lenders
sition to expand existing export markets or participating in the programs established
develop new export markets. under this subsection may retain not more
§ 636 TITLE 15—COMMERCE AND TRADE Page 808
than 25 percent of a fee collected under sub- which it is provided will not be breached by
paragraph (A)(i). the small business concern.
(19)(A) In addition to the Preferred Lenders (B)(i) No loan shall be made under this para-
Program authorized by the proviso in section graph if the total amount outstanding and
634(b)(7) of this title, the Administration is au- committed (by participation or otherwise) to
thorized to establish a Certified Lenders Pro- the borrower would exceed $750,000.
gram for lenders who establish their knowl- (ii) Subject to the provisions of clause (i), in
edge of Administration laws and regulations agreements to participate in loans on a de-
concerning the guaranteed loan program and ferred (guaranteed) basis, participation by the
their proficiency in program requirements. Administration shall be not less than 85 per
The designation of a lender as a certified lend- centum of the balance of the financing out-
er shall be suspended or revoked at any time standing at the time of disbursement.
that the Administration determines that the (iii) The rate of interest on financings made
lender is not adhering to its rules and regula- on a deferred (guaranteed) basis shall be legal
tions or that the loss experience of the lender and reasonable.
is excessive as compared to other lenders, but (iv) Financings made pursuant to this para-
such suspension or revocation shall not affect graph shall be subject to the following limita-
any outstanding guarantee. tions:
(B) In order to encourage all lending institu- (I) No immediate participation may be
tions and other entities making loans author- purchased unless it is shown that a deferred
ized under this subsection to provide loans of participation is not available.
$50,000 or less in guarantees to eligible small (II) No direct financing may be made un-
business loan applicants, the Administration less it is shown that a participation is un-
shall develop and allow participating lenders available.
to solely utilize a uniform and simplified loan
form for such loans. (C) A direct loan or the Administration’s
(C) AUTHORITY TO LIQUIDATE LOANS.— share of an immediate participation loan made
(i) IN GENERAL.—The Administrator may pursuant to this paragraph shall be any se-
permit lenders participating in the Certified cured debt instrument—
Lenders Program to liquidate loans made (i) that is subordinated by its terms to all
with a guarantee from the Administration other borrowings of the issuer;
pursuant to a liquidation plan approved by (ii) the rate of interest on which shall not
the Administrator. exceed the current average market yield on
(ii) AUTOMATIC APPROVAL.—If the Adminis- outstanding marketable obligations of the
trator does not approve or deny a request for United States with remaining periods to ma-
approval of a liquidation plan within 10 busi- turity comparable to the average maturities
ness days of the date on which the request is of such loan and adjusted to the nearest one-
made (or with respect to any routine liq- eighth of 1 per centum;
uidation activity under such a plan, within 5 (iii) the term of which is not more than
business days) such request shall be deemed twenty-five years; and
to be approved. (iv) the principal on which is amortized at
such rate as may be deemed appropriate by
(20)(A) The Administration is empowered to
the Administration, and the interest on
make loans either directly or in cooperation
which is payable not less often than annu-
with banks or other financial institutions
ally.
through agreements to participate on an im-
mediate or deferred (guaranteed) basis to (21)(A) The Administration may make loans
small business concerns eligible for assistance on a guaranteed basis under the authority of
under subsection (j)(10) and section 637(a) of this subsection—
this title. Such assistance may be provided (i) to a small business concern that has
only if the Administration determines that— been (or can reasonably be expected to be)
(i) the type and amount of such assistance detrimentally affected by—
requested by such concern is not otherwise (I) the closure (or substantial reduction)
available on reasonable terms from other of a Department of Defense installation; or
sources; (II) the termination (or substantial re-
(ii) with such assistance such concern has duction) of a Department of Defense pro-
a reasonable prospect for operating soundly gram on which such small business was a
and profitably within a reasonable period of prime contractor or subcontractor (or sup-
time; plier) at any tier; or
(iii) the proceeds of such assistance will be
(ii) to a qualified individual or a veteran
used within a reasonable time for plant con-
seeking to establish (or acquire) and operate
struction, conversion, or expansion, includ-
a small business concern.
ing the acquisition of equipment, facilities,
machinery, supplies, or material or to sup- (B) Recognizing that greater risk may be as-
ply such concern with working capital to be sociated with a loan to a small business con-
used in the manufacture of articles, equip- cern described in subparagraph (A)(i), any rea-
ment, supplies, or material for defense or ci- sonable doubts concerning the firm’s proposed
vilian production or as may be necessary to business plan for transition to nondefense-re-
insure a well-balanced national economy; lated markets shall be resolved in favor of the
and loan applicant when making any determina-
(iv) such assistance is of such sound value tion regarding the sound value of the proposed
as reasonably to assure that the terms under loan in accordance with paragraph (6).
Page 809 TITLE 15—COMMERCE AND TRADE § 636
(C) Loans pursuant to this paragraph shall lenders and by small business borrowers for
be authorized in such amounts as provided in guarantees under this subsection may be re-
advance in appropriation Acts for the purposes duced, consistent with reducing to zero the
of loans under this paragraph. cost to the Administration of making such
(D) For purposes of this paragraph a quali- guarantees—
fied individual is— (i) the Administration shall first con-
(i) a member of the Armed Forces of the sider reducing fees paid by small business
United States, honorably discharged from borrowers under clauses (i) through (iii) of
active duty involuntarily or pursuant to a paragraph (18)(A), to the maximum extent
program providing bonuses or other induce- possible; and
ments to encourage voluntary separation or (ii) fees paid by small business borrowers
early retirement; shall not be increased above the levels in
(ii) a civilian employee of the Department effect on December 8, 2004.
of Defense involuntarily separated from Fed- (24) NOTIFICATION REQUIREMENT.—The Ad-
eral service or retired pursuant to a program
ministration shall notify the Committees on
offering inducements to encourage early re-
Small Business of the Senate and the House of
tirement; or
Representatives not later than 15 days before
(iii) an employee of a prime contractor,
making any significant policy or administra-
subcontractor, or supplier at any tier of a
tive change affecting the operation of the loan
Department of Defense program whose em-
program under this subsection.
ployment is involuntarily terminated (or
(25) LIMITATION ON CONDUCTING PILOT
voluntarily terminated pursuant to a pro-
PROJECTS.—
gram offering inducements to encourage vol- (A) IN GENERAL.—Not more than 10 percent
untary separation or early retirement) due of the total number of loans guaranteed in
to the termination (or substantial reduc- any fiscal year under this subsection may be
tion) of a Department of Defense program. awarded as part of a pilot program which is
(E) JOB CREATION AND COMMUNITY BENEFIT.— commenced by the Administrator on or after
In providing assistance under this paragraph, October 1, 1996.
the Administration shall develop procedures (B) ‘‘PILOT PROGRAM’’ DEFINED.—In this
to ensure, to the maximum extent practicable, paragraph, the term ‘pilot program’ means
that such assistance is used for projects that— any lending program initiative, project, in-
(i) have the greatest potential for— novation, or other activity not specifically
(I) creating new jobs for individuals authorized by law.
whose employment is involuntarily termi- (C) LOW DOCUMENTATION LOAN PROGRAM.—
nated due to reductions in Federal defense The Administrator may carry out the low
expenditures; or documentation loan program for loans of
(II) preventing the loss of jobs by em- $100,000 or less only through lenders with
ployees of small business concerns de- significant experience in making small busi-
scribed in subparagraph (A)(i); and ness loans. Not later than 90 days after Sep-
(ii) have substantial potential for stimu- tember 30, 1996, the Administrator shall pro-
lating new economic activity in commu- mulgate regulations defining the experience
nities most affected by reductions in Federal necessary for participation as a lender in the
defense expenditures. low documentation loan program.
(22) The Administration is authorized to per- (26) CALCULATION OF SUBSIDY RATE.—All fees,
mit participating lenders to impose and col- interest, and profits received and retained by
lect a reasonable penalty fee on late payments the Administration under this subsection shall
of loans guaranteed under this subsection in be included in the calculations made by the
an amount not to exceed 5 percent of the Director of the Office of Management and
monthly loan payment per month plus inter- Budget to offset the cost (as that term is de-
est. fined in section 661a of title 2) to the Adminis-
(23) YEARLY FEE.— tration of purchasing and guaranteeing loans
(A) IN GENERAL.—With respect to each loan under this chapter.
approved under this subsection, the Admin- (27) Repealed. Pub. L. 106–8, § 3(c), Apr. 2,
istration shall assess, collect, and retain a 1999, 113 Stat. 16.
fee, not to exceed 0.55 percent per year of the (28) LEASING.—In addition to such other
outstanding balance of the deferred partici- lease arrangements as may be authorized by
pation share of the loan, in an amount estab- the Administration, a borrower may perma-
lished once annually by the Administration nently lease to one or more tenants not more
in the Administration’s annual budget re- than 20 percent of any property constructed
quest to Congress, as necessary to reduce to with the proceeds of a loan guaranteed under
zero the cost to the Administration of mak- this subsection, if the borrower permanently
ing guarantees under this subsection. As occupies and uses not less than 60 percent of
used in this paragraph, the term ‘‘cost’’ has the total business space in the property.
the meaning given that term in section 661a (29) REAL ESTATE APPRAISALS.—
of title 2. (A) IN GENERAL.—With respect to a loan
(B) PAYER.—The yearly fee assessed under under this subsection that is secured by
subparagraph (A) shall be payable by the commercial real property, an appraisal of
participating lender and shall not be charged such property by a State licensed or cer-
to the borrower. tified appraiser—
(C) LOWERING OF BORROWER FEES.—If the (i) shall be required by the Administra-
Administration determines that fees paid by tion in connection with any such loan, if
§ 636 TITLE 15—COMMERCE AND TRADE Page 810
such loan is in an amount greater than the (D) MAXIMUM LOAN AMOUNT.—The max-
Federal banking regulator appraisal imum loan amount under the Express Loan
threshold; or Program is $500,000.
(ii) may be required by the Administra- (E) OPTION TO PARTICIPATE.—Except as oth-
tion or the lender in connection with any erwise provided in this paragraph, the Ad-
such loan, if such loan is in an amount ministration shall take no regulatory, pol-
equal to or less than the Federal banking icy, or administrative action, without re-
regulator appraisal threshold, if such ap- gard to whether such action requires notifi-
praisal is necessary for appropriate evalua- cation pursuant to paragraph (24), that has
tion of creditworthiness. the effect of requiring a lender to make an
(B) FEDERAL BANKING REGULATOR AP- express loan pursuant to subparagraph (D).
PRAISAL THRESHOLD DEFINED.—For purposes
(F) EXPRESS LOANS FOR RENEWABLE ENERGY
AND ENERGY EFFICIENCY.—
of this paragraph, the term ‘‘Federal bank-
(i) DEFINITIONS.—In this subparagraph—
ing regulator appraisal threshold’’ means
(I) the term ‘‘biomass’’—
the lesser of the threshold amounts set by
(aa) means any organic material that
the Board of Governors of the Federal Re-
is available on a renewable or recur-
serve System, the Comptroller of the Cur-
ring basis, including—
rency, and the Federal Deposit Insurance (AA) agricultural crops;
Corporation for when a federally related (BB) trees grown for energy pro-
transaction that is a commercial real estate duction;
transaction requires an appraisal prepared (CC) wood waste and wood residues;
by a State licensed or certified appraiser. (DD) plants (including aquatic
(30) OWNERSHIP REQUIREMENTS.—Ownership plants and grasses);
requirements to determine the eligibility of a (EE) residues;
small business concern that applies for assist- (FF) fibers;
ance under any credit program under this (GG) animal wastes and other
chapter shall be determined without regard to waste materials; and
any ownership interest of a spouse arising (HH) fats, oils, and greases (includ-
solely from the application of the community ing recycled fats, oils, and greases);
property laws of a State for purposes of deter- and
mining marital interests. (bb) does not include—
(31) EXPRESS LOANS.— (AA) paper that is commonly recy-
(A) DEFINITIONS.—As used in this para- cled; or
graph: (BB) unsegregated solid waste;
(i) The term ‘‘disaster area’’ means the
area for which the President has declared (II) the term ‘‘energy efficiency
a major disaster, during the 5-year period project’’ means the installation or up-
beginning on the date of the declaration. grading of equipment that results in a
(ii) The term ‘‘express lender’’ means significant reduction in energy usage;
any lender authorized by the Administra- and
tion to participate in the Express Loan (III) the term ‘‘renewable energy sys-
Program. tem’’ means a system of energy derived
(iii) The term ‘‘express loan’’ means any from—
loan made pursuant to this paragraph in (aa) a wind, solar, biomass (including
which a lender utilizes to the maximum biodiesel), or geothermal source; or
extent practicable its own loan analyses, (bb) hydrogen derived from biomass
procedures, and documentation. or water using an energy source de-
(iv) The term ‘‘Express Loan Program’’ scribed in item (aa).
means the program for express loans es- (ii) LOANS.—The Administrator may
tablished by the Administration under make a loan under the Express Loan Pro-
paragraph (25)(B), as in existence on April gram for the purpose of—
5, 2004, with a guarantee rate of not more (I) purchasing a renewable energy sys-
than 50 percent. tem; or
(B) RESTRICTION TO EXPRESS LENDER.—The (II) carrying out an energy efficiency
authority to make an express loan shall be project for a small business concern.
limited to those lenders deemed qualified to (G) GUARANTEE FEE WAIVER FOR VET-
make such loans by the Administration. ERANS.—
Designation as an express lender for pur- (i) GUARANTEE FEE WAIVER.—The Admin-
poses of making an express loan shall not istrator may not collect a guarantee fee
prohibit such lender from taking any other described in paragraph (18) in connection
action authorized by the Administration for with a loan made under this paragraph to
that lender pursuant to this subsection. a veteran or spouse of a veteran on or after
(C) GRANDFATHERING OF EXISTING LEND- October 1, 2015.
ERS.—Any express lender shall retain such (ii) DEFINITION.—In this subparagraph,
designation unless the Administration deter- the term ‘‘veteran or spouse of a veteran’’
mines that the express lender has violated means—
the law or regulations promulgated by the (I) a veteran, as defined in section
Administration or modifies the require- 632(q)(4) of this title;
ments to be an express lender and the lender (II) an individual who is eligible to par-
no longer satisfies those requirements. ticipate in the Transition Assistance
Page 811 TITLE 15—COMMERCE AND TRADE § 636
Program established under section 1144 gram under this subsection in a fiscal
of title 10; year is more than zero and such cost is
(III) a member of a reserve component directly attributable to the cost of guar-
of the Armed Forces named in section anteeing loans under clause (i).
10101 of title 10;
(viii) RULES.—Not later than 270 days
(IV) the spouse of an individual de-
after November 25, 2015, the Administrator
scribed in subclause (I), (II), or (III); or
(V) the surviving spouse (as defined in shall promulgate rules to carry out this
section 101 of title 38) of an individual subparagraph.
described in subclause (I), (II), or (III) (32) LOANS FOR ENERGY EFFICIENT TECH-
who died while serving on active duty or NOLOGIES.—
as a result of a disability that is service- (A) DEFINITIONS.—In this paragraph—
connected (as defined in such section). (i) the term ‘‘cost’’ has the meaning
given that term in section 661a of title 2;
(H) RECOVERY OPPORTUNITY LOANS.— (ii) the term ‘‘covered energy efficiency
(i) IN GENERAL.—The Administrator may
loan’’ means a loan—
guarantee an express loan to a small busi- (I) made under this subsection; and
ness concern located in a disaster area in (II) the proceeds of which are used to
accordance with this subparagraph. purchase energy efficient designs, equip-
(ii) MAXIMUMS.—For a loan guaranteed ment, or fixtures, or to reduce the en-
under clause (i)—
ergy consumption of the borrower by 10
(I) the maximum loan amount is
percent or more; and
$150,000; and
(II) the guarantee rate shall be not (iii) the term ‘‘pilot program’’ means the
more than 85 percent. pilot program established under subpara-
(iii) OVERALL CAP.—A loan guaranteed graph (B) 4
under clause (i) shall not be counted in de- (B) ESTABLISHMENT.—The Administrator
termining the amount of loans made to a shall establish and carry out a pilot program
borrower for purposes of subparagraph (D). under which the Administrator shall reduce
(iv) OPERATIONS.—A small business con- the fees for covered energy efficiency loans.
cern receiving a loan guaranteed under (C) DURATION.—The pilot program shall
clause (i) shall certify that the small busi- terminate at the end of the second full fiscal
ness concern was in operation on the date year after the date that the Administrator
on which the applicable major disaster oc- establishes the pilot program.
curred as a condition of receiving the loan. (D) MAXIMUM PARTICIPATION.—A covered
(v) REPAYMENT ABILITY.—A loan guaran- energy efficiency loan shall include the max-
teed under clause (i) may only be made to imum participation levels by the Adminis-
a small business concern that dem- trator permitted for loans made under this
onstrates, to the satisfaction of the Ad- subsection.
ministrator, sufficient capacity to repay (E) FEES.—
the loan. (i) IN GENERAL.—The fee on a covered en-
(vi) TIMING OF PAYMENT OF GUARAN- ergy efficiency loan shall be equal to 50
TEES.— percent of the fee otherwise applicable to
(I) IN GENERAL.—Not later than 90 days that loan under paragraph (18).
after the date on which a request for pur- (ii) WAIVER.—The Administrator may
chase is filed with the Administrator, waive clause (i) for a fiscal year if—
the Administrator shall determine (I) for the fiscal year before that fiscal
whether to pay the guaranteed portion of year, the annual rate of default of cov-
the loan. ered energy efficiency loans exceeds that
(II) RECAPTURE.—Notwithstanding any of loans made under this subsection that
other provision of law, unless there is a are not covered energy efficiency loans;
subsequent finding of fraud by a court of (II) the cost to the Administration of
competent jurisdiction relating to a loan making loans under this subsection is
guaranteed under clause (i), on and after greater than zero and such cost is di-
the date that is 6 months after the date rectly attributable to the cost of making
on which the Administrator determines covered energy efficiency loans; and
to pay the guaranteed portion of the (III) no additional sources of revenue
loan, the Administrator may not at- authority are available to reduce the
tempt to recapture the paid guarantee. cost of making loans under this sub-
section to zero.
(vii) FEES.—
(I) IN GENERAL.—Unless the Adminis- (iii) EFFECT OF WAIVER.—If the Adminis-
trator has waived the guarantee fee that trator waives the reduction of fees under
would otherwise be collected by the Ad- clause (ii), the Administrator—
ministrator under paragraph (18) for a (I) shall not assess or collect fees in an
loan guaranteed under clause (i), and ex- amount greater than necessary to ensure
cept as provided in subclause (II), the that the cost of the program under this
guarantee fee for the loan shall be equal subsection is not greater than zero; and
to the guarantee fee that the Adminis- (II) shall reinstate the fee reductions
trator would collect if the guarantee under clause (i) when the conditions in
rate for the loan was 50 percent. clause (ii) no longer apply.
(II) EXCEPTION.—Subclause (I) shall not
apply if the cost of carrying out the pro- 4 So in original.
§ 636 TITLE 15—COMMERCE AND TRADE Page 812
(iv) NO INCREASE OF FEES.—The Adminis- (II) the cost to the Administration of
trator shall not increase the fees under making loans under this subsection is
paragraph (18) on loans made under this greater than zero and such cost is di-
subsection that are not covered energy ef- rectly attributable to the cost of making
ficiency loans as a direct result of the veteran participation loans; and
pilot program. (III) no additional sources of revenue
authority are available to reduce the
(F) GAO REPORT.—
cost of making loans under this sub-
(i) IN GENERAL.—Not later than 1 year
section to zero.
after the date that the pilot program ter-
minates, the Comptroller General of the (iii) EFFECT OF WAIVER.—If the Adminis-
United States shall submit to the Com- trator waives the reduction of fees under
mittee on Small Business of the House of clause (ii), the Administrator—
Representatives and the Committee on (I) shall not assess or collect fees in an
Small Business and Entrepreneurship of amount greater than necessary to ensure
the Senate a report on the pilot program. that the cost of the program under this
(ii) CONTENTS.—The report submitted subsection is not greater than zero; and
under clause (i) shall include— (II) shall reinstate the fee reductions
(I) the number of covered energy effi- under clause (i) when the conditions in
ciency loans for which fees were reduced clause (ii) no longer apply.
under the pilot program; (iv) NO INCREASE OF FEES.—The Adminis-
(II) a description of the energy effi- trator shall not increase the fees under
ciency savings with the pilot program; paragraph (18) on loans made under this
(III) a description of the impact of the subsection that are not veteran participa-
pilot program on the program under this tion loans as a direct result of the pilot
subsection; program.
(IV) an evaluation of the efficacy and
(F) GAO REPORT.—
potential fraud and abuse of the pilot (i) IN GENERAL.—Not later than 1 year
program; and after the date that the pilot program ter-
(V) recommendations for improving minates, the Comptroller General of the
the pilot program. United States shall submit to the Com-
(33) INCREASED VETERAN PARTICIPATION PRO- mittee on Small Business of the House of
GRAM.— Representatives and the Committee on
(A) DEFINITIONS.—In this paragraph— Small Business and Entrepreneurship of
(i) the term ‘‘cost’’ has the meaning the Senate a report on the pilot program.
given that term in section 661a of title 2; (ii) CONTENTS.—The report submitted
(ii) the term ‘‘pilot program’’ means the under clause (i) shall include—
pilot program established under subpara- (I) the number of veteran participation
graph (B); and loans for which fees were reduced under
(iii) the term ‘‘veteran participation the pilot program;
loan’’ means a loan made under this sub- (II) a description of the impact of the
section to a small business concern owned pilot program on the program under this
and controlled by veterans of the Armed subsection;
Forces or members of the reserve compo- (III) an evaluation of the efficacy and
nents of the Armed Forces. potential fraud and abuse of the pilot
program; and
(B) ESTABLISHMENT.—The Administrator (IV) recommendations for improving
shall establish and carry out a pilot program the pilot program.
under which the Administrator shall reduce
the fees for veteran participation loans. (34) EXPORT EXPRESS PROGRAM.—
(A) DEFINITIONS.—In this paragraph—
(C) DURATION.—The pilot program shall
(i) the term ‘‘export development activ-
terminate at the end of the second full fiscal
ity’’ includes—
year after the date that the Administrator (I) obtaining a standby letter of credit
establishes the pilot program. when required as a bid bond, perform-
(D) MAXIMUM PARTICIPATION.—A veteran ance bond, or advance payment guar-
participation loan shall include the max- antee;
imum participation levels by the Adminis- (II) participation in a trade show that
trator permitted for loans made under this takes place outside the United States;
subsection. (III) translation of product brochures
(E) FEES.— or catalogues for use in markets outside
(i) IN GENERAL.—The fee on a veteran the United States;
participation loan shall be equal to 50 per- (IV) obtaining a general line of credit
cent of the fee otherwise applicable to that for export purposes;
loan under paragraph (18). (V) performing a service contract from
(ii) WAIVER.—The Administrator may buyers located outside the United
waive clause (i) for a fiscal year if— States;
(I) for the fiscal year before that fiscal (VI) obtaining transaction-specific fi-
year, the annual estimated rate of de- nancing associated with completing ex-
fault of veteran participation loans ex- port orders;
ceeds that of loans made under this sub- (VII) purchasing real estate or equip-
section that are not veteran participa- ment to be used in the production of
tion loans; goods or services for export;
Page 813 TITLE 15—COMMERCE AND TRADE § 636
(VIII) providing term loans or other fi- (viii) the term ‘‘payroll costs’’—
nancing to enable a small business con- (I) means—
cern, including an export trading com- (aa) the sum of payments of any
pany and an export management com- compensation with respect to employ-
pany, to develop a market outside the ees that is a—
United States; and (AA) salary, wage, commission, or
(IX) acquiring, constructing, ren- similar compensation;
ovating, modernizing, improving, or ex- (BB) payment of cash tip or equiva-
panding a production facility or equip- lent;
ment to be used in the United States in (CC) payment for vacation, paren-
the production of goods or services for tal, family, medical, or sick leave;
export; and (DD) allowance for dismissal or
separation;
(ii) the term ‘‘express loan’’ means a (EE) payment required for the pro-
loan in which a lender uses to the max- visions of group health care or group
imum extent practicable the loan anal- life, disability, vision, or dental in-
yses, procedures, and documentation of the surance benefits, including insurance
lender to provide expedited processing of premiums;
the loan application. (FF) payment of any retirement
(B) AUTHORITY.—The Administrator may benefit; or
guarantee the timely payment of an express (GG) payment of State or local tax
loan to a small business concern made for an assessed on the compensation of em-
export development activity. ployees; and
(C) LEVEL OF PARTICIPATION.— (bb) the sum of payments of any
(i) MAXIMUM AMOUNT.—The maximum
compensation to or income of a sole
amount of an express loan guaranteed
proprietor or independent contractor
under this paragraph shall be $500,000.
that is a wage, commission, income,
(ii) PERCENTAGE.—For an express loan
net earnings from self-employment, or
guaranteed under this paragraph, the Ad-
similar compensation and that is in an
ministrator shall guarantee—
(I) 90 percent of a loan that is not more amount that is not more than $100,000
than $350,000; and on an annualized basis, as prorated for
(II) 75 percent of a loan that is more the period during which the payments
than $350,000 and not more than $500,000. are made or the obligation to make the
payments is incurred; and
(35) LOANS TO COOPERATIVES.—
(A) DEFINITION.—In this paragraph, the (II) shall not include—
term ‘‘cooperative’’ means an entity that is (aa) the compensation of an indi-
determined to be a cooperative by the Ad- vidual employee in excess of $100,000 on
ministrator, in accordance with applicable an annualized basis, as prorated for the
Federal and State laws and regulation. period during which the compensation
(B) AUTHORITY.—The Administration shall is paid or the obligation to pay the
guarantee loans made to a cooperative for compensation is incurred;
the purpose described in paragraph (15). (bb) taxes imposed or withheld under
chapters 21, 22, or 24 of title 26 during
(36) PAYCHECK PROTECTION PROGRAM.— the applicable period;
(A) DEFINITIONS.—In this paragraph—
(cc) any compensation of an em-
(i) the terms ‘‘appropriate Federal bank-
ployee whose principal place of resi-
ing agency’’ and ‘‘insured depository insti-
dence is outside of the United States;
tution’’ have the meanings given those
(dd) qualified sick leave wages for
terms in section 1813 of title 12;
(ii) the term ‘‘covered loan’’ means a which a credit is allowed under section
loan made under this paragraph during the 7001 of the Families First Coronavirus
covered period; Response Act (Public Law 116–127); or
(iii) the term ‘‘covered period’’ means (ee) qualified family leave wages for
the period beginning on February 15, 2020 which a credit is allowed under section
and ending on June 30, 2021; 7003 of the Families First Coronavirus
(iv) the term ‘‘eligible recipient’’ means Response Act (Public Law 116–127);
an individual or entity that is eligible to (ix) the term ‘‘veterans organization’’
receive a covered loan; means an organization that is described in
(v) the term ‘‘eligible self-employed indi- section 501(c)(19) of title 26 that is exempt
vidual’’ has the meaning given the term in from taxation under section 501(a) of title
section 7002(b) of the Families First 26;
Coronavirus Response Act (Public Law (x) the term ‘‘community development
116–127); financial institution’’ has the meaning
(vi) the term ‘‘insured credit union’’ has given the term in section 4702 of title 12); 5
the meaning given the term in section 1752 (xi) the term ‘‘community financial in-
of title 12; stitutions’’ means—
(vii) the term ‘‘nonprofit organization’’ (I) a community development financial
means an organization that is described in institution;
section 501(c)(3) of title 26 and that is ex-
empt from taxation under section 501(a) of 5 So in original. The closing parenthesis probably should not
title 26; appear.
§ 636 TITLE 15—COMMERCE AND TRADE Page 814
(II) a minority depository institution, would be described in section 120.110 of
as defined in section 308 of the Financial title 13, Code of Federal Regulations (or
Institutions Reform, Recovery, and En- in any successor regulation or other re-
forcement Act of 1989 (12 U.S.C. 1463 lated guidance or rule that may be
note); issued by the Administrator) other than
(III) a development company that is a business concern described in para-
certified under title V of the Small Busi- graph (a) or (k) of such section.
ness Investment Act of 1958 (15 U.S.C. 695 (B) PAYCHECK PROTECTION LOANS.—Except
et seq.); and as otherwise provided in this paragraph, the
(IV) an intermediary, as defined in sub- Administrator may guarantee covered loans
section (m)(11); under the same terms, conditions, and proc-
(xii) the term ‘‘credit union’’ means a esses as a loan made under this subsection.
State credit union or a Federal credit (C) REGISTRATION OF LOANS.—Not later
union, as those terms are defined, respec- than 15 days after the date on which a loan
tively, in section 1752 of title 12; is made under this paragraph, the Adminis-
(xiii) the term ‘‘seasonal employer’’ tration shall register the loan using the TIN
means an eligible recipient that— (as defined in section 7701 of title 26) as-
(I) does not operate for more than 7 signed to the borrower.
months in any calendar year; or (D) INCREASED ELIGIBILITY FOR CERTAIN
(II) during the preceding calendar year, SMALL BUSINESSES AND ORGANIZATIONS.—
had gross receipts for any 6 months of (i) IN GENERAL.—During the covered pe-
that year that were not more than 33.33 riod, in addition to small business con-
percent of the gross receipts of the em- cerns, any business concern, nonprofit or-
ployer for the other 6 months of that ganization, housing cooperative, veterans
year; organization, or Tribal business concern
described in section 657a(b)(2)(C) of this
(xiv) the term ‘‘housing cooperative’’ title shall be eligible to receive a covered
means a cooperative housing corporation loan if the business concern, nonprofit or-
(as defined in section 216(b) of title 26) that ganization, housing cooperative, veterans
employs not more than 300 employees; organization, or Tribal business concern
(xv) the term ‘‘destination marketing or- employs not more than the greater of—
ganization’’ means a nonprofit entity that (I) 500 employees; or
is— (II) if applicable, the size standard in
(I) an organization described in section number of employees established by the
501(c) of title 26 and exempt from tax Administration for the industry in which
under section 501(a) of such title; or the business concern, nonprofit organiza-
(II) a State, or a political subdivision tion, housing cooperative, veterans orga-
of a State (including any instrumen- nization, or Tribal business concern op-
tality of such entities)— erates.
(aa) engaged in marketing and pro-
moting communities and facilities to (ii) INCLUSION OF SOLE PROPRIETORS,
businesses and leisure travelers INDEPENDENT CONTRACTORS, AND ELIGIBLE
through a range of activities, includ- SELF-EMPLOYED INDIVIDUALS.—
ing— (I) IN GENERAL.—During the covered
(AA) assisting with the location of period, individuals who operate under a
meeting and convention sites; sole proprietorship or as an independent
(BB) providing travel information contractor and eligible self-employed in-
on area attractions, lodging accom- dividuals shall be eligible to receive a
modations, and restaurants; covered loan.
(CC) providing maps; and (II) DOCUMENTATION.—An eligible self-
(DD) organizing group tours of employed individual, independent con-
local historical, recreational, and tractor, or sole proprietorship seeking a
cultural attractions; or covered loan shall submit such docu-
mentation as determined necessary by
(bb) that is engaged in, and derives the Administrator and the Secretary, to
the majority of the operating budget of establish the applicant as eligible.
the entity from revenue attributable
(iii) BUSINESS CONCERNS WITH MORE THAN
to, providing live events;
1 PHYSICAL LOCATION.—
(xvi) the terms ‘‘exchange’’, ‘‘issuer’’, (I) IN GENERAL.—During the covered
and ‘‘security’’ have the meanings given period, any business concern that em-
those terms in section 78c(a) of this title; ploys not more than 500 employees per
and physical location of the business concern
(xvii) the term ‘‘additional covered non- and that is assigned a North American
profit entity’’— Industry Classification System code be-
(I) means an organization described in ginning with 72 at the time of disbursal
any paragraph of section 501(c) of title shall be eligible to receive a covered
26, other than paragraph (3), (4), (6), or loan.
(19), and exempt from tax under section (II) ELIGIBILITY OF NEWS ORGANIZA-
501(a) of such title; and TIONS.—
(II) does not include any entity that, if (aa) DEFINITION.—In this subclause,
the entity were a business concern, the term ‘‘included business concern’’
Page 815 TITLE 15—COMMERCE AND TRADE § 636
means a business concern, including tem code of 519130, certifies in good faith
any station which broadcasts pursuant as an Internet-only news publisher or
to a license granted by the Federal Internet-only periodical publisher, and is
Communications Commission under engaged in the collection and distribu-
title III of the Communications Act of tion of local or regional and national
1934 (47 U.S.C. 301 et seq.) without re- news and information shall be eligible to
gard for whether such a station is a receive a covered loan for the continued
concern as defined in section 121.105 of provision of news, information, content,
title 13, Code of Federal Regulations, or emergency information if—
or any successor thereto— (aa) the business concern or organi-
(AA) that employs not more than zation employs not more than 500 em-
500 employees, or the size standard ployees, or the size standard estab-
established by the Administrator for lished by the Administrator for that
the North American Industry Classi- North American Industry Classifica-
fication System code applicable to tion code, per physical location of the
the business concern, per physical lo- business concern or organization; and
cation of such business concern; or (bb) the business concern or organi-
(BB) any nonprofit organization or zation makes a good faith certification
any organization otherwise subject that proceeds of the loan will be used
to section 511(a)(2)(B) of title 26 that to support expenses at the component
is a public broadcasting entity (as of the business concern or organization
defined in section 397(11) of the Com- that supports local or regional news.
munications Act of 1934 (47 U.S.C.
397(11))). (iv) WAIVER OF AFFILIATION RULES.—Dur-
ing the covered period, the provisions ap-
(bb) ELIGIBILITY.—During the covered plicable to affiliations under section
period, an included business concern 121.103 of title 13, Code of Federal Regula-
shall be eligible to receive a covered tions, or any successor regulation, are
loan if— waived with respect to eligibility for a
(AA) the included business concern covered loan for—
is majority owned or controlled by a (I) any business concern with not more
business concern that is assigned a than 500 employees that, as of the date
North American Industry Classifica- on which the covered loan is disbursed, is
tion System code beginning with assigned a North American Industry
511110 or 5151 or, with respect to a Classification System code beginning
public broadcasting entity (as de- with 72;
fined in section 397(11) of the Com- (II) any business concern operating as
munications Act of 1934 (47 U.S.C. a franchise that is assigned a franchise
397(11))), has a trade or business that identifier code by the Administration;
falls under such a code; and (III) any business concern that receives
(BB) the included business concern financial assistance from a company li-
makes a good faith certification that censed under section 681 of this title;
proceeds of the loan will be used to (IV)(aa) any business concern (includ-
support expenses at the component ing any station which broadcasts pursu-
of the included business concern that ant to a license granted by the Federal
produces or distributes locally fo- Communications Commission under title
cused or emergency information. III of the Communications Act of 1934 (47
U.S.C. 301 et seq.) without regard for
(III) ELIGIBILITY OF CERTAIN ORGANIZA-
whether such a station is a concern as
TIONS.—Subject to the provisions in this
defined in section 121.105 of title 13, Code
subparagraph, during the covered pe-
of Federal Regulations, or any successor
riod—
thereto) that employs not more than 500
(aa) a nonprofit organization shall be
employees, or the size standard estab-
eligible to receive a covered loan if the
lished by the Administrator for the
nonprofit organization employs not
North American Industry Classification
more than 500 employees per physical
System code applicable to the business
location of the organization; and
concern, per physical location of such
(bb) an additional covered nonprofit
business concern and is majority owned
entity and an organization that, but
or controlled by a business concern that
for subclauses (I)(dd) and (II)(dd) of
is assigned a North American Industry
clause (vii), would be eligible for a cov-
Classification System code beginning
ered loan under clause (vii) shall be eli-
with 511110 or 5151; or
gible to receive a covered loan if the
(bb) any nonprofit organization that is
entity or organization employs not
assigned a North American Industry
more than 300 employees per physical
Classification System code beginning
location of the entity or organization.
with 5151; and
(IV) ELIGIBILITY OF INTERNET PUB- (V) any business concern or other orga-
LISHING ORGANIZATIONS.—A business con- nization that was not eligible to receive
cern or other organization that was not a covered loan the day before March 11,
eligible to receive a covered loan the day 2021, is assigned a North American Indus-
before March 11, 2021, is assigned a North try Classification System code of 519130,
American Industry Classification Sys- certifies in good faith as an Internet-
§ 636 TITLE 15—COMMERCE AND TRADE Page 816
only news publisher or Internet-only pe- nization shall be eligible to receive a
riodical publisher, and is engaged in the covered loan if—
collection and distribution of local or re- (aa) the destination marketing orga-
gional and national news and informa- nization does not receive more than 15
tion, if the business concern or organiza- percent of its receipts from lobbying
tion— activities;
(aa) employs not more than 500 em- (bb) the lobbying activities of the
ployees, or the size standard estab- destination marketing organization do
lished by the Administrator for that not comprise more than 15 percent of
North American Industry Classifica- the total activities of the organization;
tion code, per physical location of the (cc) the cost of the lobbying activi-
business concern or organization; and ties of the destination marketing orga-
(bb) is majority owned or controlled nization did not exceed $1,000,000 dur-
by a business concern or organization ing the most recent tax year of the
that is assigned a North American In- destination marketing organization
dustry Classification System code of that ended prior to February 15, 2020;
519130. and 6
(v) EMPLOYEE.—For purposes of deter- (dd) the destination marketing orga-
mining whether a business concern, non- nization employs not more than 300
profit organization, veterans organization, employees; and
or Tribal business concern described in (ee) the destination marketing orga-
section 657a(b)(2)(C) of this title employs nization—
not more than 500 employees under clause (AA) is described in section 501(c)
(i)(I), or for purposes of determining the of title 26 and is exempt from tax-
number of employees of a housing coopera- ation under section 501(a) of such
tive or a business concern or organization title; or
(BB) is a quasi-governmental enti-
made eligible for a loan under this para-
ty or is a political subdivision of a
graph under subclause (II), (III), or (IV) of
State or local government, including
clause (iii), subclause (IV) or (V) of clause
any instrumentality of those enti-
(iv), clause (vii), or clause (ix), the term
ties.
‘‘employee’’ includes individuals employed
on a full-time, part-time, or other basis. (viii) INELIGIBILITY OF PUBLICLY-TRADED
(vi) AFFILIATION.—The provisions appli- ENTITIES.—
cable to affiliations under section 121.103 (I) IN GENERAL.—Subject to subclause
of title 13, Code of Federal Regulations, or (II), and notwithstanding any other pro-
any successor thereto, shall apply with re- vision of this paragraph, on and after De-
spect to a nonprofit organization, a busi- cember 27, 2020, an entity that is an
ness concern or organization made eligible issuer, the securities of which are listed
for a loan under this paragraph under on an exchange registered as a national
clause (vii), a housing cooperative, and a securities exchange under section 78f of
veterans organization in the same manner this title, shall be ineligible to receive a
as with respect to a small business con- covered loan under this paragraph.
cern. (II) RULE FOR AFFILIATED ENTITIES.—
(vii) ELIGIBILITY FOR CERTAIN 501(c)(6) OR- With respect to a business concern or or-
GANIZATIONS.— ganization made eligible by subclause
(I) IN GENERAL.—Any organization that (II) or (IV) of clause (iii) or subclause
is described in section 501(c)(6) of title 26 (IV) or (V) of clause (iv) of this subpara-
and that is exempt from taxation under graph, the Administrator shall not con-
section 501(a) of such title (excluding sider whether any affiliated entity,
professional sports leagues and organiza- which for purposes of this subclause
tions with the purpose of promoting or shall include any entity that owns or
participating in a political campaign or controls such business concern or organi-
other activity) shall be eligible to re- zation, is an issuer.
ceive a covered loan if— (ix) ELIGIBILITY OF ADDITIONAL COVERED
(aa) the organization does not re- NONPROFIT ENTITIES.—An additional cov-
ceive more than 15 percent of its re- ered nonprofit entity shall be eligible to
ceipts from lobbying activities; receive a covered loan if—
(bb) the lobbying activities of the or- (I) the additional covered nonprofit en-
ganization do not comprise more than tity does not receive more than 15 per-
15 percent of the total activities of the cent of its receipts from lobbying activi-
organization; ties;
(cc) the cost of the lobbying activi- (II) the lobbying activities of the addi-
ties of the organization did not exceed tional covered nonprofit entity do not
$1,000,000 during the most recent tax comprise more than 15 percent of the
year of the organization that ended total activities of the organization;
prior to February 15, 2020; and (III) the cost of the lobbying activities
(dd) the organization employs not of the additional covered nonprofit enti-
more than 300 employees. ty did not exceed $1,000,000 during the
(II) DESTINATION MARKETING ORGANIZA-
TIONS.—Any destination marketing orga- 6 So in original. The word ‘‘and’’ probably should not appear.
Page 817 TITLE 15—COMMERCE AND TRADE § 636
most recent tax year of the additional (VI) utilities;
covered nonprofit entity that ended prior (VII) interest on any other debt obliga-
to February 15, 2020; and tions that were incurred before the cov-
(IV) the additional covered nonprofit ered period;
entity employs not more than 300 em- (VIII) covered operations expenditures,
ployees. as defined in section 636m(a) of this title;
(E) MAXIMUM LOAN AMOUNT.—Except as (IX) covered property damage costs, as
provided in subparagraph (V), during the defined in section 636m(a) of this title;
covered period, with respect to a covered (X) covered supplier costs, as defined
loan, the maximum loan amount shall be the in section 636m(a) of this title; and
lesser of— (XI) covered worker protection expend-
(i)(I) the sum of— itures, as defined in section 636m(a) of
(aa) the product obtained by multi- this title.
plying— (ii) DELEGATED AUTHORITY.—
(AA) the average total monthly pay- (I) IN GENERAL.—For purposes of mak-
ments by the applicant for payroll ing covered loans for the purposes de-
costs incurred during the 1-year period scribed in clause (i), a lender approved to
before the date on which the loan is make loans under this subsection shall
made, except that an applicant that is be deemed to have been delegated au-
a seasonal employer shall use the aver- thority by the Administrator to make
age total monthly payments for pay- and approve covered loans, subject to the
roll for any 12-week period selected by provisions of this paragraph.
the seasonal employer between Feb- (II) CONSIDERATIONS.—In evaluating
ruary 15, 2019, and February 15, 2020; by the eligibility of a borrower for a cov-
(BB) 2.5; and ered loan with the terms described in
(bb) the outstanding amount of a loan this paragraph, a lender shall consider
under subsection (b)(2) that was made whether the borrower—
during the period beginning on January (aa) was in operation on February 15,
31, 2020 and ending on the date on which 2020; and
covered loans are made available to be (bb)(AA) had employees for whom
refinanced under the covered loan; or the borrower paid salaries and payroll
taxes; or
(II) if requested by an otherwise eligible (BB) paid independent contractors,
recipient that was not in business during as reported on a Form 1099–MISC.
the period beginning on February 15, 2019
and ending on June 30, 2019, the sum of— (iii) ADDITIONAL LENDERS.—The author-
(aa) the product obtained by multi- ity to make loans under this paragraph
plying— shall be extended to additional lenders de-
(AA) the average total monthly pay- termined by the Administrator and the
ments by the applicant for payroll Secretary of the Treasury to have the nec-
costs incurred during the period begin- essary qualifications to process, close, dis-
ning on January 1, 2020 and ending on burse and service loans made with the
February 29, 2020; by guarantee of the Administration.
(BB) 2.5; and (iv) REFINANCE.—A loan made under sub-
section (b)(2) during the period beginning
(bb) the outstanding amount of a loan
on January 31, 2020 and ending on the date
under subsection (b)(2) that was made
on which covered loans are made available
during the period beginning on January
may be refinanced as part of a covered
31, 2020 and ending on the date on which
loan.
covered loans are made available to be (v) NONRECOURSE.—Notwithstanding the
refinanced under the covered loan; or waiver of the personal guarantee require-
(ii) $10,000,000. ment or collateral under subparagraph (J),
(F) ALLOWABLE USES OF COVERED LOANS.— the Administrator shall have no recourse
(i) IN GENERAL.—During the covered pe- against any individual shareholder, mem-
riod, an eligible recipient may, in addition ber, or partner of an eligible recipient of a
to the allowable uses of a loan made under covered loan for nonpayment of any cov-
this subsection, use the proceeds of the ered loan, except to the extent that such
covered loan for— shareholder, member, or partner uses the
(I) payroll costs; covered loan proceeds for a purpose not au-
(II) costs related to the continuation of thorized under clause (i) or (iv).
group health care benefits during periods (vi) PROHIBITION.—None of the proceeds
of paid sick, medical, or family leave, of a covered loan may be used for—
and insurance premiums; (I) lobbying activities, as defined in
(III) employee salaries, commissions, section 1602 of title 2;
or similar compensations; (II) lobbying expenditures related to a
(IV) payments of interest on any mort- State or local election; or
gage obligation (which shall not include (III) expenditures designed to influence
any prepayment of or payment of prin- the enactment of legislation, appropria-
cipal on a mortgage obligation); tions, regulation, administrative action,
(V) rent (including rent under a lease or Executive order proposed or pending
agreement); before Congress or any State govern-
§ 636 TITLE 15—COMMERCE AND TRADE Page 818
ment, State legislature, or local legisla- (I) IN GENERAL.—In this subparagraph,
ture or legislative body. the term ‘‘impacted borrower’’ means an
(G) BORROWER REQUIREMENTS.— eligible recipient that—
(i) 7 CERTIFICATION.—An eligible recipient (aa) is in operation on February 15,
applying for a covered loan shall make a 2020; and
good faith certification— (bb) has an application for a covered
(I) that the uncertainty of current eco- loan that is approved or pending ap-
nomic conditions makes necessary the proval on or after March 27, 2020.
loan request to support the ongoing op- (II) PRESUMPTION.—For purposes of
erations of the eligible recipient; this subparagraph, an impacted borrower
(II) acknowledging that funds will be is presumed to have been adversely im-
used to retain workers and maintain pacted by COVID–19.
payroll or make mortgage payments,
lease payments, and utility payments; (ii) DEFERRAL.—The Administrator
(III) that the eligible recipient does shall—
not have an application pending for a (I) consider each eligible recipient that
loan under this subsection for the same applies for a covered loan to be an im-
purpose and duplicative of amounts ap- pacted borrower; and
plied for or received under a covered (II) require lenders under this sub-
loan; and section to provide complete payment
(IV) during the period beginning on deferment relief for impacted borrowers
February 15, 2020 and ending on Decem- with covered loans, including payment of
ber 31, 2020, that the eligible recipient principal, interest, and fees, until the
has not received amounts under this sub- date on which the amount of forgiveness
section for the same purpose and dupli- determined under section 636m of this
cative of amounts applied for or received title is remitted to the lender.
under a covered loan. (iii) SECONDARY MARKET.—With respect
(H) FEE WAIVER.—With respect to a cov- to a covered loan that is sold on the sec-
ered loan— ondary market, if an investor declines to
(i) in lieu of the fee otherwise applicable approve a deferral requested by a lender
under paragraph (23)(A), the Administrator under clause (ii), the Administrator shall
shall collect no fee; and exercise the authority to purchase the
(ii) in lieu of the fee otherwise applicable loan so that the impacted borrower may
under paragraph (18)(A), the Administrator receive a deferral, including payment of
shall collect no fee. principal, interest, and fees, until the date
on which the amount of forgiveness deter-
(I) CREDIT ELSEWHERE.—During the covered mined under section 636m of this title is
period, the requirement that a small busi- remitted to the lender.
ness concern is unable to obtain credit else- (iv) GUIDANCE.—Not later than 30 days
where, as defined in section 632(h) of this after March 27, 2020, the Administrator
title, shall not apply to a covered loan. shall provide guidance to lenders under
(J) WAIVER OF PERSONAL GUARANTEE RE- this paragraph on the deferment process
QUIREMENT.—With respect to a covered described in this subparagraph.
loan— (v) RULE OF CONSTRUCTION.—If an eligible
(i) no personal guarantee shall be re- recipient fails to apply for forgiveness of a
quired for the covered loan; and covered loan within 10 months after the
(ii) no collateral shall be required for the last day of the covered period defined in
covered loan. section 636m(a) of this title, such eligible
(K) MATURITY FOR LOANS WITH REMAINING recipient shall make payments of prin-
BALANCE AFTER APPLICATION OF FORGIVE- cipal, interest, and fees on such covered
NESS.—With respect to a covered loan that loan beginning on the day that is not ear-
has a remaining balance after reduction lier than the date that is 10 months after
based on the loan forgiveness amount under the last day of such covered period.
section 636m of this title—
(N) SECONDARY MARKET SALES.—A covered
(i) the remaining balance shall continue
loan shall be eligible to be sold in the sec-
to be guaranteed by the Administration
ondary market consistent with this sub-
under this subsection; and
section. The Administrator may not collect
(ii) the covered loan shall have a min-
any fee for any guarantee sold into the sec-
imum maturity of 5 years and a maximum
ondary market under this subparagraph.
maturity of 10 years from the date on
(O) REGULATORY CAPITAL REQUIREMENTS.—
which the borrower applies for loan for-
(i) RISK WEIGHT.—With respect to the ap-
giveness under that section.
propriate Federal banking agencies or the
(L) INTEREST RATE REQUIREMENTS.—A cov- National Credit Union Administration
ered loan shall bear an interest rate not to Board applying capital requirements under
exceed 4 percent, calculated on a non- their respective risk-based capital require-
compounding, non-adjustable basis. ments, a covered loan shall receive a risk
(M) LOAN DEFERMENT.— weight of zero percent.
(i) DEFINITION OF IMPACTED BORROWER.— (ii) TEMPORARY RELIEF FROM TDR DISCLO-
SURES.—Notwithstanding any other provi-
7 So in original. No cl. (ii) has been enacted. sion of law, an insured depository institu-
Page 819 TITLE 15—COMMERCE AND TRADE § 636
tion or an insured credit union that modi- (iii) TIMING.—A reimbursement described
fies a covered loan in relation to in clause (i) shall be made not later than 5
COVID–19-related difficulties in a troubled days after the reported disbursement of
debt restructuring on or after March 13, the covered loan and may not be required
2020, shall not be required to comply with to be repaid by a lender unless the lender
the Financial Accounting Standards Board is found guilty of an act of fraud in con-
Accounting Standards Codification Sub- nection with the covered loan.
topic 310–40 (‘‘Receivables – Troubled Debt (iv) SENSE OF THE SENATE.—It is the
Restructurings by Creditors’’) for purposes sense of the Senate that the Administrator
of compliance with the requirements of should issue guidance to lenders and
the Federal Deposit Insurance Act (12 agents to ensure that the processing and
U.S.C. 1811 et seq.), until such time and disbursement of covered loans prioritizes
under such circumstances as the appro- small business concerns and entities in un-
priate Federal banking agency or the Na- derserved and rural markets, including
tional Credit Union Administration Board, veterans and members of the military
as applicable, determines appropriate. community, small business concerns
(P) REIMBURSEMENT FOR PROCESSING.— owned and controlled by socially and eco-
(i) IN GENERAL.—The Administrator shall nomically disadvantaged individuals (as
reimburse a lender authorized to make a defined in section 637(d)(3)(C) of this title),
covered loan as follows: women, and businesses in operation for
(I) With respect to a covered loan made less than 2 years.
during the period beginning on March 27, (Q) DUPLICATION.—Nothing in this para-
2020, and ending on the day before De- graph shall prohibit a recipient of an eco-
cember 27, 2020, the Administrator shall nomic injury disaster loan made under sub-
reimburse such a lender at a rate, based section (b)(2) that is for a purpose other than
on the balance of the financing out- paying payroll costs and other obligations
standing at the time of disbursement of described in subparagraph (F) from receiving
the covered loan, of— assistance under this paragraph.
(aa) 5 percent for loans of not more (R) WAIVER OF PREPAYMENT PENALTY.—
than $350,000; Notwithstanding any other provision of law,
(bb) 3 percent for loans of more than there shall be no prepayment penalty for
$350,000 and less than $2,000,000; and any payment made on a covered loan.
(cc) 1 percent for loans of not less (S) SET-ASIDE FOR INSURED DEPOSITORY IN-
than $2,000,000. STITUTIONS, CREDIT UNIONS, AND COMMUNITY
FINANCIAL INSTITUTIONS.—
(II) With respect to a covered loan (i) INSURED DEPOSITORY INSTITUTIONS AND
made on or after December 27, 2020, the CREDIT UNIONS.—In making loan guaran-
Administrator shall reimburse such a tees under this paragraph after April 24,
lender— 2020, the Administrator shall guarantee
(aa) for a covered loan of not more not less than $30,000,000,000 in loans made
than $50,000, in an amount equal to the by—
lesser of— (I) insured depository institutions with
(AA) 50 percent of the balance of consolidated assets of not less than
the financing outstanding at the $10,000,000,000 and less than
time of disbursement of the covered $50,000,000,000; and
loan; or (II) credit unions with consolidated as-
(BB) $2,500; and sets of not less than $10,000,000,000 and
(bb) at a rate, based on the balance of less than $50,000,000,000.
the financing outstanding at the time (ii) COMMUNITY FINANCIAL INSTITUTIONS,
of disbursement of the covered loan, SMALL INSURED DEPOSITORY INSTITUTIONS,
of— AND CREDIT UNIONS.—In making loan guar-
(AA) 5 percent for a covered loan of antees under this paragraph after April 24,
more than $50,000 and not more than 2020, the Administrator shall guarantee
$350,000; not less than $30,000,000,000 in loans made
(BB) 3 percent for a covered loan of by—
more than $350,000 and less than (I) community financial institutions;
$2,000,000; and (II) insured depository institutions
(CC) 1 percent for a covered loan of with consolidated assets of less than
not less than $2,000,000. $10,000,000,000; and
(ii) FEE LIMITS.—An agent that assists an (III) credit unions with consolidated
eligible recipient to prepare an application assets of less than $10,000,000,000.
for a covered loan may not collect a fee in (T) REQUIREMENT FOR DATE IN OPERATION.—
excess of the limits established by the Ad- A business or organization that was not in
ministrator. If an eligible recipient has operation on February 15, 2020 shall not be
knowingly retained an agent, such fees eligible for a loan under this paragraph.
shall be paid by the eligible recipient and (U) EXCLUSION OF ENTITIES RECEIVING SHUT-
may not be paid out of the proceeds of a TERED VENUE OPERATOR GRANTS.—An eligible
covered loan. A lender shall only be re- person or entity (as defined under of 4 sec-
sponsible for paying fees to an agent for tion 9009a of this title) that receives a grant
services for which the lender directly con- under such section 9009a shall not be eligible
tracts with the agent. for a loan under this paragraph.
§ 636 TITLE 15—COMMERCE AND TRADE Page 820
(V) CALCULATION OF MAXIMUM LOAN AMOUNT (A) DEFINITIONS.—In this paragraph—
FOR FARMERS AND RANCHERS.— (i) the terms ‘‘additional covered non-
(i) DEFINITION.—In this subparagraph, profit entity’’, ‘‘eligible self-employed in-
the term ‘‘covered recipient’’ means an eli- dividual’’, ‘‘housing cooperative’’, ‘‘non-
gible recipient that— profit organization’’, ‘‘payroll costs’’,
(I) operates as a sole proprietorship or ‘‘seasonal employer’’, and ‘‘veterans orga-
as an independent contractor, or is an el- nization’’ have the meanings given those
igible self-employed individual; terms in paragraph (36), except that ‘‘eligi-
(II) reports farm income or expenses on ble entity’’ shall be substituted for ‘‘eligi-
a Schedule F (or any equivalent suc- ble recipient’’ each place it appears in the
cessor schedule); and definitions of those terms;
(III) was in business as of February 15, (ii) the term ‘‘covered loan’’ means a
2020. loan made under this paragraph;
(ii) NO EMPLOYEES .—With respect to 8 (iii) the terms ‘‘covered mortgage obliga-
covered recipient without employees, the tion’’, ‘‘covered operating expenditure’’,
maximum covered loan amount shall be ‘‘covered property damage cost’’, ‘‘covered
the lesser of— rent obligation’’, ‘‘covered supplier cost’’,
(I) the sum of— ‘‘covered utility payment’’, and ‘‘covered
(aa) the product obtained by multi- worker protection expenditure’’ have the
plying— meanings given those terms in section
(AA) the gross income of the cov- 636m(a) of this title;
ered recipient in 2019, as reported on (iv) the term ‘‘eligible entity’’—
a Schedule F (or any equivalent suc- (I) means any business concern, non-
cessor schedule), that is not more profit organization, housing cooperative,
than $100,000, divided by 12; and veterans organization, Tribal business
(BB) 2.5; and concern, eligible self-employed indi-
(bb) the outstanding amount of a vidual, sole proprietor, independent con-
loan under subsection (b)(2) that was tractor, or small agricultural coopera-
made during the period beginning on tive that—
January 31, 2020 and ending on April 3, (aa) employs not more than 300 em-
2020 that the borrower intends to refi- ployees; and
nance under the covered loan, not in- (bb)(AA) except as provided in
cluding any amount of any advance subitems (BB), (CC), and (DD), had
under the loan that is not required to gross receipts during the first, second,
be repaid; or third, or, only with respect to an appli-
cation submitted on or after January
(II) $2,000,000. 1, 2021, fourth quarter in 2020 that dem-
(iii) WITH EMPLOYEES.—With respect to a onstrate not less than a 25 percent re-
covered recipient with employees, the duction from the gross receipts of the
maximum covered loan amount shall be entity during the same quarter in 2019;
calculated using the formula described in (BB) if the entity was not in business
subparagraph (E), except that the gross in- during the first or second quarter of
come of the covered recipient described in 2019, but was in business during the
clause (ii)(I)(aa)(AA) of this subparagraph, third and fourth quarter of 2019, had
as divided by 12, shall be added to the sum gross receipts during the first, second,
calculated under subparagraph (E)(i)(I). third, or, only with respect to an appli-
(iv) RECALCULATION.—A lender that made cation submitted on or after January
a covered loan to a covered recipient be- 1, 2021, fourth quarter of 2020 that dem-
fore December 27, 2020 may, at the request onstrate not less than a 25 percent re-
of the covered recipient— duction from the gross receipts of the
(I) recalculate the maximum loan
entity during the third or fourth quar-
amount applicable to that covered loan
ter of 2019;
based on the formula described in clause
(CC) if the entity was not in business
(ii) or (iii), as applicable, if doing so
would result in a larger covered loan during the first, second, or third quar-
amount; and ter of 2019, but was in business during
(II) provide the covered recipient with the fourth quarter of 2019, had gross re-
additional covered loan amounts based ceipts during the first, second, third,
on that recalculation. or, only with respect to an application
submitted on or after January 1, 2021,
(W) FRAUD ENFORCEMENT HARMONIZATION.— fourth quarter of 2020 that dem-
Notwithstanding any other provision of law, onstrate not less than a 25 percent re-
any criminal charge or civil enforcement ac- duction from the gross receipts of the
tion alleging that a borrower engaged in entity during the fourth quarter of
fraud with respect to a covered loan guaran-
2019; or
teed under this paragraph shall be filed not
(DD) if the entity was not in business
later than 10 years after the offense was
during 2019, but was in operation on
committed.
February 15, 2020, had gross receipts
(37) PAYCHECK PROTECTION PROGRAM SECOND during the second, third, or, only with
DRAW LOANS.— respect to an application submitted on
or after January 1, 2021, fourth quarter
8 So in original. The word ‘‘a’’ probably should appear. of 2020 that demonstrate not less than
Page 821 TITLE 15—COMMERCE AND TRADE § 636
a 25 percent reduction from the gross amount of a covered loan made to an eligi-
receipts of the entity during the first ble entity is the lesser of—
quarter of 2020; (I) the product obtained by multi-
(II) includes a business concern or or- plying—
ganization made eligible for a loan under (aa) at the election of the eligible en-
paragraph (36) under subclause (II), (III), tity, the average total monthly pay-
or (IV) of clause (iii), subclause (IV) or ment for payroll costs incurred or paid
(V) of clause (iv), clause (vii), or clause by the eligible entity during—
(AA) the 1-year period before the
(ix) of subparagraph (D) of paragraph (36)
date on which the loan is made; or
and that meets the requirements de-
(BB) calendar year 2019; by
scribed in items (aa) and (bb) of sub-
clause (I); and (bb) 2.5; or
(III) does not include— (II) $2,000,000.
(aa) any entity that is a type of busi-
ness concern (or would be, if such enti- (ii) SEASONAL EMPLOYERS.—The max-
ty were a business concern) described imum amount of a covered loan made to
in section 120.110 of title 13, Code of an eligible entity that is a seasonal em-
Federal Regulations (or in any suc- ployer is the lesser of—
cessor regulation or other related guid- (I) the product obtained by multi-
ance or rule that may be issued by the plying—
Administrator) other than a business (aa) at the election of the eligible en-
concern described in subsection (a) or tity, the average total monthly pay-
(k) of such section; or ments for payroll costs incurred or
(bb) any business concern or entity paid by the eligible entity for any 12-
primarily engaged in political or lob- week period between February 15, 2019
bying activities, which shall include and February 15, 2020; by
any entity that is organized for re- (bb) 2.5; or
search or for engaging in advocacy in (II) $2,000,000.
areas such as public policy or political
strategy or otherwise describes itself (iii) NEW ENTITIES.—The maximum
as a think tank in any public docu- amount of a covered loan made to an eligi-
ments; ble entity that did not exist during the 1-
(cc) any business concern or entity— year period preceding February 15, 2020 is
(AA) for which an entity created in the lesser of—
or organized under the laws of the (I) the product obtained by multi-
People’s Republic of China or the plying—
Special Administrative Region of (aa) the quotient obtained by divid-
Hong Kong, or that has significant ing—
operations in the People’s Republic (AA) the sum of the total monthly
of China or the Special Administra- payments by the eligible entity for
tive Region of Hong Kong, owns or payroll costs paid or incurred by the
holds, directly or indirectly, not less eligible entity as of the date on
than 20 percent of the economic in- which the eligible entity applies for
terest of the business concern or en- the covered loan; by
tity, including as equity shares or a (BB) the number of months in
capital or profit interest in a limited which those payroll costs were paid
liability company or partnership; or or incurred; by
(BB) that retains, as a member of (bb) 2.5; or
the board of directors of the business
(II) $2,000,000.
concern, a person who is a resident of
the People’s Republic of China; (iv) NAICS 72 ENTITIES.—The maximum
amount of a covered loan made to an eligi-
(dd) any person required to submit a
ble entity that is assigned a North Amer-
registration statement under section
ican Industry Classification System code
612 of title 22; or
beginning with 72 at the time of disbursal
(ee) an eligible person or entity (as
is the lesser of—
defined under section 9009a of this
(I) the product obtained by multi-
title) that receives a grant under such
plying—
section 9009a; and
(aa) at the election of the eligible en-
(v) the term ‘‘Tribal business concern’’ tity, the average total monthly pay-
means a Tribal business concern described ment for payroll costs incurred or paid
in section 657a(b)(2)(C) of this title. by the eligible entity during—
(B) LOANS.—Except as otherwise provided (AA) the 1-year period before the
in this paragraph, the Administrator may date on which the loan is made; or
guarantee covered loans to eligible entities (BB) calendar year 2019; by
under the same terms, conditions, and proc- (bb) 3.5; or
esses as a loan made under paragraph (36).
(II) $2,000,000.
(C) MAXIMUM LOAN AMOUNT.—
(i) IN GENERAL.—Except as otherwise pro- (D) BUSINESS CONCERNS WITH MORE THAN 1
vided in this subparagraph, the maximum PHYSICAL LOCATION.—
§ 636 TITLE 15—COMMERCE AND TRADE Page 822
(i) IN GENERAL.—For a business concern riod’’ has the meaning given that term in
with more than 1 physical location, the section 636m(a) of this title.
business concern shall be an eligible entity (ii) FORGIVENESS GENERALLY.—Except as
if the business concern would be eligible otherwise provided in this subparagraph,
for a loan under paragraph (36) pursuant to an eligible entity shall be eligible for for-
clause (iii) of subparagraph (D) of such giveness of indebtedness on a covered loan
paragraph, as applied in accordance with in the same manner as an eligible recipi-
clause (ii) of this subparagraph, and meets ent with respect to a loan made under
the revenue reduction requirements de- paragraph (36) of this section, as described
scribed in item (bb) of subparagraph in section 636m of this title.
(A)(iv)(I). (iii) FORGIVENESS AMOUNT.—An eligible
(ii) SIZE LIMIT.—For purposes of applying entity shall be eligible for forgiveness of
clause (i), the Administrator shall sub- indebtedness on a covered loan in an
stitute ‘‘not more than 300 employees’’ for amount equal to the sum of the following
‘‘not more than 500 employees’’ in para- costs incurred or expenditures made dur-
graph (36)(D)(iii). ing the covered period:
(I) Payroll costs, excluding any payroll
(E) WAIVER OF AFFILIATION RULES.— costs that are—
(i) IN GENERAL.—The waiver described in (aa) qualified wages, as defined in
paragraph (36)(D)(iv) shall apply for pur- subsection (c)(3) of section 2301 of the
poses of determining eligibility under this CARES Act (26 U.S.C. 3111 note), taken
paragraph. into account in determining the credit
(ii) SIZE LIMIT.—For purposes of applying
allowed under such section;
clause (i), the Administrator shall sub-
(bb) qualified wages taken into ac-
stitute ‘‘not more than 300 employees’’ for
count in determining the credit al-
‘‘not more than 500 employees’’ in sub-
lowed under subsection (a) or (d) of
clause (I) and (IV) of paragraph (36)(D)(iv).
section 303 of the Taxpayer Certainty
(F) LOAN NUMBER LIMITATION.—An eligible and Disaster Relief Act of 2020; or
entity may only receive 1 covered loan. (cc) premiums taken into account in
(G) EXCEPTION FROM CERTAIN CERTIFICATION determining the credit allowed under
REQUIREMENTS.—An eligible entity applying section 6432 of title 26.
for a covered loan shall not be required to
make the certification described in clause (II) Any payment of interest on any
(iii) or (iv) of paragraph (36)(G). covered mortgage obligation (which
(H) FEE WAIVER.—With respect to a cov- shall not include any prepayment of or
ered loan— payment of principal on a covered mort-
(i) in lieu of the fee otherwise applicable gage obligation).
under paragraph (23)(A), the Administrator (III) Any covered operations expendi-
shall collect no fee; and ture.
(ii) in lieu of the fee otherwise applicable (IV) Any covered property damage
under paragraph (18)(A), the Administrator cost.
(V) Any payment on any covered rent
shall collect no fee.
obligation.
(I) GROSS RECEIPTS AND SIMPLIFIED CERTIFI- (VI) Any covered utility payment.
CATION OF REVENUE TEST.— (VII) Any covered supplier cost.
(i) LOANS OF UP TO $150,000.—For a covered (VIII) Any covered worker protection
loan of not more than $150,000, the eligible expenditure.
entity— (iv) LIMITATION ON FORGIVENESS FOR ALL
(I) may submit a certification attest- ELIGIBLE ENTITIES.—Subject to any reduc-
ing that the eligible entity meets the ap- tions under section 636m(d) of this title,
plicable revenue loss requirement under the forgiveness amount under this sub-
subparagraph (A)(iv)(I)(bb); and paragraph shall be equal to the lesser of—
(II) if the eligible entity submits a cer- (I) the amount described in clause (ii);
tification under subclause (I), shall, on and
or before the date on which the eligible (II) the amount equal to the quotient
entity submits an application for for- obtained by dividing—
giveness under subparagraph (J), produce (aa) the amount of the covered loan
adequate documentation that the eligi- used for payroll costs during the cov-
ble entity met such revenue loss stand- ered period; and
ard. (bb) 0.60.
(ii) FOR NONPROFIT AND VETERANS ORGA- (v) SUBMISSION OF MATERIALS FOR FOR-
NIZATIONS.—For purposes of calculating GIVENESS.—For purposes of applying sub-
gross receipts under subparagraph section (l)(1) of section 636m of this title to
(A)(iv)(I)(bb) for an eligible entity that is a a covered loan of not more than $150,000
nonprofit organization, a veterans organi- under this paragraph, an eligible entity
zation, or an organization described in sub- may be required to provide, at the time of
paragraph (A)(iv)(II), gross receipts means the application for forgiveness, docu-
gross receipts within the meaning of sec- mentation required to substantiate rev-
tion 6033 of title 26. enue loss in accordance with subparagraph
(J) LOAN FORGIVENESS.— (I).
(i) DEFINITION OF COVERED PERIOD.—In (K) LENDER ELIGIBILITY.—Except as other-
this subparagraph, the term ‘‘covered pe- wise provided in this paragraph, a lender ap-
Page 823 TITLE 15—COMMERCE AND TRADE § 636
proved to make loans under paragraph (36) damage or destruction is not compensated for
may make covered loans under the same by insurance or otherwise: And provided fur-
terms and conditions as in paragraph (36). ther, That the Administration may increase
(L) REIMBURSEMENT FOR LOAN PROCESSING the amount of the loan by up to an additional
AND SERVICING.—The Administrator shall re- 20 per centum of the aggregate costs of such
imburse a lender authorized to make a cov- damage or destruction (whether or not com-
ered loan— pensated for by insurance or otherwise) if it
(i) for a covered loan of not more than determines such increase to be necessary or
$50,000, in an amount equal to the lesser appropriate in order to protect the damaged or
of— destroyed property from possible future disas-
(I) 50 percent of the balance of the fi- ters by taking mitigating measures, includ-
nancing outstanding at the time of dis- ing—
bursement of the covered loan; or (i) construction of retaining walls and sea
(II) $2,500; walls;
(ii) at a rate, based on the balance of the (ii) grading and contouring land; and
financing outstanding at the time of dis- (iii) relocating utilities and modifying
bursement of the covered loan, of— structures, including construction of a safe
(I) 5 percent for a covered loan of more room or similar storm shelter designed to
than $50,000 and not more than $350,000; protect property and occupants from torna-
and does or other natural disasters, if such safe
(II) 3 percent for a covered loan of room or similar storm shelter is constructed
more than $350,000. in accordance with applicable standards
issued by the Federal Emergency Manage-
(M) PUBLICATION OF GUIDANCE.—Not later ment Agency;
than 10 days after December 27, 2020, the Ad-
ministrator shall issue guidance addressing (B) to refinance any mortgage or other lien
barriers to accessing capital for minority, against a totally destroyed or substantially
underserved, veteran, and women-owned damaged home or business concern: Provided,
business concerns for the purpose of ensur- That no loan or guarantee shall be extended
ing equitable access to covered loans. unless the Administration finds that (i) the
(N) STANDARD OPERATING PROCEDURE.—The applicant is not able to obtain credit else-
Administrator shall, to the maximum extent where; (ii) such property is to be repaired, re-
practicable, allow a lender approved to make habilitated, or replaced; (iii) the amount refi-
covered loans to use existing program guid- nanced shall not exceed the amount of phys-
ance and standard operating procedures for ical loss sustained; and (iv) such amounts
loans made under this subsection. shall be reduced to the extent such mortgage
(O) SUPPLEMENTAL COVERED LOANS.—A cov- or lien is satisfied by insurance or otherwise;
ered loan under this paragraph may only be and
made to an eligible entity that— (C) during fiscal years 2000 through 2004, to
(i) has received a loan under paragraph establish a predisaster mitigation program to
(36); and make such loans (either directly or in coopera-
(ii) on or before the expected date on tion with banks or other lending institutions
which the covered loan under this para- through agreements to participate on an im-
graph is disbursed to the eligible entity, mediate or deferred (guaranteed) basis), as the
has used, or will use, the full amount of Administrator may determine to be necessary
the loan received under paragraph (36). or appropriate, to enable small businesses to
use mitigation techniques in support of a for-
(P) FRAUD ENFORCEMENT HARMONIZATION.— mal mitigation program established by the
Notwithstanding any other provision of law, Federal Emergency Management Agency, ex-
any criminal charge or civil enforcement ac- cept that no loan or guarantee may be ex-
tion alleging that a borrower engaged in tended to a small business under this subpara-
fraud with respect to a covered loan guaran- graph unless the Administration finds that the
teed under this paragraph shall be filed not small business is otherwise unable to obtain
later than 10 years after the offense was credit for the purposes described in this sub-
committed. paragraph;
(b) Disaster loans; authorization, scope, terms (2) to make such loans (either directly or in
and conditions, etc. cooperation with banks or other lending insti-
Except as to agricultural enterprises as de- tutions through agreements to participate on
fined in section 647(b)(1) of this title, the Admin- an immediate or deferred (guaranteed) basis)
istration also is empowered to the extent and in as the Administration may determine to be
such amounts as provided in advance in appro- necessary or appropriate to any small business
priation Acts— concern, private nonprofit organization, or
(1)(A) to make such loans (either directly or small agricultural cooperative located in an
in cooperation with banks or other lending in- area affected by a disaster,9 (including
stitutions through agreements to participate drought), with respect to both farm-related
on an immediate or deferred (guaranteed) and nonfarm-related small business concerns,
basis) as the Administration may determine to if the Administration determines that the con-
be necessary or appropriate to repair, rehabili- cern, the organization, or the cooperative has
tate or replace property, real or personal, suffered a substantial economic injury as a re-
damaged or destroyed by or as a result of nat-
ural or other disasters: Provided, That such 9 So in original. The comma probably should not appear.
§ 636 TITLE 15—COMMERCE AND TRADE Page 824
sult of such disaster and if such disaster con- (I) to meet its obligations as they ma-
stitutes— ture;
(A) a major disaster, as determined by the (II) to pay its ordinary and necessary op-
President under the Robert T. Stafford Dis- erating expenses; or
aster Relief and Emergency Assistance Act (III) to market, produce, or provide a
(42 U.S.C. 5121 et seq.); product or service ordinarily marketed,
(B) a natural disaster, as determined by produced, or provided by the business con-
the Secretary of Agriculture pursuant to cern.
section 1961 of title 7, in which case, assist- (B) The Administration may make such dis-
ance under this paragraph may be provided aster loans (either directly or in cooperation
to farm-related and nonfarm-related small with banks or other lending institutions
business concerns, subject to the other ap- through agreements to participate on an im-
plicable requirements of this paragraph; mediate or deferred basis) to assist a small
(C) a disaster, as determined by the Ad- business concern that has suffered or that is
ministrator of the Small Business Adminis- likely to suffer substantial economic injury as
tration; the result of an essential employee of such
(D) an emergency involving Federal pri- small business concern being ordered to per-
mary responsibility determined to exist by form active service for a period of more than
the President under the section 5191(b) of 30 consecutive days.
title 42; or (C) A small business concern described in
(E) if no disaster or emergency declaration subparagraph (B) shall be eligible to apply for
has been issued pursuant to subparagraph assistance under this paragraph during the pe-
(A), (B), (C), or (D), the Governor of a State riod beginning on the date on which the essen-
in which a disaster or emergency has oc- tial employee is ordered to active service and
curred may certify to the Small Business ending on the date that is 1 year after the date
Administration that small business con- on which such essential employee is dis-
cerns, private nonprofit organizations, or charged or released from active service. The
small agricultural cooperatives (1) have suf- Administrator may, when appropriate (as de-
fered economic injury as a result of such dis- termined by the Administrator), extend the
aster or emergency, and (2) are in need of fi- ending date specified in the preceding sentence
nancial assistance which is not available on by not more than 1 year.
reasonable terms in the disaster- or emer- (D) Any loan or guarantee extended pursu-
gency-stricken area. Not later than 30 days ant to this paragraph shall be made at the
after the date of receipt of such certification same interest rate as economic injury loans
by a Governor of a State, the Administra- under paragraph (2).
tion shall respond in writing to that Gov- (E) No loan may be made under this para-
ernor on its determination and the reasons graph, either directly or in cooperation with
therefore,10 and may then make such loans banks or other lending institutions through
as would have been available under this agreements to participate on an immediate or
deferred basis, if the total amount outstanding
paragraph if a disaster or emergency dec-
and committed to the borrower under this sub-
laration had been issued.
section would exceed $1,500,000, unless such ap-
Provided, That no loan or guarantee shall be plicant constitutes, or have 11 become due to
extended pursuant to this paragraph (2) unless changed economic circumstances, a major
the Administration finds that the applicant is source of employment in its surrounding area,
not able to obtain credit elsewhere: Provided as determined by the Administration, in which
further, That for purposes of subparagraph (D), case the Administration, in its discretion,
the Administrator shall deem that such an may waive the $1,500,000 limitation.
emergency affects each State or subdivision (F) For purposes of assistance under this
thereof (including counties), and that each paragraph, no declaration of a disaster area
State or subdivision has sufficient economic shall be required.
damage to small business concerns to qualify (G)(i) Notwithstanding any other provision
for assistance under this paragraph and the of law, the Administrator may make a loan
Administrator shall accept applications for under this paragraph of not more than $50,000
such assistance immediately. without collateral.
(3)(A) In this paragraph— (ii) The Administrator may defer payment of
(i) the term ‘‘active service’’ has the mean- principal and interest on a loan described in
ing given that term in section 101(d)(3) of clause (i) during the longer of—
title 10; (I) the 1-year period beginning on the date
(ii) the term ‘‘essential employee’’ means of the initial disbursement of the loan; and
an individual who is employed by a small (II) the period during which the relevant
business concern and whose managerial or essential employee is on active service.
technical expertise is critical to the success- (H) The Administrator shall give priority to
ful day-to-day operations of that small busi- any application for a loan under this para-
ness concern; and graph and shall process and make a deter-
(iii) the term ‘‘substantial economic in- mination regarding such applications prior to
jury’’ means an economic harm to a business processing or making a determination on
concern that results in the inability of the other loan applications under this subsection,
business concern— on a rolling basis.
10 So in original. Probably should be ‘‘therefor,’’. 11 So in original. Probably should be ‘‘has’’.
Page 825 TITLE 15—COMMERCE AND TRADE § 636
(4) COORDINATION WITH FEMA.— (G) application materials that clearly
(A) IN GENERAL.—Notwithstanding any state the function of the Administration as
other provision of law, for any disaster de- the Federal source of disaster loans for
clared under this subsection or major dis- homeowners and renters.
aster (including any major disaster relating (6) AUTHORITY FOR QUALIFIED PRIVATE CON-
to which the Administrator declares eligi- TRACTORS.—
bility for additional disaster assistance (A) DISASTER LOAN PROCESSING.—The Ad-
under paragraph (9)), the Administrator, in ministrator may enter into an agreement
consultation with the Administrator of the with a qualified private contractor, as deter-
Federal Emergency Management Agency, mined by the Administrator, to process
shall ensure, to the maximum extent prac- loans under this subsection in the event of a
ticable, that all application periods for dis- major disaster (including any major disaster
aster relief under this chapter correspond relating to which the Administrator declares
with application deadlines established under eligibility for additional disaster assistance
the Robert T. Stafford Disaster Relief and under paragraph (9)), under which the Ad-
Emergency Assistance Act (42 U.S.C. 5121 et ministrator shall pay the contractor a fee
seq.), or as extended by the President. for each loan processed.
(B) DEADLINES.—Notwithstanding any (B) LOAN LOSS VERIFICATION SERVICES.—
other provision of law, not later than 10 days The Administrator may enter into an agree-
before the closing date of an application pe- ment with a qualified lender or loss
riod for a major disaster (including any verification professional, as determined by
major disaster relating to which the Admin- the Administrator, to verify losses for loans
istrator declares eligibility for additional under this subsection in the event of a major
disaster assistance under paragraph (9)), the disaster (including any major disaster relat-
Administrator, in consultation with the Ad- ing to which the Administrator declares eli-
ministrator of the Federal Emergency Man- gibility for additional disaster assistance
agement Agency, shall submit to the Com- under paragraph (9)), under which the Ad-
mittee on Small Business and Entrepreneur- ministrator shall pay the lender or
ship of the Senate and the Committee on verification professional a fee for each loan
Small Business of the House of Representa- for which such lender or verification profes-
tives a report that includes— sional verifies losses.
(i) the deadline for submitting applica-
tions for assistance under this chapter re- (7) DISASTER ASSISTANCE EMPLOYEES.—
lating to that major disaster; (A) IN GENERAL.—In carrying out this sec-
(ii) information regarding the number of tion, the Administrator may, where prac-
loan applications and disbursements proc- ticable, ensure that the number of full-time
essed by the Administrator relating to equivalent employees—
that major disaster for each day during (i) in the Office of the Disaster Assist-
the period beginning on the date on which ance is not fewer than 800; and
(ii) in the Disaster Cadre of the Adminis-
that major disaster was declared and end-
tration is not fewer than 1,000.
ing on the date of that report; and
(iii) an estimate of the number of poten- (B) REPORT.—In carrying out this sub-
tial applicants that have not submitted an section, if the number of full-time employees
application relating to that major dis- for either the Office of Disaster Assistance
aster. or the Disaster Cadre of the Administration
(5) PUBLIC AWARENESS OF DISASTERS.—If a is below the level described in subparagraph
disaster is declared under this subsection or (A) for that office, not later than 21 days
the Administrator declares eligibility for addi- after the date on which that staffing level
tional disaster assistance under paragraph (9), decreased below the level described in sub-
the Administrator shall make every effort to paragraph (A), the Administrator shall sub-
communicate through radio, television, print, mit to the Committee on Appropriations and
and web-based outlets, all relevant informa- the Committee on Small Business and En-
tion needed by disaster loan applicants, in- trepreneurship of the Senate and the Com-
cluding— mittee on Appropriations and Committee on
(A) the date of such declaration; Small Business of the House of Representa-
(B) cities and towns within the area of tives, a report—
such declaration; (i) detailing staffing levels on that date;
(C) loan application deadlines related to (ii) requesting, if practicable and deter-
such disaster; mined appropriate by the Administrator,
(D) all relevant contact information for additional funds for additional employees;
victim services available through the Ad- and
ministration (including links to small busi- (iii) containing such additional informa-
ness development center websites); tion, as determined appropriate by the Ad-
(E) links to relevant Federal and State dis- ministrator.
aster assistance websites, including links to (8) INCREASED LOAN CAPS.—
websites providing information regarding as- (A) AGGREGATE LOAN AMOUNTS.—Except as
sistance available from the Federal Emer- provided in subparagraph (B), and notwith-
gency Management Agency; standing any other provision of law, the ag-
(F) information on eligibility criteria for gregate loan amount outstanding and com-
Administration loan programs, including mitted to a borrower under this subsection
where such applications can be found; and may not exceed $2,000,000.
§ 636 TITLE 15—COMMERCE AND TRADE Page 826
(B) WAIVER AUTHORITY.—The Adminis- trator determines that the average proc-
trator may, at the discretion of the Admin- essing time for applications for disaster
istrator, increase the aggregate loan amount loans under this subparagraph relating
under subparagraph (A) for loans relating to to a specific major disaster is more than
a disaster to a level established by the Ad- 30 days, the Administrator shall suspend
ministrator, based on appropriate economic the processing of such applications sub-
indicators for the region in which that dis- mitted by eligible small business con-
aster occurred. cerns located outside the disaster area,
(9) DECLARATION OF ELIGIBILITY FOR ADDI- until the Administrator determines that
TIONAL DISASTER ASSISTANCE.—
the average processing time for such ap-
(A) IN GENERAL.—If the President declares plications is not more than 15 days.
a major disaster, the Administrator may de- (iii) LOAN TERMS.—A loan under this sub-
clare eligibility for additional disaster as- paragraph shall be made on the same
sistance in accordance with this paragraph. terms as a loan under paragraph (2).
(B) THRESHOLD.—A major disaster for
(D) DEFINITIONS.—In this paragraph—
which the Administrator declares eligibility
(i) the term ‘‘disaster area’’ means the
for additional disaster assistance under this
area for which the applicable major dis-
paragraph shall—
aster was declared;
(i) have resulted in extraordinary levels
(ii) the term ‘‘disaster-related substan-
of casualties or damage or disruption se-
tial economic injury’’ means economic
verely affecting the population (including
harm to a business concern that results in
mass evacuations), infrastructure, envi-
the inability of the business concern to—
ronment, economy, national morale, or
(I) meet its obligations as it matures;
government functions in an area;
(II) meet its ordinary and necessary
(ii) be comparable to the description of a
operating expenses; or
catastrophic incident in the National Re-
(III) market, produce, or provide a
sponse Plan of the Administration, or any
product or service ordinarily marketed,
successor thereto, unless there is no suc-
produced, or provided by the business
cessor to such plan, in which case this
concern because the business concern re-
clause shall have no force or effect; and
lies on materials from the disaster area
(iii) be of such size and scope that—
or sells or markets in the disaster area;
(I) the disaster assistance programs
and
under the other paragraphs under this
subsection are incapable of providing (iii) the term ‘‘eligible small business
adequate and timely assistance to indi- concern’’ means a small business con-
viduals or business concerns located cern—
within the disaster area; or (I) that has suffered disaster-related
(II) a significant number of business substantial economic injury as a result
concerns outside the disaster area have of the applicable major disaster; and
suffered disaster-related substantial eco- (II)(aa) for which not less than 25 per-
nomic injury as a result of the incident. cent of the market share of that small
business concern is from business trans-
(C) ADDITIONAL ECONOMIC INJURY DISASTER
acted in the disaster area;
LOAN ASSISTANCE.—
(bb) for which not less than 25 percent
(i) IN GENERAL.—If the Administrator de-
of an input into a production process of
clares eligibility for additional disaster as-
that small business concern is from the
sistance under this paragraph, the Admin-
disaster area; or
istrator may make such loans under this
(cc) that relies on a provider located in
subparagraph (either directly or in co-
the disaster area for a service that is not
operation with banks or other lending in-
readily available elsewhere.
stitutions through agreements to partici-
pate on an immediate or deferred basis) as (10) REDUCING CLOSING AND DISBURSEMENT
the Administrator determines appropriate DELAYS.—The Administrator shall provide a
to eligible small business concerns located clear and concise notification on all applica-
anywhere in the United States. tion materials for loans made under this sub-
(ii) PROCESSING TIME.— section and on relevant websites notifying an
(I) IN GENERAL.—If the Administrator applicant that the applicant may submit all
determines that the average processing documentation necessary for the approval of
time for applications for disaster loans the loan at the time of application and that
under this subparagraph relating to a failure to submit all documentation could
specific major disaster is more than 15 delay the approval and disbursement of the
days, the Administrator shall give pri- loan.
ority to the processing of such applica- (11) INCREASING TRANSPARENCY IN LOAN AP-
tions submitted by eligible small busi- PROVALS.—The Administrator shall establish
ness concerns located inside the disaster and implement clear, written policies and pro-
area, until the Administrator determines cedures for analyzing the ability of a loan ap-
that the average processing time for plicant to repay a loan made under this sub-
such applications is not more than 15 section.
days. (12) ADDITIONAL AWARDS TO SMALL BUSINESS
(II) SUSPENSION OF APPLICATIONS FROM DEVELOPMENT CENTERS, WOMEN’S BUSINESS CEN-
OUTSIDE DISASTER AREA.—If the Adminis- TERS, AND SCORE FOR DISASTER RECOVERY.—
Page 827 TITLE 15—COMMERCE AND TRADE § 636
(A) IN GENERAL.—The Administration may economic damage to the recipient of the
provide financial assistance to a small busi- loan or substantial risks to health or safety,
ness development center, a women’s business upon receiving documentation of the sub-
center described in section 656 of this title, stantial economic damage or the substantial
the Service Corps of Retired Executives, or risk to health and safety from an inde-
any proposed consortium of such individuals pendent loss verifier, and subject to subpara-
or entities to spur disaster recovery and graph (B), the Administrator may increase
growth of small business concerns located in the amount of the loan under this sub-
an area for which the President has declared section, as necessary for the cost of repairs,
a major disaster. rehabilitation, or replacement needed to ad-
(B) FORM OF FINANCIAL ASSISTANCE.—Fi- dress the cause of the economic damage or
nancial assistance provided under this para- health or safety risk.
graph shall be in the form of a grant, con- (B) REQUIREMENTS.—The Administrator
tract, or cooperative agreement. may only increase the amount of a loan
(C) NO MATCHING FUNDS REQUIRED.—Match- under subparagraph (A) upon receiving an
ing funds shall not be required for any grant, appropriate certification from the borrower
contract, or cooperative agreement under and person performing the mitigation at-
this paragraph. testing to the reasonableness of the mitiga-
(D) REQUIREMENTS.—A recipient of finan- tion costs and an assignment of any proceeds
cial assistance under this paragraph shall received from the person engaging in the
provide counseling, training, and other re- malfeasance. The assignment of proceeds re-
lated services, such as promoting long-term covered from the person engaging in the
resiliency, to small business concerns and malfeasance shall be equal to the amount of
entrepreneurs impacted by a major disaster. the loan under this section. Any mitigation
(E) PERFORMANCE.— activities shall be subject to audit and inde-
(i) IN GENERAL.—The Administrator, in pendent verification of completeness and
cooperation with the recipients of finan- cost reasonableness.
cial assistance under this paragraph, shall
establish metrics and goals for perform- (14) BUSINESS RECOVERY CENTERS.—
(A) IN GENERAL.—The Administrator, act-
ance of grants, contracts, and cooperative
ing through the district offices of the Ad-
agreements under this paragraph, which
ministration, shall identify locations that
shall include recovery of sales, recovery of
may be used as recovery centers by the Ad-
employment, reestablishment of business
ministration in the event of a disaster de-
premises, and establishment of new small
clared under this subsection or a major dis-
business concerns.
(ii) USE OF ESTIMATES.—The Adminis- aster.
(B) REQUIREMENTS FOR IDENTIFICATION.—
trator shall base the goals and metrics for
Each district office of the Administration
performance established under clause (i),
shall—
in part, on the estimates of disaster im- (i) identify a location described in sub-
pact prepared by the Office of Disaster As- paragraph (A) in each county, parish, or
sistance for purposes of estimating loan- similar unit of general local government
making requirements. in the area served by the district office;
(F) TERM.— and
(i) IN GENERAL.—The term of any grant, (ii) ensure that the locations identified
contract, or cooperative agreement under under subparagraph (A) may be used as a
this paragraph shall be for not more than recovery center without cost to the Gov-
2 years. ernment, to the extent practicable.
(ii) EXTENSION.—The Administrator may
(15) INCREASED OVERSIGHT OF ECONOMIC IN-
make 1 extension of a grant, contract, or JURY DISASTER LOANS.—The Administrator
cooperative agreement under this para-
shall increase oversight of entities receiving
graph for a period of not more than 1 year,
loans under paragraph (2), and may consider—
upon a showing of good cause and need for (A) scheduled site visits to ensure bor-
the extension. rower eligibility and compliance with re-
(G) EXEMPTION FROM OTHER PROGRAM RE- quirements established by the Adminis-
QUIREMENTS.—Financial assistance provided trator; and
under this paragraph is in addition to, and (B) reviews of the use of the loan proceeds
wholly separate from, any other form of as- by an entity described in paragraph (2) to en-
sistance provided by the Administrator sure compliance with requirements estab-
under this chapter. lished by the Administrator.
(H) COMPETITIVE BASIS.—The Administra- (16) 12 DISASTER DECLARATION IN RURAL
tion shall award financial assistance under AREAS.—
this paragraph on a competitive basis. (A) DEFINITIONS.—In this paragraph—
(13) SUPPLEMENTAL ASSISTANCE FOR CON- (i) the term ‘‘rural area’’ means any
TRACTOR MALFEASANCE.— county or other political subdivision of a
(A) IN GENERAL.—If a contractor or other State, the District of Columbia, or a terri-
person engages in malfeasance in connection tory or possession of the United States
with repairs to, rehabilitation of, or replace- that is designated as a rural area by the
ment of real or personal property relating to Bureau of the Census; and
which a loan was made under this subsection
and the malfeasance results in substantial 12 So in original. Two pars. (16) have been enacted.
§ 636 TITLE 15—COMMERCE AND TRADE Page 828
(ii) the term ‘‘significant damage’’ repair or replace his home, or (ii) such concern
means, with respect to property, uninsured to repair or replace plant or equipment which
losses of not less than 40 percent of the es- was damaged or destroyed as the result of a dis-
timated fair replacement value or pre-dis- aster meeting the requirements of clause (A) or
aster fair market value of the damaged (B) of paragraph (2) of this subsection, and (C)
property, whichever is lower. the Administrator determines such action is
necessary to avoid severe financial hardship:
(B) DISASTER DECLARATION.—For the pur-
Provided further, That the provisions of para-
pose of making loans under paragraph (1) or
graph (1) of subsection (d) of this section shall
(2), the Administrator may declare a dis-
not be applicable to any such loan having a ma-
aster in a rural area for which a major dis-
turity in excess of twenty years. Notwith-
aster was declared by the President under
standing any other provision of law, and except
section 401 of the Robert T. Stafford Disaster
as provided in subsection (d), the interest rate
Relief and Emergency Assistance Act (42
on the Administration’s share of any loan made
U.S.C. 5170) and for which individual assist- under subsection (b) shall not exceed the aver-
ance was not authorized under section 408 of age annual interest rate on all interest-bearing
such Act (42 U.S.C. 5174) if— obligations of the United States then forming a
(i) the Governor of the State or the Chief part of the public debt as computed at the end
Executive of the Indian tribal government of the fiscal year next preceding the date of the
in which the rural area is located requests loan and adjusted to the nearest one-eighth of 1
such a declaration; and per centum plus one-quarter of 1 per centum:
(ii) any home, small business concern, Provided, however, That the interest rate for
private nonprofit organization, or small loans made under paragraphs (1) and (2) hereof
agricultural cooperative has incurred sig- shall not exceed the rate of interest which is in
nificant damage in the rural area. effect at the time of the occurrence of the dis-
(C) SBA REPORT.—Not later than 120 days aster. In agreements to participate in loans on a
after December 20, 2022, and every year deferred basis under this subsection, such par-
thereafter, the Administrator shall submit ticipation by the Administration shall not be in
to the Committee on Small Business and En- excess of 90 per centum of the balance of the
trepreneurship of the Senate and the Com- loan outstanding at the time of disbursement.
mittee on Small Business of the House of Notwithstanding any other provision of law, the
Representatives a report on, with respect to interest rate on the Administration’s share of
the 1-year period preceding submission of any loan made pursuant to paragraph (1) of this
the report— subsection to repair or replace a primary resi-
(i) any economic injury that resulted dence and/or replace or repair damaged or de-
from a major disaster declared by the stroyed personal property, less the amount of
President under section 401 of the Robert compensation by insurance or otherwise, with
T. Stafford Disaster Relief and Emergency respect to a disaster occurring on or after July
Assistance Act (42 U.S.C. 5170) in a rural 1, 1976, and prior to October 1, 1978, shall be: 1
area; per centum on the amount of such loan not ex-
(ii) each request for assistance made by ceeding $10,000, and 3 per centum on the amount
the Governor of a State or the Chief Exec- of such loan over $10,000 but not exceeding
utive of an Indian tribal government under $40,000. The interest rate on the Administra-
subparagraph (B)(i) and the response of the tion’s share of the first $250,000 of all other loans
Administrator, including the timeline for made pursuant to paragraph (1) of this sub-
each response; and section, with respect to a disaster occurring on
(iii) any regulatory changes that will im- or after July 1, 1976, and prior to October 1, 1978,
pact the ability of communities in rural shall be 3 per centum. All repayments of prin-
areas to obtain disaster assistance under cipal on the Administration’s share of any loan
this subsection. made under the above provisions shall first be
applied to reduce the principal sum of such loan
(16) 12 STATUTE OF LIMITATIONS.—Notwith- which bears interest at the lower rates provided
standing any other provision of law, any in this paragraph. The principal amount of any
criminal charge or civil enforcement action loan made pursuant to paragraph (1) in connec-
alleging that a borrower engaged in fraud with tion with a disaster which occurs on or after
respect to a loan made under this subsection April 1, 1977, but prior to January 1, 1978, may be
in response to COVID–19 during the covered increased by such amount, but not more than
period (as defined in section 9009(a) of this $2,000, as the Administration determines to be
title) shall be filed not later than 10 years reasonable in light of the amount and nature of
after the offense was committed. loss, damage, or injury sustained in order to fi-
No loan under this subsection, including re- nance the installation of insulation in the prop-
newals and extensions thereof, may be made for erty which was lost, damaged, or injured, if the
a period or periods exceeding thirty years: Pro- uninsured, damaged portion of the property is 10
vided, That the Administrator may consent to a per centum or more of the market value of the
suspension in the payment of principal and in- property at the time of the disaster. Not later
terest charges on, and to an extension in the than June 1, 1978, the Administration shall pre-
maturity of, the Federal share of any loan under pare and transmit to the Select Committee on
this subsection for a period not to exceed five Small Business of the Senate, the Committee on
years, if (A) the borrower under such loan is a Small Business of the House of Representatives,
homeowner or a small business concern, (B) the and the Committees of the Senate and House of
loan was made to enable (i) such homeowner to Representatives having jurisdiction over meas-
Page 829 TITLE 15—COMMERCE AND TRADE § 636
ures relating to energy conservation, a report on January 1, 1972 but prior to July 1, 1973, the
its activities under this paragraph, including total amount so canceled shall not exceed
therein an evaluation of the effect of such ac- $5,000 and the interest on the balance of the
tivities on encouraging the installation of insu- loan shall be at a rate of 1 percentum per
lation in property which is repaired or replaced annum.
after a disaster which is subject to this para- (E) 13 A State grant made on or prior to July
graph, and its recommendations with respect to 1, 1979, shall not be considered compensation
the continuation, modification, or termination for the purpose of applying the provisions of
of such activities. section 312(a) of the Disaster Relief and Emer-
In the administration of the disaster loan pro- gency Assistance Act [42 U.S.C. 5155(a)] to a
gram under paragraphs (1) and (2) of this sub- disaster loan under paragraph (1) (2) 14 of this
section, in the case of property loss or damage subsection.
or injury resulting from a major disaster as de-
termined by the President or a disaster as deter- With respect to any loan referred to in clause
mined by the Administrator which occurs on or (D) which is outstanding on August 16, 1972, the
after January 1, 1971, and prior to July 1, 1973, Administrator shall—
the Small Business Administration, to the ex- (i) make such change in the interest rate on
tent such loss or damage or injury is not com- the balance of such loan as is required under
pensated for by insurance or otherwise— that clause effective as of August 16, 1972; and
(A) may make any loan for repair, rehabili- (ii) in applying the limitation set forth in
tation, or replacement of property damaged or that clause with respect to the total amount
destroyed without regard to whether the re- of such loan which may be canceled, consider
quired financial assistance is otherwise avail- as part of the amount so canceled any part of
able from private sources; such loan which was previously canceled pur-
(B) may, in the case of the total destruction suant to section 231 of the Disaster Relief Act
or substantial property damage of a home or of 1970 [15 U.S.C. 636a].
business concern, refinance any mortgage or Whoever wrongfully misapplies the proceeds of
other liens outstanding against the destroyed a loan obtained under this subsection shall be
or damaged property if such property is to be civilly liable to the Administrator in an amount
repaired, rehabilitated, or replaced, except equal to one-and-one half times the original
that (1) in the case of a business concern, the principal amount of the loan.
amount refinanced shall not exceed the (c) Private disaster loans
amount of the physical loss sustained, and (2)
(1) Definitions
in the case of a home, the amount of each
monthly payment of principal and interest on In this subsection—
the loan after refinancing under this clause (A) the term ‘‘disaster area’’ means any
shall not be less than the amount of each such area for which the President declared a
payment made prior to such refinancing; major disaster relating to which the Admin-
(C) may, in the case of a loan made under istrator declares eligibility for additional
clause (A) or a mortgage or other lien refi- disaster assistance under subsection (b)(9),
nanced under clause (B) in connection with during the period of that major disaster dec-
the destruction of, or substantial damage to, laration;
property owned and used as a residence by an (B) the term ‘‘eligible individual’’ means
individual who by reason of retirement, dis- an individual who is eligible for disaster as-
ability, or other similar circumstances relies sistance under subsection (b)(1) relating to a
for support on survivor, disability, or retire- major disaster relating to which the Admin-
ment benefits under a pension, insurance, or istrator declares eligibility for additional
other programs, consent to the suspension of disaster assistance under subsection (b)(9);
the payments of the principal of that loan, (C) the term ‘‘eligible small business con-
mortgage, or lien during the lifetime of that cern’’ means a business concern that is—
individual and his spouse for so long as the Ad- (i) a small business concern, as defined
ministration determines that making such under this chapter; or
payments would constitute a substantial hard- (ii) a small business concern, as defined
ship; in section 103 of the Small Business Invest-
(D) shall notwithstanding the provisions of ment Act of 1958 [15 U.S.C. 662];
any other law and upon presentation by the (D) the term ‘‘preferred lender’’ means a
applicant of proof of loss or damage or injury lender participating in the Preferred Lender
and a bona fide estimate of cost of repair, re- Program;
habilitation, or replacement, cancel the prin- (E) the term ‘‘Preferred Lender Program’’
cipal of any loan made to cover a loss or dam- has the meaning given that term in sub-
age or injury resulting from such disaster, ex- section (a)(2)(C)(ii); and
cept that— (F) the term ‘‘qualified private lender’’
(i) with respect to a loan made in connec- means any privately-owned bank or other
tion with a disaster occurring on or after lending institution that—
January 1, 1971 but prior to January 1, 1972, (i) is not a preferred lender; and
the total amount so canceled shall not ex- (ii) the Administrator determines meets
ceed $2,500, and the interest on the balance the criteria established under paragraph
of the loan shall be at a rate of 3 per centum (10).
per annum; and
(ii) with respect to a loan made in connec- 13 See 1980 Amendment note below.
tion with a disaster occurring on or after 14 So in original. Probably should be ‘‘or (2)’’.
§ 636 TITLE 15—COMMERCE AND TRADE Page 830
(2) Program required (i) Exclude the preferred lender from par-
The Administrator shall carry out a pro- ticipating in the program under this sub-
gram, to be known as the Private Disaster As- section.
sistance program, under which the Adminis- (ii) Exclude the preferred lender from
tration may guarantee timely payment of participating in the Preferred Lender Pro-
principal and interest, as scheduled, on any gram for a period of not more than 5 years.
loan made to an eligible small business con- (8) Fees
cern located in a disaster area and to an eligi-
ble individual. (A) In general
(3) Use of loans The Administrator may not collect a guar-
antee fee under this subsection.
A loan guaranteed by the Administrator
under this subsection may be used for any pur- (B) Origination fee
pose authorized under subsection (b). The Administrator may pay a qualified
(4) Online applications private lender or preferred lender an origina-
tion fee for a loan guaranteed under this
(A) Establishment
subsection in an amount agreed upon in ad-
The Administrator may establish, directly vance between the qualified private lender
or through an agreement with another enti- or preferred lender and the Administrator.
ty, an online application process for loans
guaranteed under this subsection. (9) Documentation
(B) Other Federal assistance A qualified private lender or preferred lender
may use its own loan documentation for a loan
The Administrator may coordinate with guaranteed by the Administrator under this
the head of any other appropriate Federal subsection, to the extent authorized by the
agency so that any application submitted Administrator. The ability of a lender to use
through an online application process estab- its own loan documentation for a loan guaran-
lished under this paragraph may be consid- teed under this subsection shall not be consid-
ered for any other Federal assistance pro- ered part of the criteria for becoming a quali-
gram for disaster relief. fied private lender under the regulations pro-
(C) Consultation mulgated under paragraph (10).
In establishing an online application proc- (10) Implementation regulations
ess under this paragraph, the Administrator
shall consult with appropriate persons from (A) In general
the public and private sectors, including pri- Not later than 1 year after the date of en-
vate lenders. actment of the Small Business Disaster Re-
(5) Maximum amounts sponse and Loan Improvements Act of 2008,
the Administrator shall issue final regula-
(A) Guarantee percentage
tions establishing permanent criteria for
The Administrator may guarantee not qualified private lenders.
more than 85 percent of a loan under this
subsection. (B) Report to Congress
(B) Loan amount Not later than 6 months after the date of
enactment of the Small Business Disaster
The maximum amount of a loan guaran- Response and Loan Improvements Act of
teed under this subsection shall be $2,000,000. 2008, the Administrator shall submit a report
(6) Terms and conditions on the progress of the regulations required
A loan guaranteed under this subsection by subparagraph (A) to the Committee on
shall be made under the same terms and condi- Small Business and Entrepreneurship of the
tions as a loan under subsection (b). Senate and the Committee on Small Busi-
ness of the House of Representatives.
(7) Lenders
(A) In general (11) Authorization of appropriations
A loan guaranteed under this subsection (A) In general
made to— Amounts necessary to carry out this sub-
(i) a qualified individual may be made by section shall be made available from
a preferred lender; and amounts appropriated to the Administration
(ii) a qualified small business concern to carry out subsection (b).
may be made by a qualified private lender
(B) Authority to reduce interest rates and
or by a preferred lender that also makes
other terms and conditions
loans to qualified individuals.
(B) Compliance Funds appropriated to the Administration
to carry out this subsection,9 may be used by
If the Administrator determines that a the Administrator to meet the loan terms
preferred lender knowingly failed to comply and conditions specified in paragraph (6).
with the underwriting standards for loans
guaranteed under this subsection or violated (12) Purchase of loans
the terms of the standard operating proce- The Administrator may enter into an agree-
dure agreement between that preferred lend- ment with a qualified private lender or pre-
er and the Administration, the Adminis- ferred lender to purchase any loan guaranteed
trator shall do 1 or more of the following: under this subsection.
Page 831 TITLE 15—COMMERCE AND TRADE § 636
(d) Extension or renewal of loans; purchase of accept such a loan in sufficient amount to
participations; assumption of obligations; repay the Administration: Provided further,
disaster loans; interest rates; loan amounts That no loan under subsection (b)(1) shall be
(1) The Administration may further extend the made, either directly or in cooperation with
maturity of or renew any loan made pursuant to banks or other lending institutions through
this section, or any loan transferred to the Ad- agreements to participate on an immediate or
ministration pursuant to Reorganization Plan deferred basis, if the total amount outstanding
Numbered 2 of 1954, or Reorganization Plan and committed to the borrower under such
Numbered 1 of 1957, for additional periods not to subsection would exceed $500,000 for each dis-
exceed ten years beyond the period stated there- aster, unless an applicant constitutes a major
in, if such extension or renewal will aid in the source of employment in an area suffering a
orderly liquidation of such loan. disaster, in which case the Administration, in
(2) During any period in which principal and its discretion, may waive the $500,000 limita-
interest charges are suspended on the Federal tion.
share of any loan, as provided in subsection (b), (4) Notwithstanding the provisions of any
the Administrator shall, upon the request of any other law, the interest rate on the Federal share
person, firm, or corporation having a participa- of any loan made under subsection (b) shall be—
tion in such loan, purchase such participation, (A) in the case of a homeowner unable to se-
or assume the obligation of the borrower, for the cure credit elsewhere, the rate prescribed by
balance of such period, to make principal and in- the Administration but not more than one-
terest payments on the non-Federal share of half the rate determined by the Secretary of
such loan: Provided, That no such payments the Treasury taking into consideration the
shall be made by the Administrator in behalf of current average market yield on outstanding
any borrower unless (i) the Administrator deter- marketable obligations of the United States
mines that such action is necessary in order to with remaining periods to maturity com-
avoid a default, and (ii) the borrower agrees to parable to the average maturities of such
make payments to the Administration in an ag-
loans plus an additional charge of not to ex-
gregate amount equal to the amount paid in its
ceed 1 per centum per annum as determined by
behalf by the Administrator, in such manner
the Administrator, and adjusted to the nearest
and at such times (during or after the term of
one-eighth of 1 per centum but not to exceed
the loan) as the Administrator shall determine
8 per centum per annum;
having due regard to the purposes sought to be
(B) in the case of a homeowner able to se-
achieved by this paragraph.
(3) With respect to a disaster occurring on or cure credit elsewhere, the rate prescribed by
after October 1, 1978, and prior 15 August 13, 1981, the Administration but not more than the rate
on the Administration’s share of loans made determined by the Secretary of the Treasury
pursuant to paragraph (1) of subsection (b)— taking into consideration the current average
(A) if the loan proceeds are to repair or re- market yield on outstanding marketable obli-
place a primary residence and/or repair or re- gations of the United States with remaining
place damaged or destroyed personal property, periods to maturity comparable to the average
the interest rate shall be 3 percent on the first maturities of such loans plus an additional
$55,000 of such loan; charge of not to exceed 1 per centum per
(B) if the loan proceeds are to repair or re- annum as determined by the Administrator,
place property damaged or destroyed and if and adjusted to the nearest one-eighth of 1 per
the applicant is a business concern which is centum;
unable to obtain sufficient credit elsewhere, (C) in the case of a business concern unable
the interest rate shall be as determined by the to obtain credit elsewhere, not to exceed 8 per
Administration, but not in excess of 5 percent centum per annum;
per annum; and (D) in the case of a business concern able to
(C) if the loan proceeds are to repair or re- obtain credit elsewhere, the rate prescribed by
place property damaged or destroyed and if the Administration but not in excess of the
the applicant is a business concern which is rate prevailing in private market for similar
able to obtain sufficient credit elsewhere, the loans and not more than the rate prescribed by
interest rate shall not exceed the current av- the Administration as the maximum interest
erage market yield on outstanding marketable rate for deferred participation (guaranteed)
obligations of the United States with remain- loans under subsection (a). Loans under this
ing periods to maturity comparable to the av- subparagraph shall be limited to a maximum
erage maturities of such loans and adjusted to term of three years.
the nearest one-eighth of 1 percent, and an ad- (5) Notwithstanding the provisions of any
ditional amount as determined by the Admin- other law, the interest rate on the Federal share
istration, but not to exceed 1 percent: Pro- of any loan made under subsection (b)(1) and
vided, That three years after such loan is fully (b)(2) on account of a disaster commencing on or
disbursed and every two years thereafter for after October 1, 1982, shall be—
the term of the loan, if the Administration de- (A) in the case of a homeowner unable to se-
termines that the borrower is able to obtain a cure credit elsewhere, the rate prescribed by
loan from non-Federal sources at reasonable the Administration but not more than one-
rates and terms for loans of similar purposes half the rate determined by the Secretary of
and periods of time, the borrower shall, upon the Treasury taking into consideration the
request by the Administration, apply for and current average market yield on outstanding
marketable obligations of the United States
15 So in original. Probably should be ‘‘prior to’’. with remaining periods to maturity com-
§ 636 TITLE 15—COMMERCE AND TRADE Page 832
parable to the average maturities of such loan istrator, in obtaining the best available collat-
plus an additional charge of not to exceed 1 eral for a loan of not more than $200,000 under
per centum per annum as determined by the paragraph (1) or (2) of subsection (b) relating to
Administrator, and adjusted to the nearest damage to or destruction of the property of, or
one-eighth of 1 per centum, but not to exceed economic injury to, a small business concern,
4 per centum per annum; shall not require the owner of the small business
(B) in the case of a homeowner able to se- concern to use the primary residence of the
cure credit elsewhere, the rate prescribed by owner as collateral if the Administrator deter-
the Administration but not more than the rate mines that the owner has other assets of equal
determined by the Secretary of the Treasury quality and with a value equal to or greater
taking into consideration the current average than the amount of the loan that could be used
market yield on outstanding marketable obli- as collateral for the loan: Provided further, That
gations of the United States with remaining nothing in the preceding proviso may be con-
periods to maturity comparable to the average strued to reduce the amount of collateral re-
maturities of such loans plus an additional quired by the Administrator in connection with
charge of not to exceed 1 per centum per a loan described in the preceding proviso or to
annum as determined by the Administrator, modify the standards used to evaluate the qual-
and adjusted to the nearest one-eighth of 1 per ity (rather than the type) of such collateral.
centum, but not to exceed 8 per centum per Employees of concerns sharing a common busi-
annum; ness premises shall be aggregated in deter-
(C) in the case of a business, private non- mining ‘‘major source of employment’’ status
profit organization, or other concern, includ- for nonprofit applicants owning such premises.
ing agricultural cooperatives, unable to obtain
With respect to any loan which is outstanding
credit elsewhere, not to exceed 4 per centum
on April 18, 1984, and which was made on ac-
per annum;
(D) in the case of a business concern able to count of a disaster commencing on or after Oc-
obtain credit elsewhere, the rate prescribed by tober 1, 1982, the Administrator shall make such
the Administration but not in excess of the change in the interest rate on the balance of
lowest of (i) the rate prevailing in the private such loan as is required herein effective as of
market for similar loans, (ii) the rate pre- April 18, 1984.
(7) The Administration shall not withhold dis-
scribed by the Administration as the max-
aster assistance pursuant to this paragraph to
imum interest rate for deferred participation
nurseries who are victims of drought disasters.
(guaranteed) loans under subsection (a), or
As used in subsection (b)(2) the term ‘‘an area
(iii) 8 per centum per annum. Loans under this
affected by a disaster’’ includes any county, or
subparagraph shall be limited to a maximum
county contiguous thereto, determined to be a
term of 7 years.
disaster by the President, the Secretary of Agri-
(6) Notwithstanding the provisions of any culture or the Administrator of the Small Busi-
other law, such loans, subject to the reductions ness Administration.
required by subparagraphs (A) and (B) of sub- (8) DISASTER LOANS FOR SUPERSTORM SANDY.—
section (b)(1), shall be in amounts equal to 100 (A) IN GENERAL.—Notwithstanding any other
per centum of loss. The interest rates for loans provision of law, and subject to the same re-
made under subsection (b)(1) and (2), as deter- quirements and procedures that are used to
mined pursuant to paragraph (5), shall be the make loans pursuant to subsection (b), a small
rate of interest which is in effect on the date of business concern, homeowner, nonprofit enti-
the disaster commenced: Provided, That no loan ty, or renter that was located within an area
under subsection (b)(1) and (2) shall be made, ei- and during the time period with respect to
ther directly or in cooperation with banks or which a major disaster was declared by the
other lending institutions through agreements President under section 401 of the Robert T.
to participate on an immediate or deferred Stafford Disaster Relief and Emergency As-
(guaranteed) basis, if the total amount out- sistance Act (42 U.S.C. 5170) by reason of
standing and committed to the borrower under Superstorm Sandy may apply to the Adminis-
subsection (b) would exceed $500,000 for each dis- trator—
aster unless an applicant constitutes a major (i) for a loan to repair, rehabilitate, or re-
source of employment in an area suffering a dis- place property damaged or destroyed by rea-
aster, in which case the Administration, in its son of Superstorm Sandy; or
discretion, may waive the $500,000 limitation: (ii) if such a small business concern has
Provided further, That the Administration, sub- suffered substantial economic injury by rea-
ject to the reductions required by subparagraphs son of Superstorm Sandy, for a loan to assist
(A) and (B) of subsection (b)(1), shall not reduce such a small business concern.
the amount of eligibility for any homeowner on (B) TIMING.—The Administrator shall select
account of loss of real estate to less than $100,000 loan recipients and make available loans for a
for each disaster nor for any homeowner or les- period of not less than 1 year after the date on
see on account of loss of personal property to which the Administrator carries out this au-
less than $20,000 for each disaster, such sums thority.
being in addition to any eligible refinancing: (C) INSPECTOR GENERAL REVIEW.—Not later
Provided further, That the Administration shall than 6 months after the date on which the Ad-
not require collateral for loans of $14,000 or less ministrator begins carrying out this author-
(or such higher amount as the Administrator de- ity, the Inspector General of the Administra-
termines appropriate in the event of a major dis- tion shall initiate a review of the controls for
aster) which are made under paragraph (1) of ensuring applicant eligibility for loans made
subsection (b): Provided further, That the Admin- under this paragraph.
Page 833 TITLE 15—COMMERCE AND TRADE § 636
(e) Funds for small business development cen- the Administration’s participation may total 100
ters under section 648 of this title per centum of the balance of the loan at the
The Administration shall not fund any Small time of disbursement. The Administration’s
Business Development Center or any variation share of any loan made under this subsection
thereof, except as authorized in section 648 of shall bear interest at the rate of 3 per centum
this title. per annum. The maximum term of any such
loan, including extensions and renewals thereof,
(f) Additional requirements for subsection (b) may not exceed fifteen years. All loans made
loans under this subsection shall be of such sound
(1) 16 Increased deferment authorized value or so secured as reasonably to assure re-
(A) In general payment: Provided, however, That any reason-
able doubt shall be resolved in favor of the appli-
In making loans under subsection (b), the cant.
Administrator may provide, to the person (3) For purposes of this subsection, the term
receiving the loan, an option to defer repay- ‘‘handicapped individual’’ means a person who
ment on the loan. has a physical, mental, or emotional impair-
(B) Period ment, defect, ailment, disease, or disability of a
The period of a deferment under subpara- permanent nature which in any way limits the
graph (A) may not exceed 4 years. selection of any type of employment for which
the person would otherwise be qualified or qual-
(g) Net earnings clauses prohibited for sub-
ifiable.
section (b) loans
(i) Loans to small business concerns located in
In making loans under subsection (b), the Ad- urban or rural areas with high proportions
ministrator shall not require the borrower to of unemployed or low-income individuals, or
pay any non-amortized amount for the first five owned by low-income individuals
years after repayment begins.
(1) The Administration also is empowered to
(h) Loans to handicapped persons and organiza- make, participate (on an immediate basis) in, or
tions for handicapped guarantee loans, repayable in not more than fif-
(1) The Administration also is empowered, teen years, to any small business concern, or to
where other financial assistance is not available any qualified person seeking to establish such a
on reasonable terms, to make such loans (either concern, when it determines that such loans will
directly or in cooperation with Banks or other further the policies established in section 631(b) 2
lending institutions through agreements to par- of this title, with particular emphasis on the
ticipate on an immediate or deferred basis) as preservation or establishment of small business
the Administration may determine to be nec- concerns located in urban or rural areas with
essary or appropriate— high proportions of unemployed or low-income
(A) to assist any public or private organiza- individuals, or owned by low-income individuals:
tion— Provided, however, That no such loans shall be
(i) which is organized under the laws of the made, participated in, or guaranteed if the total
United States or of any State, operated in of such Federal assistance to a single borrower
the interest of handicapped individuals, the outstanding at any one time would exceed
net income of which does not inure in whole $100,000. The Administration may defer pay-
or in part to the benefit of any shareholder ments on the principal of such loans for a grace
or other individual; period and use such other methods as it deems
(ii) which complies with any applicable oc- necessary and appropriate to assure the success-
cupational health and safety standard pre- ful establishment and operation of such concern.
scribed by the Secretary of Labor; and The Administration may, in its discretion, as a
(iii) which, in the production of commod- condition of such financial assistance, require
ities and in the provision of services during that the borrower take steps to improve his
any fiscal year in which it receives financial management skills by participating in a man-
assistance under this subsection, employs agement training program approved by the Ad-
handicapped individuals for not less than 75 ministration: Provided, however, That any man-
per centum of the man-hours required for agement training program so approved must be
the production or provision of the commod- of sufficient scope and duration to provide rea-
ities or services; or sonable opportunity for the individuals served
(B) to assist any handicapped individual in to develop entrepreneurial and managerial self-
establishing, acquiring, or operating a small sufficiency.
business concern. (2) The Administration shall encourage, as far
as possible, the participation of the private busi-
(2) The Administration’s share of any loan ness community in the program of assistance to
made under this subsection shall not exceed such concerns, and shall seek to stimulate new
$350,000, nor may any such loan be made if the private lending activities to such concerns
total amount outstanding and committed (by through the use of the loan guarantees, partici-
participation or otherwise) to the borrower from pations in loans, and pooling arrangements au-
the business loan and investment fund estab- thorized by this subsection.
lished by section 633(c)(1)(B) of this title would (3) To insure an equitable distribution between
exceed $350,000. In agreements to participate in urban and rural areas for loans between $3,500
loans on a deferred basis under this subsection, and $100,000 made under this subsection, the Ad-
ministration is authorized to use the agencies
16 So in original. No par. (2) has been enacted. and agreements and delegations developed under
§ 636 TITLE 15—COMMERCE AND TRADE Page 834
title III of the Economic Opportunity Act of (j) Financial assistance for projects providing
1964, as amended [42 U.S.C. 2841 et seq.], as it technical or management assistance; areas of
shall determine necessary. high concentration of unemployment or low-
income; preferences; manner and method of
(4) The Administration shall provide for the
payment; accessible services; program eval-
continuing evaluation of programs under this
uations; establishment of development pro-
subsection, including full information on the lo- gram; coordination of policies
cation, income characteristics, and types of
(1) The Administration shall provide financial
businesses and individuals assisted, and on new
assistance to public or private organizations to
private lending activity stimulated, and the re-
pay all or part of the cost of projects designed to
sults of such evaluation together with rec- provide technical or management assistance to
ommendations shall be included in the report re- individuals or enterprises eligible for assistance
quired by section 639(a) of this title. under subsection (i), paragraph (10) of this sub-
(5) Loans made pursuant to this subsection section; and section 637(a) of this title, with spe-
(including immediate participation in and guar- cial attention to small businesses located in
antees of such loans) shall have such terms and areas of high concentration of unemployed or
conditions as the Administration shall deter- low-income individuals, to small businesses eli-
mine, subject to the following limitations— gible to receive contracts pursuant to section
637(a) of this title.
(A) there is reasonable assurance of repay- (2) Financial assistance under this subsection
ment of the loan; may be provided for projects, including, but not
(B) the financial assistance is not otherwise limited to—
available on reasonable terms from private (A) planning and research, including feasi-
sources or other Federal, State, or local pro- bility studies and market research;
grams; (B) the identification and development of
new business opportunities;
(C) the amount of the loan, together with (C) the furnishing of centralized services
other funds available, is adequate to assure with regard to public services and Federal
completion of the project or achievement of Government programs including programs au-
the purposes for which the loan is made; thorized under subsection (i); paragraph (10) of
(D) the loan bears interest at a rate not less this subsection, and section 637(a) of this title;
than (i) a rate determined by the Secretary of (D) the establishment and strengthening of
the Treasury, taking into consideration the business service agencies, including trade as-
sociations and cooperatives; and
average market yield on outstanding Treasury
(E) the furnishing of business counseling,
obligations of comparable maturity, plus (ii) management training, and legal and other re-
such additional charge, if any, toward cov- lated services, with special emphasis on the
ering other costs of the program as the Admin- development of management training pro-
istration may determine to be consistent with grams using the resources of the business com-
its purposes: Provided, however, That the rate munity, including the development of manage-
of interest charged on loans made in redevel- ment training opportunities in existing busi-
opment areas designated under the Public ness, and with emphasis in all cases upon pro-
Works and Economic Development Act of 1965 viding management training of sufficient
[42 U.S.C. 3121 et seq.] shall not exceed the rate scope and duration to develop entrepreneurial
currently applicable to new loans made under and managerial self-sufficiency on the part of
section 201 of that Act [42 U.S.C. 3141]; and the individuals served.
(E) fees not in excess of amounts necessary (3) The Administration shall encourage the
to cover administrative expenses and probable placement of subcontracts by businesses with
losses may be required on loan guarantees. small business concerns located in areas of high
concentration of unemployed or low-income in-
(6) The Administration shall take such steps dividuals, with small businesses owned by low-
as may be necessary to insure that, in any fiscal income individuals, and with small businesses
year, at least 50 per centum of the amounts eligible to receive contracts pursuant to section
loaned or guaranteed pursuant to this sub- 637(a) of this title. The Administration may pro-
section are allotted to small business concerns vide incentives and assistance to such busi-
located in urban areas identified by the Admin- nesses that will aid in the training and upgrad-
istration as having high concentrations of un- ing of potential subcontractors or other small
employed or low-income individuals or to small business concerns eligible for assistance under
business concerns owned by low-income individ- subsections (i) and (j), and section 637(a) of this
uals. The Administration shall define the mean- title.
ing of low income as it applies to owners of (4) The Administration shall give preference to
small business concerns eligible to be assisted projects which promote the ownership, partici-
under this subsection. pation in ownership, or management of small
businesses owned by low-income individuals and
(7) No financial assistance shall be extended small businesses eligible to receive contracts
pursuant to this subsection where the Adminis- pursuant to section 637(a) of this title.
tration determines that the assistance will be (5) The financial assistance authorized for
used in relocating establishments from one area projects under this subsection includes assist-
to another if such relocation would result in an ance advanced by grant, agreement, or contract.
increase in unemployment in the area of origi- (6) The Administration is authorized to make
nal location. payments under grants and contracts entered
Page 835 TITLE 15—COMMERCE AND TRADE § 636
into under this subsection in lump sum or in- signed to meet the specific needs of small
stallments, and in advance or by way of reim- business concerns participating in the Pro-
bursement, and in the case of grants, with nec- gram and which have received or are apply-
essary adjustments on account of overpayments ing to receive a surety bond, and (III) prepa-
or underpayments. ration of all forms necessary to receive a
(7) To the extent feasible, services under this surety bond guarantee from the Administra-
subsection shall be provided in a location which tion pursuant to title IV, part B of the Small
is easily accessible to the individuals and small Business Investment Act of 1958 [15 U.S.C.
business concerns served. 694a et seq.].
(8) Repealed. Pub. L. 101–574, title II, § 242(2),
(B) Small business concerns eligible to re-
Nov. 15, 1990, 104 Stat. 2827.
(9) The Administration shall take such steps ceive contracts pursuant to section 637(a) of
as may be necessary and appropriate, in coordi- this title shall participate in the Program.
(C)(i) A small business concern participating
nation and cooperation with the heads of other
in any program or activity conducted under
Federal departments and agencies, to insure
the authority of this paragraph or eligible for
that contracts, subcontracts, and deposits made
the award of contracts pursuant to section
by the Federal Government or with programs
637(a) of this title on September 1, 1988, shall
aided with Federal funds are placed in such way
be permitted continued participation and eli-
as to further the purposes of subsections (i) and
gibility in such program or activity for a pe-
(j) and section 637(a) of this title.
(10) There is established within the Adminis- riod of time which is the greater of—
(I) 9 years less the number of years since
tration a small business and capital ownership
the award of its first contract pursuant to
development program (hereinafter referred to as
section 637(a) of this title; or
the ‘‘Program’’) which shall provide assistance
(II) its original fixed program participa-
exclusively for small business concerns eligible
tion term (plus any extension thereof) as-
to receive contracts pursuant to section 637(a) of
signed prior to November 15, 1988, plus eight-
this title. The program, and all other services
een months.
and activities authorized under this subsection
and section 637(a) of this title, shall be managed (ii) Nothing contained in this subparagraph
by the Associate Administrator for Minority shall be deemed to prevent the Administration
Small Business and Capital Ownership Develop- from instituting a termination or graduation
ment under the supervision of, and responsible pursuant to subparagraph (F) or (H) for issues
to, the Administrator. unrelated to the expiration of any time period
(A) The Program shall— limitation.
(i) assist small business concerns partici- (D)(i) Promptly after certification under
pating in the Program (either through pub- paragraph (11) a Program Participant shall
lic or private organizations) to develop and submit a business plan (hereinafter referred to
maintain comprehensive business plans as the ‘‘plan’’) as described in clause (ii) of
which set forth the Program Participant’s this subparagraph for review by the Business
specific business targets, objectives, and Opportunity Specialist assigned to assist such
goals developed and maintained in con- Program Participant. The plan may be a revi-
formity with subparagraph (D).17 sion of a preliminary business plan submitted
(ii) provide for such other nonfinancial by the Program Participant or required by the
services as deemed necessary for the estab- Administration as a part of the application for
lishment, preservation, and growth of small certification under this section and shall be
business concerns participating in the Pro- designed to result in the Program Participant
gram, including but not limited to (I) loan eliminating the conditions or circumstances
packaging, (II) financial counseling, (III) ac- upon which the Administration determined
counting and bookkeeping assistance, (IV) eligibility pursuant to section 637(a)(6) of this
marketing assistance, and (V) management title. Such plan, and subsequent modifications
assistance; submitted under clause (iii) of this subpara-
(iii) assist small business concerns partici- graph, shall be approved by the business op-
pating in the Program to obtain equity and portunity specialist prior to the Program Par-
debt financing; ticipant being eligible for award of a contract
(iv) establish regular performance moni- pursuant to section 637(a) of this title.
toring and reporting systems for small busi- (ii) The plans submitted under this subpara-
ness concerns participating in the Program graph shall include the following:
to assure compliance with their business (I) An analysis of market potential, com-
plans; petitive environment, and other business
(v) analyze and report the causes of suc- analyses estimating the Program Partici-
cess and failure of small business concerns pant’s prospects for profitable operations
participating in the Program; and during the term of program participation
(vi) provide assistance necessary to help and after graduation.
small business concerns participating in the (II) An analysis of the Program Partici-
Program to procure surety bonds, with such pant’s strengths and weaknesses with par-
assistance including, but not limited to, (I) ticular attention to correcting any finan-
the preparation of application forms re- cial, managerial, technical, or personnel
quired to receive a surety bond, (II) special conditions which are likely to impede the
management and technical assistance de- small business concern from receiving con-
tracts other than those awarded under sec-
17 So in original. The period probably should be a semicolon. tion 637(a) of this title.
§ 636 TITLE 15—COMMERCE AND TRADE Page 836
(III) Specific targets, objectives, and goals, (i) voluntarily elects not to continue par-
for the business development of the Program ticipation;
Participant during the next and succeeding (ii) completes the period of Program par-
years utilizing the results of the analyses ticipation as prescribed by paragraph (15);
conducted pursuant to subclauses (I) and (iii) is terminated pursuant to a termi-
(II). nation proceeding conducted in accordance
(IV) A transition management plan out- with section 637(a)(9) of this title; or
lining specific steps to assure profitable (iv) is graduated pursuant to a graduation
business operations after graduation (to be proceeding conducted in accordance with
incorporated into the Program Participant’s section 637(a)(9) of this title.
plan during the first year of the transitional
(F) For purposes of this section and section
stage of Program participation).
(V) Estimates of contract awards pursuant 637(a) of this title, the term ‘‘terminated’’ and
to section 637(a) of this title and from other the term ‘‘termination’’ means the total de-
sources, which the Program Participant will nial or suspension of assistance under this
require to meet the specific targets, objec- paragraph or under section 637(a) of this title
tives, and goals for the years covered by its prior to the graduation of the participating
plan. The estimates established shall be con- small business concern or prior to the expira-
sistent with the provisions of subparagraph tion of the maximum program participation
(I) and section 637(a) of this title. term. An action for termination shall be based
upon good cause, including—
(iii) Each Program Participant shall annu- (i) the failure by such concern to maintain
ally review its currently approved plan with its eligibility for Program participation;
its Business Opportunity Specialist and mod- (ii) the failure of the concern to engage in
ify such plan as may be appropriate. Any business practices that will promote its
modified plan shall be submitted to the Ad- competitiveness within a reasonable period
ministration for approval. The currently ap- of time as evidenced by, among other indica-
proved plan shall be considered valid until tors, a pattern of unjustified delinquent per-
such time as a modified plan is approved by formance or terminations for default with
the Business Opportunity Specialist. Annual respect to contracts awarded under the au-
reviews pertaining to years in the transitional thority of section 637(a) of this title;
stage of program participation shall require, (iii) a demonstrated pattern of failing to
as appropriate, a written verification that make required submissions or responses to
such Program Participant has complied with the Administration in a timely manner;
the requirements of subparagraph (I) relating (iv) the willful violation of any rule or reg-
to attaining business activity from sources ulation of the Administration pertaining to
other than contracts awarded pursuant to sec- material issues;
tion 637(a) of this title. (v) the debarment of the concern or its dis-
(iv) Each Program Participant shall annu- advantaged owners by any agency pursuant
ally forecast its needs for contract awards
to subpart 9.4 of title 48, Code of Federal
under section 637(a) of this title for the next
Regulations (or any successor regulation); or
program year and the succeeding program
(vi) the conviction of the disadvantaged
year during the review of its business plan,
owner or an officer of the concern for any of-
conducted pursuant to clause (iii). Such fore-
fense indicating a lack of business integrity
cast shall be known as the section 8(a) [15
including any conviction for embezzlement,
U.S.C. 637(a)] contract support level and shall
theft, forgery, bribery, falsification or viola-
be included in the Program Participant’s busi-
tion of section 645 of this title. For purposes
ness plan. Such forecast shall include—
(I) the aggregate dollar value of contract of this clause, no termination action shall be
support to be sought on a noncompetitive taken with respect to a disadvantaged owner
basis under section 637(a) of this title, re- solely because of the conviction of an officer
flecting compliance with the requirements of the concern (who is other than a disadvan-
of subparagraph (I) relating to attaining taged owner) unless such owner conspired
business activity from sources other than with, abetted, or otherwise knowingly acqui-
contracts awarded pursuant to section 637(a) esced in the activity or omission that was
of this title, the basis of such officer’s conviction.
(II) the types of contract opportunities (G) The Director of the Division may ini-
being sought, identified by Standard Indus- tiate a termination proceeding by recom-
trial Classification (SIC) Code or otherwise, mending such action to the Associate Admin-
(III) an estimate of the dollar value of con- istrator for Minority Small Business and Cap-
tract support to be sought on a competitive ital Ownership Development. Whenever the
basis, and Associate Administrator, or a designee of such
(IV) such other information as may be re- officer, determines such termination is appro-
quested by the Business Opportunity Spe- priate, within 15 days after making such a de-
cialist to provide effective business develop- termination the Program Participant shall be
ment assistance to the Program Participant. provided a written notice of intent to termi-
(E) A small business concern participating nate, specifying the reasons for such action.
in the program conducted under the authority No Program Participant shall be terminated
of this paragraph and eligible for the award of from the Program pursuant to subparagraph
contracts pursuant to section 637(a) of this (F) without first being afforded an opportunity
title shall be denied all such assistance if such for a hearing in accordance with section
concern— 637(a)(9) of this title.
Page 837 TITLE 15—COMMERCE AND TRADE § 636
(H) For the purposes of this subsection and the dollar volume of its competitive business
section 637(a) of this title the term ‘‘grad- activity or limiting the dollar volume of
uated’’ or ‘‘graduation’’ means that the Pro- contracts awarded to the Program Partici-
gram Participant is recognized as successfully pant pursuant to section 637(a) of this title;
completing the program by substantially except for actions that would constitute a
achieving the targets, objectives, and goals termination, remedial measures taken pur-
contained in the concern’s business plan there- suant to this subclause shall not be review-
by demonstrating its ability to compete in the able pursuant to section 637(a)(9) of this
marketplace without assistance under this title.
section or section 637(a) of this title. (J)(i) The Administration shall conduct an
(I)(i) During the developmental stage of its
evaluation of a Program Participant’s eligi-
participation in the Program, a Program Par-
bility for continued participation in the Pro-
ticipant shall take all reasonable efforts with-
gram whenever it receives specific and cred-
in its control to attain the targets contained
ible information alleging that such Program
in its business plan for contracts awarded
Participant no longer meets the requirements
other than pursuant to section 637(a) of this
for Program eligibility. Upon making a find-
title (hereinafter referred to as ‘‘business ac-
ing that a Program Participant is no longer
tivity targets.’’). Such efforts shall be made a
eligible, the Administration shall initiate a
part of the business plan and shall be suffi-
termination proceeding in accordance with
cient in scope and duration to satisfy the Ad-
subparagraph (F). A Program Participant’s
ministration that the Program Participant
eligibility for award of any contract under the
will engage a reasonable marketing strategy
authority of section 637(a) of this title may be
that will maximize its potential to achieve its
suspended pursuant to subpart 9.4 of title 48,
business activity targets.
Code of Federal Regulations (or any successor
(ii) During the transitional stage of the Pro-
regulation).
gram a Program Participant shall be subject
(ii)(I) Except as authorized by subclauses (II)
to regulations regarding business activity tar-
or (III), no award shall be made pursuant to
gets that are promulgated by the Administra-
section 637(a) of this title to a concern other
tion pursuant to clause (iii);
than a small business concern.
(iii) The regulations referred to in clause (ii)
(II) In determining the size of a small busi-
shall:
ness concern owned by a socially and economi-
(I) establish business activity targets ap-
cally disadvantaged Indian tribe (or a wholly
plicable to Program Participants during the
owned business entity of such tribe), each
fifth year and each succeeding year of Pro-
firm’s size shall be independently determined
gram Participation; such targets, for such
without regard to its affiliation with the tribe,
period of time, shall reflect a reasonably
any entity of the tribal government, or any
consistent increase in contracts awarded
other business enterprise owned by the tribe,
other than pursuant to section 637(a) of this
unless the Administrator determines that one
title, expressed as a percentage of total
or more such tribally owned business concerns
sales; when promulgating business activity
have obtained, or are likely to obtain, a sub-
targets the Administration may establish
stantial unfair competitive advantage within
modified targets for Program Participants
an industry category.
that have participated in the Program for a
(III) Any joint venture established under the
period of longer than four years on June 1,
authority of section 602(b) of Public Law
1989;
100–656, the ‘‘Business Opportunity Develop-
(II) require a Program Participant to at-
ment Reform Act of 1988’’, shall be eligible for
tain its business activity targets;
(III) provide that, before the receipt of any award of a contract pursuant to section 637(a)
contract to be awarded pursuant to section of this title.
637(a) of this title, the Program Participant (11)(A) The Associate Administrator for Mi-
(if it is in the transitional stage) must cer- nority Small Business and Capital Ownership
tify that it has complied with the regula- Development shall be responsible for coordi-
tions promulgated pursuant to subclause nating and formulating policies relating to Fed-
(II), or that it is in compliance with such re- eral assistance to small business concerns eligi-
medial measures as may have been ordered ble for assistance under subsection (i) and small
pursuant to regulations issued under sub- business concerns eligible to receive contracts
clause (V); pursuant to section 637(a) of this title.
(IV) require the Administration to review (B)(i) Except as provided in clause (iii), no in-
each Program Participant’s performance re- dividual who was determined pursuant to sec-
garding attainment of business activity tar- tion 637(a) of this title to be socially and eco-
gets during periodic reviews of such Partici- nomically disadvantaged before August 15, 1989,
pant’s business plan; and shall be permitted to assert such disadvantage
(V) authorize the Administration to take with respect to any other concern making appli-
appropriate remedial measures with respect cation for certification after August 15, 1989.
to a Program Participant that has failed to (ii) Except as provided in clause (iii), any indi-
attain a required business activity target for vidual upon whom eligibility is based pursuant
the purpose of reducing such Participant’s to section 637(a)(4) of this title shall be per-
dependence on contracts awarded pursuant mitted to assert such eligibility for only one
to section 637(a) of this title; such remedial small business concern.
actions may include, but are not limited to (iii) A socially and economically disadvan-
assisting the Program Participant to expand taged Indian tribe may own more than one small
§ 636 TITLE 15—COMMERCE AND TRADE Page 838
business concern eligible for assistance pursuant cerning protests from applicants that have
to paragraph (10) and section 637(a) of this title been denied program admission;
if— (vii) decide protests regarding the status of
(I) the Indian tribe does not own another a concern as a disadvantaged concern for pur-
firm in the same industry which has been de- poses of any program or activity conducted
termined to be eligible to receive contracts under the authority of subsection (d) of sec-
under this program, and tion 637 of this title, or any other provision of
(II) the individuals responsible for the man- Federal law that references such subsection
agement and daily operations of the concern for a definition of program eligibility; and
do not manage more than two Program Par- (viii) implement such policy directives as
ticipants. may be issued by the Associate Administrator
(C) No concern, previously eligible for the for Minority Small Business and Capital Own-
award of contracts pursuant to section 637(a) of ership Development pursuant to subparagraph
this title, shall be subsequently recertified for (I) regarding, among other things, the geo-
program participation if its prior participation graphic distribution of concerns to be admit-
in the program was concluded for any of the rea- ted to the program and the industrial make-up
sons described in paragraph (10)(E). of such concerns.
(D) A concern eligible for the award of con- (G) An applicant shall not be denied admission
tracts pursuant to this subsection shall remain into the program established by paragraph (10)
eligible for such contracts if there is a transfer due solely to a determination by the Division
of ownership and control (as defined pursuant to that specific contract opportunities are unavail-
section 637(a)(4) of this title) to individuals who able to assist in the development of such con-
are determined to be socially and economically cern unless—
disadvantaged pursuant to section 637(a) of this (i) the Government has not previously pro-
title. In the event of such a transfer, the con- cured and is unlikely to procure the types of
cern, if not terminated or graduated, shall be el- products or services offered by the concern; or
igible for a period of continued participation in (ii) the purchases of such products or serv-
the program not to exceed the time limitations ices by the Federal Government will not be in
prescribed in paragraph (15). quantities sufficient to support the develop-
(E) There is established a Division of Program mental needs of the applicant and other Pro-
Certification and Eligibility (hereinafter re- gram Participants providing the same or simi-
ferred to in this paragraph as the ‘‘Division’’) lar items or services.
that shall be made part of the Office of Minority
Small Business and Capital Ownership Develop- (H) Not later than 90 days after receipt of a
ment. The Division shall be headed by a Direc- completed application for Program certifi-
tor who shall report directly to the Associate cation, the Associate Administrator for Minor-
Administrator for Minority Small Business and ity Small Business and Capital Ownership De-
Capital Ownership Development. The Division velopment shall certify a small business concern
shall establish field offices within such regional as a Program Participant or shall deny such ap-
offices of the Administration as may be nec- plication.
essary to perform efficiently its functions and (I) Thirty days before the conclusion of each
responsibilities. fiscal year, the Director of the Division shall re-
(F) Subject to the provisions of section view all concerns that have been admitted into
637(a)(9) of this title, the functions and responsi- the Program during the preceding 12-month pe-
bility of the Division are to— riod. The review shall ascertain the number of
(i) receive, review and evaluate applications entrants, their geographic distribution and in-
for certification pursuant to paragraphs (4), dustrial classification. The Director shall also
(5), (6) and (7) of section 637(a) of this title; estimate the expected growth of the Program
(ii) advise each program applicant within 15 during the next fiscal year and the number of
days after the receipt of an application as to additional Business Opportunity Specialists, if
whether such application is complete and suit- any, that will be needed to meet the anticipated
able for evaluation and, if not, what matters demand for the Program. The findings and con-
must be rectified; clusions of the Director shall be reported to the
(iii) render recommendations on such appli- Associate Administrator for Minority Small
cations to the Associate Administrator for Mi- Business and Capital Ownership Development by
nority Small Business and Capital Ownership September 30 of each year. Based on such report
Development; and such additional data as may be relevant, the
(iv) review and evaluate financial state- Associate Administrator shall, by October 31 of
ments and other submissions from concerns each year, issue policy and program directives
participating in the program established by applicable to such fiscal year that—
paragraph (10) to ascertain continued eligi- (i) establish priorities for the solicitation of
bility to receive subcontracts pursuant to sec- program applications from underrepresented
tion 637(a) of this title; regions and industry categories;
(v) make a request for the initiation of ter- (ii) assign staffing levels and allocate other
mination or graduation proceedings, as appro- program resources as necessary to meet pro-
priate, to the Associate Administrator for Mi- gram needs; and
nority Small Business and Capital Ownership (iii) establish priorities in the processing
Development; and admission of new Program Participants as
(vi) make recommendations to the Associate may be necessary to achieve an equitable geo-
Administrator for Minority Small Business graphic distribution of concerns and a dis-
and Capital Ownership Development con- tribution of concerns across all industry cat-
Page 839 TITLE 15—COMMERCE AND TRADE § 636
egories in proportions needed to increase sig- (iii) the contract to which it pertains does
nificantly contract awards to small business not exceed $3,000,000 in amount. This sub-
concerns owned and controlled by socially and paragraph shall cease to be effective on Oc-
economically disadvantaged individuals. When tober 1, 1994.
considering such increase the Administration (E) Financial assistance whereby the Admin-
shall give due consideration to those indus- istration may purchase in whole or in part,
trial categories where Federal purchases have and on behalf of such concerns, skills training
been substantial but where the participation or upgrading for employees or potential em-
rate of such concerns has been limited. ployees of such concerns. Such assistance may
(12)(A) The Administration shall segment the be made without regard to section 647(a) of
Capital Ownership Development Program into this title. Assistance may be made by direct
two stages: a developmental stage; and a transi- payment to the training provider or by reim-
tional stage. bursing the Program Participant or the Par-
(B) The developmental stage of program par- ticipant’s employee, if such reimbursement is
ticipation shall be designed to assist the concern found to be reasonable and appropriate. For
in its effort to overcome its economic disadvan- purposes of this subparagraph the term ‘‘train-
tage by providing such assistance as may be nec- ing provider’’ shall mean an institution of
essary and appropriate to access its markets and higher education, a community or vocational
college, or an institution eligible to provide
to strengthen its financial and managerial
skills training or upgrading under title I of
skills.
the Workforce Innovation and Opportunity
(C) The transitional stage of program partici-
Act [29 U.S.C. 3111 et seq.]. The Administra-
pation shall be designed to overcome, insofar as
tion shall, in consultation with the Secretary
practicable, the remaining elements of economic of Labor, promulgate rules and regulations to
disadvantage and to prepare such concern for implement this subparagraph that establish
graduation from the program. acceptable training and upgrading perform-
(13) A Program Participant, if otherwise eligi- ance standards and provide for such moni-
ble, shall be qualified to receive the following toring or audit requirements as may be nec-
assistance during the stages of program partici- essary to ensure the integrity of the training
pation specified in paragraph 12: 18 effort. No financial assistance shall be granted
(A) Contract support pursuant to section under the subparagraph unless the Adminis-
637(a) of this title. trator determines that—
(B) Financial assistance pursuant to sub- (i) such concern has documented that it
section (a)(20). has first explored the use of existing cost-
(C) A maximum of two exemptions from the free or cost-subsidized training programs of-
requirements of section 35(a) 2 of title 41, fered by public and private sector agencies
which exemptions shall apply only to con- working with programs of employment and
tracts awarded pursuant to section 637(a) of training and economic development;
this title and shall only be used to allow for (ii) no more than five employees or poten-
contingent agreements by a small business tial employees of such concern are recipients
concern to acquire the machinery, equipment, of any benefits under this subparagraph at
facilities, or labor needed to perform such con- any one time;
tracts. No exemption shall be made pursuant (iii) no more than $2,500 shall be made
to this subparagraph if the contract to which available for any one employee or potential
it pertains has an anticipated value in excess employee;
of $10,000,000. This subparagraph shall cease to (iv) the length of training or upgrading fi-
be effective on October 1, 1992. nanced by this subparagraph shall be no less
(D) A maximum of five exemptions from the than one month nor more than six months;
(v) such concern has given adequate assur-
requirements of sections 3131 and 3133 of title
ance it will employ the trainee or upgraded
40, which exemptions shall apply only to con-
employee for at least six months after the
tracts awarded pursuant to section 637(a) of
training or upgrading financed by this sub-
this title, except that, such exemptions may
paragraph has been completed and each
be granted under this subparagraph only if—
trainee or upgraded employee has provided a
(i) the Administration finds that such con-
similar assurance to remain within the em-
cern is unable to obtain the requisite bond
ploy of such concern for such period; if such
or bonds from a surety and that no surety is concern, trainee, or upgraded employee
willing to issue a bond subject to the guar- breaches this agreement, the Administration
antee provision of title IV of the Small Busi- shall be entitled to and shall make diligent
ness Investment Act of 1958 (15 U.S.C. 692 et efforts to obtain from the violating party
seq.); the repayment of all funds expended on be-
(ii) the Administration and the agency half of the violating party, such repayment
providing the contracting opportunity have shall be made to the Administration to-
provided for the protection of persons fur- gether with such interest and costs of collec-
nishing materials or labor to the Program tion as may be reasonable; the violating
Participant by arranging for the direct dis- party shall be barred from receiving any fur-
bursement of funds due to such persons by ther assistance under this subparagraph;
the procuring agency or through any bank (vi) the training to be financed may take
the deposits of which are insured by the Fed- place either at such concern’s facilities or at
eral Deposit Insurance Corporation; and those of the training provider; and
(vii) such concern will maintain such
18 So in original. Probably should be ‘‘paragraph (12):’’. records as the Administration deems appro-
§ 636 TITLE 15—COMMERCE AND TRADE Page 840
priate to ensure that the provisions of this (bb) in the case of a covered territory busi-
paragraph and any other applicable law have ness, the period beginning on January 1,
not been violated. 2021, and ending on the date that is 4 years
(F)(i) The transfer of technology or surplus after such date.
property owned by the United States to such a (II) The Administrator may transfer tech-
concern. Activities designed to effect such nology or surplus property under clause (i) to
transfer shall be developed in cooperation with a Puerto Rico business or a covered territory
the heads of Federal agencies and shall include business if either such business meets the re-
the transfer by grant, license, or sale of such quirements for such a transfer, without regard
technology or property to such a concern. to whether either such business is a Program
Such property may be transferred to Program Participant.
Participants on a priority basis. Technology (G) Training assistance whereby the Admin-
or property transferred under this subpara- istration shall conduct training sessions to as-
graph shall be used by the concern during the sist individuals and enterprises eligible to re-
normal conduct of its business operation and ceive contracts under section 637(a) of this
shall not be sold or transferred to any other title in the development of business principles
party (other than the Government) during and strategies to enhance their ability to suc-
such concern’s term of participation in the cessfully compete for contracts in the market-
Program and for one year thereafter. place.
(ii)(I) In this clause— (H) Joint ventures, leader-follower arrange-
(aa) the term ‘‘covered period’’ means the ments, and teaming agreements between the
2-year period beginning on the date on which Program Participant and other Program Par-
the President declared the applicable major ticipants and other business concerns with re-
disaster; and spect to contracting opportunities for the re-
(bb) the term ‘‘disaster area’’ means the search, development, full-scale engineering or
area for which the President has declared a production of major systems. Such activities
major disaster, during the covered period. shall be undertaken on the basis of programs
(II) The Administrator may transfer tech- developed by the agency responsible for the
nology or surplus property under clause (i) on procurement of the major system, with the as-
a priority basis to a small business concern lo- sistance of the Administration.
cated in a disaster area if— (I) Transitional management business plan-
(aa) the small business concern meets the ning training and technical assistance.
requirements for such a transfer, without re- (J) Program Participants in the develop-
gard to whether the small business concern mental stage of Program participation shall
is a Program Participant; and be eligible for the assistance provided by sub-
(bb) for a small business concern that is a paragraphs (A), (B), (C), (D), (E), (F), and (G).
Program Participant, on and after the date (14) Program Participants in the transitional
on which the President declared the applica- stage of Program participation shall be eligible
ble major disaster, the small business con- for the assistance provided by subparagraphs
cern has not received property under this (A), (B), (F), (G), (H), and (I) of paragraph (13).
subparagraph on the basis of the status of (15) Subject to the provisions of paragraph
the small business concern as a Program (10)(C), a small business concern may receive de-
Participant. velopmental assistance under the Program and
(III) For any transfer of property under this contracts under section 637(a) of this title for a
clause to a small business concern, the terms total period of not longer than nine years, meas-
and conditions shall be the same as a transfer ured from the date of its certification under the
to a Program Participant, except that the authority of such section, of which—
small business concern shall agree not to sell (A) no more than four years may be spent in
or transfer the property to any party other the developmental stage of Program Partici-
than the Federal Government during the cov- pation; and
(B) no more than five years may be spent in
ered period.
(IV) A small business concern that receives the transitional stage of Program Participa-
a transfer of property under this clause may tion.
not receive a transfer of property under clause (16)(A) The Administrator shall develop and
(i) during the covered period. implement a process for the systematic collec-
(V) If a small business concern sells or trans- tion of data on the operations of the Program
fers property in violation of the agreement de- established pursuant to paragraph (10).
scribed in subclause (III), the Administrator (B) Not later than April 30 of each year, the
may initiate proceedings to prohibit the small Administrator shall submit a report to the Con-
business concern from receiving a transfer of gress on the Program that shall include the fol-
property under this clause or clause (i), in ad- lowing:
dition to any other remedy available to the (i) The average personal net worth of indi-
Administrator. viduals who own and control concerns that
(iii)(I) In this clause, the term ‘‘covered pe- were initially certified for participation in the
riod’’ means— Program during the immediately preceding
(aa) in the case of a Puerto Rico business, fiscal year. The Administrator shall also indi-
the period beginning on August 13, 2018, and cate the dollar distribution of net worths, at
ending on the date on which the Oversight $50,000 increments, of all such individuals
Board established under section 2121 of title found to be socially and economically dis-
48 terminates; and advantaged. For the first report required pur-
Page 841 TITLE 15—COMMERCE AND TRADE § 636
suant to this paragraph the Administrator (k) Functions relating to loans and financial as-
shall also provide the data specified in the pre- sistance for projects providing technical or
ceding sentence for all eligible individuals in management assistance to individuals or en-
the Program as of November 15, 1988. terprises eligible for assistance as small busi-
ness concerns located in urban or rural
(ii) A description and estimate of the bene-
areas with high proportions of unemployed
fits and costs that have accrued to the econ-
or low-income individuals, or owned by low-
omy and the Government in the immediately income individuals
preceding fiscal year due to the operations of
those business concerns that were performing In carrying out its functions under subsections
contracts awarded pursuant to section 637(a) (i) and (j) and section 637(a) of this title, the Ad-
of this title. ministration is authorized—
(1) to utilize, with their consent, the services
(iii) A compilation and evaluation of those and facilities of Federal agencies without re-
business concerns that have exited the Pro- imbursement, and, with the consent of any
gram during the immediately preceding three State or political subdivision of a State, ac-
fiscal years. Such compilation and evaluation cept and utilize the services and facilities of
shall detail the number of concerns actively such State or subdivision without reimburse-
engaged in business operations, those that ment;
have ceased or substantially curtailed such op- (2) to accept, in the name of the Administra-
erations, including the reasons for such ac- tion, and employ or dispose of in furtherance
tions, and those concerns that have been ac- of the purposes of this chapter, any money or
quired by other firms or organizations owned property, real, personal, or mixed, tangible, or
and controlled by other than socially and eco- intangible, received by gift, devise, bequest, or
nomically disadvantaged individuals. For otherwise;
those businesses that have continued oper- (3) to accept voluntary and uncompensated
ations after they exited from the Program, the services, notwithstanding the provisions of
section 1342 of title 31; and
Administrator shall also separately detail the (4) to employ experts and consultants or or-
benefits and costs that have accrued to the ganizations thereof as authorized by section
economy during the immediately preceding 3109 of title 5, except that no individual may
fiscal year due to the operations of such con- be employed under the authority of this sub-
cerns. section for more than one hundred days in any
(iv) A listing of all participants in the Pro- fiscal year; to compensate individuals so em-
gram during the preceding fiscal year identi- ployed at rates not in excess of the daily
fying, by State and by Region, for each firm: equivalent of the highest rate payable under
the name of the concern, the race or ethnicity, section 5332 of title 5, including traveltime;
and gender of the disadvantaged owners, the and to allow them, while away from their
dollar value of all contracts received in the homes or regular places of business, travel ex-
preceding year, the dollar amount of advance penses (including per diem in lieu of subsist-
payments received by each concern pursuant ence) as authorized by section 5703 of title 5
to contracts awarded under section 637(a) of for persons in the Government service em-
this title, and a description including (if ap- ployed intermittently, while so employed: Pro-
propriate) an estimate of the dollar value of vided, however, That contracts for such em-
all benefits received pursuant to paragraphs ployment may be renewed annually.
(13) and (14) and subsection (a)(20) during such (l) Small business intermediary lending pilot
year. program
(1) Definitions
(v) The total dollar value of contracts and
options awarded during the preceding fiscal In this subsection—
year pursuant to section 637(a) of this title and (A) the term ‘‘eligible intermediary’’—
(i) means a private, nonprofit entity
such amount expressed as a percentage of
that—
total sales of (I) all firms participating in the (I) seeks or has been awarded a loan
Program during such year; and (II) of firms in from the Administrator to make loans to
each of the nine years of program participa- small business concerns under this sub-
tion. section; and
(vi) A description of such additional re- (II) has not less than 1 year of experi-
sources or program authorities as may be re- ence making loans to startup, newly es-
quired to provide the types of services needed tablished, or growing small business con-
over the next two-year period to service the cerns; and
expected portfolio of firms certified pursuant (ii) includes—
to section 637(a) of this title. (I) a private, nonprofit community de-
(vii) The total dollar value of contracts and velopment corporation;
options awarded pursuant to section 637(a) of (II) a consortium of private, nonprofit
this title, at such dollar increments as the Ad- organizations or nonprofit community
ministrator deems appropriate, for each four development corporations; and
(III) an agency of or nonprofit entity
digit standard industrial classification code
established by a Native American Tribal
under which such contracts and options were
Government; and
classified.
(B) the term ‘‘Program’’ means the small
(C) The first report required by subparagraph business intermediary lending pilot program
(B) shall pertain to fiscal year 1990. established under paragraph (2).
§ 636 TITLE 15—COMMERCE AND TRADE Page 842
(2) Establishment Program during the 2-year period beginning
There is established a 3-year small business on the date of the initial disbursement of
intermediary lending pilot program, under funds under that loan.
which the Administrator may make direct (G) Maximum participants and amounts
loans to eligible intermediaries, for the pur- During each of fiscal years 2011, 2012, and
pose of making loans to startup, newly estab- 2013, the Administrator may make loans
lished, and growing small business concerns. under the Program—
(3) Purposes (i) to not more than 20 eligible inter-
mediaries; and
The purposes of the Program are—
(ii) in a total amount of not more than
(A) to assist small business concerns in
$20,000,000.
areas suffering from a lack of credit due to
poor economic conditions or changes in the (5) Loans to small business concerns
financial market; and (A) In general
(B) to establish a loan program under The Administrator, through an eligible
which the Administrator may provide loans intermediary, shall make loans to startup,
to eligible intermediaries to enable the eligi- newly established, and growing small busi-
ble intermediaries to provide loans to start- ness concerns for working capital, real es-
up, newly established, and growing small tate, and the acquisition of materials, sup-
business concerns for working capital, real plies, furniture, fixtures, and equipment.
estate, or the acquisition of materials, sup- (B) Maximum loan
plies, or equipment.
An eligible intermediary may not make a
(4) Loans to eligible intermediaries loan under this subsection of more than
(A) Application $200,000 to any 1 small business concern.
Each eligible intermediary desiring a loan (C) Applicable interest rates
under this subsection shall submit an appli- A loan made by an eligible intermediary to
cation to the Administrator that describes— a small business concern under this sub-
(i) the type of small business concerns to section, may have a fixed or a variable inter-
be assisted; est rate, and shall bear an interest rate spec-
(ii) the size and range of loans to be ified by the eligible intermediary in the ap-
made; plication of the eligible intermediary for a
(iii) the interest rate and terms of loans loan under this subsection.
to be made;
(D) Review restrictions
(iv) the geographic area to be served and
the economic, poverty, and unemployment The Administrator may not review indi-
characteristics of the area; vidual loans made by an eligible inter-
(v) the status of small business concerns mediary to a small business concern before
in the area to be served and an analysis of approval of the loan by the eligible inter-
the availability of credit; and mediary.
(vi) the qualifications of the applicant to (6) Termination
carry out this subsection. The authority of the Administrator to make
(B) Loan limits loans under the Program shall terminate 3
No loan may be made to an eligible inter- years after September 27, 2010.
mediary under this subsection if the total (m) Microloan Program
amount outstanding and committed to the (1)(A) Purposes
eligible intermediary by the Administrator The purposes of the Microloan Program
would, as a result of such loan, exceed are—
$1,000,000 during the participation of the eli- (i) to assist women, low-income, veteran
gible intermediary in the Program. (within the meaning of such term under sec-
(C) Loan duration tion 632(q) of this title), and minority entre-
Loans made by the Administrator under preneurs and business owners and other such
this subsection shall be for a term of 20 individuals possessing the capability to op-
years. erate successful business concerns;
(ii) to assist small business concerns in
(D) Applicable interest rates
those areas suffering from a lack of credit
Loans made by the Administrator to an el- due to economic downturns;
igible intermediary under the Program shall (iii) to establish a microloan program to
bear an annual interest rate equal to 1.00 be administered by the Small Business Ad-
percent. ministration—
(E) Fees; collateral (I) to make loans to eligible inter-
The Administrator may not charge any mediaries to enable such intermediaries to
fees or require collateral with respect to any provide small-scale loans, particularly
loan made to an eligible intermediary under loans in amounts averaging not more than
this subsection. $10,000, to startup, newly established, or
growing small business concerns for work-
(F) Delayed payments ing capital or the acquisition of materials,
The Administrator shall not require the supplies, or equipment;
repayment of principal or interest on a loan (II) to make grants to eligible inter-
made to an eligible intermediary under the mediaries that, together with non-Federal
Page 843 TITLE 15—COMMERCE AND TRADE § 636
matching funds, will enable such inter- lished, or growing small business concerns
mediaries to provide intensive marketing, and providing, as an integral part of its
management, and technical assistance to microloan program, intensive marketing,
microloan borrowers; management, and technical assistance to its
(III) to make grants to eligible nonprofit borrowers.
entities that, together with non-Federal (3) Loans to intermediaries
matching funds, will enable such entities (A) Intermediary applications
to provide intensive marketing, manage-
(i) In general
ment, and technical assistance to assist
low-income entrepreneurs and other low- As part of its application for a loan, each
income individuals obtain private sector intermediary shall submit a description to
financing for their businesses, with or the Administration of—
without loan guarantees; and (I) the type of businesses to be as-
(IV) to report to the Committees on sisted;
Small Business of the Senate and the (II) the size and range of loans to be
House of Representatives on the effective- made;
(III) the geographic area to be served
ness of the microloan program and the ad-
and its economic, poverty, and unem-
visability and feasibility of implementing
ployment characteristics;
such a program nationwide; and
(IV) the status of small business con-
(iv) to establish a welfare-to-work cerns in the area to be served and an
microloan initiative, which shall be adminis- analysis of their credit and technical as-
tered by the Administration, in order to test sistance needs;
the feasibility of supplementing the tech- (V) any marketing, management, and
nical assistance grants provided under technical assistance to be provided in
clauses (ii) and (iii) of subparagraph (B) to connection with a loan made under this
individuals who are receiving assistance subsection;
under the State program funded under part (VI) the local economic credit mar-
A of title IV of the Social Security Act (42 kets, including the costs associated with
U.S.C. 601 et seq.), or under any comparable obtaining credit locally;
State funded means tested program of as- (VII) the qualifications of the appli-
sistance for low-income individuals, in order cant to carry out the purpose of this sub-
to adequately assist those individuals in— section; and
(I) establishing small businesses; and (VIII) any plan to involve other tech-
(II) eliminating their dependence on that nical assistance providers (such as coun-
assistance. selors from the Service Corps of Retired
(B) Establishment Executives or small business develop-
ment centers) or private sector lenders
There is established a microloan program,
in assisting selected business concerns.
under which the Administration may—
(i) make direct loans to eligible inter- (ii) Selection of intermediaries
mediaries, as provided under paragraph (3), In selecting intermediaries to partici-
for the purpose of making short-term, fixed pate in the program established under this
interest rate microloans to startup, newly subsection, the Administration shall give
established, and growing small business con- priority to those applicants that provide
cerns under paragraph (6); loans in amounts averaging not more than
(ii) in conjunction with such loans and $10,000.
subject to the requirements of paragraph (4), (B) Intermediary contribution
make grants to such intermediaries for the As a condition of any loan made to an
purpose of providing intensive marketing, intermediary under subparagraph (B)(i) of
management, and technical assistance to paragraph (1), the Administrator shall re-
small business concerns that are borrowers quire the intermediary to contribute not
under this subsection; and less than 15 percent of the loan amount in
(iii) subject to the requirements of para-
cash from non-Federal sources.
graph (5), make grants to nonprofit entities
for the purpose of providing marketing, (C) Loan limits
management, and technical assistance to Notwithstanding subsection (a)(3), no loan
low-income individuals seeking to start or shall be made under this subsection if the
enlarge their own businesses, if such assist- total amount outstanding and committed to
ance includes working with the grant recipi- one intermediary (excluding outstanding
ent to secure loans in amounts not to exceed grants) from the business loan and invest-
$50,000 from private sector lending institu- ment fund established by this chapter would,
tions, with or without a loan guarantee from as a result of such loan, exceed $750,000 in
the nonprofit entity. the first year of such intermediary’s partici-
(2) Eligibility for participation pation in the program, $7,000,000 (in the ag-
gregate) in the remaining years of the
An intermediary shall be eligible to receive
intermediary’s participation in the program,
loans and grants under subparagraphs (B)(i)
and $3,000,000 in any of those remaining
and (B)(ii) of paragraph (1) if it—
years.
(A) meets the definition in paragraph (10); 2
and (D)(i) In general
(B) has at least 1 year of experience mak- The Administrator shall, by regulation, re-
ing microloans to startup, newly estab- quire each intermediary to establish a loan
§ 636 TITLE 15—COMMERCE AND TRADE Page 844
loss reserve fund, and to maintain such re- (ii) Applicable interest rates
serve fund until all obligations owed to the Except as provided in clause (iii), loans
Administration under this subsection are re- made by the Administration under this
paid. subsection to an intermediary shall bear
(ii) Level of loan loss reserve fund an interest rate equal to 1.25 percentage
(I) In general points below the rate determined by the
Subject to subclause (III), the Adminis- Secretary of the Treasury for obligations
trator shall require the loan loss reserve of the United States with a period of matu-
fund of an intermediary to be maintained rity of 5 years, adjusted to the nearest one-
at a level equal to 15 percent of the out- eighth of 1 percent.
standing balance of the notes receivable (iii) Rates applicable to certain small loans
owed to the intermediary. Loans made by the Administration to an
(II) Review of loan loss reserve intermediary that makes loans to small
After the initial 5 years of an business concerns and entrepreneurs aver-
intermediary’s participation in the pro- aging not more than $7,500, shall bear an
gram authorized by this subsection, the interest rate that is 2 percentage points
Administrator shall, at the request of the below the rate determined by the Sec-
intermediary, conduct a review of the an- retary of the Treasury for obligations of
nual loss rate of the intermediary. Any the United States with a period of matu-
intermediary in operation under this sub- rity of 5 years, adjusted to the nearest one-
section prior to October 1, 1994, that re- eighth of 1 percent.
quests a reduction in its loan loss reserve (iv) Rates applicable to multiple sites or of-
shall be reviewed based on the most recent fices
5-year period preceding the request.
The interest rate prescribed in clause (ii)
(III) Reduction of loan loss reserve
or (iii) shall apply to each separate loan-
Subject to the requirements of clause making site or office of 1 intermediary
IV,19 the Administrator may reduce the only if such site or office meets the re-
annual loan loss reserve requirement of an quirements of that clause.
intermediary to reflect the actual average
(v) Rate basis
loan loss rate for the intermediary during
the preceding 5-year period, except that in The applicable rate of interest under this
no case shall the loan loss reserve be re- paragraph shall—
duced to less than 10 percent of the out- (I) be applied retroactively for the first
standing balance of the notes receivable year of an intermediary’s participation
owed to the intermediary. in the program, based upon the actual
(IV) Requirements lending practices of the intermediary as
determined by the Administration prior
The Administrator may reduce the an-
to the end of such year; and
nual loan loss reserve requirement of an (II) be based in the second and subse-
intermediary only if the intermediary
quent years of an intermediary’s partici-
demonstrates to the satisfaction of the Ad-
pation in the program, upon the actual
ministrator that—
(aa) the average annual loss rate for lending practices of the intermediary
the intermediary during the preceding 5- during the term of the intermediary’s
year period is less than 15 percent; and participation in the program.
(bb) that 20 no other factors exist that (vii) 21 Covered intermediaries
may impair the ability of the inter- The interest rates prescribed in this sub-
mediary to repay all obligations owed to paragraph shall apply to all loans made to
the Administration under this sub- intermediaries under this subsection on or
section. after October 28, 1991.
(E) Unavailability of comparable credit (G) Delayed payments
An intermediary may make a loan under The Administration shall not require re-
this subsection of more than $20,000 to a payment of interest or principal of a loan
small business concern only if such small made to an intermediary under this sub-
business concern demonstrates that it is un- section during the first year of the loan.
able to obtain credit elsewhere at com-
parable interest rates and that it has good (H) Fees; collateral
prospects for success. In no case shall an Except as provided in subparagraphs (B)
intermediary make a loan under this sub- and (D), the Administration shall not charge
section of more than $50,000, or have out- any fees or require collateral other than an
standing or committed to any 1 borrower assignment of the notes receivable of the
more than $50,000. microloans with respect to any loan made to
(F) Loan duration; interest rates an intermediary under this subsection.
(i) Loan duration (4) Marketing, management and technical as-
Loans made by the Administration under sistance grants to intermediaries
this subsection shall be for a term of 10 Grants made in accordance with subpara-
years. graph (B)(ii) of paragraph (1) shall be subject
to the following requirements:
19 So in original. Probably should be ‘‘subclause (IV),’’.
20 So in original. The word ‘‘that’’ probably should not appear. 21 So in original. Probably should be ‘‘(vi)’’.
Page 845 TITLE 15—COMMERCE AND TRADE § 636
(A) Grant amounts (E) Assistance to certain small business con-
Except as otherwise provided in subpara- cerns
graphs (C) and (G) and subject to subpara- (i) In general
graph (B), each intermediary that receives a Each intermediary may expend an
loan under subparagraph (B)(i) of paragraph amount not to exceed 50 percent of the
(1) shall be eligible to receive a grant to pro- grant funds received under paragraph
vide marketing, management, and technical (1)(B)(ii) to provide information and tech-
assistance to small business concerns that nical assistance to small business concerns
are borrowers under this subsection. Except that are prospective borrowers under this
as provided in subparagraphs (C) and (G), subsection.
each intermediary meeting the requirements (ii) Technical assistance
of subparagraph (B) may receive a grant of An intermediary may expend not more
not more than 25 percent of the total out- than 50 percent of the funds received under
standing balance of loans made to it under paragraph (1)(B)(ii) to enter into third
this subsection. party contracts for the provision of tech-
nical assistance.
(B) Contribution
(F) Supplemental grant
As a condition of a grant made under sub- (i) In general
paragraph (A), the Administrator shall re-
quire the intermediary to contribute an The Administration may accept any
amount equal to 25 percent of the amount of funds transferred to the Administration
the grant, obtained solely from non-Federal from other departments or agencies of the
sources. In addition to cash or other direct Federal Government to make grants in ac-
funding, the contribution may include indi- cordance with this subparagraph and sec-
rect costs or in-kind contributions paid for tion 202(b) of the Small Business Reauthor-
ization Act of 1997 to participating inter-
under non-Federal programs.
mediaries and technical assistance pro-
(C) Additional technical assistance grants for viders under paragraph (5), for use in ac-
making certain loans cordance with clause (iii) to provide addi-
tional technical assistance and related
(i) In general services to recipients of assistance under a
State program described in paragraph
In addition to grants made under sub-
(1)(A)(iv) at the time they initially apply
paragraph (A) or (G), each intermediary
for assistance under this subparagraph.
shall be eligible to receive a grant equal to
5 percent of the total outstanding balance (ii) Eligible recipients; grant amounts
of loans made to the intermediary under In making grants under this subpara-
this subsection if— graph, the Administration may select,
(I) the intermediary provides not less from among participating intermediaries
than 25 percent of its loans to small busi- and technical assistance providers de-
ness concerns located in or owned by 1 or scribed in clause (i), not more than 20
more residents of an economically dis- grantees in fiscal year 1998, not more than
tressed area; or 25 grantees in fiscal year 1999, and not
(II) the intermediary has a portfolio of more than 30 grantees in fiscal year 2000,
loans made under this subsection— each of whom may receive a grant under
(aa) that averages not more than this subparagraph in an amount not to ex-
$10,000 during the period of the ceed $200,000 per year.
intermediary’s participation in the (iii) Use of grant amounts
program; or Grants under this subparagraph—
(bb) of which not less than 25 percent (I) are in addition to other grants pro-
is serving rural areas during the period vided under this subsection and shall not
of the intermediary’s participation in require the contribution of matching
the program. amounts as a condition of eligibility;
and
(ii) Purposes (II) may be used by a grantee—
A grant awarded under clause (i) may be (aa) to pay or reimburse a portion of
used to provide marketing, management, child care and transportation costs of
and technical assistance to small business recipients of assistance described in
concerns that are borrowers under this clause (i), to the extent such costs are
subsection. not otherwise paid by State block
grants under the Child Care Develop-
(iii) Contribution exception ment Block Grant Act of 1990 (42 U.S.C.
The contribution requirements in sub- 9858 2 et seq.) or under part A of title IV
paragraph (B) do not apply to grants made of the Social Security Act (42 U.S.C.
under this subparagraph. 601 et seq.); and
(bb) for marketing, management, and
(D) Eligibility for multiple sites or offices technical assistance to recipients of
The eligibility for a grant described in sub- assistance described in clause (i).
paragraph (A),9 or (C) shall be determined (iv) Memorandum of Understanding
separately for each loan-making site or of- Prior to accepting any transfer of funds
fice of 1 intermediary. under clause (i) from a department or
§ 636 TITLE 15—COMMERCE AND TRADE Page 846
agency of the Federal Government, the (C) Interest limit
Administration shall enter into a Memo- Notwithstanding any provision of the laws
randum of Understanding with the depart- of any State or the constitution of any State
ment or agency, which shall— pertaining to the rate or amount of interest
(I) specify the terms and conditions of that may be charged, taken, received, or re-
the grants under this subparagraph; and served on a loan, the maximum rate of inter-
(II) provide for appropriate monitoring est to be charged on a microloan funded
of expenditures by each grantee under under this subsection shall not exceed the
this subparagraph and each recipient of rate of interest applicable to a loan made to
assistance described in clause (i) who re- an intermediary by the Administration—
ceives assistance from a grantee under (i) in the case of a loan of more than
this subparagraph, in order to ensure $7,500 made by the intermediary to a small
compliance with this subparagraph by business concern or entrepreneur by more
those grantees and recipients of assist- than 7.75 percentage points; and
ance. (ii) in the case of a loan of not more than
(G) Grant amounts based on appropriations $7,500 made by the intermediary to a small
In any fiscal year in which the amount ap- business concern or entrepreneur by more
propriated to make grants under subpara- than 8.5 percentage points.
graph (A) is sufficient to provide to each (D) Review restriction
intermediary that receives a loan under The Administration shall not review indi-
paragraph (1)(B)(i) a grant of not less than 25 vidual microloans made by intermediaries
percent of the total outstanding balance of prior to approval.
loans made to the intermediary under this
subsection, the Administration shall make a (E) Establishment of child care or transpor-
grant under subparagraph (A) to each inter- tation businesses
mediary of not less than 25 percent and not In addition to other eligible small busi-
more than 30 percent of that total out- nesses concerns, borrowers under any pro-
standing balance for the intermediary. gram under this subsection may include in-
(5) Private sector borrowing technical assist- dividuals who will use the loan proceeds to
ance grants establish for-profit or nonprofit child care
establishments or businesses providing for-
Grants made in accordance with subpara-
profit transportation services.
graph (B)(iii) of paragraph (1) shall be subject
to the following requirements: (7) Program funding for microloans
(A) Grant amounts (A) Number of participants
Subject to the requirements of subpara- Under the program authorized by this sub-
graph (B), the Administration may make not section, the Administration may fund, on a
more than 55 grants annually, each in competitive basis, not more than 300 inter-
amounts not to exceed $200,000 for the pur- mediaries.
poses specified in subparagraph (B)(iii) of (B) Allocation
paragraph (1).
(i) Minimum allocation
(B) Contribution
Subject to the availability of appropria-
As a condition of any grant made under tions, of the total amount of new loan
subparagraph (A), the Administration shall funds made available for award under this
require the grant recipient to contribute an subsection in each fiscal year, the Admin-
amount equal to 20 percent of the amount of istration shall make available for award in
the grant, obtained solely from non-Federal each State (including the District of Co-
sources. In addition to cash or other direct lumbia, the Commonwealth of Puerto
funding, the contribution may include indi- Rico, the United States Virgin Islands,
rect costs or in-kind contributions paid for Guam, and American Samoa) an amount
under non-Federal programs. equal to the sum of—
(6) Loans to small business concerns from eligi- (I) the lesser of—
ble intermediaries (aa) $800,000; or
(A) In general (bb) 1⁄55 of the total amount of new
loan funds made available for award
An eligible intermediary shall make short-
under this subsection for that fiscal
term, fixed rate loans to startup, newly es-
year; and
tablished, and growing small business con-
cerns from the funds made available to it (II) any additional amount, as deter-
under subparagraph (B)(i) of paragraph (1) mined by the Administration.
for working capital and the acquisition of (ii) Redistribution
materials, supplies, furniture, fixtures, and
If, at the beginning of the third quarter
equipment.
of a fiscal year, the Administration deter-
(B) Portfolio requirement mines that any portion of the amount
To the extent practicable, each inter- made available to carry out this sub-
mediary that operates a microloan program section is unlikely to be made available
under this subsection shall maintain a under clause (i) during that fiscal year, the
microloan portfolio with an average loan Administration may make that portion
size of not more than $15,000. available for award in any one or more
Page 847 TITLE 15—COMMERCE AND TRADE § 636
States (including the District of Columbia, (C) a description of the matching contribu-
the Commonwealth of Puerto Rico, the tions of each intermediary;
United States Virgin Islands, Guam, and (D) the numbers and amounts of
American Samoa) without regard to clause microloans made by the intermediaries to
(i). small business concern borrowers;
(8) Equitable distribution of intermediaries (E) the repayment history of each inter-
mediary;
In approving microloan program applicants
(F) a description of the loan portfolio of
and providing funding to intermediaries under
each intermediary including the extent to
this subsection, the Administration shall se-
which it provides microloans to small busi-
lect and provide funding to such inter-
ness concerns in rural areas; and
mediaries as will ensure appropriate avail-
(G) any recommendations for legislative
ability of loans for small businesses in all in-
changes that would improve program oper-
dustries located throughout each State, par-
ations.
ticularly those located in urban and in rural
areas. (11) Definitions
(9) Grants for management, marketing, tech- For purposes of this subsection—
nical assistance, and related services (A) the term ‘‘intermediary’’ means—
(A) In general (i) a private, nonprofit entity;
(ii) a private, nonprofit community de-
The Administration may procure technical velopment corporation;
assistance for intermediaries participating (iii) a consortium of private, nonprofit
in the Microloan Program to ensure that organizations or nonprofit community de-
such intermediaries have the knowledge, velopment corporations;
skills, and understanding of microlending (iv) a quasi-governmental economic de-
practices necessary to operate successful velopment entity (such as a planning and
microloan programs. development district), other than a State,
(B) Assistance amount county, municipal government, or any
The Administration shall transfer 7 per- agency thereof, if—
cent of its annual appropriation for loans (I) no application is received from an
and loan guarantees under this subsection to eligible nonprofit organization; or
the Administration’s Salaries and Expense (II) the Administration determines
Account for the specific purpose of providing that the needs of a region or geographic
1 or more technical assistance grants to ex- area are not adequately served by an ex-
perienced microlending organizations and isting, eligible nonprofit organization
national and regional nonprofit organiza- that has submitted an application; or
tions that have demonstrated experience in (v) an agency of or nonprofit entity es-
providing training support for microenter- tablished by a Native American Tribal
prise development and financing.22 to Government,
achieve the purpose set forth in subpara-
that seeks to borrow or has borrowed funds
graph (A).
from the Administration to make
(C) Welfare-to-work microloan initiative microloans to small business concerns under
Of amounts made available to carry out this subsection;
the welfare-to-work microloan initiative (B) the term ‘‘microloan’’ means a short-
under paragraph (1)(A)(iv) in any fiscal year, term, fixed rate loan of not more than
the Administration may use not more than 5 $50,000, made by an intermediary to a start-
percent to provide technical assistance, ei- up, newly established, or growing small busi-
ther directly or through contractors, to wel- ness concern;
fare-to-work microloan initiative grantees, (C) the term ‘‘rural area’’ means any polit-
to ensure that, as grantees, they have the ical subdivision or unincorporated area—
knowledge, skills, and understanding of (i) in a nonmetropolitan county (as de-
microlending and welfare-to-work transi- fined by the Secretary of Agriculture) or
tion, and other related issues, to operate a its equivalent thereof; or
successful welfare-to-work microloan initia- (ii) in a metropolitan county or its
tive. equivalent that has a resident population
(10) Report to Congress of less than 20,000 if the Small Business
Administration has determined such polit-
On November 1, 1995, the Administration
ical subdivision or area to be rural.23
shall submit to the Committees on Small
Business of the Senate and the House of Rep- (D) the term ‘‘economically distressed
resentatives a report, including the Adminis- area’’, as used in paragraph (4), means a
tration’s evaluation of the effectiveness of the county or equivalent division of local gov-
first 31⁄2 years of the microloan program and ernment of a State in which the small busi-
the following: ness concern is located, in which, according
(A) the numbers and locations of the inter- to the most recent data available from the
mediaries funded to conduct microloan pro- Bureau of the Census, Department of Com-
grams; merce, not less than 40 percent of residents
(B) the amounts of each loan and each have an annual income that is at or below
grant to intermediaries; the poverty level.
22 So in original. The period probably should not appear. 23 So in original. The period probably should be ‘‘; and’’.
§ 636 TITLE 15—COMMERCE AND TRADE Page 848
(12) Deferred participation loan pilot under subsection (a) or (b) before being or-
In lieu of making direct loans to inter- dered to active service; or
mediaries as authorized in paragraph (1)(B), (ii) a small business concern that re-
during fiscal years 1998 through 2000, the Ad- ceived a direct loan under subsection (a) or
ministration may, on a pilot program basis, (b) before an eligible reservist, who is an
participate on a deferred basis of not less than essential employee, was ordered to active
90 percent and not more than 100 percent on service.
loans made to intermediaries by a for-profit or (2) Deferral of direct loans
nonprofit entity or by alliances of such enti- (A) In general
ties, subject to the following conditions: The Administration shall, upon written re-
(A) Number of loans quest, defer repayment of principal and in-
In carrying out this paragraph, the Admin- terest due on a direct loan made under sub-
istration shall not participate in providing section (a) or (b), if such loan was incurred
financing on a deferred basis to more than 10 by a qualified borrower.
intermediaries in urban areas or more than (B) Period of deferral
10 intermediaries in rural areas. The period of deferral for repayment under
(B) Term of loans this paragraph shall begin on the date on
which the eligible reservist is ordered to ac-
The term of each loan shall be 10 years.
tive service and shall terminate on the date
During the first year of the loan, the inter-
that is 180 days after the date such eligible
mediary shall not be required to repay any
reservist is discharged or released from ac-
interest or principal. During the second
tive service.
through fifth years of the loan, the inter-
mediary shall be required to pay interest (C) Interest rate reduction during deferral
only. During the sixth through tenth years Notwithstanding any other provision of
of the loan, the intermediary shall be re- law, during the period of deferral described
quired to make interest payments and fully in subparagraph (B), the Administration
amortize the principal. may, in its discretion, reduce the interest
(C) Interest rate rate on any loan qualifying for a deferral
under this paragraph.
The interest rate on each loan shall be the
(3) Deferral of loan guarantees and other
rate specified by paragraph (3)(F) for direct
financings
loans.
The Administration shall—
(13) Evaluation of welfare-to-work microloan
(A) encourage intermediaries participating
initiative
in the program under subsection (m) to defer
On January 31, 1999, and annually thereafter, repayment of a loan made with proceeds
the Administration shall submit to the Com- made available under that subsection, if
mittees on Small Business of the House of such loan was incurred by a small business
Representatives and the Senate a report on concern that is eligible to apply for assist-
any monies distributed pursuant to paragraph ance under subsection (b)(3); and
(4)(F). (B) not later than 30 days after August 17,
(n) Repayment deferred for active service reserv- 1999, establish guidelines to—
ists (i) encourage lenders and other inter-
mediaries to defer repayment of, or pro-
(1) Definitions
vide other relief relating to, loan guaran-
In this subsection: tees under subsection (a) and financings
(A) Active service under section 697a of this title that were
incurred by small business concerns that
The term ‘‘active service’’ has the mean-
are eligible to apply for assistance under
ing given that term in section 101(d)(3) of
subsection (b)(3), and loan guarantees pro-
title 10.
vided under subsection (m) if the inter-
(B) Eligible reservist mediary provides relief to a small business
The term ‘‘eligible reservist’’ means a concern under this paragraph; and
member of a reserve component of the (ii) implement a program to provide for
Armed Forces ordered to perform active the deferral of repayment or other relief to
service for a period of more than 30 consecu- any intermediary providing relief to a
tive days. small business borrower under this para-
graph.
(C) Essential employee
The term ‘‘essential employee’’ means an (Pub. L. 85–536, § 2[7], July 18, 1958, 72 Stat. 387;
individual who is employed by a small busi- Pub. L. 85–699, title VI, § 602(c), Aug. 21, 1958, 72
ness concern and whose managerial or tech- Stat. 698; Pub. L. 86–367, § 2, Sept. 22, 1959, 73
nical expertise is critical to the successful Stat. 647; Pub. L. 87–70, title III, § 305[a], June 30,
day-to-day operations of that small business 1961, 75 Stat. 167; Pub. L. 87–305, § 9, Sept. 26, 1961,
concern. 75 Stat. 668; Pub. L. 88–264, § 1, Feb. 5, 1964, 78
Stat. 7; Pub. L. 88–560, title III, § 319, Sept. 2,
(D) Qualified borrower 1964, 78 Stat. 794; Pub. L. 89–59, § 1(a), (b), June
The term ‘‘qualified borrower’’ means— 30, 1965, 79 Stat. 206; Pub. L. 89–409, § 3(a), May 2,
(i) an individual who is an eligible re- 1966, 80 Stat. 133; Pub. L. 89–769, § 7(b), Nov. 6,
servist and who received a direct loan 1966, 80 Stat. 1319; Pub. L. 90–104, title I, §§ 103,
Page 849 TITLE 15—COMMERCE AND TRADE § 636
104, Oct. 11, 1967, 81 Stat. 268; Pub. L. 90–448, title §§ 202–208(a), 210, title VIII, § 802(a)], Dec. 21, 2000,
XI, § 1106(a), Aug. 1, 1968, 82 Stat. 567; Pub. L. 114 Stat. 2763, 2763A–681 to 2763A–684, 2763A–702;
90–495, § 31, Aug. 23, 1968, 82 Stat. 835; Pub. L. Pub. L. 107–100, § 6(a), Dec. 21, 2001, 115 Stat. 970;
91–173, title V, § 504(a), (b), Dec. 30, 1969, 83 Stat. Pub. L. 108–447, div. K, title I, §§ 101(a), 102,
802; Pub. L. 91–596, § 28(a), (b), Dec. 29, 1970, 84 103(a), 107(a), (b), Dec. 8, 2004, 118 Stat. 3442–3446;
Stat. 1618; Pub. L. 91–597, § 25(a), (b), Dec. 29, 1970, Pub. L. 109–163, div. A, title VIII, § 845(a)(2), (c),
84 Stat. 1633, 1634; Pub. L. 92–385, §§ 1(a), 2(a), Jan. 6, 2006, 119 Stat. 3390, 3391; Pub. L. 110–140,
Aug. 16, 1972, 86 Stat. 554, 555; Pub. L. 92–500, title XII, §§ 1201, 1202, Dec. 19, 2007, 121 Stat. 1764,
§ 8(a), Oct. 18, 1972, 86 Stat. 898; Pub. L. 92–595, 1765; Pub. L. 110–186, title II, §§ 201(a), 203, 204,
§ 3(b), Oct. 27, 1972, 86 Stat. 1316; Pub. L. 93–237, 208, Feb. 14, 2008, 122 Stat. 627, 629, 631; Pub. L.
§§ 2(a), (b), 3(a), 5, 6, Jan. 2, 1974, 87 Stat. 1023, 110–234, title XII, §§ 12061, 12063(a), (c)(2), 12065,
1024; Pub. L. 93–386, §§ 2(a)(4), 3(2), 8, 9, 12, Aug. 12066(a), 12068(a), (b)(2), 12070, 12074(a),
23, 1974, 88 Stat. 742, 746, 748, 749; Pub. L. 94–305, 12077–12078(b)(1), (c), 12081–12083(a), May 22, 2008,
title I, §§ 108(b), 109, 111, 112(c), (d), 114, June 4, 122 Stat. 1406, 1407, 1409–1411, 1414–1418; Pub. L.
1976, 90 Stat. 666, 667; Pub. L. 95–89, title I, 110–246, § 4(a), title XII, §§ 12061, 12063(a), (c)(2),
§ 101(d), (e), title III, §§ 301, 302, title IV, §§ 402–405, 12065, 12066(a), 12068(a), (b)(2), 12070, 12074(a),
Aug. 4, 1977, 91 Stat. 553, 558–560; Pub. L. 95–315, 12077–12078(b)(1), (c), 12081–12083(a), June 18, 2008,
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99–272, title XVIII, §§ 18006(a)(1), (2), 18007, 18013, L. 114–92, div. A, title VIII, § 865(a)(2), Nov. 25,
Apr. 7, 1986, 100 Stat. 366, 370; Pub. L. 99–514, § 2, 2015, 129 Stat. 928; Pub. L. 115–141, div. E, title V,
Oct. 22, 1986, 100 Stat. 2095; Pub. L. 100–418, title § 532, Mar. 23, 2018, 132 Stat. 581; Pub. L. 115–189,
VIII, §§ 8005, 8007(a), Aug. 23, 1988, 102 Stat. 1557, § 4(a)(2), June 21, 2018, 132 Stat. 1497; Pub. L.
1559; Pub. L. 100–533, title III, § 302(a), Oct. 25, 115–232, div. A, title VIII, §§ 853(b), 861(c),
1988, 102 Stat. 2693; Pub. L. 100–590, title I, 862(b)(1), (f), Aug. 13, 2018, 132 Stat. 1885, 1896,
§§ 102(a), 103, 111(c), 119(a), 120–122, Nov. 3, 1988, 1897, 1900; Pub. L. 115–370, § 2, Dec. 21, 2018, 132
102 Stat. 2992, 2995, 2999, 3000; Pub. L. 100–656, Stat. 5105; Pub. L. 116–92, div. A, title VIII,
title II, §§ 201(a), 202, 203, 205, 206, 208, title III, § 877(a), Dec. 20, 2019, 133 Stat. 1529; Pub. L.
§§ 301–303(a), title IV, § 408, title V, § 505(h), Nov. 116–136, div. A, title I, §§ 1102(a), (c), (d), 1110(f),
15, 1988, 102 Stat. 3856, 3858, 3859, 3861, 3862,
Mar. 27, 2020, 134 Stat. 286, 294, 308; Pub. L.
3865–3868, 3877, 3887; Pub. L. 100–707, title I,
116–139, div. A, § 101(d), Apr. 24, 2020, 134 Stat. 621;
§ 109(f), Nov. 23, 1988, 102 Stat. 4708; Pub. L.
Pub. L. 116–142, §§ 2(a), 3(a), (c), June 5, 2020, 134
101–37, §§ 4–6(a), 7(a), 8–10(b), June 15, 1989, 103
Stat. 641, 642; Pub. L. 116–260, div. N, title III,
Stat. 70–73; Pub. L. 101–162, title V, (1), (2), Nov.
§§ 304(a), (b)(1)(C)(ii), 308(a), 310(a)(1), (b), 311(a),
21, 1989, 103 Stat. 1024, 1025; Pub. L. 101–574, title
313(a), 315(a), 316–319, 326, 329(a), 334, 335(a),
II, §§ 202, 204(a), 206, 242, 245, title III, § 307, Nov.
336(a), 337(a), 338(a), 339(b), 340(a), (b)(1),
15, 1990, 104 Stat. 2818–2820, 2827, 2830; Pub. L.
341–343(a), 344, Dec. 27, 2020, 134 Stat. 1993, 1994,
102–140, title VI, § 609(b), (h), Oct. 28, 1991, 105
2000, 2001, 2008, 2011–2015, 2036, 2037, 2041, 2042,
Stat. 825, 827; Pub. L. 102–191, § 4, Dec. 5, 1991, 105
2047, 2048, 2049–2051; Pub. L. 116–283, div. A, title
Stat. 1591; Pub. L. 102–366, title I, §§ 104, 113(a),
VIII, § 866(b), Jan. 1, 2021, 134 Stat. 3785; Pub. L.
title II, § 211, Sept. 4, 1992, 106 Stat. 988, 989, 997;
117–2, title V, § 5001(a), (b), (c)(2), Mar. 11, 2021,
Pub. L. 102–564, title III, § 307(b), (c), Oct. 28, 1992,
135 Stat. 81–84; Pub. L. 117–6, § 2(a), Mar. 30, 2021,
106 Stat. 4263, 4264; Pub. L. 103–81, §§ 4, 5(a), 8,
135 Stat. 250; Pub. L. 117–165, § 2(a), Aug. 5, 2022,
Aug. 13, 1993, 107 Stat. 781, 782; Pub. L. 103–403,
136 Stat. 1363; Pub. L. 117–166, § 2, Aug. 5, 2022, 136
title II, §§ 201, 202, 204–208(b), 209–211, title VI,
Stat. 1365; Pub. L. 117–249, § 2(a), Dec. 20, 2022, 136
§§ 603–605(a), Oct. 22, 1994, 108 Stat. 4180–4183, 4202,
Stat. 2350.)
4203; Pub. L. 104–36, §§ 2–4(a), 5, Oct. 12, 1995, 109
Stat. 295–297; Pub. L. 104–208, div. D, title I, Editorial Notes
§§ 103(a)–(d), (f), 105, 107, 111, Sept. 30, 1996, 110
Stat. 3009–726, 3009–727, 3009–731 to 3009–733; Pub. REFERENCES IN TEXT
L. 105–135, title II, §§ 201, 202(a), 231, title VII, Subsections (b) and (c) of section 631 of this title, re-
§ 706, Dec. 2, 1997, 111 Stat. 2597, 2598, 2606, 2637; ferred to in subsecs. (a)(11) and (i)(1), were redesignated
Pub. L. 105–277, div. A, § 101(f) [title VIII, subsections (c) and (d), respectively, and a new sub-
§ 405(d)(10), (f)(9)], Oct. 21, 1998, 112 Stat. 2681–337, section (b) was added by Pub. L. 100–418, title VIII,
2681–420, 2681–430; Pub. L. 106–8, § 3(a), (c), Apr. 2, § 8002, Aug. 23, 1988, 102 Stat. 1553.
The Small Business Investment Act of 1958, referred
1999, 113 Stat. 13, 16; Pub. L. 106–22, §§ 2, 3, Apr. to in subsecs. (a)(13), (36)(A)(xi)(III) and (j)(10)(A)(vi),
27, 1999, 113 Stat. 36, 37; Pub. L. 106–24, § 1(a), Apr. (13)(D)(i), is Pub. L. 85–699, Aug. 21, 1958, 72 Stat. 689.
27, 1999, 113 Stat. 39; Pub. L. 106–50, title IV, Title IV, part B of title IV, and title V of the Act are
§§ 401(b), 402(a), (b), 403, 404, Aug. 17, 1999, 113 classified generally to subchapter IV–A (§ 692 et seq.),
Stat. 244–246; Pub. L. 106–554, § 1(a)(9) [title II, part B (§ 694a et seq.) of subchapter IV–A, and sub-
§ 636 TITLE 15—COMMERCE AND TRADE Page 850
chapter V (§ 695 et seq.), respectively, of chapter 14B of to in subsec. (c)(10), is the date of enactment of subtitle
this title. For complete classification of this Act to the B (§§ 12051–12091) of title XII of Pub. L. 110–246, which
Code, see Short Title note set out under section 661 of was approved June 18, 2008.
this title and Tables. Reorganization Plan Numbered 2 of 1954, referred to
The Trade Act of 1974, referred to in subsec. (a)(16)(E), in subsec. (d)(1), is set out in the Appendix to Title 5,
is Pub. L. 93–618, Jan. 3, 1975, 88 Stat. 1978. Chapter 3 of Government Organization and Employees.
title II of the Act is classified generally to part 3 (§ 2341 Reorganization Plan Numbered 1 of 1957, referred to
et seq.) of subchapter II of chapter 12 of Title 19, Cus- in subsec. (d)(1), is set out in the Appendix to Title 5.
toms Duties. For complete classification of this Act to The Economic Opportunity Act of 1964, referred to in
the Code, see section 2101 of Title 19 and Tables. subsec. (i)(3), is Pub. L. 88–452, Aug. 20, 1964, 78 Stat. 508.
Section 7002(b) of the Families First Coronavirus Re- Title III of the Act was classified generally to sub-
sponse Act, referred to in subsec. (a)(36)(A)(v), is sec- chapter III (§ 2841 et seq.) of chapter 34 of Title 42, The
tion 7002(b) of Pub. L. 116–127, which is set out in a note Public Health and Welfare, prior to its repeal by Pub.
under section 1401 of Title 26, Internal Revenue Code. L. 97–35, title VI, § 683(a), Aug. 13, 1981, 95 Stat. 519. For
Section 7001 of the Families First Coronavirus Re- complete classification of this Act to the Code, see Ta-
sponse Act, referred to in subsec. (a)(36)(A)(viii)(II)(dd), bles.
is section 7001 of Pub. L. 116–127, which is set out as a The Public Works and Economic Development Act of
note under section 3111 of Title 26, Internal Revenue 1965, referred to in subsec. (i)(5)(D), is Pub. L. 89–136,
Code. Aug. 26, 1965, 79 Stat. 552, which is classified generally
Section 7003 of the Families First Coronavirus Re- to chapter 38 (§ 3121 et seq.) of Title 42. For complete
sponse Act, referred to in subsec. (a)(36)(A)(viii)(II)(ee), classification of this Act to the Code, see Short Title
is section 7003 of Pub. L. 116–127, which is set out as a note set out under section 3121 of Title 42 and Tables.
note under section 3111 of Title 26, Internal Revenue Section 602(b) of Public Law 100–656, the ‘‘Business
Code. Opportunity Development Reform Act of 1988’’, referred
Section 308 of the Financial Institutions Reform, Re- to in subsec. (j)(10)(J)(ii)(III), is set out as a note under
covery, and Enforcement Act of 1989, referred to in sub- section 637 of this title.
sec. (a)(36)(A)(xi)(II), is section 308 of Pub. L. 101–73, Section 35(a) of title 41, referred to in subsec.
which is set out as a note under section 1463 of Title 12, (j)(13)(C), was struck out and former section 35(b) of
Banks and Banking. title 41 redesignated section 35(a) by Pub. L. 103–355,
The Communications Act of 1934, referred to in sub- title VII, § 7201(1), Oct. 13, 1994, 108 Stat. 3378. Section 35
sec. (a)(36)(D)(iii)(II)(aa), (IV)(aa), is act June 19, 1934, of title 41 was subsequently repealed and restated as
ch. 652, 48 Stat. 1064. Title III of the Act is classified sections 6501(1) and 6502 of Title 41, Public Contracts,
generally to subchapter III (§ 301 et seq.) of chapter 5 of by Pub. L. 111–350, §§ 3, 7(b), Jan. 4, 2011, 124 Stat. 3677,
Title 47, Telecommunications. For complete classifica- 3855. For disposition of sections of former Title 41, see
tion of this Act to the Code, see section 609 of Title 47 Disposition Table preceding section 101 of Title 41.
and Tables. The Workforce Innovation and Opportunity Act, re-
The Federal Deposit Insurance Act, referred to in ferred to in subsec. (j)(13)(E), is Pub. L. 113–128, July 22,
subsec. (a)(36)(O)(ii), is act Sept. 21, 1950, ch. 967, § 2, 64 2014, 128 Stat. 1425. Title I of the Act is classified gen-
Stat. 873, which is classified generally to chapter 16 erally to subchapter I (§ 3111 et seq.) of chapter 32 of
(§ 1811 et seq.) of Title 12, Banks and Banking. For com- Title 29, Labor. For complete classification of this Act
plete classification of this Act to the Code, see Short to the Code, see Short Title note set out under section
Title note set out under section 1811 of Title 12 and Ta- 3101 of Title 29 and Tables.
bles. The Social Security Act, referred to in subsec.
Section 9009a of this title and such section 9009a, re- (m)(1)(A)(iv), (4)(F)(iii)(II)(aa), is act Aug. 14, 1935, ch.
ferred to in subsec. (a)(36)(U), (37)(A)(iv)(III)(ee), were 531, 49 Stat. 620. Part A of title IV of the Act is classi-
in the original ‘‘section 24 of the Economic Aid to fied generally to part A (§ 601 et seq.) of subchapter IV
Hard-Hit Small Businesses, Nonprofits, and Venues of chapter 7 of Title 42, The Public Health and Welfare.
Act’’ and ‘‘such section 24’’, respectively. The named For complete classification of this Act to the Code, see
Act was enacted as title III of div. N of Pub. L. 116–260, section 1305 of Title 42 and Tables.
and section 324 of such title III, which defines ‘‘eligible Paragraph (10), referred to in subsec. (m)(2)(A), was
person or entity’’ for purposes of that section, is classi- redesignated paragraph (11) by Pub. L. 102–366, title I,
fied to section 9009a of this title. § 113(a)(8), Sept. 4, 1992, 106 Stat. 992.
Section 2301 of the CARES Act, referred to in subsec. Section 202(b) of the Small Business Reauthorization
(a)(37)(J)(iii)(I)(aa), is section 2301 of Pub. L. 116–136, Act of 1997, referred to in subsec. (m)(4)(F)(i), is section
which is set out as a note under section 3111 of Title 26, 202(b) of Pub. L. 105–135, which is set out as a note
Internal Revenue Code. below.
Section 303 of the Taxpayer Certainty and Disaster The Child Care and Development Block Grant Act of
Relief Act of 2020, referred to in subsec. 1990, referred to in subsec. (m)(4)(F)(iii)(II)(aa), is sub-
(a)(37)(J)(iii)(I)(bb), is section 303 of of div. EE of Pub. chapter C (§ 658A et seq.) of chapter 8 of subtitle A of
L. 116–260, title III, Dec. 27, 2020, 134 Stat. 3075. Subsec. title VI of Pub. L. 97–35, as added by Pub. L. 101–508,
(a) of section 303 is not classified to the Code. Subsec. title V, § 5082(2), Nov. 5, 1990, 104 Stat. 1388–236, which is
(d) of section 303 amended provisions set out as notes classified generally to subchapter II–B (§ 9857 et seq.) of
under section 3111 of Title 26, Internal Revenue Code, chapter 105 of Title 42, The Public Health and Welfare.
and is otherwise not classified to the Code. For com- For complete classification of this Act to the Code, see
plete classification of section 303 to the Code, see Ta- section 9857(a) of Title 42 and Tables.
bles. CODIFICATION
The Robert T. Stafford Disaster Relief and Emer-
gency Assistance Act, referred to in subsec. (b), is Pub. September 30, 1996, referred to in subsec. (a)(25)(C),
L. 93–288, May 22, 1974, 88 Stat. 143, formerly known as was in the original ‘‘the date of enactment of this sub-
the Disaster Relief and Emergency Assistance Act, section’’ which was translated as meaning the date of
which is classified principally to chapter 68 (§ 5121 et enactment of Pub. L. 104–208, which enacted par. (25) of
seq.) of Title 42, The Public Health and Welfare. For subsec. (a), to reflect the probable intent of Congress.
complete classification of this Act to the Code, see In subsec. (d)(3), ‘‘August 13, 1981’’ substituted for
Short Title note set out under section 5121 of Title 42 ‘‘the effective date of this Act’’, such words having
and Tables. been inserted in place of ‘‘to October 1, 1983’’ by section
Section 231 of the Disaster Relief Act of 1970 [15 1914 of Pub. L. 97–35. ‘‘This Act’’ probably meant the
U.S.C. 636a], referred to in penultimate par. of subsec. Small Business Budget Reconciliation and Loan Con-
(b), was repealed by Pub. L. 97–35, title XIX, § 1917, Aug. solidation/Improvement Act of 1981 (title XIX of Pub.
13, 1981, 95 Stat. 781. L. 97–35) rather than the Small Business Act (Pub. L.
The date of enactment of the Small Business Disaster 85–536). See Effective Date of 1981 Amendment note set
Response and Loan Improvements Act of 2008, referred out under section 631 of this title.
Page 851 TITLE 15—COMMERCE AND TRADE § 636
In subsec. (j)(11)(B)(i), as enacted by the amendments clause (IV) or (V) of clause (iv), clause (vii), or clause
made by Pub. L. 101–37, ‘‘August 15, 1989’’ substituted (ix)’’ for ‘‘clause (iii)(II), (iv)(IV), or (vii)’’.
for ‘‘the effective date of this subparagraph’’ and ‘‘such Subsec. (a)(36)(D)(viii)(II). Pub. L. 117–2,
effective date’’. Section 32 of Pub. L. 101–37 provided § 5001(b)(1)(D), substituted ‘‘business concern made eli-
that the amendments made by Pub. L. 101–37 shall gible by subclause (II) or (IV) of clause (iii) or sub-
apply as if included in Pub. L. 100–656. Section clause (IV) or (V) of clause (iv) of this subparagraph’’
803(b)(1)(A) of Pub. L. 100–656 provided that the amend- for ‘‘business concern made eligible by clause (iii)(II) or
ment made by section 201(a) thereof to subsec. (j)(11) clause (iv)(IV) of this subparagraph’’ and inserted ‘‘or
shall take effect on June 1, 1989. Section 31 of Pub. L. organization’’ after ‘‘business concern’’ in two places.
101–37 amended section 803(b) of Pub. L. 100–656 to make Subsec. (a)(36)(D)(ix). Pub. L. 117–2, § 5001(a)(1)(B)(ii),
such amendments effective on August 15, 1989, in place added cl. (ix).
of June 1, 1989. See 1988 and 1989 Effective Date of Subsec. (a)(37)(A)(i). Pub. L. 117–2, § 5001(a)(2), inserted
Amendment notes below. ‘‘ ‘additional covered nonprofit entity’,’’ after ‘‘the
‘‘Sections 3131 and 3133 of title 40’’ substituted in sub- terms’’.
sec. (j)(13)(D) for ‘‘the Act entitled ‘An Act requiring Subsec. (a)(37)(A)(iv)(II). Pub. L. 117–2, § 5001(b)(2),
contracts for the construction, alteration and repair of substituted ‘‘subclause (II), (III), or (IV) of clause (iii),
any public building or public work of the United States subclause (IV) or (V) of clause (iv), clause (vii), or
to be accompanied by a performance bond protecting clause (ix)’’ for ‘‘clause (iii)(II), (iv)(IV), or (vii)’’.
the United States and by an additional bond for the Subsec. (a)(37)(J)(iii)(I)(cc). Pub. L. 117–2, § 5001(c)(2),
protection of persons furnishing material and labor for added item (cc).
the construction, alteration, or repair of said public Subsec. (j)(13)(F)(iii)(I). Pub. L. 116–283, § 866(b)(1),
buildings or public works’, approved August 24, 1935 (49 substituted ‘‘means—’’ and items (aa) and (bb) for
Stat. 793)’’ on authority of Pub. L. 107–217, § 5(c), Aug. ‘‘means the period beginning on August 13, 2018, and
21, 2002, 116 Stat. 1303, the first section of which enacted ending on the date on which the Oversight Board estab-
Title 40, Public Buildings, Property, and Works. lished under section 2121 of title 48 terminates.’’
In subsec. (k)(3), ‘‘section 1342 of title 31’’ substituted Subsec. (j)(13)(F)(iii)(II). Pub. L. 116–283, § 866(b)(2), in-
for ‘‘section 3679(b) of the Revised Statutes (31 U.S.C. serted ‘‘or a covered territory business’’ after ‘‘a Puer-
665(b))’’ on authority of Pub. L. 97–258, § 4(b), Sept. 13, to Rico business’’ and, in two places, substituted ‘‘ei-
1982, 96 Stat. 1067, the first section of which enacted ther such business’’ for ‘‘the Puerto Rico business’’.
Title 31, Money and Finance. 2020—Subsec. (a)(2)(A). Pub. L. 116–260, § 326(a)(2),
Section 3109 of title 5, referred to in subsec. (k)(4), amended subpar. (A) generally. Prior to amendment,
substituted for ‘‘section 15 of the Administrative Ex- text read as follows: ‘‘Except as provided in subpara-
penses Act of 1946 (5 U.S.C. 55a)’’ on authority of Pub. graphs (B), (D), (E), and (F), in an agreement to partici-
L. 89–554, § 7(b), Sept. 6, 1966, 80 Stat. 631, the first sec- pate in a loan on a deferred basis under this subsection
tion of which enacted Title 5, Government Organization (including a loan made under the Preferred Lenders
and Employees. Program or the Community Advantage Pilot Program
Section 5703 of title 5, referred to in subsec. (k)(4), of the Administration), such participation by the Ad-
substituted for ‘‘section 5 of such Act (5 U.S.C. 73b–2)’’ ministration shall be equal to 90 percent of the balance
on authority of section 7(b) of Pub. L. 89–554, Sept. 6, of the financing outstanding at the time of disburse-
1966, 80 Stat. 631, section 1 of which enacted Title 5. ment of the loan.’’
Pub. L. 110–234 and Pub. L. 110–246 made identical Pub. L. 116–260, § 326(a)(1), substituted ‘‘the Preferred
amendments to this section. The amendments by Pub. Lenders Program or the Community Advantage Pilot
L. 110–234 were repealed by section 4(a) of Pub. L. Program of the Administration), such participation by
110–246. the Administration shall be equal to 90 percent of the
balance of the financing outstanding at the time of dis-
PRIOR PROVISIONS bursement of the loan.’’ for ‘‘the Preferred Lenders
Provisions similar to those comprising subsec. (e) of Program), such participation by the Administration
this section were contained in section 2(a) and (b) of shall be equal to—
Pub. L. 87–550, July 25, 1962, 76 Stat. 221 (formerly clas- ‘‘(i) 75 percent of the balance of the financing out-
sified to section 637a(a) and (b) of this title) prior to re- standing at the time of disbursement of the loan, if
peal thereof by section 3(b) of Pub. L. 89–409. such balance exceeds $150,000; or
Prior similar provisions were contained in section 207 ‘‘(ii) 85 percent of the balance of the financing out-
of act July 30, 1953, ch. 282, title II, 67 Stat. 235, as standing at the time of disbursement of the loan, if
amended by acts Aug. 9, 1955, ch. 628, §§ 2, 5, 69 Stat. 547; such balance is less than or equal to $150,000.’’
Feb. 2, 1956, ch. 29, §§ 2, 3, 70 Stat. 10; Pub. L. 85–335, Feb. Pub. L. 116–136, § 1102(a)(1)(A), substituted ‘‘(E), and
22, 1958, 72 Stat. 27, which was previously classified to (F)’’ for ‘‘and (E)’’ in introductory provisions.
this section. See Codification note set out under sec- Subsec. (a)(2)(F). Pub. L. 116–136, § 1102(a)(1)(B), added
tion 631 of this title. subpar. (F).
Subsec. (a)(7). Pub. L. 116–260, § 334, designated exist-
AMENDMENTS ing provisions as subpar. (A), inserted heading, sub-
2022—Subsec. (a)(36)(W). Pub. L. 117–166, § 2(a), added stituted ‘‘The Administrator’’ for ‘‘The Administra-
subpar. (W). tion’’, inserted ‘‘and interest’’ after ‘‘principal’’, and
Subsec. (a)(37)(P). Pub. L. 117–166, § 2(b), added subpar. added subpars. (B) and (C).
(P). Subsec. (a)(31)(A)(iv). Pub. L. 116–260, § 326(b)(2)(B),
Subsec. (b)(16). Pub. L. 117–249 added par. (16) relating substituted ‘‘guarantee rate of not more than 50 per-
to disaster declaration in rural areas. cent.’’ for ‘‘guarantee rate—
Pub. L. 117–165 added par. (16) relating to statute of ‘‘(I) for a loan in an amount less than or equal to
limitations. $350,000, of not more than 75 percent; and
2021—Subsec. (a)(36)(A)(iii). Pub. L. 117–6 substituted ‘‘(II) for a loan in an amount greater than $350,000,
‘‘June 30, 2021’’ for ‘‘March 31, 2021’’. of not more than 50 percent.’’
Subsec. (a)(36)(A)(xvii). Pub. L. 117–2, § 5001(a)(1)(A), Pub. L. 116–260, § 326(b)(2)(A), substituted ‘‘with a
added cl. (xvii). guarantee rate—
Subsec. (a)(36)(D)(iii)(III). Pub. L. 117–2, ‘‘(I) for a loan in an amount less than or equal to
§ 5001(a)(1)(B)(i), added subcl. (III). $350,000, of not more than 75 percent; and
Subsec. (a)(36)(D)(iii)(IV). Pub. L. 117–2, § 5001(b)(1)(A), ‘‘(II) for a loan in an amount greater than $350,000,
added subcl. (IV). of not more than 50 percent.’’
Subsec. (a)(36)(D)(iv)(V). Pub. L. 117–2, § 5001(b)(1)(B), for ‘‘with a guaranty rate of not more than 50 percent.’’
added subcl. (V). Subsec. (a)(31)(D). Pub. L. 116–136, § 1102(c)(2), as
Subsec. (a)(36)(D)(v). Pub. L. 117–2, § 5001(b)(1)(C), sub- amended by Pub. L. 116–260, § 326(b)(1), substituted
stituted ‘‘subclause (II), (III), or (IV) of clause (iii), sub- ‘‘$500,000’’ for ‘‘$1,000,000’’.
§ 636 TITLE 15—COMMERCE AND TRADE Page 852
Pub. L. 116–136, § 1102(c)(1), substituted ‘‘$1,000,000’’ for ing, substituted ‘‘Subject to subclause (II), and not-
‘‘$350,000’’. withstanding’’ for ‘‘Notwithstanding’’, and added subcl.
Subsec. (a)(31)(G)(ii), (iii). Pub. L. 116–136, § 1102(d), re- (II).
designated cl. (iii) as (ii) and struck out former cl. (ii). Pub. L. 116–260, § 342(2), added cl. (viii).
Prior to amendment, text read as follows: ‘‘If the Presi- Subsec. (a)(36)(E). Pub. L. 116–260, § 313(a)(1), sub-
dent’s budget for the upcoming fiscal year, submitted stituted ‘‘Except as provided in subparagraph (V), dur-
to Congress pursuant to section 1105(a) of title 31, in- ing’’ for ‘‘During’’ in introductory provisions.
cludes a cost for the program established under this Subsec. (a)(36)(E)(i)(I)(aa)(AA). Pub. L. 116–260,
subsection that is above zero, the requirements of § 336(a), substituted ‘‘except that an applicant that is a
clause (i) shall not apply to loans made during such up- seasonal employer shall use the average total monthly
coming fiscal year.’’ payments for payroll for any 12-week period selected by
Subsec. (a)(36). Pub. L. 116–136, § 1102(a)(2), added par. the seasonal employer between February 15, 2019, and
(36). February 15, 2020’’ for ‘‘except that, in the case of an
Subsec. (a)(36)(A)(iii). Pub. L. 116–260, § 343(a), sub- applicant that is seasonal employer, as determined by
stituted ‘‘March 31, 2021’’ for ‘‘December 31, 2020’’. the Administrator, the average total monthly pay-
Pub. L. 116–142, § 3(a), substituted ‘‘December 31, 2020’’ ments for payroll shall be for the 12-week period begin-
for ‘‘June 30, 2020’’. ning February 15, 2019, or at the election of the eligible
Subsec. (a)(36)(A)(viii)(I)(aa)(EE). Pub. L. 116–260, recipient, March 1, 2019, and ending June 30, 2019’’.
§ 308(a), inserted ‘‘or group life, disability, vision, or Subsec. (a)(36)(F)(i)(VIII) to (XI). Pub. L. 116–260,
dental insurance’’ before ‘‘benefits’’. § 304(a), added subcls. (VIII) to (XI).
Subsec. (a)(36)(A)(viii)(I)(bb). Pub. L. 116–260, § 344(1), Subsec. (a)(36)(F)(v). Pub. L. 116–260, § 337(a), sub-
substituted ‘‘on an annualized basis, as prorated for the stituted ‘‘clause (i) or (iv)’’ for ‘‘clause (i)’’.
period during which the payments are made or the obli- Subsec. (a)(36)(F)(vi). Pub. L. 116–260, § 319, added cl.
gation to make the payments is incurred’’ for ‘‘in 1 (vi).
year, as prorated for the covered period’’. Subsec. (a)(36)(H). Pub. L. 116–260, § 338(a)(1), sub-
Subsec. (a)(36)(A)(viii)(II)(aa). Pub. L. 116–260, stituted ‘‘With’’ for ‘‘During the covered period, with’’
§ 344(2)(A), substituted ‘‘$100,000 on an annualized basis, in introductory provisions.
as prorated for the period during which the compensa- Subsec. (a)(36)(J). Pub. L. 116–260, § 338(a)(2), sub-
tion is paid or the obligation to pay the compensation stituted ‘‘With’’ for ‘‘During the covered period, with’’
is incurred’’ for ‘‘an annual salary of $100,000, as pro- in introductory provisions.
rated for the covered period’’. Subsec. (a)(36)(K). Pub. L. 116–260, § 304(b)(1)(C)(ii)(I),
Subsec. (a)(36)(A)(viii)(II)(bb). Pub. L. 116–260, substituted ‘‘section 636m’’ for ‘‘section 9005’’ in intro-
§ 344(2)(B), substituted ‘‘applicable period’’ for ‘‘covered ductory provisions.
period’’. Subsec. (a)(36)(K)(ii). Pub. L. 116–142, § 2(a), inserted
Subsec. (a)(36)(A)(x) to (xii). Pub. L. 116–139, ‘‘minimum maturity of 5 years and a’’ before ‘‘max-
§ 101(d)(1), added cls. (x) to (xii). imum maturity’’.
Subsec. (a)(36)(A)(xiii). Pub. L. 116–260, § 315(a), added Subsec. (a)(36)(L). Pub. L. 116–260, § 339(b), inserted
cl. (xiii). ‘‘, calculated on a non-compounding, non-adjustable
Subsec. (a)(36)(A)(xiv). Pub. L. 116–260, § 316(1), added basis’’ after ‘‘4 percent’’.
cl. (xiv). Subsec. (a)(36)(M). Pub. L. 116–260,
Subsec. (a)(36)(A)(xv). Pub. L. 116–260, § 318(1), added § 304(b)(1)(C)(ii)(II)(aa), substituted ‘‘section 636m’’ for
cl. (xv). ‘‘section 9005’’ in two places.
Subsec. (a)(36)(A)(xvi). Pub. L. 116–260, § 342(1), added Subsec. (a)(36)(M)(ii). Pub. L. 116–260, § 338(a)(3)(A),
cl. (xvi). substituted ‘‘The’’ for ‘‘During the covered period, the’’
Subsec. (a)(36)(D)(i). Pub. L. 116–260, § 316(2)(A), in- in introductory provisions.
serted ‘‘housing cooperative,’’ before ‘‘veterans organi- Subsec. (a)(36)(M)(ii)(II). Pub. L. 116–142, § 3(c)(1), sub-
zation,’’ wherever appearing. stituted ‘‘, including payment of principal, interest,
Subsec. (a)(36)(D)(ii)(II). Pub. L. 116–260, § 335(a), sub- and fees, until the date on which the amount of forgive-
stituted ‘‘as determined necessary by the Adminis- ness determined under section 9005 of this title is re-
trator and the Secretary, to establish the applicant as mitted to the lender.’’ for ‘‘for a period of not less than
eligible’’ for ‘‘as is necessary to establish such indi- 6 months, including payment of principal, interest, and
vidual as eligible, including payroll tax filings reported fees, and not more than 1 year.’’
to the Internal Revenue Service, Forms 1099–MISC, and Subsec. (a)(36)(M)(iii). Pub. L. 116–260, § 338(a)(3)(B),
income and expenses from the sole proprietorship, as substituted ‘‘With’’ for ‘‘During the covered period,
determined by the Administrator and the Secretary’’. with’’.
Subsec. (a)(36)(D)(iii). Pub. L. 116–260, § 317(a), des- Pub. L. 116–142, § 3(c)(2), substituted ‘‘, including pay-
ignated existing provisions as subcl. (I), inserted head- ment of principal, interest, and fees, until the date on
ing, and added subcl. (II). which the amount of forgiveness determined under sec-
Subsec. (a)(36)(D)(iv)(IV). Pub. L. 116–260, § 317(b), tion 9005 of this title is remitted to the lender.’’ for
added subcl. (IV). ‘‘for a period of not less than 6 months, including pay-
Subsec. (a)(36)(D)(v). Pub. L. 116–260, § 318(2)(A), in- ment of principal, interest, and fees, and not more than
serted ‘‘or for purposes of determining the number of 1 year.’’
employees of a housing cooperative or a business con- Subsec. (a)(36)(M)(v). Pub. L. 116–260,
cern or organization made eligible for a loan under this § 304(b)(1)(C)(ii)(II)(bb), substituted ‘‘section 636m(a)’’
paragraph under clause (iii)(II), (iv)(IV), or (vii),’’ be- for ‘‘section 9005(a)’’.
fore ‘‘the term ‘employee’ ’’. Pub. L. 116–142, § 3(c)(3), added cl. (v).
Subsec. (a)(36)(D)(vi). Pub. L. 116–260, § 318(2)(B), in- Subsec. (a)(36)(P)(i). Pub. L. 116–260, § 340(a)(1), amend-
serted ‘‘a business concern or organization made eligi- ed cl. (i) generally. Prior to amendment, text read as
ble for a loan under this paragraph under clause (vii),’’ follows: ‘‘The Administrator shall reimburse a lender
after ‘‘a nonprofit organization,’’. authorized to make a covered loan at a rate, based on
Pub. L. 116–260, § 316(2)(B), which directed the inser- the balance of the financing outstanding at the time of
tion of ‘‘, a housing cooperative,’’ before ‘‘a veterans disbursement of the covered loan, of—
organization’’, was executed by making the insertion ‘‘(I) 5 percent for loans of not more than $350,000;
before ‘‘and a veterans organization’’ to reflect the ‘‘(II) 3 percent for loans of more than $350,000 and
probable intent of Congress. less than $2,000,000; and
Subsec. (a)(36)(D)(vii). Pub. L. 116–260, § 318(2)(C), ‘‘(III) 1 percent for loans of not less than $2,000,000.’’
added cl. (vii). Subsec. (a)(36)(P)(ii). Pub. L. 116–260, § 340(b)(1), in-
Subsec. (a)(36)(D)(viii). Pub. L. 116–260, § 317(c), in cl. serted at end ‘‘If an eligible recipient has knowingly re-
(viii) added by section 342(2) of Pub. L. 116–260, des- tained an agent, such fees shall be paid by the eligible
ignated existing provisions as subcl. (I), inserted head- recipient and may not be paid out of the proceeds of a
Page 853 TITLE 15—COMMERCE AND TRADE § 636
covered loan. A lender shall only be responsible for pay- Subsec. (b)(3)(B). Pub. L. 116–92, § 877(a)(1)(B), sub-
ing fees to an agent for services for which the lender di- stituted ‘‘being ordered to perform active service for a
rectly contracts with the agent.’’ period of more than 30 consecutive days’’ for ‘‘being or-
Subsec. (a)(36)(P)(iii). Pub. L. 116–260, § 340(a)(2), dered to active military duty during a period of mili-
amended cl. (iii) generally. Prior to amendment, text tary conflict’’.
read as follows: ‘‘A reimbursement described in clause Subsec. (b)(3)(C). Pub. L. 116–92, § 877(a)(1)(C), sub-
(i) shall be made not later than 5 days after the dis- stituted ‘‘active service’’ for ‘‘active duty’’ in two
bursement of the covered loan.’’ places.
Subsec. (a)(36)(Q). Pub. L. 116–260, § 341, which di- Subsec. (b)(3)(G)(ii)(II). Pub. L. 116–92, § 877(a)(1)(D),
rected striking out ‘‘during the period beginning on substituted ‘‘active service’’ for ‘‘active duty’’.
January 31, 2020, and ending on the date on which cov- Subsec. (n). Pub. L. 116–92, § 877(a)(2), substituted ‘‘ac-
ered loans are made available’’, which appeared after tive service’’ for ‘‘active duty’’ in heading and in two
‘‘loan made under subsection (b)(2)’’, was executed by places in each of pars. (1)(D) and (2)(B), and in par. (1),
striking out text containing ‘‘2020 and’’ instead of added subpar. (A), redesignated former subpars. (A) and
‘‘2020, and’’, to reflect the probable intent of Congress. (B) as (B) and (C), respectively, substituted ‘‘ordered to
Subsec. (a)(36)(S). Pub. L. 116–139, § 101(d)(2), added perform active service for a period of more than 30 con-
subpar. (S). secutive days’’ for ‘‘ordered to active duty during a pe-
Subsec. (a)(36)(T). Pub. L. 116–260, § 310(a)(1), added riod of military conflict’’ in subpar. (B) as redesig-
subpar. (T). nated, and struck out former subpar. (C) which defined
Subsec. (a)(36)(U). Pub. L. 116–260, § 310(b), added sub- the term ‘‘period of military conflict’’.
par. (U). 2018—Subsec. (a)(1)(A)(i). Pub. L. 115–189 inserted
Subsec. (a)(36)(V). Pub. L. 116–260, § 313(a)(2), added ‘‘The Administrator has the authority to direct, and
subpar. (V). conduct oversight for, the methods by which lenders
Subsec. (a)(37). Pub. L. 116–260, § 311(a), added par. (37). determine whether a borrower is able to obtain credit
Subsec. (b)(2). Pub. L. 116–136, § 1110(f)(7), inserted elsewhere.’’ before ‘‘No financial assistance’’.
‘‘: Provided further, That for purposes of subparagraph Subsec. (a)(15)(A). Pub. L. 115–232, § 862(b)(1)(A)(i), sub-
(D), the Administrator shall deem that such an emer- stituted ‘‘this subsection—’’ for ‘‘this subsection’’, in-
gency affects each State or subdivision thereof (includ- serted cl. (i) designation before ‘‘to qualified employee
ing counties), and that each State or subdivision has trusts’’ and ‘‘, and for any transaction costs associated
sufficient economic damage to small business concerns with purchasing,’’ after ‘‘purchasing’’, substituted
to qualify for assistance under this paragraph and the ‘‘; and’’ for period at end, and added cl. (ii).
Administrator shall accept applications for such assist- Subsec. (a)(15)(B). Pub. L. 115–232, § 862(b)(1)(A)(ii)(I),
ance immediately’’ before period at end of concluding inserted ‘‘or by the small business concern’’ after ‘‘the
provisions. trustee of such trust’’ in introductory provisions.
Subsec. (b)(2)(D). Pub. L. 116–136, § 1110(f)(1)–(3), (5), Subsec. (a)(15)(B)(iv). Pub. L. 115–232,
added subpar. (D). Former subpar. (D) redesignated (E). § 862(b)(1)(A)(ii)(II)–(IV), added cl. (iv).
Subsec. (b)(2)(E). Pub. L. 116–136, § 1110(f)(4), (6), redes- Subsec. (a)(15)(E). Pub. L. 115–232, § 862(f), substituted
ignated subpar. (D) as (E) and substituted ‘‘(C), or (D)’’ ‘‘Administration, which shall include—’’ for ‘‘Adminis-
for ‘‘or (C)’’; ‘‘disaster or emergency declaration’’ for tration.’’ and added cls. (i) to (iii).
‘‘disaster declaration’’ in two places; ‘‘disaster or emer- Subsec. (a)(15)(F), (G). Pub. L. 115–232,
gency has occurred’’ for ‘‘disaster has occurred’’; ‘‘such § 862(b)(1)(A)(iii), added subpars. (F) and (G).
disaster or emergency’’ for ‘‘such disaster’’; and Subsec. (a)(29). Pub. L. 115–370 redesignated introduc-
‘‘disaster- or emergency-stricken’’ for ‘‘disaster strick- tory provisions as subpar. (A) and inserted heading, re-
en’’. designated former subpars. (A) and (B) as cls. (i) and
Subsec. (m)(3)(C). Pub. L. 116–260, § 329(a)(2), sub- (ii), respectively, of subpar. (A) and realigned margins,
stituted ‘‘$7,000,000’’ for ‘‘$10,000,000’’ and ‘‘$3,000,000’’ in cl. (i), substituted ‘‘, if such loan is in an amount
for ‘‘$4,500,000’’. greater than the Federal banking regulator appraisal
Pub. L. 116–260, § 329(a)(1)(A), substituted ‘‘$10,000,000 threshold’’ for ‘‘for more than $250,000’’, in cl. (ii), sub-
(in the aggregate)’’ for ‘‘and $6,000,000’’ and inserted be- stituted ‘‘, if such loan is in an amount equal to or less
fore period at end ‘‘, and $4,500,000 in any of those re- than the Federal banking regulator appraisal thresh-
maining years’’. old’’ for ‘‘$250,000 or less’’, and added subpar. (B).
Subsec. (m)(4)(A). Pub. L. 116–260, § 329(a)(1)(B)(i), sub- Subsec. (a)(35). Pub. L. 115–232, § 862(b)(1)(B), added
stituted ‘‘subparagraphs (C) and (G)’’ for ‘‘subparagraph par. (35).
(C)’’ in two places. Subsec. (j)(13)(F)(iii). Pub. L. 115–232, § 861(c), added
Subsec. (m)(4)(C)(i). Pub. L. 116–260, § 329(a)(1)(B)(ii), cl. (iii).
amended cl. (i) generally. Prior to amendment, text Subsec. (m)(3)(C). Pub. L. 115–232, § 853(b), substituted
read as follows: ‘‘Each intermediary that has a port- ‘‘$6,000,000’’ for ‘‘$5,000,000’’.
folio of loans made under this subsection that averages Subsec. (m)(4)(E). Pub. L. 115–141 substituted ‘‘50 per-
not more than $10,000 during the period of the cent’’ for ‘‘25 percent’’ in cls. (i) and (ii).
intermediary’s participation in the program shall be el- 2015—Subsec. (a)(1)(A). Pub. L. 114–38, § 4(b)(1), des-
igible to receive a grant equal to 5 percent of the total ignated existing provisions as cl. (i), inserted cl. (i)
outstanding balance of loans made to the intermediary heading, and added cl. (ii)
under this subsection, in addition to grants made under Subsec. (a)(1)(C). Pub. L. 114–38, § 4(b)(2), added sub-
subparagraph (A).’’ par. (C).
Subsec. (m)(4)(G). Pub. L. 116–260, § 329(a)(1)(B)(iii), Subsec. (a)(31)(A). Pub. L. 114–88, § 2106(1), added cl. (i)
added subpar. (G). and redesignated former cls. (i) to (iii) as (ii) to (iv), re-
Subsec. (m)(11)(C)(ii). Pub. L. 116–260, § 329(a)(1)(C)(i), spectively.
which directed amendment of cl. (ii) by striking all Subsec. (a)(31)(G). Pub. L. 114–38, § 2, added subpar.
after the semicolon and inserting ‘‘and’’, could not be (G).
executed because a semicolon did not appear. Subsec. (a)(31)(H). Pub. L. 114–88, § 2106(2), added sub-
Subsec. (m)(11)(D). Pub. L. 116–260, § 329(a)(1)(C)(ii), par. (H).
which directed amendment of par. (11) ‘‘by striking all Subsec. (b)(1)(A). Pub. L. 114–88, § 1102, substituted
after subparagraph (C) and inserting’’ subpar. (D), was ‘‘mitigating measures, including—’’ and text of cls. (i)
executed by adding subpar. (D) after subpar. (C), to re- to (iii) for ‘‘mitigating measures, including, but not
flect the probable intent of Congress. limited to, construction of retaining walls and sea
2019—Subsec. (b)(3)(A)(i), (ii). Pub. L. 116–92, walls, grading and contouring land, relocating utilities
§ 877(a)(1)(A), added cl. (i), redesignated former cl. (i) as and modifying structures’’.
(ii) and inserted ‘‘and’’ at end, and struck out former Subsec. (b)(10). Pub. L. 114–88, § 1103, added par. (10).
cl. (ii) which defined the term ‘‘period of military con- Subsec. (b)(11). Pub. L. 114–88, § 1104, added par. (11).
flict’’. Subsec. (b)(12). Pub. L. 114–88, § 2101, added par. (12).
§ 636 TITLE 15—COMMERCE AND TRADE Page 854
Subsec. (b)(13). Pub. L. 114–88, § 2107, added par. (13). Subsec. (a)(2)(E). Pub. L. 111–240, § 1206(a)(2)(C), added
Subsec. (b)(14). Pub. L. 114–88, § 2201, added par. (14). subpar. (E).
Subsec. (b)(15). Pub. L. 114–88, § 2301(a), added par. (15). Subsec. (a)(3)(A). Pub. L. 111–240, § 1111(b)(2), sub-
Subsec. (d)(6). Pub. L. 114–88, § 2109, inserted stituted ‘‘$3,750,000’’ for ‘‘$4,500,000’’.
‘‘: Provided further, That the Administrator, in obtain- Pub. L. 111–240, § 1111(a)(2), substituted ‘‘$4,500,000 (or
ing the best available collateral for a loan of not more if the gross loan amount would exceed $5,000,000’’ for
than $200,000 under paragraph (1) or (2) of subsection (b) ‘‘$1,500,000 (or if the gross loan amount would exceed
relating to damage to or destruction of the property of, $2,000,000’’.
or economic injury to, a small business concern, shall Subsec. (a)(3)(B). Pub. L. 111–240, § 1206(a)(1), sub-
not require the owner of the small business concern to stituted ‘‘$4,500,000 (or if the gross loan amount would
use the primary residence of the owner as collateral if exceed $5,000,000), of which not more than $4,000,000’’ for
the Administrator determines that the owner has other ‘‘$1,750,000, of which not more than $1,250,000’’.
assets of equal quality and with a value equal to or Subsec. (a)(14). Pub. L. 111–240, § 1206(d)(2), inserted
greater than the amount of the loan that could be used par. (14) and subpar. (A) headings, substituted ‘‘The Ad-
as collateral for the loan: Provided further, That noth- ministrator’’ for ‘‘The Administration’’ in subpar. (A),
ing in the preceding proviso may be construed to re- added subpar. (B), redesignated former subpars. (B) and
duce the amount of collateral required by the Adminis- (C) as (C) and (D), respectively, and inserted headings,
trator in connection with a loan described in the pre- and substituted ‘‘The Administrator’’ for ‘‘The Admin-
ceding proviso or to modify the standards used to istration’’ in subpar. (D) as redesignated.
evaluate the quality (rather than the type) of such col- Subsec. (a)(16)(A). Pub. L. 111–240, § 1206(b)(1), struck
lateral’’ after ‘‘which are made under paragraph (1) of out ‘‘in’’ before dash at end of introductory provisions.
subsection (b)’’. Subsec. (a)(16)(A)(i). Pub. L. 111–240, § 1206(b)(2), in-
Pub. L. 114–88, § 2102(b), substituted ‘‘$14,000’’ for serted ‘‘in’’ after cl. (i) designation and struck out ‘‘or’’
‘‘$25,000’’ and ‘‘in the event of a major disaster’’ for ‘‘in at end.
the event of a disaster’’. Subsec. (a)(16)(A)(ii). Pub. L. 111–240, § 1206(b)(3), in-
Pub. L. 114–88, § 2102(a), substituted ‘‘$25,000’’ for serted ‘‘in’’ after cl. (ii) designation and substituted
‘‘$14,000’’ and ‘‘in the event of a disaster’’ for ‘‘in the ‘‘, including any debt that qualifies for refinancing
event of a major disaster’’. under any other provision of this subsection; or’’ for pe-
Subsec. (d)(8). Pub. L. 114–88, § 1101, added par. (8). riod at end.
Subsec. (j)(10)(D)(i). Pub. L. 114–92 struck out ‘‘The Subsec. (a)(16)(A)(iii). Pub. L. 111–240, § 1206(b)(4),
Business Opportunity Specialist shall have a Level I added cl. (iii).
Federal Acquisition Certification in Contracting (or Subsec. (a)(16)(B). Pub. L. 111–240, § 1206(c), designated
any successor certification) or the equivalent Depart- existing provisions as cl. (i), inserted cl. (i) heading,
ment of Defense certification, except that a Business substituted ‘‘Except as provided in clause (ii), each
Opportunity Specialist serving at the time of the date loan’’ for ‘‘Each loan’’, and added cl. (ii).
of enactment of the National Defense Authorization Subsec. (a)(16)(F). Pub. L. 111–240, § 1206(g), added sub-
Act for Fiscal Year 2013 may continue to serve as a par. (F).
Subsec. (a)(31)(D). Pub. L. 111–240, § 1135(b), sub-
Business Opportunity Specialist for a period of 5 years
stituted ‘‘$350,000’’ for ‘‘$1,000,000’’.
beginning on that date of enactment without such a
Pub. L. 111–240, § 1135(a), substituted ‘‘$1,000,000’’ for
certification.’’ after ‘‘to assist such Program Partici-
‘‘$350,000’’.
pant.’’ Subsec. (a)(32), (33). Pub. L. 111–240, § 1133(a)(1), redes-
Subsec. (j)(13)(F). Pub. L. 114–88, § 2105, designated ex- ignated par. (32), relating to increased veteran partici-
isting provisions as cl. (i) and added cl. (ii). pation program, as (33).
2014—Subsec. (j)(13)(E). Pub. L. 113–128 substituted Subsec. (a)(34). Pub. L. 111–240, § 1133(b), redesignated
‘‘an institution eligible to provide skills training or up- par. (35) as (34) and struck out former par. (34) which re-
grading under title I of the Workforce Innovation and lated to floor plan financing program.
Opportunity Act’’ for ‘‘an institution eligible to pro- Pub. L. 111–240, § 1133(a)(2), added par. (34).
vide skills training or upgrading under title I of the Subsec. (a)(35). Pub. L. 111–240, § 1206(f), added par.
Workforce Investment Act of 1998’’. (35).
2013—Subsec. (j)(10)(D)(i). Pub. L. 112–239 inserted Pub. L. 111–240, § 1133(b)(2), redesignated par. (35) as
‘‘The Business Opportunity Specialist shall have a (34).
Level I Federal Acquisition Certification in Con- Subsec. (l). Pub. L. 111–240, § 1131(a), added subsec. (l)
tracting (or any successor certification) or the equiva- and struck out former subsec. (l) which read ‘‘[RE-
lent Department of Defense certification, except that a SERVED]’’.
Business Opportunity Specialist serving at the time of Subsec. (m)(1)(B)(iii). Pub. L. 111–240, § 1113(1), sub-
the date of enactment of the National Defense Author- stituted ‘‘$50,000’’ for ‘‘$35,000’’.
ization Act for Fiscal Year 2013 may continue to serve Subsec. (m)(3)(B). Pub. L. 111–240, § 1401(c)(1)(A),
as a Business Opportunity Specialist for a period of 5 struck out cl. (i) designation and heading, substituted
years beginning on that date of enactment without ‘‘As’’ for ‘‘Subject to clause (ii), as’’, and struck out cl.
such a certification.’’ after ‘‘to assist such Program (ii) relating to waiver of non-Federal share.
Participant.’’ Pub. L. 111–240, § 1401(a)(1), designated existing provi-
2011—Subsec. (d)(5)(D). Pub. L. 112–74 substituted ‘‘7 sions as cl. (i) and inserted cl. (i) heading, substituted
years’’ for ‘‘three years’’. ‘‘Subject to clause (ii), as a condition’’ for ‘‘As a condi-
2010—Subsec. (a)(2)(A). Pub. L. 111–240, § 1206(a)(2)(A), tion’’ and ‘‘the Administrator’’ for ‘‘the Administra-
substituted ‘‘subparagraphs (B), (D), and (E)’’ for ‘‘sub- tion’’, and added cl. (ii).
paragraph (B)’’ in introductory provisions. Subsec. (m)(3)(C). Pub. L. 111–240, § 1113(2)(A), sub-
Subsec. (a)(2)(A)(i). Pub. L. 111–240, § 1111(b)(1)(A), sub- stituted ‘‘$5,000,000’’ for ‘‘$3,500,000’’.
stituted ‘‘75 percent’’ for ‘‘90 percent’’. Subsec. (m)(3)(E). Pub. L. 111–240, § 1113(2)(B), sub-
Pub. L. 111–240, § 1111(a)(1)(A), substituted ‘‘90 per- stituted ‘‘$50,000’’ for ‘‘$35,000’’ in two places.
cent’’ for ‘‘75 percent’’. Subsec. (m)(4)(B). Pub. L. 111–240, § 1401(c)(1)(B),
Subsec. (a)(2)(A)(ii). Pub. L. 111–240, § 1111(b)(1)(B), struck out cl. (i) designation and heading, substituted
substituted ‘‘85 percent’’ for ‘‘90 percent’’. ‘‘As’’ for ‘‘Subject to clause (ii), as’’, and struck out cl.
Pub. L. 111–240, § 1111(a)(1)(B), substituted ‘‘90 per- (ii) relating to waiver of non-Federal share.
cent’’ for ‘‘85 percent’’. Pub. L. 111–240, § 1401(a)(2), designated existing provi-
Subsec. (a)(2)(C)(ii), (iii). Pub. L. 111–240, § 1206(e), sions as cl. (i), inserted cl. (i) heading, substituted
added cl. (ii) and redesignated former cl. (ii) as (iii). ‘‘Subject to clause (ii), as a condition of a grant made
Subsec. (a)(2)(D). Pub. L. 111–240, § 1206(d)(1), sub- under subparagraph (A), the Administrator shall re-
stituted ‘‘be’’ for ‘‘not exceed’’. quire’’ for ‘‘As a condition of any grant made under
Pub. L. 111–240, § 1206(a)(2)(B), substituted ‘‘In’’ for subparagraph (A), the Administration shall require’’,
‘‘Notwithstanding subparagraph (A), in’’. and added cl. (ii).
Page 855 TITLE 15—COMMERCE AND TRADE § 636
Subsec. (m)(11)(B). Pub. L. 111–240, § 1113(3), sub- Subsecs. (d) to (f). Pub. L. 110–246, § 12068(a), redesig-
stituted ‘‘$50,000’’ for ‘‘$35,000’’. nated subsecs. (c) and (d) as (d) and (e), respectively,
2008—Subsec. (a)(32). Pub. L. 110–186, § 208, added par. and added subsec. (f).
(32) relating to increased veteran participation pro- Subsec. (g). Pub. L. 110–246, § 12070, added subsec. (g).
gram. 2007—Subsec. (a)(31)(F). Pub. L. 110–140, § 1201, added
Subsec. (b). Pub. L. 110–246, § 12078(c)(2), in concluding subpar. (F).
provisions substituted ‘‘paragraphs (1) and (2)’’ for Subsec. (a)(32). Pub. L. 110–140, § 1202, added par. (32).
‘‘paragraphs (1), (2), and (4)’’ and ‘‘paragraph (1) (2)’’ for 2006—Subsec. (b)(2). Pub. L. 109–163, § 845(a)(2)(A), in
‘‘paragraph (1), (2), or (4)’’. introductory provisions, inserted ‘‘(including drought),
Pub. L. 110–246, § 12078(c)(1), substituted ‘‘the Admin- with respect to both farm-related and nonfarm-related
istration’’ for ‘‘the, Administration’’ in introductory small business concerns,’’ before ‘‘if the Administra-
provisions. tion’’.
Pub. L. 110–246, § 12068(b)(2)(B), which directed amend- Subsec. (b)(2)(B). Pub. L. 109–163, § 845(a)(2)(B), sub-
ment of ‘‘the undesignated matter following paragraph stituted ‘‘section 1961 of title 7, in which case, assist-
(3)’’ by substituting ‘‘Notwithstanding any other provi- ance under this paragraph may be provided to farm-re-
sion of law, and except as provided in subsection (d), lated and nonfarm-related small business concerns,
the interest rate on the Administration’s share of any subject to the other applicable requirements of this
loan made under subsection (b)’’ for ‘‘Notwithstanding paragraph’’ for ‘‘the Consolidated Farmers Home Ad-
the provisions of any other law the interest rate on the ministration Act of 1961 (7 U.S.C. 1961)’’.
Administration’s share of any loan made under sub- Subsec. (b)(2)(D). Pub. L. 109–163, § 845(c), substituted
section (b) except as provided in subsection (c),’’ was ‘‘Not later than 30 days after the date of receipt of such
executed by making the substitution for ‘‘Notwith- certification by a Governor of a State, the Administra-
standing the provisions of any other law, the interest tion shall respond in writing to that Governor on its
rate on the Administration’s share of any loan made determination and the reasons therefore, and may’’ for
under subsection (b), except as provided in subsection ‘‘Upon receipt of such certification, the Administration
(c),’’ in concluding provisions after par. (6), to reflect may’’.
the probable intent of Congress and the addition of 2004—Subsec. (a)(3)(A). Pub. L. 108–447, § 103(a), sub-
pars. (4) to (6) by Pub. L. 110–246, §§ 12063(a), 12066(a). See stituted ‘‘$1,500,000’’ for ‘‘$1,000,000’’.
below. Subsec. (a)(3)(B). Pub. L. 108–447, § 107(b), substituted
Pub. L. 110–246, § 12068(b)(2)(A), which directed amend- ‘‘$1,750,000’’ for ‘‘$1,250,000’’ and ‘‘$1,250,000’’ for
ment of ‘‘the undesignated matter following paragraph ‘‘$750,000’’.
(3)’’ by substituting ‘‘That the provisions of paragraph Subsec. (a)(16). Pub. L. 108–447, § 107(a), inserted head-
(1) of subsection (d)’’ for ‘‘That the provisions of para- ing and amended par. (16) generally. Prior to amend-
graph (1) of subsection (c)’’, was executed by making ment, par. (16) provided that the Administration could
the substitution in concluding provisions after par. (6), guarantee loans to assist any eligible small business
to reflect the probable intent of Congress and the addi- concern in an industry engaged in or adversely affected
tion of pars. (4) to (6) by Pub. L. 110–246, §§ 12063(a), by international trade in the financing of the acquisi-
12066(a). See below. tion, construction, renovation, modernization, im-
Subsec. (b)(1)(A). Pub. L. 110–246, § 12078(b)(1), inserted provement or expansion of productive facilities or
‘‘of the aggregate costs of such damage or destruction equipment to be used in the United States in the pro-
(whether or not compensated for by insurance or other- duction of goods and services involved in international
wise)’’ after ‘‘20 per centum’’. trade.
Subsec. (b)(2). Pub. L. 110–246, § 12061(a)(1), in intro- Subsec. (a)(18)(A). Pub. L. 108–447, § 102(a), amended
ductory provisions inserted ‘‘, private nonprofit organi- heading and text of subpar. (A) generally. Prior to
zation,’’ after ‘‘small business concern’’ and ‘‘, the or- amendment, text read as follows: ‘‘With respect to each
ganization,’’ after ‘‘the concern’’. loan guaranteed under this subsection (other than a
Subsec. (b)(2)(A). Pub. L. 110–246, § 12063(c)(2), sub- loan that is repayable in 1 year or less), the Adminis-
stituted ‘‘Robert T. Stafford Disaster Relief and Emer- tration shall collect a guarantee fee, which shall be
gency Assistance Act (42 U.S.C. 5121 et seq.)’’ for ‘‘Dis- payable by the participating lender, and may be
aster Relief and Emergency Assistance Act’’. charged to the borrower, as follows:
Subsec. (b)(2)(D). Pub. L. 110–246, § 12061(a)(2), inserted ‘‘(i) A guarantee fee equal to 2 percent of the de-
‘‘, private nonprofit organizations,’’ after ‘‘small busi- ferred participation share of a total loan amount that
ness concerns’’. is not more than $150,000.
Subsec. (b)(3)(C). Pub. L. 110–186, § 201(a), substituted ‘‘(ii) A guarantee fee equal to 3 percent of the de-
‘‘1 year’’ for ‘‘90 days’’ and inserted at end ‘‘The Admin- ferred participation share of a total loan amount that
istrator may, when appropriate (as determined by the is more than $150,000, but not more than $700,000.
Administrator), extend the ending date specified in the ‘‘(iii) A guarantee fee equal to 3.5 percent of the de-
preceding sentence by not more than 1 year.’’ ferred participation share of a total loan amount that
Subsec. (b)(3)(E). Pub. L. 110–246, § 12077, inserted ‘‘, or is more than $700,000.’’
have become due to changed economic circumstances,’’ Subsec. (a)(18)(C). Pub. L. 108–447, § 102(b), struck out
after ‘‘constitutes’’. heading and text of subpar. (C). Text read as follows:
Subsec. (b)(3)(G), (H). Pub. L. 110–186, §§ 203, 204, added ‘‘With respect to loans approved during the 2-year pe-
subpars. (G) and (H). riod beginning on October 1, 2002, the guarantee fee
Subsec. (b)(4), (5). Pub. L. 110–246, § 12063(a), added
under subparagraph (A) shall be as follows:
pars. (4) and (5).
‘‘(i) A guarantee fee equal to 1 percent of the de-
Subsec. (b)(6). Pub. L. 110–246, § 12066(a), added par. (6).
Subsec. (b)(7). Pub. L. 110–246, § 12074(a), added par. (7). ferred participation share of a total loan amount that
Subsec. (b)(8). Pub. L. 110–246, § 12078(a), added par. (8). is not more than $150,000.
Subsec. (b)(9). Pub. L. 110–246, § 12081, added par. (9). ‘‘(ii) A guarantee fee equal to 2.5 percent of the de-
Subsec. (b)(9)(C), (D). Pub. L. 110–246, § 12082, added ferred participation share of a total loan amount that
subpars. (C) and (D). is more than $150,000, but not more than $700,000.
Subsec. (c). Pub. L. 110–246, § 12083(a), added subsec. ‘‘(iii) A guarantee fee equal to 3.5 percent of the de-
(c). ferred participation share of a total loan amount that
Pub. L. 110–246, § 12068(a)(1), redesignated subsec. (c) is more than $700,000.’’
as (d). Subsec. (a)(23). Pub. L. 108–447, § 102(c)(1), substituted
Subsec. (c)(5)(C). Pub. L. 110–246, § 12061(b), inserted ‘‘Yearly’’ for ‘‘Annual’’ in heading.
‘‘, private nonprofit organization,’’ after ‘‘business’’. Subsec. (a)(23)(A). Pub. L. 108–447, § 102(c)(2), added
Subsec. (c)(6). Pub. L. 110–246, § 12065, substituted subpar. (A) and struck out heading and text of former
‘‘$14,000 or less (or such higher amount as the Adminis- subpar. (A). Text read as follows: ‘‘With respect to each
trator determines appropriate in the event of a major loan guaranteed under this subsection, the Administra-
disaster)’’ for ‘‘$10,000 or less’’. tion shall, in accordance with such terms and proce-
§ 636 TITLE 15—COMMERCE AND TRADE Page 856
dures as the Administration shall establish by regula- Subsec. (m)(7)(A). Pub. L. 106–554, § 1(a)(9) [title II,
tion, assess and collect an annual fee in an amount § 210(a)(6)], added subpar. (A) and struck out heading
equal to 0.5 percent of the outstanding balance of the and text of former subpar. (A). Text read as follows:
deferred participation share of the loan. With respect ‘‘During the program authorized by this subsection, the
to loans approved during the 2-year period beginning on Administration may fund, on a competitive basis, not
October 1, 2002, the annual fee assessed and collected more than 200 microloan programs.’’
under the preceding sentence shall be in an amount Subsec. (m)(11)(B). Pub. L. 106–554, § 1(a)(9) [title II,
equal to 0.25 percent of the outstanding balance of the § 210(b)], substituted ‘‘$35,000’’ for ‘‘$25,000’’.
deferred participation share of the loan.’’ 1999—Subsec. (a)(10). Pub. L. 106–50, § 401(b), inserted
Subsec. (a)(23)(B). Pub. L. 108–447, § 102(c)(3), sub- ‘‘guaranteed’’ after ‘‘provide’’ and ‘‘, including service-
stituted ‘‘yearly’’ for ‘‘annual’’. disabled veterans,’’ after ‘‘handicapped individual’’.
Subsec. (a)(23)(C). Pub. L. 108–447, § 102(c)(4), added Subsec. (a)(21)(A)(ii). Pub. L. 106–50, § 404, inserted ‘‘or
subpar. (C). a veteran’’ after ‘‘qualified individual’’.
Subsec. (a)(31). Pub. L. 108–447, § 101(a), added par. (31). Subsec. (a)(27). Pub. L. 106–8, § 3(a), (c), temporarily
2001—Subsec. (a)(18)(C). Pub. L. 107–100, § 6(a)(1), added added par. (27) relating to Year 2000 computer problem
subpar. (C). program. See Effective and Termination Dates of 1999
Subsec. (a)(23)(A). Pub. L. 107–100, § 6(a)(2), inserted at Amendments note below.
end ‘‘With respect to loans approved during the 2-year Subsec. (b)(1)(C). Pub. L. 106–24, § 1(a), added subpar.
period beginning on October 1, 2002, the annual fee as- (C).
sessed and collected under the preceding sentence shall Subsec. (b)(3). Pub. L. 106–50, § 402(b), added par. (3).
Subsec. (m)(1)(A)(i). Pub. L. 106–50, § 403, inserted
be in an amount equal to 0.25 percent of the out-
‘‘veteran (within the meaning of such term under sec-
standing balance of the deferred participation share of
tion 632(q) of this title),’’ after ‘‘low-income,’’.
the loan.’’ Subsec. (m)(3)(D). Pub. L. 106–22, § 3, struck out sub-
2000—Subsec. (a)(2)(A)(i). Pub. L. 106–554, § 1(a)(9)
par. (D) heading and amended text generally. Prior to
[title II, § 202(1)], substituted ‘‘$150,000’’ for ‘‘$100,000’’.
amendment, text read as follows: ‘‘The Administration
Subsec. (a)(2)(A)(ii). Pub. L. 106–554, § 1(a)(9) [title II,
shall, by regulation, require each intermediary to es-
§ 202(2)], substituted ‘‘85 percent’’ for ‘‘80 percent’’ and
tablish a loan loss reserve fund, and to maintain such
‘‘$150,000’’ for ‘‘$100,000’’.
reserve fund until all obligations owed to the Adminis-
Subsec. (a)(3)(A). Pub. L. 106–554, § 1(a)(9) [title II,
tration under this subsection are repaid. The Adminis-
§ 203], substituted ‘‘$1,000,000 (or if the gross loan
tration shall require the loan loss reserve fund to be
amount would exceed $2,000,000),’’ for ‘‘$750,000,’’.
Subsec. (a)(4). Pub. L. 106–554, § 1(a)(9) [title II, maintained—
‘‘(i) during the initial 5 years of the intermediary’s
§ 205(1)], inserted heading and struck out former head-
participation in the program under this subsection,
ing ‘‘Interest rates and fees.—’’.
at a level equal to not more than 15 percent of the
Subsec. (a)(4)(B)(iii). Pub. L. 106–554, § 1(a)(9) [title II,
outstanding balance of the notes receivable owed to
§ 204], added cl. (iii).
Subsec. (a)(4)(C). Pub. L. 106–554, § 1(a)(9) [title II, the intermediary; and
‘‘(ii) in each year of participation thereafter, at a
§ 205(2)], added subpar. (C).
level equal to not more than the greater of—
Subsec. (a)(18). Pub. L. 106–554, § 1(a)(9) [title II, § 206],
‘‘(I) 2 times an amount reflecting the total losses
amended heading and text of par. (18) generally, sub-
of the intermediary as a result of participation in
stituting present provisions for provisions which had the program under this subsection, as determined
authorized guarantee fee in an amount equal to sum of by the Administrator on a case-by-case basis; or
3 percent of amount of deferred participation share of ‘‘(II) 10 percent of the outstanding balance of the
loan that was less than or equal to $250,000, if deferred notes receivable owed to the intermediary.’’
participation share of loan exceeded $250,000, plus 3.5 Subsec. (m)(7)(B). Pub. L. 106–22, § 2(1), added subpar.
percent of difference between $500,000 or total deferred (B) and struck out heading and text of former subpar.
participation share of loan, whichever was less, and (B). Text read as follows: ‘‘During any fiscal year, a
$250,000, plus, if deferred participation share of loan ex- State shall not receive new loan funds from the Admin-
ceeded $500,000, 3.875 percent of difference between total istration that exceed 125 percent of the State’s pro rata
deferred participation share of loan and $500,000, and share of the microloan program authorization during
set forth provisions relating to exception for certain such fiscal year, such share to be based on the popu-
loans. lation of the State, as compared to the total population
Subsec. (a)(28). Pub. L. 106–554, § 1(a)(9) [title II, § 207], of the United States. If, however, at the beginning of
added par. (28). the fourth quarter of a fiscal year the Administration
Subsec. (a)(29). Pub. L. 106–554, § 1(a)(9) [title II, determines that a portion of appropriated microloan
§ 208(a)], added par. (29). funds are unlikely to be awarded during that year, the
Subsec. (a)(30). Pub. L. 106–554, § 1(a)(9) [title VIII, Administration may make additional funds available
§ 802(a)], added par. (30). to a State in excess of 125 percent of the pro rata share
Subsec. (m)(1)(A)(iii)(I). Pub. L. 106–554, § 1(a)(9) [title of that State.’’
II, § 210(a)(2)], substituted ‘‘$10,000’’ for ‘‘$7,500’’. Subsec. (m)(8). Pub. L. 106–22, § 2(2), inserted ‘‘and
Subsec. (m)(1)(B)(iii). Pub. L. 106–554, § 1(a)(9) [title II, providing funding to intermediaries’’ after ‘‘program
§ 210(a)(1)], substituted ‘‘$35,000’’ for ‘‘$25,000’’. applicants’’ and ‘‘and provide funding to’’ after ‘‘shall
Subsec. (m)(3)(A)(ii). Pub. L. 106–554, § 1(a)(9) [title II, select’’.
§ 210(a)(2)], substituted ‘‘$10,000’’ for ‘‘$7,500’’. Subsec. (n). Pub. L. 106–50, § 402(a), added subsec. (n).
Subsec. (m)(3)(E). Pub. L. 106–554, § 1(a)(9) [title II, 1998—Subsec. (j)(13)(E). Pub. L. 105–277, § 101(f) [title
§ 210(a)(1), (3)], substituted ‘‘$20,000’’ for ‘‘$15,000’’ and VIII, § 405(f)(9)], struck out ‘‘the Job Training Partner-
‘‘$35,000’’ for ‘‘$25,000’’ in two places. ship Act or’’ before ‘‘title I of the Workforce’’ in intro-
Subsec. (m)(4)(C)(i). Pub. L. 106–554, § 1(a)(9) [title II, ductory provisions.
§ 210(a)(2)], which directed the amendment of subsec. Pub. L. 105–277, § 101(f) [title VIII, § 405(d)(10)], sub-
(m)(4)(C)(i)(II) by substituting ‘‘$10,000’’ for ‘‘$7,500’’, stituted ‘‘the Job Training Partnership Act or title I of
was executed by making the substitution in subsec. the Workforce Investment Act of 1998’’ for ‘‘the Job
(m)(4)(C)(i) to reflect the probable intent of Congress Training Partnership Act (29 U.S.C. 1501 et seq.)’’.
and the termination of the temporary amendment by 1997—Subsec. (a). Pub. L. 105–135, § 231(1), inserted
Pub. L. 103–403, § 208(a)(2), (c). See 1994 Amendment note heading.
and Effective and Termination Dates of 1994 Amend- Subsec. (a)(1). Pub. L. 105–135, § 231(2), inserted head-
ment note below. ing, designated existing provisions as subpar. (A) and
Subsec. (m)(5)(A). Pub. L. 106–554, § 1(a)(9) [title II, inserted heading, and added subpar. (B).
§ 210(a)(4)], substituted ‘‘55 grants’’ for ‘‘25 grants’’ and Subsec. (a)(8). Pub. L. 105–135, § 706, added par. (8).
‘‘$200,000’’ for ‘‘$125,000’’. Subsec. (m). Pub. L. 105–135, § 201(c), struck out
Subsec. (m)(6)(B). Pub. L. 106–554, § 1(a)(9) [title II, ‘‘Demonstration’’ and ‘‘demonstration’’ wherever ap-
§ 210(a)(5)], substituted ‘‘$15,000’’ for ‘‘$10,000’’. pearing in heading and text.
Page 857 TITLE 15—COMMERCE AND TRADE § 636
Subsec. (m)(1)(A)(iv). Pub. L. 105–135, § 202(a)(1), added proposal to the Administration under that Act and the
cl. (iv). loan would provide part or all of the financial assist-
Subsec. (m)(3)(C). Pub. L. 105–135, § 201(a), substituted ance necessary to carry out such proposal, and (3) the
‘‘$3,500,000’’ for ‘‘$2,500,000’’. Secretary’s certification is in force at the time the Ad-
Subsec. (m)(3)(D)(i), (ii). Pub. L. 105–135, § 201(b), ministration makes the loan. With respect to loans
added cls. (i) and (ii) and struck out former cls. (i) and made under this subsection the Administration shall
(ii) which read as follows: apply the provisions of sections 314, 315, 316, 318, 319,
‘‘(i) in the first year of the intermediary’s participa- and 320 of the Trade Expansion Act of 1962 as though
tion in the demonstration program, at a level equal to such loans had been made under section 314 of that
not more than 15 percent of the outstanding balance of Act.’’
the notes receivable owed to the intermediary; and Subsec. (f). Pub. L. 104–208, § 107(c), amended subsec.
‘‘(ii) in each year of participation thereafter, at a (f) generally, substituting ‘‘(f) [RESERVED]’’ for prior
level reflecting the intermediary’s total losses as a re- provisions of subsec. (f) which read as follows: ‘‘In the
sult of participation in the demonstration program, as administration of the disaster loan program under sub-
determined by the Administration on a case-by-case section (b)(1) of this section, in the case of property
basis, but in no case shall the required level exceed 15 loss or damage as a result of a disaster which is a
percent of the outstanding balance of the notes receiv- ‘major disaster’ as defined in section 102(2) of the Dis-
able owed to the intermediary under the program.’’ aster Relief and Emergency Assistance Act, the Small
Subsec. (m)(4)(E). Pub. L. 105–135, § 201(d)(1), des- Business Administration, to the extent such loss or
ignated existing provisions as cl. (i), inserted heading, damage is not compensated for by insurance or other-
substituted ‘‘25 percent’’ for ‘‘15 percent’’, and added cl. wise, may lend to a privately owned college or univer-
(ii). sity without regard to whether the required financial
Subsec. (m)(4)(F). Pub. L. 105–135, § 202(a)(2), added assistance is otherwise available from private sources,
subpar. (F). and may waive interest payments and defer principal
Subsec. (m)(5)(A). Pub. L. 105–135, § 201(d)(2), struck payments on such a loan for the first three years of the
out ‘‘in each of the 5 years of the demonstration pro- term of the loan.’’
gram established under this subsection,’’ after ‘‘re- Subsec. (l). Pub. L. 104–208, § 107(c), amended subsec.
quirements of subparagraph (B),’’ and substituted ‘‘an- (l) generally, substituting ‘‘(l) [RESERVED]’’ for prior
nually’’ for ‘‘for terms of up to 5 years’’. provisions of subsec. (l) which consisted of 9 pars. au-
Subsec. (m)(6)(E). Pub. L. 105–135, § 202(a)(3), added thorizing loans to small business concerns for solar en-
subpar. (E). ergy and energy conservation measures.
Subsec. (m)(9). Pub. L. 105–135, § 202(a)(4)(A), sub- Subsec. (m)(7)(B). Pub. L. 104–208, § 105, inserted at
stituted ‘‘Grants for management, marketing, tech- end ‘‘If, however, at the beginning of the fourth quarter
nical assistance, and related services’’ for ‘‘Technical of a fiscal year the Administration determines that a
assistance for intermediaries’’ in heading. portion of appropriated microloan funds are unlikely to
Subsec. (m)(9)(C). Pub. L. 105–135, § 202(a)(4)(B), added be awarded during that year, the Administration may
subpar. (C). make additional funds available to a State in excess of
Subsec. (m)(12). Pub. L. 105–135, § 201(c)(4), substituted 125 percent of the pro rata share of that State.’’
‘‘1998 through 2000’’ for ‘‘1995 through 1997’’. 1995—Subsec. (a)(2). Pub. L. 104–36, § 2, amended par.
Subsec. (m)(13). Pub. L. 105–135, § 202(a)(5), added par. (2) generally. Prior to amendment, par. (2) related to
(13). percentage levels in loan participation agreements.
1996—Subsec. (a)(2)(C)(ii)(II). Pub. L. 104–208, § 103(a), Subsec. (a)(18). Pub. L. 104–36, § 3(a), amended par. (18)
amended subcl. (II) generally. Prior to amendment, generally. Prior to amendment, par. (18) read as fol-
subcl. (II) read as follows: ‘‘authority to service and liq- lows: ‘‘The Administration shall collect a guarantee fee
uidate such loans.’’ equal to two percent of the amount of the deferred par-
Subsec. (a)(2)(D). Pub. L. 104–208, § 111, added subpar. ticipation share of any loan under this subsection other
(D). than a loan repayable in one year or less. The fee shall
Subsec. (a)(4). Pub. L. 104–208, § 103(f), inserted par. (4) be payable by the participating lending institution and
heading, designated existing text as subpar. (A) and in- may be charged to the borrower.’’
serted heading, and added subpar. (B). Subsec. (a)(19)(B). Pub. L. 104–36, § 3(b)(1), substituted
Subsec. (a)(19)(C). Pub. L. 104–208, § 103(b), added sub- ‘‘shall develop’’ for ‘‘shall (i) develop’’ and struck out
par. (C). at end ‘‘, and (ii) allow such lenders to retain one-half
Subsec. (a)(25). Pub. L. 104–208, § 103(c), added par. (25). of the fee collected pursuant to subsection (a)(18) of
Subsec. (a)(26). Pub. L. 104–208, § 103(d), added par. (26). this section on such loans. A participating lender may
Subsec. (d). Pub. L. 104–208, § 107(a), struck out ‘‘(1)’’ not retain any fee pursuant to this paragraph if the
before ‘‘The Administration’’ and struck out par. (2) amount committed and outstanding to the applicant
which read as follows: ‘‘The Administration is author- would exceed $50,000 unless the amount in excess of
ized to hold seminars throughout the Nation to make $50,000 is an amount not approved under the provisions
potential applicants aware of the opportunities avail- of this paragraph’’.
able under this subsection and related government en- Subsec. (a)(19)(C). Pub. L. 104–36, § 3(b)(2), struck out
ergy programs, and to make grants to qualified organi- subpar. (C) which read as follows: ‘‘In order to encour-
zations to provide training seminars for small business age lending institutions and other entities making
concerns regarding practical and easily implemented loans authorized under this subsection to provide loans
methods for design, manufacture, installation, and to small business loan applicants located in rural areas,
servicing of equipment and for providing services listed such lenders shall be permitted to retain one-half of the
in paragraph (1) of this subsection, except that recipi- fee collected pursuant to paragraph (18) on loans of less
ents of loans made pursuant to this subsection shall than $75,000. A participating lender may not retain any
not subsequently be eligible for such grants.’’ fee pursuant to this subparagraph if the amount com-
Subsec. (e). Pub. L. 104–208, § 107(b), amended subsec. mitted and outstanding to the applicant would exceed
(e) generally, substituting ‘‘(e) [RESERVED]’’ for prior $75,000 unless the amount in excess of $75,000 is an
provisions of subsec. (e) which read as follows: ‘‘The amount not approved under the provisions of this sub-
Administration also is empowered to make loans (ei- paragraph. This subparagraph shall cease to be effec-
ther directly or in cooperation with banks or other tive on October 1, 1995.’’
lenders through agreements to participate on an imme- Subsec. (a)(23). Pub. L. 104–36, § 4(a), added par. (23).
diate or deferred basis) to assist any firm to adjust to Subsec. (a)(24). Pub. L. 104–36, § 5, added par. (24).
changed economic conditions resulting from increased 1994—Subsec. (a)(2)(B)(iv). Pub. L. 103–403, § 211,
competition from imported articles, but only if (1) an amended cl. (iv) generally. Prior to amendment, cl. (iv)
adjustment proposal of such firm has been certified by read as follows: ‘‘not less than 85 percent of the financ-
the Secretary of Commerce pursuant to the Trade Ex- ing outstanding at the time of disbursement if such fi-
pansion Act of 1962, (2) the Secretary has referred such nancing is a loan under paragraph (16).’’
§ 636 TITLE 15—COMMERCE AND TRADE Page 858
Subsec. (a)(3)(B). Pub. L. 103–403, § 210, amended sub- ness concern is located, in which, according to the most
par. (B) generally. Prior to amendment, subpar. (B) recent data available from the Bureau of the Census,
read as follows: ‘‘if the total amount outstanding and Department of Commerce, not less than 40 percent of
committed (on a deferred basis) solely for the purposes residents have an annual income that is at or below the
provided in paragraph (16) to the borrower from the poverty level.’’. See Effective and Termination Dates of
business loan and investment fund established by this 1994 Amendment note below.
chapter would exceed $1,000,000, such amount to be in Subsec. (m)(12). Pub. L. 103–403, § 201, added par. (12).
addition to any financing solely for working capital, 1993—Subsec. (a)(2). Pub. L. 103–81, § 5(a)(2)–(4), in con-
supplies, or revolving lines of credit for export purposes cluding provisions, substituted ‘‘less than the above
up to a maximum of $250,000; and’’. specified percentums’’ for ‘‘less than 85 percent under
Subsec. (a)(14)(A). Pub. L. 103–403, § 209, amended sub- subparagraph (B)’’ and ‘‘not less than 70 percent, unless
par. (A) generally. Prior to amendment, subpar. (A) a lesser percent is required by clause (B)(ii) or upon
read as follows: ‘‘The Administration under this sub- the’’ for ‘‘not less than 80 percent, except upon’’ and in-
section may provide extensions and revolving lines of serted after third sentence ‘‘The maximum interest
credit for export purposes and financing to enable small rate for a loan guaranteed under the Preferred Lenders
business concerns, including small business export Program shall not exceed the maximum interest rate,
trading companies and small business export manage- as determined by the Administration, which is made
ment companies, to develop foreign markets. No such applicable to other loan guarantees under subsection
extension or revolving line of credit may be made for (a) of this section.’’
a period or periods exceeding 3 years. A bank or partici- Subsec. (a)(2)(B). Pub. L. 103–81, § 5(a)(1), struck out
pating lending institution may establish the rate of in- ‘‘and’’ at end of cl. (i), added cls. (ii) and (iii), and re-
terest on extensions and revolving lines of credit as designated former cl. (ii) as (iv).
may be legal and reasonable.’’ Subsec. (a)(22). Pub. L. 103–81, § 4, added par. (22).
Subsec. (a)(21)(A). Pub. L. 103–403, § 605(a), inserted Subsec. (m)(1)(B)(iii). Pub. L. 103–81, § 8(1), substituted
‘‘on a guaranteed basis’’ before ‘‘under the authority’’. ‘‘$25,000’’ for ‘‘$15,000’’.
Subsec. (a)(21)(E). Pub. L. 103–403, § 603, added subpar. Subsec. (m)(5)(A). Pub. L. 103–81, § 8(2), substituted
(E). ‘‘25 grants for terms of up to 5 years’’ for ‘‘6 grants’’.
Subsec. (m)(3)(C). Pub. L. 103–403, § 206, substituted Subsec. (m)(9)(B). Pub. L. 103–81, § 8(3), substituted ‘‘7
‘‘$2,500,000’’ for ‘‘$1,250,000’’. percent’’ for ‘‘3 percent’’.
Subsec. (m)(4)(B). Pub. L. 103–403, § 208(a)(1), (c), tem- 1992—Subsec. (a)(4). Pub. L. 102–366, § 104, substituted
porarily inserted ‘‘except for a grant made to an inter- ‘‘Notwithstanding the provisions of the constitution of
mediary that provides not less than 50 percent of its any State or the laws of any State limiting the rate or
loans to small business concerns located in or owned by amount of interest which may be charged, taken, re-
one or more residents of an economically distressed ceived, or reserved, the maximum legal rate of interest
area,’’ after ‘‘under subparagraph (A),’’. See Effective on any financing made on a deferred basis pursuant to
and Termination Dates of 1994 Amendment note below. this subsection’’ for ‘‘The rate of interest on financings
Subsec. (m)(4)(C)(i). Pub. L. 103–403, § 208(a)(2), (c), made on a deferred basis shall be legal and reasonable
temporarily added cl. (i) which read as follows: ‘‘In ad- but’’.
dition to grants made under subparagraph (A), each Subsec. (a)(21). Pub. L. 102–366, § 211, added par. (21).
intermediary shall be eligible to receive a grant equal Subsec. (m)(1)(A)(i). Pub. L. 102–366, § 113(a)(1)(A),
to 5 percent of the total outstanding balance of loans amended cl. (i) generally, substituting ‘‘and business
made to the intermediary under this subsection if— owners and other such individuals’’ for ‘‘, business
‘‘(I) the intermediary provides not less than 25 per- owners, and other individuals’’.
cent of its loans to small business concerns located in Subsec. (m)(1)(A)(iii)(I). Pub. L. 102–366, § 113(a)(1)(B),
or owned by one or more residents of an economically inserted ‘‘, particularly loans in amounts averaging
distressed area; or not more than $7,500,’’ after ‘‘small-scale loans’’.
‘‘(II) the intermediary has a portfolio of loans made Subsec. (m)(3)(A). Pub. L. 102–366, § 113(a)(2), des-
under this subsection that averages not more than ignated existing provisions as cl. (i) and inserted head-
$7,500 during the period of the intermediary’s partici- ing, redesignated cls. (i) to (viii) as subcls. (I) to (VIII),
pation in the program.’’ respectively, substituted ‘‘economic, poverty, and un-
See Effective and Termination Dates of 1994 Amend- employment’’ for ‘‘economic and unemployment’’ in
ment note below. subcl. (III), amended subcl. (VIII) generally, and added
Subsec. (m)(4)(E). Pub. L. 103–403, § 207, added subpar. cl. (ii). Prior to amendment, subcl. (VIII) read as fol-
(E). lows: ‘‘any plan to involve private sector lenders in as-
Subsec. (m)(7). Pub. L. 103–403, § 204, amended par. (7) sisting selected small business concerns.’’
generally, substituting present provisions for former Subsec. (m)(3)(F). Pub. L. 102–366, § 113(a)(3), amended
provisions relating to program funding, which provided subpar. (F) generally. Prior to amendment, subpar. (F)
for: in subpar. (A), first year programs; in subpar. (B), read as follows: ‘‘Loans made by the Administration
expanded programs; and in subpar. (C), State limita- under this subsection shall be for a term of 10 years and
tions. at an interest rate equal to the rate determined by the
Subsec. (m)(8). Pub. L. 103–403, § 205, amended heading Secretary of the Treasury for obligations of the United
and text of par. (8) generally. Prior to amendment, text States with a period of maturity of 5 years, adjusted to
read as follows: ‘‘In funding microloan programs, the the nearest one-eighth of 1 percent.’’
Administration shall ensure that at least one-half of Subsec. (m)(4)(A). Pub. L. 102–366, § 113(a)(4)(B), added
the programs funded under this subsection will provide subpar. (A) and struck out former subpar. (A) which
microloans to small business concerns located in rural read as follows: ‘‘Except as otherwise provided in sub-
areas.’’ paragraph (C) and subject to the requirements of sub-
Subsec. (m)(9)(B). Pub. L. 103–403, § 604, inserted ‘‘and paragraph (B), each intermediary that receives a loan
loan guarantees’’ after ‘‘for loans’’ and ‘‘and national under subparagraph (B)(i) of paragraph (1) shall be eli-
and regional nonprofit organizations that have dem- gible to receive a grant to provide marketing, manage-
onstrated experience in providing training support for ment, and technical assistance to small business con-
microenterprise development and financing.’’ after ‘‘ex- cerns that are borrowers under this subsection. In the
perienced microlending organizations’’. first and second years of an intermediary’s program
Subsec. (m)(11)(A)(v). Pub. L. 103–403, § 202, added cl. participation, each intermediary meeting the require-
(v). ment of subparagraph (B) may receive a grant of not
Subsec. (m)(11)(D). Pub. L. 103–403, § 208(b), (c), tempo- more than 20 percent of the total outstanding balance
rarily added subpar. (D) which read as follows: ‘‘the of loans made to it under this subsection. In the third
term ‘economically distressed area’, as used in para- and subsequent years of an intermediary’s program
graph (4), means a county or equivalent division of participation, each intermediary meeting the require-
local government of a State in which the small busi- ments of subparagraph (B) may receive a grant of not
Page 859 TITLE 15—COMMERCE AND TRADE § 636
more than 10 percent of the total outstanding balance Subsec. (j)(3)(B). Pub. L. 101–574, § 242(1), struck out
of loans made to it under this subsection.’’ subpar. (B) which read as follows: ‘‘The General Ac-
Pub. L. 102–366, § 113(a)(4)(A), substituted ‘‘Except as counting Office shall evaluate the activities taken by
otherwise provided in subparagraph (C) and subject to’’ the Administration to achieve the purpose of this para-
for ‘‘Subject to’’. graph and evaluate the success of these activities in
Subsec. (m)(4)(B). Pub. L. 102–366, § 113(a)(4)(C), sub- achieving the purposes of this paragraph. The General
stituted ‘‘25 percent’’ for ‘‘one-half’’. Accounting Office shall report to the Congress by Janu-
Subsec. (m)(4)(C), (D). Pub. L. 102–366, § 113(a)(4)(D), ary 1, 1981, and at any time thereafter at the discretion
added subpars. (C) and (D). of the Comptroller General, on the findings of this eval-
Subsec. (m)(5)(A). Pub. L. 102–366, § 113(a)(5), sub- uation and shall make recommendations on actions
stituted ‘‘6 grants’’ for ‘‘2 grants’’. needed to improve the Administration’s performance
Subsec. (m)(6)(C). Pub. L. 102–366, § 113(a)(6), amended pursuant to this paragraph.’’
subpar. (C) generally. Prior to amendment, subpar. (C) Subsec. (j)(8). Pub. L. 101–574, § 242(2), struck out par.
read as follows: ‘‘Notwithstanding any provision of the (8) which read as follows: ‘‘The General Accounting Of-
laws of any State or the constitution of any State per- fice shall provide for an independent and continuing
taining to the rate or amount of interest that may be evaluation of programs under subsections (i) and (j) of
charged, taken, received or reserved on a loan, the this section and section 637(a) of this title, including
maximum rate of interest to be charged on a microloan full information on, and analysis of, the character and
funded under this subsection shall be not more than 4 impact of managerial assistance provided, the location,
percentage points above the prime lending rate, as income characteristics, and extent to which private re-
identified by the Administration and published in the sources and skills have been involved in these pro-
Federal Register on a quarterly basis.’’ grams. Such evaluation together with any rec-
Subsec. (m)(7)(A). Pub. L. 102–564, § 307(b)(1), inserted
ommendations deemed advisable by the Comptroller
at end: ‘‘If, at the end of fiscal year 1992, the Adminis-
General shall be reported to the Congress by January 1,
tration has funded less than 50 microloan programs
1981, and at any time thereafter at the discretion of the
under this subparagraph, the Administration may, in
Comptroller General.’’
fiscal year 1993, fund a number of additional microloan Subsec. (j)(10)(J)(ii). Pub. L. 101–574, § 204(a), amended
programs equal to the difference between 50 and the cl. (ii) generally. Prior to amendment, cl. (ii) read as
number of microloan programs actually funded in fiscal follows: ‘‘Except as provided under section 602 of the
year 1992.’’ Business Opportunity Development Reform Act of 1988,
Pub. L. 102–366, § 113(a)(7)(A), substituted ‘‘60
no award shall be made pursuant to section 637(a) of
microloan programs’’ for ‘‘35 microloan programs’’.
this title to other than a small business concern.’’
Subsec. (m)(7)(B). Pub. L. 102–564, § 307(b)(2), sub-
Subsec. (j)(13)(D)(iii). Pub. L. 101–574, § 206, sub-
stituted ‘‘In addition to any microloan programs au-
stituted ‘‘October 1, 1994’’ for ‘‘October 1, 1992’’.
thorized to be funded in fiscal year 1993 in accordance 1989—Subsec. (a)(2). Pub. L. 101–162, title V, (1),
with subparagraph (A), in the second’’ for ‘‘In the sec- amended par. (2) generally. Prior to amendment, par.
ond’’. (2) read as follows: ‘‘In agreements to participate in
Pub. L. 102–366, § 113(a)(7)(B), substituted ‘‘50 addi-
loans on a deferred basis under this subsection, such
tional’’ for ‘‘25 additional’’.
Subsec. (m)(7)(C)(i). Pub. L. 102–366, § 113(a)(7)(C), participation by the Administration, except as pro-
amended cl. (i) generally. Prior to amendment, cl. (i) vided in paragraph (6), shall be:
‘‘(A) not less than 90 per centum of the balance of
read as follows: ‘‘be awarded more than 2 microloan
the financing outstanding at the time of disburse-
programs in any year of the demonstration program;’’.
Subsec. (m)(7)(C)(ii), (iii). Pub. L. 102–366, ment if such financing does not exceed $155,000; and
‘‘(B) subject to the limitation in paragraph (3)—
§ 113(a)(7)(D), (E), substituted ‘‘$1,500,000’’ for
‘‘(i) not less than 70 per centum nor more than 85
‘‘$1,000,000’’ in cl. (ii) and ‘‘$2,500,000’’ for ‘‘$1,500,000’’ in
per centum of the financing outstanding at the
cl. (iii).
Subsec. (m)(9), (10). Pub. L. 102–366, § 113(a)(8), (9), time of disbursement if such financing exceeds
added par. (9) and redesignated former par. (9) as (10). $155,000 but is less than $714,285,
‘‘(ii) less than 70 per centum of the financing out-
Former par. (10) redesignated (11).
Subsec. (m)(11). Pub. L. 102–564, § 307(c), inserted ‘‘pri- standing at the time of disbursement if such financ-
vate,’’ before ‘‘nonprofit’’ in subpar. (A)(ii). ing exceeds $714,285;
Pub. L. 102–366, § 113(a)(8), (10), redesignated par. (10) ‘‘(iii) not less than 85 per centum of the financing
as (11) and amended subpar. (A) generally. Prior to outstanding at the time of disbursement if such fi-
amendment, subpar. (A) read as follows: ‘‘the term nancing is a loan under paragraph (16) and is less
‘intermediary’ means a private, nonprofit entity or a than $1,176,470; and
nonprofit community development corporation that ‘‘(iv) less than 85 per centum of the financing out-
seeks to borrow or has borrowed funds from the Small standing at the time of disbursement if such financ-
Business Administration to make microloans to small ing is a loan under paragraph (16) and exceeds
business concerns under this subsection;’’. $1,176,470;
1991—Subsec. (a)(18). Pub. L. 102–140, § 609(b), struck Provided, That the Administration shall not use the per
out ‘‘or a loan under paragraph (13)’’ after ‘‘one year or centum of guarantee requested as a criterion to estab-
less’’. lish priorities in approving guarantee requests nor
Subsec. (a)(19)(B). Pub. L. 102–191 struck out ‘‘during shall the Administration reduce the per centum guar-
fiscal years 1989, 1990, and 1991,’’ after ‘‘small business anteed to less than 85 per centum pursuant to subpara-
loan applicants,’’. graph (B) other than by a determination made on each
Subsec. (m). Pub. L. 102–140, § 609(h), added subsec. application: Provided, further, That the Administration
(m). may reduce its participation below the per centums
1990—Subsec. (a)(14)(A). Pub. L. 101–574, § 202, struck stated in this paragraph if the lender requests the re-
out ‘‘pre-export’’ before ‘‘financing’’ and substituted ‘‘3 duction under the preferred lenders program or any
years’’ for ‘‘18 months’’. successor thereto, but any such reduction shall not ex-
Subsec. (a)(16)(A). Pub. L. 101–574, § 245, struck out at ceed five points. As used in this sentence the term ‘pre-
end ‘‘The lender shall agree to sell the loan in the sec- ferred lenders program’ means a program under which,
ondary market as authorized in sections 634(f) and pursuant to a written agreement between the lender
634(g) of this title within 180 days of the date of dis- and the Administration, the lender has been delegated
bursement.’’ (1) complete authority to make and close loans with a
Subsec. (a)(19)(C). Pub. L. 101–574, § 307, added subpar. guarantee from the Administration without obtaining
(C). the prior specific approval of the Administration, and
Subsec. (j)(3)(A). Pub. L. 101–574, § 242(1), struck out (2) authority to service and liquidate such loans.’’
subpar. (A), which was previously struck out by Pub. L. Subsec. (a)(19). Pub. L. 101–162, title V, (2), amended
100–656, § 505(h). See 1988 Amendment note below. par. (19) generally. Prior to amendment, par. (19) read
§ 636 TITLE 15—COMMERCE AND TRADE Page 860
as follows: ‘‘During fiscal years 1989, 1990, and 1991, in Subsec. (j)(10)(J)(i). Pub. L. 101–37, § 6(a), substituted
addition to the preferred lenders program authorized by ‘‘suspended’’ for ‘‘suspended or terminated’’.
the proviso in section 634(b)(7) of this title, the Admin- Subsec. (j)(11)(B). Pub. L. 101–37, § 4(1), added subpar.
istration is authorized to establish a certified loan pro- (B) and struck out former subpar. (B) which read as fol-
gram for lenders who establish their knowledge of Ad- lows: ‘‘Except as provided in section 602(d) of the Busi-
ministration laws and regulations concerning the loan ness Opportunity Development Reform Act of 1988, any
guarantees program and their proficiency in program individual upon whom eligibility is based pursuant to
requirements. In order to encourage certified lenders section 637(a)(4) of this title, shall be permitted to as-
and preferred lenders to provide loans of $50,000 or less sert such eligibility for only one small business con-
in guarantees to eligible small business loan appli- cern. Notwithstanding the provisions of the preceding
cants, the Administration (A) shall develop and shall sentence, no individual who was determined pursuant
allow participating lenders in the certified loan pro- to section 637(a) of this title to be socially and eco-
gram and in the preferred loan program to solely uti- nomically disadvantaged before June 1, 1989, shall be
lize a uniform and simplified loan form for such loans permitted to assert such disadvantage with respect to
and (B) shall allow such lenders to retain one-half of any other concern making application for certification
the fee collected pursuant to subsection (a)(16) of this after June 1, 1989.’’
section on such loans: Provided, That a participating Subsec. (j)(11)(E). Pub. L. 101–37, § 4(2), (3), substituted
lender may not retain any fee pursuant to this para- ‘‘Office of Minority Small Business’’ for ‘‘Office of the
graph if the amount committed and outstanding to the Associate Administrator for Minority Small Business’’
applicant would exceed $50,000 unless such excess and ‘‘the Associate Administrator for Minority Small
amount was not approved under the provisions of this Business and Capital Ownership Development’’ for
paragraph. The designation of a lender as a certified ‘‘such Associate Administrator’’.
lender shall be suspended or revoked at any time that Subsec. (j)(11)(F)(v). Pub. L. 101–37, § 4(4), substituted
the Administration determines that the lender is not ‘‘to the Associate Administrator’’ for ‘‘with the Asso-
adhering to its rules and regulations or if the Adminis- ciate Administrator’’.
tration determines that the loss experience of the lend- Subsec. (j)(11)(F)(vi). Pub. L. 101–37, § 4(5), added cl.
er is excessive as compared to other lenders: Provided (vi) and struck out former cl. (vi) which read as follows:
further, That any suspension or revocation of the des- ‘‘decide protests from applicants that have been denied
ignation shall not affect any outstanding guarantee: program admission;’’.
Subsec. (j)(11)(F)(viii). Pub. L. 101–37, § 4(6), sub-
And, provided further, That the Administration may not
stituted ‘‘subparagraph (I)’’ for ‘‘subparagraph (H)’’.
reduce the per centum of guarantee as a criterion of Subsec. (j)(11)(G)(ii). Pub. L. 101–37, § 4(7), substituted
eligibility for participation in this program, except as ‘‘Participants’’ for ‘‘participants’’.
otherwise provided by law.’’ Subsec. (j)(11)(H), (I). Pub. L. 101–37, § 4(9), added sub-
Subsec. (a)(20)(C)(iv). Pub. L. 101–37, § 9, inserted ‘‘is’’ par. (H) and redesignated former subpar. (H) as (I).
before ‘‘amortized’’. Subsec. (j)(12)(A). Pub. L. 101–37, § 8(a)(1), substituted
Subsec. (j)(10)(A)(i). Pub. L. 101–37, § 5(a), substituted ‘‘developmental’’ for ‘‘development’’.
‘‘which set forth’’ for ‘‘which sets forth’’. Subsec. (j)(12)(B). Pub. L. 101–37, § 8(a)(2), inserted ‘‘in
Subsec. (j)(10)(D)(i). Pub. L. 101–37, § 5(b)(1), sub- its effort’’ after ‘‘to assist the concern’’.
stituted ‘‘Business Opportunity Specialist’’ for ‘‘busi- Subsec. (j)(13)(E). Pub. L. 101–37, § 8(b), inserted sec-
ness opportunity specialist’’. ond sentence and struck out former second sentence
Subsec. (j)(10)(D)(ii)(II). Pub. L. 101–37, § 5(b)(2), sub- which read as follows: ‘‘Such financial assistance may
stituted ‘‘the small business concern’’ for ‘‘small busi- be made without regard to section 647(a) of this title,
ness concerns’’. shall be made by way of reimbursement to the training
Subsec. (j)(10)(D)(iii). Pub. L. 101–37, § 5(b)(3), inserted provider, and shall have such adjustments as may be
‘‘relating to attaining business activity from sources necessary to provide for overpayments or underpay-
other than contracts awarded pursuant to section 637(a) ments.’’
of this title’’ after ‘‘subparagraph (I)’’. 1988—Subsec. (a)(2). Pub. L. 100–590, § 103, inserted
Subsec. (j)(10)(D)(iv). Pub. L. 101–37, § 5(b)(4), sub- ‘‘, but any such reduction shall not exceed five points’’
stituted ‘‘contract awards’’ for ‘‘contact awards’’. after ‘‘any successor thereto’’ in second proviso.
Subsec. (j)(10)(D)(iv)(I). Pub. L. 101–37, § 5(b)(5), in- Subsec. (a)(2)(B)(iii), (iv). Pub. L. 100–418, § 8007(a)(1),
serted ‘‘relating to attaining business activity from added cls. (iii) and (iv).
sources other than contracts awarded pursuant to sec- Subsec. (a)(3). Pub. L. 100–418, § 8007(a)(2), amended
tion 637(a) of this title’’ after ‘‘subparagraph (I)’’. par. (3) generally. Prior to amendment, par. (3) read as
Subsec. (j)(10)(E)(ii). Pub. L. 101–37, § 7(a)(1), sub- follows: ‘‘No loan under this subsection shall be made
stituted ‘‘completes the period of Program participa- if the total amount outstanding and committed (by
tion as prescribed by paragraph (15)’’ for ‘‘participates participation or otherwise) to the borrower from the
in the Program for a period in excess of the time limits business loan and investment fund established by this
prescribed by paragraph (15)’’. chapter would exceed $500,000: Provided, That no such
Subsec. (j)(10)(F). Pub. L. 101–37, § 7(a)(2), struck out loan made or effected either directly or in cooperation
subpar. (F) appearing first, which read as follows: ‘‘For with banks or other lending institutions through agree-
the purposes of this subsection and section 637(a) of ments to participate on an immediate basis shall ex-
this title, the terms ‘terminated’ or ‘termination’ shall ceed $350,000.’’
mean the total denial’’. Subsec. (a)(12). Pub. L. 100–590, § 111(c), designated ex-
Pub. L. 101–37, § 7(a)(3), in subpar. (F) appearing sec- isting provisions as subpar. (A) and added subpar.
ond, inserted first sentence and struck out former first (b)[(B)].
sentence which read as follows: ‘‘For the purposes of Subsec. (a)(14). Pub. L. 100–418, § 8005, amended par.
this chapter, this subsection and section 637(a) of this (14) generally. Prior to amendment, par. (14) read as
title, the terms ‘terminated’ or ‘termination’ shall follows: ‘‘The Administration under this subsection
mean the total denial or suspension of assistance pro- may provide extensions and revolving lines of credit for
vided pursuant to this paragraph or section 637(a) of export purposes to enable small business concerns to
this title prior to the graduation of the participating develop foreign markets and for preexport financing:
small business concern pursuant to subparagraph (H) or Provided, however, That no such extension or revolving
the expiration of the maximum program participation line of credit may be made for a period or periods ex-
in terms prescribed by paragraph (15).’’ ceeding eighteen months. A bank or participating lend-
Subsec. (j)(10)(I). Pub. L. 101–37, § 10(b), designated as ing institution may establish the rate of interest on ex-
subpar. (I) the undesignated subpar. which followed tensions and revolving lines of credit as may be legal
subpar. (H). and reasonable.’’
Pub. L. 101–37, § 10(a), made technical correction to di- Subsec. (a)(16) to (18). Pub. L. 100–418, § 8007(a)(3), (4),
rectory language of Pub. L. 100–656, § 303(a), see 1988 added pars. (16) and (17) and redesignated former par.
Amendment note below. (16) as (18).
Page 861 TITLE 15—COMMERCE AND TRADE § 636
Subsec. (a)(19). Pub. L. 100–533 and Pub. L. 100–590, subpar. designation, but which probably was intended
§ 102(a), made identical amendments adding par. (19). to be subpar. (I). See 1989 Amendment note above.
Subsec. (a)(20). Pub. L. 100–656, § 302, added par. (20). Subsec. (j)(10)(J). Pub. L. 100–656, § 206, added subpar.
Subsec. (b)(1)(A). Pub. L. 100–590, §§ 119(a), 121, sub- (J).
stituted ‘‘natural or other disasters’’ for ‘‘floods, riots Subsec. (j)(11). Pub. L. 100–656, § 201(a), designated ex-
or civil disorders, or other catastrophes’’ and inserted isting provisions as subpar. (A) and added subpars. (B)
proviso that Administration may increase loan up to to (H).
additional 20 per centum to protect damaged or de- Subsec. (j)(12). Pub. L. 100–656, § 301(a), added par. (12).
stroyed property from possible future disasters. Subsec. (j)(13). Pub. L. 100–656, § 301(b), added par. (13).
Subsec. (b)(2)(A). Pub. L. 100–707, § 109(f)(1), sub- Subsec. (j)(14). Pub. L. 100–656, § 301(c), added par. (14).
stituted ‘‘the Disaster Relief and Emergency Assist- Subsec. (j)(15). Pub. L. 100–656, § 202, added par. (15).
ance Act’’ for ‘‘the Act entitled ‘An Act to authorize Subsec. (j)(16). Pub. L. 100–656, § 408, added par. (16).
Federal assistance to States and local governments in 1986—Subsec. (a)(2). Pub. L. 99–272, § 18013, in subpar.
major disasters, and for other purposes’, approved Sep- (A) substituted ‘‘$155,000’’ for ‘‘$100,000’’, in subpar.
tember 30, 1950, as amended (42 U.S.C. 1855–1855g)’’. (B)(i) substituted ‘‘$155,000’’ for ‘‘$100,000’’ and ‘‘85’’ for
Subsec. (b)(E). Pub. L. 100–707, § 109(f)(2), substituted ‘‘90’’, in proviso following subpar. (B) substituted ‘‘85’’
‘‘section 312(a) of the Disaster Relief and Emergency for ‘‘90’’, and inserted a second proviso relating to re-
Assistance Act’’ for ‘‘subsection (b) of section 315 of duction by the Administration of its participation
Public Law 93–288 (42 U.S.C. 5155)’’. below the per centum stated in this paragraph and de-
Subsec. (c)(5)(C). Pub. L. 100–590, § 120(b), substituted fining ‘‘preferred lenders program’’.
‘‘business or other concern, including agricultural co- Subsec. (a)(15)(B)(i). Pub. L. 99–514 substituted ‘‘Inter-
operatives,’’ for ‘‘business concern’’. nal Revenue Code of 1986’’ for ‘‘Internal Revenue Code
Subsec. (c)(6). Pub. L. 100–590, § 122, substituted ‘‘refi- of 1954’’, which for purposes of codification was trans-
nancing: Provided further, That the Administration lated as ‘‘title 26’’ thus requiring no change in text.
shall not require collateral for loans of $10,000 or less Subsec. (a)(16). Pub. L. 99–272, § 18007, added par. (16).
which are made under paragraph (1) of subsection (b)’’. Subsec. (b). Pub. L. 99–272, § 18006(a)(1), in provision
for ‘‘refinancing’’. preceding par. (1) substituted ‘‘Except as to agricul-
Subsec. (c)(7). Pub. L. 100–590, § 120(a), added par. (7). tural enterprises as defined in section 647(b)(1) of this
Subsec. (f). Pub. L. 100–707, § 109(f)(3), substituted title, the,’’ for ‘‘The’’, struck out par. (3) which author-
‘‘section 102(2) of the Disaster Relief and Emergency ized loans, each one not to exceed $500,000, to any small
Assistance Act’’ for ‘‘section 2(a) of the Act of Sep- business concern to effect continuation of, additions to,
tember 30, 1950 (42 U.S.C. 1855a(a))’’. alterations in, or reestablishment in the same or a new
Subsec. (j)(3)(A). Pub. L. 100–656, § 505(h), struck out location of its plant, facilities, or methods or operation
subpar. (A) which read as follows: ‘‘An advisory com- caused by direct action of the Federal Government or
mittee composed of five high-level officers from five as a consequence of Federal Government action pro-
United States businesses and five representatives of vided that the applicant was unable to obtain credit
minority small businesses shall be created to facilitate elsewhere, and struck out par. (4) which authorized dis-
the achievement of the purposes of this paragraph. The aster loans, each one not to exceed $100,000, to any
members of the advisory committee shall be appointed small business concern located in an area of economic
by the President. The chairman of the advisory com- dislocation that was the result of the drastic fluctua-
mittee, who shall be designated by the President shall tion in the value of the currency of a country contig-
report annually to the President and to the Congress on uous to the United States and adjustments in the regu-
the activities of the advisory committee.’’ lation of its monetary system if such concern was un-
Subsec. (j)(10)(A)(i). Pub. L. 100–656, § 205(a), amended able to obtain credit elsewhere.
cl. (i) generally. Prior to amendment, cl. (i) read as fol- Subsec. (c)(4). Pub. L. 99–272, § 18006(a)(2), struck out
lows: ‘‘assist small business concerns participating in provision following subpar. (D) which provided that
the Program to develop comprehensive business plans loans, subject to reductions under subpars. (A) and (B)
with specific business targets, objectives, and goals for of par. (1), be in amounts equal to 100 percent of loss if
correcting the impairment of such concern’s ability to the applicant was a homeowner and 85 percent if the
compete, as determined for such concern pursuant to applicant was a business or otherwise, the interest rate
section 637(a)(6) of this title, within a fixed period of for loans under pars. (1) and (2) be the rate of interest
time as mutually agreed upon by the applicant and the in effect on the date the disaster commenced, and the
Administrator prior to acceptance in such program: Administrator, in his discretion, waive the $500,000 lim-
Provided, That not less than one year prior to the expi- itation on the total amount outstanding and com-
ration of such period, and upon the request of such con- mitted to the borrower under this subsection if the ap-
cern, the Administration shall review such period and plicant constituted a major source of employment in
may extend such period as necessary and appropriate: an area suffering a disaster.
Provided further, That no determination made under 1984—Subsec. (b)(2). Pub. L. 98–270, § 311(1), (3), sub-
this paragraph shall be considered a denial of total par- stituted in provisions preceding subpar. (A) ‘‘small
ticipation for the purposes of section 637(a)(9) of this business concern or small agricultural cooperative’’ for
title;’’. ‘‘small business concern’’ and ‘‘the concern or the coop-
Subsec. (j)(10)(C). Pub. L. 100–656, § 205(b)(1), (2), redes- erative’’ for ‘‘the concern’’.
ignated subpar. (D) as (C) and struck out former sub- Subsec. (b)(2)(D). Pub. L. 98–270, § 311(2), substituted
par. (C) which read as follows: ‘‘No small business con- ‘‘small business concerns or small agricultural coopera-
cern shall receive a contract pursuant to section 637(a) tives’’ for ‘‘small business concerns’’.
of this title unless— Subsec. (b)(3). Pub. L. 98–270, § 308, inserted ‘‘continu-
‘‘(i) the business plan required pursuant to para- ation of,’’ after ‘‘in effecting’’ and inserted provision di-
graph (10)(A)(i) is approved by the Administration; recting that, for purposes of this paragraph, the impact
and of the 1983 Payment-in-Kind Land Diversion program,
‘‘(ii) the program is able to provide such concern or any successor Payment-in-Kind program with a
with, but not limited to, such management, technical similar impact on the small business community, be
and financial services as may be necessary to achieve deemed to be a consequence of Federal Government ac-
the targets, objectives, and goals of such business.’’ tion.
Subsec. (j)(10)(D). Pub. L. 100–656, § 205(b)(2), (3), added Subsec. (b)(4). Pub. L. 98–270, § 304(2), added par. (4).
subpar. (D). Former subpar. (D) redesignated (C). Subsec. (c). Pub. L. 98–270, § 301, added undesignated
Pub. L. 100–656, § 203, added subpar. (D). par. following par. (6).
Subsec. (j)(10)(E) to (H). Pub. L. 100–656, § 208, added Subsec. (c)(5). Pub. L. 98–270, § 301, added par. (5).
subpars. (E) to (H). Subsec. (c)(6). Pub. L. 98–270, § 301, added par. (6).
Subsec. (j)(10)[(I)]. Pub. L. 100–656, § 303(a), as amended Pub. L. 98–270, § 309, inserted provision directing that
by Pub. L. 101–37, § 10(a), added new subpar. without employees of concerns sharing common business prem-
§ 636 TITLE 15—COMMERCE AND TRADE Page 862
ises be aggregated in determining ‘‘major source of em- Subsec. (b)(1). Pub. L. 97–35, § 1911, revised provisions
ployment’’ status for nonprofit applicants owning such to specifically authorize loans only to repair, rehabili-
premises. tate, or replace property, real or personal, damaged or
Subsec. (d)(1). Pub. L. 98–395 substituted provisions destroyed, and is not compensated for by insurance or
stating that the Administration shall not fund any otherwise, and to refinance any mortgage or other lien
Small Business Development Center except as author- against a totally destroyed or substantially damaged
ized for former provisions which prohibited such fund- home or business concern upon finding that the appli-
ing only after October 1, 1980. cant is not able to obtain credit elsewhere, that such
1981—Subsec. (a). Pub. L. 97–35, § 1902, substituted pro- property is to be repaired, rehabilitated, or replaced,
visions empowering the Administration to the extent that the amount refinanced shall not exceed the loss,
and in such amounts as provided in advance in appro- and that the amount shall be reduced to the extent
priation acts, for plant acquisition, construction, con- such mortgage or lien is satisfied by insurance or oth-
version, or expansion, including the acquisition of land, erwise.
material, supplies, equipment, and working capital, Subsec. (b)(2). Pub. L. 97–35, § 1911, revised provisions
and to make loans to qualified small business concerns to continue to authorize loans to business concerns
including those owned by qualified Indian tribes, for which the Administration determines to have suffered
purposes of this chapter, and that financing may be substantial economic injury as a result of a physical
made either directly or in cooperation with banks or disaster as declared under certain pertinent triggering
other financial institutions through agreements to par- legislation.
ticipate on an immediate or deferred basis for provi- Subsec. (b)(3) to (9). Pub. L. 97–35, § 1913(a), designated
sions empowering the Administration to make loans to existing provisions of par. (5) as (3) with minor changes,
enable small business concerns and such concerns whol- and struck out pars. (3), (4), and (6) to (9) relating to
ly owned by Indian tribes to finance plant construc- non-physical disaster loans.
tion, conversion, or expansion, including the acquisi- Subsec. (c)(3). Pub. L. 97–35, § 1914, substituted ‘‘effec-
tion of land, or to finance residential or commercial tive date of this Act’’ for ‘‘to October 1, 1983’’.
construction or rehabilitation, for sale, with a proviso Subsec. (c)(4). Pub. L. 97–35, § 1912, added par. (4).
that such loans shall not be used primarily for the ac- Subsec. (g). Pub. L. 97–35, § 1913(c), repealed subsec. (g)
quisition of land, or to finance the acquisition of equip- which related to loans to small business concerns for
ment, facilities, machinery, supplies, or materials, or water pollution control facilities.
to supply such concerns with working capital to be 1980—Subsec. (a). Pub. L. 96–481, § 112, inserted provi-
used in the manufacture of articles, equipment, sup- sions preceding par. (1) empowering the Administration
plies, or materials for war, defense, or civilian produc- to the extent and in such amounts as are provided in
tion or as may be necessary to insure a well-balanced appropriation acts to make or effect either directly or
national economy, and that such loans may be made or in cooperation with banks or other lending institutions
effected either directly or in cooperation with banks or through agreements to participate on an immediate or
other lending institutions through agreements to par- deferred basis extensions and revolving lines of credit
ticipate on an immediate or deferred basis. for export purposes to enable small business concerns
Subsec. (a)(6)(C). Pub. L. 97–35, § 1910, repealed subpar. to develop foreign markets and for preexport financing,
(C) which read as follows: ‘‘the Administration shall
with proviso limiting the extension of credit or revolv-
not decline to participate in a loan on a deferred basis
ing line of credit to a period of eighteen months.
under this subsection solely because such loan will be Subsec. (a)(8). Pub. L. 96–302, § 505, added par. (8).
used to refinance all or any part of the existing indebt- Subsec. (b). Pub. L. 96–302, § 124, which directed that
edness of a small business concern, unless the Adminis- cl. (E), respecting duplication of disaster benefits, be
tration determines that— added at end of subsec. (b), was executed by inserting
‘‘(i) the holder of such existing indebtedness is in a
cl. (E) following cl. (D) in next to last par. of subsec. (b)
position likely to sustain a loss if such refinancing is
as the probable intent of Congress.
not provided, and
‘‘(ii) if the Administration provides such refi- Subsec. (b)(4). Pub. L. 96–302, § 123, substituted ‘‘other
nancing through an agreement to participate on a de- causes’’ for ‘‘undetermined causes’’ and made the small
ferred basis, it will be in a position likely to sustain business concern ineligible for loan assistance when the
part or all of any loss which would have otherwise concern intentionally adulterates its product in at-
been sustained by the holder of the original indebted- tempting to establish eligibility under the loan assist-
ness: Provided further, That the Administration may ance program.
decline to approve such refinancing if it determines Subsec. (b)(8). Pub. L. 96–302, § 122, authorized loans to
that the loan will not benefit the small business con- assist small business concern affected by a shortage of
cern.’’ coal or other energy-producing resource caused by a
Subsec. (a)(8). Pub. L. 97–35, § 1910, repealed par. (8) strike, boycott, or embargo, unless the strike, boycott,
which read as follows: ‘‘(8)(A) Any loan made under the or embargo is directly against the small business con-
authority of this subsection by the Administration in cern.
cooperation with a bank or other lending institution Subsec. (c)(3). Pub. L. 96–302, § 119(a), (b), added sub-
through an agreement to participate on a deferred par. (C) and extended disaster loans to disasters occur-
basis, may, upon the concurrence of the Administra- ring prior to Oct. 1, 1983, instead of Oct. 1, 1982.
tion, borrower and such bank or institution, have the Subsec. (d)(1). Pub. L. 96–302, § 203, substituted provi-
term of such loan extended or such loan refinanced sions respecting: funding of small business development
with an extension of its term: Provided, That the aggre- centers under section 648 of this title on and after Oct.
gate term of such extended or refinanced loan does not 1, 1980; operation of such centers funded prior to Oct. 1,
exceed the term permitted pursuant to paragraph (5): 1979; and prescribing $300,000 limitation for fiscal year
And provided further, That such extended loans, or 1980, for such centers funded in fiscal year 1979, for pro-
refinancings shall be repaid in equal installments of visions respecting grants for studies research, and
principal and interest. counseling concerning the managing, financing, and op-
‘‘(B) An additional service fee not exceeding 1 per eration of small-business enterprises; study and re-
centum of the outstanding amount of the principal may search recommendation; and conditions, now covered
be paid by the borrower to the lender in consideration in section 648(a) of this title.
for such lender extending the term or refinancing of Subsec. (j)(10). Pub. L. 96–481, § 104, in opening para-
such borrower’s indebtedness if such extension or refi- graph substituted provision that the program and all
nancing results in the term of such indebtedness ex- other services and activities authorized under this sub-
ceeding ten years. section and section 637(a) of this title shall be managed
‘‘(C) The authority provided in this paragraph shall by the Associate Administrator for Minority Small
not be construed to otherwise limit the authority of Business and Capital Ownership Development under the
the Administration to set terms and conditions of the Supervision of, and responsible to the Administrator,
loan.’’ for provision that the management of the program
Page 863 TITLE 15—COMMERCE AND TRADE § 636
shall be vested in the Associate Administrator for Mi- in whole or in part by the Federal Government or by a
nority Small Business and Capital Ownership Develop- program or project by a State or local government or
ment who shall also manage all other services and ac- public service entity, providing such government or
tivities authorized under this subsection and section public service entity has the authority to exercise the
637(a) of this title. right of eminent domain on such program or project’’
Subsec. (j)(10)(A)(i). Pub. L. 96–481, § 106(a), sub- for ‘‘federally aided urban renewal program or a high-
stituted ‘‘targets, objectives, and goals for correcting way project or any other construction constructed by
the impairment of such concern’s ability to compete, as or with funds provided in whole or in part by the Fed-
determined for such concern pursuant to section eral Government’’.
637(a)(6) of this title, within a fixed period of time as Subsec. (b)(5). Pub. L. 95–89, § 302, inserted ‘‘heretofore
mutually agreed upon by the applicant and the Admin- or hereafter enacted’’ after ‘‘any Federal law’’.
istrator prior to acceptance in such program: Provided, Subsec. (b)(9). Pub. L. 95–89, § 404, added par. (9).
That not less than one year prior to the expiration of Subsec. (g)(4). Pub. L. 95–89, § 101(e), repealed par. (4)
such period, and upon the request of such concern, the which authorized appropriation of not to exceed
Administration shall review such period and may ex- $800,000,000 to the disaster fund solely for purpose of
tend such period as necessary and appropriate; Provided carrying out subsec. (g) loans to small business con-
further, That no determination made under this para- cerns for water pollution control facilities.
graph shall be considered a denial of participation for 1976—Subsec. (a)(1). Pub. L. 94–305, § 112(c), inserted
the purposes of section 637(a)(9) of this title’’ for ‘‘tar- reference to non-Federal sources.
gets, objectives and goals’’. Subsec. (a)(4)(A). Pub. L. 94–305, § 111, substituted
Subsec. (j)(10)(C). Pub. L. 96–481, § 107, in the condi- ‘‘$500,000: Provided, That no such loan made or effected
tions required to receive a contract by a small business either directly or in cooperation with banks or other
concern, substituted provisions that the business plan lending institutions through agreements to participate
be approved by the Administration and that the pro- on an immediate basis shall exceed $350,000’’ for
gram be able to provide the concern with management, ‘‘$350,000’’.
technical and financial services necessary to achieve Subsec. (a)(4)(C). Pub. L. 94–305, § 108(b), substituted
the targets, objectives and goals of such business, for provision relating to a twenty year maturity period for
provision that the program be able to provide the con- any portion of loan made for the purpose of acquiring
cern with management, technical and financial services real property or constructing facilities for provision re-
as may be necessary to promote the competitive viabil- lating to a ten year maturity for portion of loan made
ity of the concern within a reasonable period of time. for purpose of constructing facilities.
1979—Subsec. (b) following par. (9). Pub. L. 96–38 in- Subsec. (b). Pub. L. 94–305, § 114, in provisions fol-
serted ‘‘, except as provided in subsection (c) of this lowing par. (8), substituted provisions requiring inter-
section,’’ after ‘‘the interest rate on the Administra- est rate on Administration’s share of any loan made
tion’s share of any loan made under this subsection’’ in under this subsection not to exceed the average annual
first unnumbered paragraph. interest rate on all interest-bearing obligations of the
Subsec. (c)(3). Pub. L. 96–38 added par. (3). United States then forming a part of the public debt for
1978—Subsec. (a). Pub. L. 95–507, § 231, inserted provi- provisions requiring interest rate on Administration’s
sion including small-business concerns totally owned share of any loan made under this subsection not to ex-
and controlled by Indian tribes within the scope of this ceed 3 per centum per annum except for loans made
section. under pars. (3), (5), (6), (7), or (8) in which the interest
Subsec. (d). Pub. L. 95–315, § 3, designated existing will not exceed either 23⁄4 per centum per annum or the
provisions as par. (1) and added par. (2). average annual interest rate of all interest-bearing ob-
Subsec. (j). Pub. L. 95–507, § 204, included individuals ligations of the United States then forming a part of
and enterprises eligible for assistance under par. (10) of the public debt.
this subsection and section 637(a) of this title among Subsec. (b)(4). Pub. L. 94–305, § 112(d), struck out pro-
those eligible for assistance under this section, pro- viso that loans under subsec. (b)(4) of this section in-
vided for the establishment of the small business and clude loans to persons who are engaged in business of
capital ownership development program, and provided raising livestock, and who suffer substantial injury as
for the coordination of certain Federal policies under a result of animal disease.
this section by the Associate Administrator for Minor- Subsec. (i)(1), (3). Pub. L. 94–305, § 109, substituted
ity Small Business and Capital Ownership Develop- ‘‘$100,000’’ for ‘‘$50,000’’.
ment. 1974—Subsec. (a)(4)(B). Pub. L. 93–386, § 8, substituted
Subsec. (k). Pub. L. 95–507, § 205, inserted reference to provisions for determining the rate of interest for the
section 637(a). Administration’s share of any loan for provisions set-
Subsec. (k)(4). Pub. L. 95–510 substituted ‘‘the daily ting forth the rate of interest for the Administration’s
equivalent of the highest rate payable under section share of any loan as not more than 51⁄2 per centum per
5332 of title 5’’ for ‘‘$100 per diem’’. annum.
Subsec. (l). Pub. L. 95–315, § 2, added subsec. (l). Subsec. (a)(5)(B). Pub. L. 93–386, § 8, substituted provi-
1977—Subsec. (a). Pub. L. 95–89, § 301, authorized loans sions for determining the rate of interest for the Ad-
to finance residential or commercial construction or ministration’s share of any loan for provisions setting
rehabilitation for sale, subject to restriction that such forth the rate of interest for the Administration’s share
loans be not used primarily for the acquisition of land. of any loan as not less than 3 nor more than 5 per cen-
Subsec. (a)(8). Pub. L. 95–89, § 101(d), repealed par. (8) tum per annum.
which required the Administrator to make direct loans Subsec. (a)(8). Pub. L. 93–386, § 12, added par. (8).
under subsec. (a) in an aggregate amount of not less Subsec. (b)(4). Pub. L. 93–237, § 5, inserted proviso that
than $400,000,000 during fiscal year ending June 30, 1975. loans under this paragraph include loans to persons
Subsec. (b). Pub. L. 95–89, § 405, inserted following par. who are engaged in the business of raising livestock
(9) provisions respecting interest rate on loans to repair and who suffer substantial economic injury as a result
or replace primary residence and/or replace or repair of animal disease.
damaged or destroyed personal property, including in- Subsec. (b)(5) to (7). Pub. L. 93–237, §§ 2(a), (b), 6, con-
stallation of insulation in connection with any disaster solidated into a single par. (5) the authority of the
occurring on or after April 1, 1977, and transmission of Small Business Administration contained in former
a report to congressional committees respecting the ac- par. (5) to make loans to small business concerns to
tivities under the provisions and the encouragement of meet the requirements of the Federal Coal Mine Health
such insulation installations. and Safety Act of 1969, the Egg Products Inspection
Subsec. (b)(2)(C) to (E). Pub. L. 95–89, § 403, added sub- Act, the Wholesome Poultry Products Act, and the
pars. (C) to (E). Wholesome Meat Act, and former par. (6) to make loans
Subsec. (b)(3). Pub. L. 95–89, § 402, substituted ‘‘pro- to small business concerns to meet the requirements of
gram or project constructed by or with funds provided the Occupational Safety and Health Act of 1970, ex-
§ 636 TITLE 15—COMMERCE AND TRADE Page 864
panded such authority to finance structural, oper- loan and adjusted to the nearest one-eighth of 1 per
ational, or other changes required in order to meet centum, plus one-quarter of 1 per centum per annum.
standards imposed by Federal laws, or by State laws Subsec. (d). Pub. L. 87–305 empowered the Administra-
enacted in conformity with Federal laws, redesignated tion to make grants to any corporation formed by two
former par. (7) as par. (6), and added par. (7). or more eligible entities described in the text, author-
Subsec. (b)(8). Pub. L. 93–386, § 9(a), added par. (8). ized it to recommend to grant applicants particular
Subsec. (b). Pub. L. 93–386, § 9(b), substituted ‘‘para- studies or research, eliminated the limitation of one
graph (3), (5), (6), (7), or (8)’’ for ‘‘paragraph (3), (5), (6), grant to a State, and conditioned grants to the pro-
or (7)’’ in first par. following the numbered pars. curement of additional amounts from sources other
Subsecs. (g), (h). Pub. L. 93–237, § 3(a), redesignated than the Administration.
subsec. (g), relating to loans to handicapped persons 1959—Subsec. (d). Pub. L. 86–367 struck out provision
and organizations for handicapped, as (h). for making the grants from the fund established in the
Subsec. (h)(2). Pub. L. 93–386, § 3(2), inserted ‘‘The Ad- Treasury by section 602(b) of the Small Business Invest-
ministration’s share of’’ before ‘‘any loan’’. ment Act of 1958.
Subsecs. (i) to (k). Pub. L. 93–386, § 2(a)(4), added sub- 1958—Subsec. (d). Pub. L. 85–699 added subsec. (d).
secs. (i) to (k).
1972—Subsec. (b). Pub. L. 92–385 added par. (7), and in Statutory Notes and Related Subsidiaries
text following the numbered paragraphs, inserted pro-
visions relating to the administration of the disaster CHANGE OF NAME
loan program in relation to disasters occurring between Committee on Small Business of Senate changed to
January 1, 1971, and July 1, 1973. Committee on Small Business and Entrepreneurship of
Subsec. (g). Pub. L. 92–595 added subsec. (g) relating Senate. See Senate Resolution No. 123, One Hundred
to loans to handicapped persons and organizations for Seventh Congress, June 29, 2001. Previously, Select
handicapped. Committee on Small Business of Senate became Com-
Pub. L. 92–500 added subsec. (g) relating to loans to
mittee on Small Business of Senate. See Senate Reso-
small business concerns for water pollution control fa-
lution No. 101, Ninety-Seventh Congress, Mar. 25, 1981.
cilities.
1970—Subsec. (b). Pub. L. 91–597 added par. (5) relating EFFECTIVE DATE OF 2021 AMENDMENT
to loans for additions or alterations required under the
Egg Products Inspection Act, etc., and inserted ref- Pub. L. 117–2, title V, § 5001(c)(3), Mar. 11, 2021, 135
erence to such par. (5). Stat. 84, provided that: ‘‘The amendments made by this
Pub. L. 91–596 added par. (6) and inserted reference to subsection [amending this section and section 636m of
par. (6) after reference to par. (5). this title] shall apply only with respect to applications
1969—Subsec. (b). Pub. L. 91–173 added par. (5), and in- for forgiveness of covered loans made under paragraphs
serted reference to par. (5) after reference to par. (3). (36) or (37) of section 7(a) of the Small Business Act [15
1968—Subsec. (b)(1). Pub. L. 90–448 empowered the Ad- U.S.C. 636(a)(36), (37)], as amended by the Economic Aid
ministration to make loans because of riots or civil dis- to Hard-Hit Small Businesses, Nonprofits, and Venues
orders. Act (title III of division N of Public Law 116–260), that
Subsec. (b)(3). Pub. L. 90–495 added continuing in busi- are received on or after the date of the enactment of
ness at its existing location, purchasing a business, and this Act [Mar. 11, 2021].’’
establishing a new business to the list of purposes for EFFECTIVE DATE OF 2020 AMENDMENT
which loans may be made, and extended the causes of
substantial economic injury of the concern involved to Pub. L. 116–260, div. N, title III, § 304(c), Dec. 27, 2020,
include its location in, adjacent to, or near a federally 134 Stat. 1996, provided that:
aided urban renewal program, highway project, or ‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
other construction project using federal funds. the amendments made by subsections (a) and (b) [trans-
1967—Subsec. (a)(4). Pub. L. 90–104, § 103, extended ma- ferring section 9005 of this title to section 636m of this
turity date for construction loans from ten to fifteen title and amending this section and sections 636m and
years. 9008 of this title] shall be effective as if included in the
Subsec. (f). Pub. L. 90–104, § 104, redesignated subsec. CARES Act (Public Law 116–136; 134 Stat. 281) and shall
(e), added by Pub. L. 89–769, as (f). apply to any loan made pursuant to section 7(a)(36) of
1966—Subsec. (e). Pub. L. 89–409 added subsec. (e). the Small Business Act (15 U.S.C. 636(a)(36)) before, on,
Pub. L. 89–769 added subsec. (e) which provided for as- or after the date of enactment of this Act [Dec. 27,
sistance to privately owned higher education in major 2020], including forgiveness of such a loan.
disaster areas and repayment. ‘‘(2) EXCLUSION OF LOANS ALREADY FORGIVEN.—The
1965—Subsec. (b). Pub. L. 89–59, § 1(a), increased the amendments made by subsections (a) and (b) shall not
maturity of disaster loans from twenty to thirty years, apply to a loan made pursuant to section 7(a)(36) of the
and authorized suspension of principal and interest Small Business Act (15 U.S.C. 636(a)(36)) for which the
payments and extension of date of maturity for five borrower received forgiveness before the date of enact-
year period. ment of this Act under section 1106 of the CARES Act
Subsec. (c). Pub. L. 89–59, § 1(b), designated existing [15 U.S.C. 9005], as in effect on the day before such date
provisions as par. (1) and added par. (2). of enactment.’’
1964—Subsecs. (b)(2), (4). Pub. L. 88–264 extended pro- Pub. L. 116–260, div. N, title III, § 308(b), Dec. 27, 2020,
visions of par. (2) to any small business affected by dis- 134 Stat. 2000, provided that: ‘‘The amendment made by
asters other than drought or excessive rainfall and subsection (a) [amending this section] shall be effective
added par. (4) for disaster loans to any such business as if included in the CARES Act (Public Law 116–136;
suffering economic injuries through natural or undeter- 134 Stat. 281) and shall apply to any loan made pursu-
mined causes. ant to section 7(a)(36) of the Small Business Act (15
Subsec. (b)(3). Pub. L. 88–560 provided that the pur- U.S.C. 636(a)(36)) before, on, or after the date of enact-
poses of a loan under this paragraph may include the ment of this Act [Dec. 27, 2020], including forgiveness of
purchase or construction of other premises whether or such a loan.’’
not the borrower owned the premises from which it was Pub. L. 116–260, div. N, title III, § 310(a)(2), Dec. 27,
displaced. 2020, 134 Stat. 2000, provided that: ‘‘The amendment
1961—Subsec. (b). Pub. L. 87–70 added par. (3), and in- made by paragraph (1) [amending this section] shall be
serted provisions limiting the interest rate in the case effective as if included in the CARES Act (Public Law
of loans made pursuant to par. (3) to not more than the 116–136; 134 Stat. 281) and shall apply to any loan made
higher of (A) 23⁄4 per centum per annum, or (B) the aver- pursuant to section 7(a)(36) of the Small Business Act
age annual interest rate on all interest-bearing obliga- (15 U.S.C. 636(a)(36)) before, on, or after the date of en-
tions forming a part of the public debt as computed at actment of this Act [Dec. 27, 2020], including forgive-
the end of the fiscal year next preceding the date of the ness of such a loan.’’
Page 865 TITLE 15—COMMERCE AND TRADE § 636
Pub. L. 116–260, div. N, title III, § 313(b), Dec. 27, 2020, 116–136; 134 Stat. 281) and shall apply to any loan made
134 Stat. 2009, provided that: pursuant to section 7(a)(36) of the Small Business Act
‘‘(1) IN GENERAL.—Except as provided in paragraph (2), (15 U.S.C. 636(a)(36)) before, on, or after the date of en-
the amendments made by subsection (a) [amending this actment of this Act [Dec. 27, 2020], including forgive-
section] shall be effective as if included in the CARES ness of such a loan.’’
Act (Public Law 116–136; 134 Stat. 281) and shall apply Pub. L. 116–260, div. N, title III, § 339(a), (c), Dec. 27,
to any loan made pursuant to section 7(a)(36) of the 2020, 134 Stat. 2049, provided that:
Small Business Act (15 U.S.C. 636(a)(36)) before, on, or ‘‘(a) DEFINITIONS.—In this section [amending this sec-
after the date of enactment of this Act [Dec. 27, 2020], tion and enacting this note], the terms ‘covered loan’
including forgiveness of such a loan. and ‘eligible recipient’ have the meanings given the
‘‘(2) EXCLUSION OF LOANS ALREADY FORGIVEN.—The terms in section 7(a)(36)(A) of the Small Business Act
amendments made by subsection (a) shall not apply to (15 U.S.C. 636(a)(36)(A)).
a loan made pursuant to section 7(a)(36) of the Small ‘‘(c) APPLICABILITY.—The amendment made by sub-
Business Act (15 U.S.C. 636(a)(36)) for which the bor- section (b) [amending this section] may apply with re-
rower received forgiveness before the date of enactment spect to a covered loan made before the date of enact-
of this Act under section 1106 of the CARES Act [15 ment of this Act [Dec. 27, 2020], upon the agreement of
U.S.C. 9005], as in effect on the day before such date of the lender and the eligible recipient with respect to the
enactment.’’ covered loan.’’
Pub. L. 116–260, div. N, title III, § 315(c), Dec. 27, 2020, Pub. L. 116–260, div. N, title III, § 340(b)(2), Dec. 27,
134 Stat. 2011, provided that: ‘‘The amendments made 2020, 134 Stat. 2050, provided that: ‘‘The amendment
by subsections (a) and (b) [amending this section and made by paragraph (1) [amending this section] shall be
section 636m of this title] shall be effective as if in- effective as if included in the CARES Act (Public Law
cluded in the CARES Act (Public Law 116–136; 134 Stat. 116–136; 134 Stat. 281) and shall apply to any loan made
281) and shall apply to any loan made pursuant to sec- pursuant to section 7(a)(36) of the Small Business Act
tion 7(a)(36) of the Small Business Act (15 U.S.C. (15 U.S.C. 636(a)(36)) before, on, or after the date of en-
636(a)(36)) before, on, or after the date of enactment of actment of this Act [Dec. 27, 2020], including forgive-
this Act [Dec. 27, 2020], including forgiveness of such a ness of such a loan.’’
loan.’’ Pub. L. 116–260, div. N, title III, § 343(b), Dec. 27, 2020,
Pub. L. 116–260, div. N, title III, § 326(a)(2), Dec. 27, 134 Stat. 2051, provided that: ‘‘The amendment made by
2020, 134 Stat. 2036, provided in part that the amend- subsection (a) [amending this section] shall be effective
ment made by section 326(a)(2) of Pub. L. 116–260 is ef- as if included in the CARES Act (Public Law 116–136;
fective Oct. 1, 2021. 134 Stat. 281) and shall apply to any loan made pursu-
Pub. L. 116–260, div. N, title III, § 326(b)(2)(B), Dec. 27, ant to section 7(a)(36) of the Small Business Act (15
2020, 134 Stat. 2037, provided in part that the amend- U.S.C. 636(a)(36)) before, on, or after the date of enact-
ment made by section 326(b)(2)(B) of Pub. L. 116–260 is ment of this Act [Dec. 27, 2020], including forgiveness of
effective Oct. 1, 2021. such a loan.’’
Pub. L. 116–260, div. N, title III, § 329(a)(2), Dec. 27, Pub. L. 116–260, div. N, title III, § 348, Dec. 27, 2020, 134
2020, 134 Stat. 2042, provided in part that the amend- Stat. 2052, provided that: ‘‘Except as otherwise provided
ment made by section 329(a)(2) of Pub. L. 116–260 is ef- in this Act [probably means ‘‘this title’’, title III of div.
fective Oct. 1, 2021. N of Pub. L. 116–260, see Tables for classification], this
Pub. L. 116–260, div. N, title III, § 335(b), Dec. 27, 2020, Act and the amendments made by this Act shall take
134 Stat. 2047, provided that: ‘‘The amendment made by effect on the date of enactment of this Act [Dec. 27,
subsection (a) [amending this section] shall be effective 2020] and apply to loans and grants made on or after the
as if included in the CARES Act (Public Law 116–136; date of enactment of this Act.’’
134 Stat. 281) and shall apply to any loan made pursu- Pub. L. 116–142, § 2(b), June 5, 2020, 134 Stat. 641, pro-
ant to section 7(a)(36) of the Small Business Act (15 vided that: ‘‘The amendment made by this section
U.S.C. 636(a)(36)) before, on, or after the date of enact- [amending this section] shall take effect on the date of
ment of this Act [Dec. 27, 2020], including forgiveness of the enactment of this Act [June 5, 2020] and shall apply
such a loan.’’ to any loan made pursuant to section 7(a)(36) of the
Pub. L. 116–260, div. N, title III, § 336(b), Dec. 27, 2020, Small Business Act (15 U.S.C. 636(a)(36)) on or after
134 Stat. 2048, provided that: such date. Nothing in this Act [see Short Title of 2020
‘‘(1) IN GENERAL.—Except as provided in paragraph (2), Amendment note set out under section 631 of this title],
the amendment made by subsection (a) [amending this the CARES Act (Public Law 116–136) [see Short Title
section] shall be effective as if included in the CARES note set out under section 9001 of this title], or the Pay-
Act (Public Law 116–136; 134 Stat. 281) and shall apply check Protection Program and Health Care Enhance-
to any loan made pursuant to section 7(a)(36) of the ment Act (Public Law 116–139) [see Short Title of 2020
Small Business Act (15 U.S.C. 636(a)(36)) before, on, or Amendment note set out under section 9001 of this
after the date of enactment of this Act [Dec. 27, 2020], title] shall be construed to prohibit lenders and bor-
including forgiveness of such a loan. rowers from mutually agreeing to modify the maturity
‘‘(2) EXCLUSION OF LOANS ALREADY FORGIVEN.—The terms of a covered loan described in subparagraph (K)
amendment made by subsection (a) shall not apply to of such section [15 U.S.C. 636(a)(36)(K)] to conform with
a loan made pursuant to section 7(a)(36) of the Small requirements of this section.’’
Business Act (15 U.S.C. 636(a)(36)) for which the bor- Pub. L. 116–142, § 3(d), June 5, 2020, 134 Stat. 643, pro-
rower received forgiveness before the date of enactment vided that: ‘‘The amendments made by this section
of this Act under section 1106 of the CARES Act [15 [amending this section and section 9005 of this title]
U.S.C. 9005], as in effect on the day before such date of shall be effective as if included in the CARES Act (Pub-
enactment.’’ lic Law 116–136) [see Short Title note set out under sec-
Pub. L. 116–260, div. N, title III, § 337(b), Dec. 27, 2020, tion 9001 of this title] and shall apply to any loan made
134 Stat. 2048, provided that: ‘‘The amendment made by pursuant to section 7(a)(36) of the Small Business Act
subsection (a) [amending this section] shall be effective (15 U.S.C. 636(a)(36)) or section 1109 of the CARES Act
as if included in the CARES Act (Public Law 116–136; [15 U.S.C. 9008].’’
134 Stat. 281) and shall apply to any loan made pursu- Pub. L. 116–136, div. A, title I, § 1102(c)(2), Mar. 27,
ant to section 7(a)(36) of the Small Business Act (15 2020, 134 Stat. 294, as amended by Pub. L. 116–260, div.
U.S.C. 636(a)(36)) before, on, or after the date of enact- N, title III, § 326(b)(1), Dec. 27, 2020, 134 Stat. 2036, pro-
ment of this Act [Dec. 27, 2020], including forgiveness of vided in part that the amendment made by section
such a loan.’’ 1102(c)(2) of Pub. L. 116–136 is effective on Oct. 1, 2021.
Pub. L. 116–260, div. N, title III, § 338(b), Dec. 27, 2020,
134 Stat. 2048, provided that: ‘‘The amendments made EFFECTIVE DATE OF 2019 AMENDMENT
by subsection (a) [amending this section] shall be effec- Pub. L. 116–92, div. A, title VIII, § 877(b), Dec. 20, 2019,
tive as if included in the CARES Act (Public Law 133 Stat. 1529, provided that: ‘‘The amendments made
§ 636 TITLE 15—COMMERCE AND TRADE Page 866
by subsection (a)(1) [amending this section] shall apply subsection (a) [amending this section] shall take effect
to an economic injury suffered or likely to be suffered on the date of enactment of this Act [Dec. 8, 2004].’’
as the result of an essential employee being ordered to Pub. L. 108–447, div. K, title I, § 103(b), Dec. 8, 2004, 118
perform active service (as defined in section 101(d)(3) of Stat. 3444, provided that: ‘‘The amendment made by
title 10, United States Code) for a period of more than subsection (a) [amending this section] shall take effect
30 consecutive days who is discharged or released from on the date of enactment of this Act [Dec. 8, 2004].’’
such active service on or after the date of enactment of Pub. L. 108–447, div. K, title I, § 107(c), Dec. 8, 2004, 118
this Act [Dec. 20, 2019].’’ Stat. 3446, provided that: ‘‘The amendments made by
this section [amending this section] shall take effect on
EFFECTIVE DATE OF 2015 AMENDMENT
the date of enactment of this Act [Dec. 8, 2004].’’
Pub. L. 114–88, div. B, title I, § 2102(b), Nov. 25, 2015, 129
Stat. 690, as amended by Pub. L. 115–280, § 1, Nov. 29, EFFECTIVE DATE OF 2001 AMENDMENT
2018, 132 Stat. 4190; Pub. L. 116–70, § 2, Nov. 22, 2019, 133 Amendment by Pub. L. 107–100 effective Oct. 1, 2002,
Stat. 1145, provided that the amendment made by sec- see section 6(e) of Pub. L. 107–100, set out in an Effec-
tion 2102(b) is effective on the date that is 7 years after tive Date of 2001 Amendment; Use of Funds note under
Nov. 25, 2015. section 697 of this title.
EFFECTIVE DATE OF 2014 AMENDMENT
EFFECTIVE AND TERMINATION DATES OF 1999
Amendment by Pub. L. 113–128 effective on the first AMENDMENTS
day of the first full program year after July 22, 2014
(July 1, 2015), see section 506 of Pub. L. 113–128, set out Pub. L. 106–50, title IV, § 402(e), Aug. 17, 1999, 113 Stat.
as an Effective Date note under section 3101 of Title 29, 246, provided that:
Labor. ‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
the amendments made by this section [amending this
EFFECTIVE DATE OF 2010 AMENDMENT section] shall take effect on the date of the enactment
Pub. L. 111–240, title I, § 1111(b), Sept. 27, 2010, 124 of this section [Aug. 17, 1999].
Stat. 2508, provided that the amendment made by sec- ‘‘(2) DISASTER LOANS.—The amendments made by sub-
tion 1111(b) is effective Jan. 1, 2011. section (b) [amending this section] shall apply to eco-
Pub. L. 111–240, title I, § 1133(b), Sept. 27, 2010, 124 nomic injury suffered or likely to be suffered as the re-
Stat. 2515, provided that the amendment made by sec- sult of a period of military conflict occurring or ending
tion 1133(b) is effective Sept. 30, 2013. on or after March 24, 1999.’’
Pub. L. 111–240, title I, § 1135(b), Sept. 27, 2010, 124 Pub. L. 106–8, § 3(c), Apr. 2, 1999, 113 Stat. 16, provided
Stat. 2520, provided that the amendment made by sec- that effective Dec. 31, 2000, this section (amending this
tion 1135(b) is effective 1 year after Sept. 27, 2010. section and enacting provisions set out as a note under
Pub. L. 111–240, title I, § 1206(h), Sept. 27, 2010, 124 this section) and the amendments made by this section
Stat. 2532, provided that: ‘‘The amendments made by are repealed.
subsections (a) through (f) [amending this section]
shall apply with respect to any loan made after the EFFECTIVE DATE OF 1998 AMENDMENT
date of enactment of this Act [Sept. 27, 2010].’’ Amendment by section 101(f) [title VIII, § 405(d)(10)] of
Pub. L. 111–240, title I, § 1401(c), Sept. 27, 2010, 124 Pub. L. 105–277 effective Oct. 21, 1998, and amendment
Stat. 2549, provided that the amendment made by sec- by section 101(f) [title VIII, § 405(f)(9)] of Pub. L. 105–277
tion 1401(c)(1) is effective Oct. 1, 2012. effective July 1, 2000, see section 101(f) [title VIII,
EFFECTIVE DATE OF 2008 AMENDMENT § 405(g)(1), (2)(B)] of Pub. L. 105–277, set out as a note
under section 3502 of Title 5, Government Organization
Amendment of this section and repeal of Pub. L.
and Employees.
110–234 by Pub. L. 110–246 effective May 22, 2008, the
date of enactment of Pub. L. 110–234, except as other- EFFECTIVE DATE OF 1997 AMENDMENT
wise provided, see section 4 of Pub. L. 110–246, set out
as an Effective Date note under section 8701 of Title 7, Amendment by Pub. L. 105–135 effective on Oct. 1,
Agriculture. 1997, see section 3 of Pub. L. 105–135, set out as a note
Pub. L. 110–234, title XII, § 12078(b)(2), May 22, 2008, 122 under section 631 of this title.
Stat. 1415, and Pub. L. 110–246, § 4(a), title XII,
EFFECTIVE DATE OF 1996 AMENDMENT
§ 12078(b)(2), June 18, 2008, 122 Stat. 1664, 2177, provided
that: ‘‘The amendment made by paragraph (1) [amend- Amendment by Pub. L. 104–208 effective Oct. 1, 1996,
ing this section] shall apply with respect to a loan or see section 3 of Pub. L. 104–208, set out as a note under
guarantee made after the date of enactment of this Act section 633 of this title.
[June 18, 2008].’’
[Pub. L. 110–234 and Pub. L. 110–246 enacted identical EFFECTIVE DATE OF 1995 AMENDMENT
provisions. Pub. L. 110–234 was repealed by section 4(a) Amendment by Pub. L. 104–36 inapplicable to loans
of Pub. L. 110–246, set out as a note under section 8701 made or guaranteed under Small Business Act or Small
of Title 7, Agriculture.] Business Investment Act of 1958 before Oct. 12, 1995, un-
Pub. L. 110–234, title XII, § 12083(b), May 22, 2008, 122
less such loans are refinanced, extended, restructured,
Stat. 1420, and Pub. L. 110–246, § 4(a), title XII, § 12083(b),
or renewed on or after Oct. 12, 1995, see section 8 of Pub.
June 18, 2008, 122 Stat. 1664, 2182, provided that: ‘‘The
L. 104–36, set out as a note under section 634 of this
amendments made by this section [amending this sec-
title.
tion] shall apply to any major disaster declared on or
after the date of enactment of this Act [June 18, 2008].’’ EFFECTIVE AND TERMINATION DATES OF 1994
[Pub. L. 110–234 and Pub. L. 110–246 enacted identical AMENDMENT
provisions. Pub. L. 110–234 was repealed by section 4(a)
of Pub. L. 110–246, set out as a note under section 8701 Pub. L. 103–403, title II, § 208(c), Oct. 22, 1994, 108 Stat.
of Title 7, Agriculture.] 4182, provided that: ‘‘The amendments made by this
section [amending this section] shall remain in effect
EFFECTIVE DATE OF 2007 AMENDMENT during the period beginning on the date of enactment
Amendment by Pub. L. 110–140 effective on the date of this Act [Oct. 22, 1994] and ending on October 1, 1997.’’
that is 1 day after Dec. 19, 2007, see section 1601 of Pub.
EFFECTIVE DATE OF 1993 AMENDMENT
L. 110–140, set out as an Effective Date note under sec-
tion 1824 of Title 2, The Congress. Pub. L. 103–81, § 5(b), Aug. 13, 1993, 107 Stat. 782, pro-
vided that: ‘‘Notwithstanding any other provision of
EFFECTIVE DATE OF 2004 AMENDMENT law, the amendments made by subsection (a) [amending
Pub. L. 108–447, div. K, title I, § 101(b), Dec. 8, 2004, 118 this section] shall be effective September 1, 1993, but
Stat. 3443, provided that: ‘‘The amendment made by shall not be applicable to loan guarantee applications
Page 867 TITLE 15—COMMERCE AND TRADE § 636
received by the Administration prior to August 21, 1993. EFFECTIVE DATE OF 1980 AMENDMENT
In order to determine the percent of the loan to be
Amendment by Pub. L. 96–302 effective Oct. 1, 1980,
guaranteed pursuant to the amendments made by sub-
see section 507 of Pub. L. 96–302, set out as a note under
section (a), the Administration shall aggregate the out-
section 631 of this title.
standing guaranteed principal of multiple loan guaran-
Pub. L. 96–302, title I, § 119(d), July 2, 1980, 94 Stat. 841,
tees issued on behalf of the same borrower.’’
provided that: ‘‘The amendments made by this section
to sections 7(c)(3)(C) [subsection (c)(3) of this section]
EFFECTIVE DATE OF 1992 AMENDMENT
and 18 [section 647 of this title] of the Small Business
Pub. L. 102–366, title I, § 113(b), Sept. 4, 1992, 106 Stat. Act shall not apply to any disaster which commenced
993, provided that: ‘‘The amendments made by para- on or before the effective date of this Act.’’
graphs (4) and (5) of subsection (a) [amending this sec-
tion] shall become effective on October 1, 1992.’’ EFFECTIVE DATE OF 1978 AMENDMENT
Amendment by Pub. L. 95–510 effective Oct. 1, 1979,
EFFECTIVE DATE OF 1989 AMENDMENT see section 105 of Pub. L. 95–510, set out as a note under
Amendment by Pub. L. 101–37 applicable as if in- section 634 of this title.
cluded in Pub. L. 100–656, see section 32 of Pub. L. EFFECTIVE DATE OF 1977 AMENDMENT
101–37, set out as a note under section 631 of this title.
Amendment by section 101(d), (e) of Pub. L. 95–89 ef-
EFFECTIVE DATE OF 1988 AMENDMENTS fective Oct. 1, 1977, see section 106 of Pub. L. 95–89, set
out as a note under section 633 of this title.
Amendments by sections 202, 203, 206, 301(a), 408, and
505(h) of Pub. L. 100–656 and subsec. (j)(13)(G) and (I) of EFFECTIVE DATE OF 1972 AMENDMENT
this section as added by section 301(b) of Pub. L.
Pub. L. 92–385, § 1(b), Aug. 16, 1972, 86 Stat. 555, pro-
100–656, effective Nov. 15, 1988, see section 803(a) of Pub.
vided that: ‘‘The last paragraph of the amendment
L. 100–656, set out as a note under section 631 of this
made by subsection (a) [amending this section] shall
title.
apply only with respect to loans made on or after the
Amendments by sections 201(a), 205, 208, 301(b), (c),
date of enactment of this Act [Aug. 16, 1972].’’
and 303(a) of Pub. L. 100–656 effective Aug. 15, 1989, see
section 803(b)(1)(A), (B) of Pub. L. 100–656, as amended, EFFECTIVE DATE OF 1970 AMENDMENTS
set out as a note under section 631 of this title.
Amendment by section 302 of Pub. L. 100–656 effective For effective date of amendment by Pub. L. 91–597 see
June 1, 1989, see section 803(b)(2) of Pub. L. 100–656, as section 29 of Pub. L. 91–597, set out as a note under sec-
amended, set out as a note under section 631 of this tion 1031 of Title 21, Food and Drugs.
title. Amendment by Pub. L. 91–596 effective 120 days after
Subsection (j)(13)(E) of this section as added by sec- Dec. 29, 1970, see section 34 of Pub. L. 91–596, set out as
tion 301(b) of Pub. L. 100–656 effective Oct. 1, 1989, see a note under section 651 of Title 29, Labor.
section 803(b)(4)(D) of Pub. L. 100–656, as amended, set EFFECTIVE DATE OF 1968 AMENDMENT
out as a note under section 631 of this title.
Amendments by sections 119(a) and 120 to 122 of Pub. Amendment by Pub. L. 90–495 effective Aug. 23, 1968,
L. 100–590 effective for all loan applications resulting see section 37 of Pub. L. 90–495, set out as a note under
from disaster declarations made on or after Aug. 1, section 101 of Title 23, Highways.
1988, or from disaster declarations whose filing periods EFFECTIVE DATE OF 1966 AMENDMENT
were open on Oct. 1, 1988, see section 137 of Pub. L.
100–590, set out as a note under section 631 of this title. Pub. L. 89–409, § 3(c), May 2, 1966, 80 Stat. 133, provided
that: ‘‘This section [amending this section, repealing
EFFECTIVE DATE OF 1984 AMENDMENT section 637a of this title, and enacting provisions set
out as a note under section 633 of this title] shall take
Amendment by Pub. L. 98–270 effective Oct. 1, 1983, effect on July 1, 1966.’’
see section 313 of Pub. L. 98–270, set out as a note under
section 632 of this title. REGULATIONS
Pub. L. 98–270, title III, § 307, Apr. 18, 1984, 98 Stat. 161,
Pub. L. 117–249, § 2(b), Dec. 20, 2022, 136 Stat. 2351, pro-
provided that: ‘‘The amendments made by sections 304
vided that: ‘‘Not later than 120 days after the date of
and 305 of this title [amending this section and provi-
enactment of this Act [Dec. 20, 2022], the Administrator
sions set out as a note under section 631 of this title]
of the Small Business Administration shall issue regu-
shall apply to economic dislocations certified by any
lations to carry out the amendment made by sub-
State Governor to the Small Business Administration
section (a) [amending this section].’’
after the date of enactment of this Act [Apr. 18, 1984]
Pub. L. 116–136, div. A, title I, § 1102(e), Mar. 27, 2020,
providing such dislocation commenced since January 1,
134 Stat. 294, provided that: ‘‘On and after the date of
1982.’’
enactment of this Act [Mar. 27, 2020], the interim final
Amendment by section 311 of Pub. L. 98–270 applicable
rule published by the Administrator entitled ‘Express
to loans granted on the basis of any disaster with re-
Loan Programs: Affiliation Standards’ (85 Fed. Reg.
spect to which a declaration has been issued after Sept.
7622 (February 10, 2020)) is permanently rescinded and
1, 1982, under subsec. (b)(2)(A), (B), or (C) of this section
shall have no force or effect.’’
or with respect to which a certification has been made
Pub. L. 111–240, title I, § 1131(b), Sept. 27, 2010, 124
after such date under subsec. (b)(2)(D) of this section,
Stat. 2514, provided that: ‘‘Not later than 180 days after
see section 312 of Pub. L. 98–270, set out as a note under
the date of enactment of this Act [Sept. 27, 2010], the
section 632 of this title.
Administrator [of the Small Business Administration]
shall issue regulations to carry out section 7(l) of the
EFFECTIVE DATE OF 1981 AMENDMENT
Small Business Act [15 U.S.C. 636(l)], as amended by
Pub. L. 97–35, title XIX, § 1910, Aug. 13, 1981, 95 Stat. subsection (a).’’
778, provided that the repeal of subsec. (a)(6)(C), (8) of Pub. L. 106–50, title IV, § 402(d), Aug. 17, 1999, 113 Stat.
this section is effective Oct. 1, 1985. 246, provided that: ‘‘Not later than 30 days after the
Amendment by section 1913 of Pub. L. 97–35 effective date of the enactment of this section [Aug. 17, 1999], the
Oct. 1, 1981, amendments by sections 1902, 1911, 1912, and Administrator of the Small Business Administration
1914 of Pub. L. 97–35 effective Aug. 13, 1981, but shall not shall issue such guidelines as the Administrator deter-
affect any financing made, obligated, or committed mines to be necessary to carry out this section [amend-
under this chapter or chapter 14B of this title prior to ing this section and enacting provisions set out as
Aug. 13, 1981, see section 1918 of Pub. L. 97–35, set out notes under this section] and the amendments made by
as a note under section 631 of this title. this section.’’
§ 636 TITLE 15—COMMERCE AND TRADE Page 868
Pub. L. 106–8, § 3(b), Apr. 2, 1999, 113 Stat. 15, which such lender applications that have been submitted to
provided that not later than 30 days after Apr. 2, 1999, the Administrator before June 1, 2021.’’
Administrator of the Small Business Administration
was to issue guidelines to carry out the program under SUBSEQUENT PAYCHECK PROTECTION PROGRAM LOANS
former subsec. (a)(27) of this section, was repealed by Pub. L. 116–260, div. N, title II, § 276(b), Dec. 27, 2020,
Pub. L. 106–8, § 3(c), Apr. 2, 1999, 113 Stat. 16, effective 134 Stat. 1979, provided that: ‘‘For purposes of the Inter-
Dec. 31, 2000. nal Revenue Code of 1986 [26 U.S.C. 1 et seq.], in the
Section 114 of Pub. L. 102–366 provided that: ‘‘Not case of any taxable year ending after the date of the en-
later than 45 days after the date of enactment of this actment of this Act [Dec. 27, 2020]—
Act [Sept. 4, 1992], the Small Business Administration ‘‘(1) no amount shall be included in the gross in-
shall promulgate interim final regulations to imple- come of an eligible entity (within the meaning of sub-
ment the amendments made by this subtitle [subtitle B paragraph (J) of section 7(a)(37) of the Small Business
(§§ 111–115) of title I of Pub. L. 102–366, amending this Act [15 U.S.C. 636(a)(37)]) by reason of forgiveness of
section, enacting provisions set out as notes below, and indebtedness described in clause (ii) of such subpara-
amending provisions set out as a note under section 631 graph,
of this title].’’ ‘‘(2) no deduction shall be denied, no tax attribute
Pub. L. 102–140, title VI, § 609(i), Oct. 28, 1991, 105 Stat. shall be reduced, and no basis increase shall be de-
831, provided that: ‘‘Not later than 90 days after the nied, by reason of the exclusion from gross income
date of the enactment of this Act [Oct. 28, 1991], the provided by paragraph (1), and
Small Business Administration shall promulgate in- ‘‘(3) in the case of an eligible entity that is a part-
terim final regulations to implement the microloan nership or S corporation—
demonstration program.’’ ‘‘(A) any amount excluded from income by reason
Pub. L. 100–656, title VIII, § 801, Nov. 15, 1988, 102 Stat. of paragraph (1) shall be treated as tax exempt in-
3898, as amended by Pub. L. 101–37, § 30, June 15, 1989, 103 come for purposes of sections 705 and 1366 of the In-
Stat. 76, provided that: ‘‘The Small Business Adminis- ternal Revenue Code of 1986 [26 U.S.C. 705, 1366], and
tration shall— ‘‘(B) except as provided by the Secretary of the
‘‘(1) within 60 days after the date of enactment of Treasury (or the Secretary’s delegate), any increase
this Act [Nov. 15, 1988] conduct meetings of present in the adjusted basis of a partner’s interest in a
and potential participants in the program established partnership under section 705 of the Internal Rev-
by section 7(j)(10) of the Small Business Act [15 U.S.C. enue Code of 1986 with respect to any amount de-
636(j)(10)], as amended by this Act, to ascertain and scribed in subparagraph (A) shall equal the part-
consider public comment on the nature and extent of ner’s distributive share of deductions resulting
regulations needed to implement this Act [see Short from costs giving rise to the forgiveness of indebt-
Title of 1988 Amendment note set out under section edness referred to in paragraph (1).’’
631 of this title];
‘‘(2) within one hundred and twenty days after the DEMOGRAPHIC INFORMATION ON LOAN APPLICATIONS
date of enactment of this Act, publish in the Federal Pub. L. 116–260, div. N, title III, § 309, Dec. 27, 2020, 134
Register proposed rules and regulations imple- Stat. 2000, provided that: ‘‘On and after the date of en-
menting this Act; and actment of this Act [Dec. 27, 2020], any loan origination
‘‘(3) within 270 days after the date of enactment of application for a loan under paragraph (36) or (37) of
this Act, publish in the Federal Register final rules section 7(a) of the Small Business Act (15 U.S.C. 636(a)),
and regulations implementing this Act.’’ as amended and added by this division, shall include a
means by which the applicant for the loan may, at the
TERMINATION OF REPORTING REQUIREMENTS
discretion of the applicant, submit demographic infor-
For termination, effective May 15, 2000, of provisions mation of the owner of the recipient of the loan, includ-
of law requiring submittal to Congress of any annual, ing the sex, race, ethnicity, and veteran status of the
semiannual, or other regular periodic report listed in owner.’’
House Document No. 103–7 (in which reports required
under subsections (a)(15)(E) and (j)(16)(B) of this section ELIGIBLE CHURCHES AND RELIGIOUS ORGANIZATIONS
are listed on page 191), see section 3003 of Pub. L. 104–66, Pub. L. 116–260, div. N, title III, § 311(c), Dec. 27, 2020,
as amended, set out as a note under section 1113 of 134 Stat. 2007, provided that:
Title 31, Money and Finance. ‘‘(1) SENSE OF CONGRESS.—It is the sense of Congress
that the interim final rule of the [Small Business] Ad-
TRANSFER OF FUNCTIONS
ministration entitled ‘Business Loan Program Tem-
For transfer of all functions, personnel, assets, com- porary Changes; Paycheck Protection Program’ (85
ponents, authorities, grant programs, and liabilities of Fed. Reg. 20817 (April 15, 2020)) properly clarified the
the Federal Emergency Management Agency, including eligibility of churches and religious organizations for
the functions of the Under Secretary for Federal Emer- loans made under paragraph (36) of section 7(a) of the
gency Management relating thereto, to the Federal Small Business Act (15 U.S.C. 636(a)).
Emergency Management Agency, see section 315(a)(1) ‘‘(2) APPLICABILITY OF PROHIBITION.—The prohibition
of Title 6, Domestic Security. on eligibility established by section 120.110(k) of title
For transfer of functions, personnel, assets, and li- 13, Code of Federal Regulations, or any successor regu-
abilities of the Federal Emergency Management Agen- lation, shall not apply to a loan under paragraph (36) of
cy, including the functions of the Director of the Fed- section 7(a) of the Small Business Act (15 U.S.C.
eral Emergency Management Agency relating thereto, 636(a)).’’
to the Secretary of Homeland Security, and for treat-
ment of related references, see former section 313(1) and INCREASED ABILITY FOR PAYCHECK PROTECTION PRO-
GRAM BORROWERS TO REQUEST AN INCREASE IN LOAN
sections 551(d), 552(d), and 557 of Title 6, Domestic Secu-
rity, and the Department of Homeland Security Reor- AMOUNT DUE TO UPDATED REGULATIONS
ganization Plan of November 25, 2002, as modified, set Pub. L. 116–260, div. N, title III, § 312, Dec. 27, 2020, 134
out as a note under section 542 of Title 6. Stat. 2007, provided that:
‘‘(a) DEFINITIONS.—In this section—
RESTRICTION
‘‘(1) the terms ‘covered loan’ and ‘eligible recipient’
Pub. L. 117–6, § 2(c), Mar. 30, 2021, 135 Stat. 250, pro- have the meanings given those terms in 7(a)(36)(A) of
vided that: ‘‘From June 1, 2021, through June 30, 2021, the Small Business Act (15 U.S.C. 636(a)(36)(A)); and
the Administrator of the Small Business Administra- ‘‘(2) the term ‘included covered loan’ means a cov-
tion shall not accept new lender applications for loans ered loan for which, as of the date of enactment of
under paragraph (36) or (37) of section 7(a) of the Small this Act [Dec. 27, 2020], the borrower had not received
Business Act (15 U.S.C. 636(a)) and shall only process forgiveness under section 1106 of the CARES Act [15
Page 869 TITLE 15—COMMERCE AND TRADE § 636
U.S.C. 9005], as in effect on the day before such date ‘‘(i) shall receive a risk weight of zero percent;
of enactment. and
‘‘(b) RULES OR GUIDANCE.—Not later than 17 days ‘‘(ii) shall not be included in the calculation of
after the date of enactment of this Act, and without re- any applicable leverage ratio or other applicable
gard to the notice requirements under section 553(b) of capital ratio or calculation.
title 5, United States Code, the Administrator [of the ‘‘(B) LOANS DESCRIBED.—A loan referred to in sub-
Small Business Administration] shall issue rules or paragraph (A) is—
guidance to ensure that an eligible recipient of an in- ‘‘(i) a loan made by a Farm Credit Bank de-
cluded covered loan that returns amounts disbursed scribed in section 1.2(a) of the Farm Credit Act of
under the included covered loan or does not accept the 1971 (12 U.S.C. 2002(a)) to a Federal Land Bank As-
full amount of the included covered loan for which the sociation, a Production Credit Association, or an
eligible recipient was approved— agricultural credit association described in that
‘‘(1) in the case of an eligible recipient that re- section to make loans under paragraph (36) or (37)
turned all or part of an included covered loan, the eli- of section 7(a) of the Small Business Act (15
gible recipient may reapply for a covered loan for an U.S.C. 636(a)) or forgive those loans in accordance
amount equal to the difference between the amount with section 7A of the Small Business Act [15
retained and the maximum amount applicable; and U.S.C. 636m], as redesignated and transferred by
‘‘(2) in the case of an eligible recipient that did not section 304 of this Act, and subparagraph (J) of
accept the full amount of an included covered loan, such paragraph (37); or
the eligible recipient may request a modification to ‘‘(ii) a loan made by a Federal Land Bank Asso-
increase the amount of the covered loan to the max- ciation, a Production Credit Association, an agri-
imum amount applicable, subject to the requirements cultural credit association, or the bank for co-
of section 7(a)(36) of the Small Business Act (15 U.S.C. operatives described in section 1.2(a) of the Farm
636(a)(36)). Credit Act of 1971 (12 U.S.C. 2002(a)) under para-
‘‘(c) INTERIM FINAL RULES.—Notwithstanding the in- graph (36) or (37) of section 7(a) of the Small Busi-
terim final rule issued by the Administration entitled ness Act (15 U.S.C. 636(a)).
‘Business Loan Program Temporary Changes; Paycheck ‘‘(c) EFFECTIVE DATE; APPLICABILITY.—This section
Protection Program—Loan Increases’ (85 Fed. Reg. shall be effective as if included in the CARES Act (Pub-
29842 (May 19, 2020)), an eligible recipient of an included lic Law 116–136; 134 Stat. 281) and shall apply to any
covered loan that is eligible for an increased covered loan made pursuant to section 7(a)(36) of the Small
loan amount as a result of any interim final rule that Business Act (15 U.S.C. 636(a)(36)) before, on, or after
allows for covered loan increases may submit a request the date of enactment of this Act [Dec. 27, 2020], includ-
for an increase in the included covered loan amount ing forgiveness of such a loan.’’
even if—
‘‘(1) the initial covered loan amount has been fully CONFLICTS OF INTEREST
disbursed; or
‘‘(2) the lender of the initial covered loan has sub- Pub. L. 116–260, div. N, title III, § 322, Dec. 27, 2020, 134
mitted to the [Small Business] Administration a Stat. 2017, provided that:
‘‘(a) DEFINITIONS.—In this section:
Form 1502 report related to the covered loan.’’
‘‘(1) CONTROLLING INTEREST.—The term ‘controlling
FARM CREDIT SYSTEM INSTITUTIONS interest’ means owning, controlling, or holding not
Pub. L. 116–260, div. N, title III, § 314, Dec. 27, 2020, 134 less than 20 percent, by vote or value, of the out-
Stat. 2009, provided that: standing amount of any class of equity interest in an
‘‘(a) DEFINITION OF FARM CREDIT SYSTEM INSTITU- entity.
TION.—In this section, the term ‘Farm Credit System
‘‘(2) COVERED ENTITY.—
institution’— ‘‘(A) DEFINITION.—The term ‘covered entity’
‘‘(1) means an institution of the Farm Credit Sys- means an entity in which a covered individual di-
tem chartered under the Farm Credit Act of 1971 (12 rectly or indirectly holds a controlling interest.
U.S.C. 2001 et seq.); and ‘‘(B) TREATMENT OF SECURITIES.—For the purpose
‘‘(2) does not include the Federal Agricultural of determining whether an entity is a covered enti-
Mortgage Corporation. ty, the securities owned, controlled, or held by 2 or
‘‘(b) FACILITATION OF PARTICIPATION IN PPP AND SEC- more individuals who are related as described in
OND DRAW LOANS.— paragraph (3)(B) shall be aggregated.
‘‘(1) APPLICABLE RULES.—Solely with respect to ‘‘(3) COVERED INDIVIDUAL.—The term ‘covered indi-
loans under paragraphs (36) and (37) of section 7(a) of vidual’ means—
the Small Business Act (15 U.S.C. 636(a)), Farm Credit ‘‘(A) the President, the Vice President, the head
Administration regulations and guidance issued as of of an Executive department, or a Member of Con-
July 14, 2020, and compliance with such regulations gress; and
and guidance, shall be deemed functionally equiva- ‘‘(B) the spouse, as determined under applicable
lent to requirements referenced in section 3(a)(iii)(II) common law, of an individual described in subpara-
of the interim final rule of the [Small Business] Ad- graph (A).
ministration entitled ‘Business Loan Program Tem- ‘‘(4) EXECUTIVE DEPARTMENT.—The term ‘Executive
porary Changes; Paycheck Protection Program’ (85 department’ has the meaning given the term in sec-
Fed. Reg. 20811 (April 15, 2020)) or any similar require- tion 101 of title 5, United States Code.
ment referenced in that interim final rule in imple- ‘‘(5) MEMBER OF CONGRESS.—The term ‘Member of
menting such paragraph (37). Congress’ means a Member of the Senate or House of
‘‘(2) APPLICABILITY OF CERTAIN LOAN REQUIRE- Representatives, a Delegate to the House of Rep-
MENTS.—For purposes of making loans under para- resentatives, and the Resident Commissioner from
graph (36) or (37) of section 7(a) of the Small Business Puerto Rico.
Act (15 U.S.C. 636(a)) or forgiving those loans in ac- ‘‘(6) EQUITY INTEREST.—The term ‘equity interest’
cordance with section 7A of the Small Business Act means—
[15 U.S.C. 636m], as redesignated and transferred by ‘‘(A) a share in an entity, without regard to
section 304 of this Act, and subparagraph (J) of such whether the share is—
paragraph (37), sections 4.13, 4.14, and 4.14A of the ‘‘(i) transferable; or
Farm Credit Act of 1971 (12 U.S.C. 2199, 2202, 2202a) ‘‘(ii) classified as stock or anything similar;
(including regulations issued under those sections) ‘‘(B) a capital or profit interest in a limited li-
shall not apply. ability company or partnership; or
‘‘(3) RISK WEIGHT.— ‘‘(C) a warrant or right, other than a right to con-
‘‘(A) IN GENERAL.—With respect to the application vert, to purchase, sell, or subscribe to a share or in-
of Farm Credit Administration capital require- terest described in subparagraph (A) or (B), respec-
ments, a loan described in subparagraph (B)— tively.
§ 636 TITLE 15—COMMERCE AND TRADE Page 870
‘‘(b) REQUIREMENT FOR DISCLOSURE REGARDING EXIST- ‘‘(2) the limitation on amounts allowed to be ex-
ING LOANS.—For any loan under paragraph (36) of sec- pended to provide information and technical assist-
tion 7(a) of the Small Business Act (15 U.S.C. 636(a)) ance under clause (i) of section 7(m)(4)(E) of the
made to a covered entity before the date of enactment Small Business Act (15 U.S.C. 636(m)(4)(E)) and enter
of this Act [Dec. 27, 2020]— into third party contracts for the provision of tech-
‘‘(1) if, before the date of enactment of this Act, the nical assistance under clause (ii) of such section
covered entity submitted an application for forgive- 7(m)(4)(E).’’
ness under section 1106 of the CARES Act (15 U.S.C.
9005) (as such section was in effect on the day before TEMPORARY DURATION OF LOANS TO BORROWERS
the date of enactment of this Act) with respect to Pub. L. 116–260, div. N, title III, § 329(c), Dec. 27, 2020,
such loan, not later than 30 days after the date of en- 134 Stat. 2042, provided that:
actment of this Act, the principal executive officer, ‘‘(1) IN GENERAL.—During the period beginning on the
or individual performing a similar function, of the date of enactment of this Act [Dec. 27, 2020] and ending
covered entity shall disclose to the Administrator on September 30, 2021, the duration of a loan made by
that the entity is a covered entity; and an eligible intermediary under section 7(m) of the
‘‘(2) if, on or after the date of enactment of this Small Business Act (15 U.S.C. 636(m))—
Act, the covered entity submits an application for ‘‘(A) to an existing borrower may be extended to
forgiveness under section 7A of the Small Business not more than 8 years; and
Act [15 U.S.C. 636m], as redesignated and transferred ‘‘(B) to a new borrower may be not more than 8
by section 304 of this Act, with respect to such loan, years.
not later than 30 days after submitting the applica- ‘‘(2) REVERSION.—On and after October 1, 2021, the du-
tion, the principal executive officer, or individual ration of a loan made by an eligible intermediary to a
performing a similar function, of the covered entity borrower under section 7(m) of the Small Business Act
shall disclose to the Administrator [of the Small (15 U.S.C. 636(m)) shall be 7 years or such other amount
Business Administration] that the entity is a covered established by the Administrator [of the Small Busi-
entity. ness Administration].’’
‘‘(c) BAN ON NEW LOANS.—On and after the date of en-
FINDINGS
actment of this Act [Dec. 27, 2020], a loan under para-
graph (36) or (37) of section 7(a) of the Small Business Pub. L. 114–88, div. A, § 1002, Nov. 25, 2015, 129 Stat.
Act (15 U.S.C. 636(a)), as added and amended by this 687, provided that: ‘‘Congress finds the following:
Act, may not be made to a covered entity.’’ ‘‘(1) In 2012, Superstorm Sandy caused substantial
physical and economic damage to the United States,
TEMPORARY ADMINISTRATIVE FEE WAIVER and New York in particular.
Pub. L. 116–260, div. N, title III, § 327(a), Dec. 27, 2020, ‘‘(2) For businesses and homeowners, the primary
134 Stat. 2037, provided that: means of obtaining long-term Federal financial as-
‘‘(1) IN GENERAL.—During the period beginning on the sistance in the wake of disasters such as Superstorm
date of enactment of this Act [Dec. 27, 2020] and ending Sandy is through the Small Business Administra-
on September 30, 2021, and to the extent that the cost tion’s Disaster Loan Program.
of such elimination or reduction of fees is offset by ap- ‘‘(3) With regard to the Small Business Administra-
propriations, with respect to each loan guaranteed tion’s operation of the Disaster Loan Program after
under section 7(a) of the Small Business Act (15 U.S.C. Superstorm Sandy, the Government Accountability
636(a)) (including a recipient of assistance under the Office found that the Administration did not meet its
Community Advantage Pilot Program of the [Small timeliness goals for processing business loan applica-
Business] Administration) for which an application is tions.
approved or pending approval on or after the date of en- ‘‘(4) According to the Government Accountability
actment of this Act, the Administrator [of the Small Office, the Small Business Administration stated
Business Administration] shall— that it was challenged by an unexpectedly high vol-
‘‘(A) in lieu of the fee otherwise applicable under ume of loan applications that it received early in its
section 7(a)(23)(A) of the Small Business Act (15 response to Superstorm Sandy.
U.S.C. 636(a)(23)(A)), collect no fee or reduce fees to ‘‘(5) As a result, many businesses and homeowners
the maximum extent possible; and affected by Superstorm Sandy were unable to apply
‘‘(B) in lieu of the fee otherwise applicable under for financing from the Small Business Administra-
section 7(a)(18)(A) of the Small Business Act (15 tion.’’
U.S.C. 636(a)(18)(A)), collect no fee or reduce fees to
AVAILABILITY OF FUNDS
the maximum extent possible.
‘‘(2) APPLICATION OF FEE ELIMINATIONS OR REDUC- Pub. L. 111–240, title I, § 1131(c), Sept. 27, 2010, 124
TIONS.—To the extent that amounts are made available Stat. 2514, provided that: ‘‘Any amounts provided to the
to the Administrator for the purpose of fee elimi- Administrator [of the Small Business Administration]
nations or reductions under paragraph (1), the Adminis- for the purposes of carrying out section 7(l) of the
trator shall— Small Business Act [15 U.S.C. 636(l)], as amended by
‘‘(A) first use any amounts provided to eliminate or subsection (a), shall remain available until expended.’’
reduce fees paid by small business borrowers under
clauses (i) through (iii) of section 7(a)(18)(A) of the MARKETING AND OUTREACH
Small Business Act (15 U.S.C. 636(a)(18)(A)), to the Pub. L. 110–234, title XII, § 12063(b), May 22, 2008, 122
maximum extent possible; and Stat. 1408, and Pub. L. 110–246, § 4(a), title XII, § 12063(b),
‘‘(B) then use any amounts provided to eliminate or June 18, 2008, 122 Stat. 1664, 2170, provided that: ‘‘Not
reduce fees under 7(a)(23)(A) of the Small Business later than 90 days after the date of enactment of this
Act (15 U.S.C. 636(a)(23)(A)).’’ Act [June 18, 2008], the Administrator shall create a
marketing and outreach plan that—
TEMPORARY WAIVER OF TECHNICAL ASSISTANCE GRANTS
‘‘(1) encourages a proactive approach to the disaster
MATCHING REQUIREMENTS AND FLEXIBILITY ON PRE-
relief efforts of the Administration;
AND POST-LOAN ASSISTANCE
‘‘(2) makes clear the services provided by the Ad-
Pub. L. 116–260, div. N, title III, § 329(b), Dec. 27, 2020, ministration, including contact information, applica-
134 Stat. 2042, provided that: ‘‘During the period begin- tion information, and timelines for submitting appli-
ning on the date of enactment of this Act [Dec. 27, 2020] cations, the review of applications, and the disburse-
and ending on September 30, 2021, the [Small Business] ment of funds;
Administration shall waive— ‘‘(3) describes the different disaster loan programs
‘‘(1) the requirement to contribute non-Federal of the Administration, including how they are made
funds under section 7(m)(4)(B) of the Small Business available and the eligibility requirements for each
Act (15 U.S.C. 636(m)(4)(B)); and loan program;
Page 871 TITLE 15—COMMERCE AND TRADE § 636
‘‘(4) provides for regional marketing, focusing on develop a comprehensive outreach and technical as-
disasters occurring in each region before the date of sistance program (in this subsection referred to as
enactment of this Act [June 18, 2008], and likely sce- the ‘program’) to—
narios for disasters in each such region; and ‘‘(A) market the loans available under section
‘‘(5) ensures that the marketing plan is made avail- 7(b)(3) of the Small Business Act (15 U.S.C. 636(b)(3))
able at small business development centers and on to Reservists, and family members of Reservists,
the website of the Administration.’’ that are on active duty and that are not on active
[Pub. L. 110–234 and Pub. L. 110–246 enacted identical duty; and
provisions. Pub. L. 110–234 was repealed by section 4(a) ‘‘(B) provide technical assistance to a small busi-
of Pub. L. 110–246, set out as a note under section 8701 ness concern applying for a loan under that section.
of Title 7, Agriculture.] ‘‘(2) COMPONENTS.—The program shall—
[‘‘Administration’’ and ‘‘Administrator’’, referred to ‘‘(A) incorporate appropriate websites maintained
in Pub. L. 110–246, § 12063(b), set out above, as meaning by the Administration, the Department of Veterans
the Small Business Administration and the Adminis- Affairs, and the Department of Defense; and
‘‘(B) require that information on the program is
trator thereof, see section 636e of this title.]
made available to small business concerns directly
DEFINITION OF TERMS USED IN PUB. L. 110–186 through—
‘‘(i) the district offices and resource partners of
Pub. L. 110–186, § 3, Feb. 14, 2008, 122 Stat. 623, provided the Administration, including small business de-
that: ‘‘In this Act [see Short Title of 2008 Amendment velopment centers, women’s business centers, and
note set out under section 631 of this title]— the Service Corps of Retired Executives; and
‘‘(1) the term ‘activated’ means receiving an order ‘‘(ii) other Federal agencies, including the De-
placing a Reservist on active duty; partment of Veterans Affairs and the Department
‘‘(2) the term ‘active duty’ has the meaning given of Defense.
that term in section 101 of title 10, United States ‘‘(3) REPORT.—
Code; ‘‘(A) IN GENERAL.—Not later than 6 months after
‘‘(3) the terms ‘Administration’ and ‘Administrator’ the date of enactment of this Act, and every 6
mean the Small Business Administration and the Ad- months thereafter until the date that is 30 months
ministrator thereof, respectively; after such date of enactment, the Administrator
‘‘(4) the term ‘Reservist’ means a member of a re- shall submit to Congress a report on the status of
serve component of the Armed Forces, as described in the program.
section 10101 of title 10, United States Code; ‘‘(B) CONTENTS.—Each report submitted under
‘‘(5) the term ‘Service Corps of Retired Executives’ subparagraph (A) shall include—
means the Service Corps of Retired Executives au- ‘‘(i) for the 6-month period ending on the date of
thorized by section 8(b)(1) of the Small Business Act that report—
(15 U.S.C. 637(b)(1)); ‘‘(I) the number of loans approved under sec-
‘‘(6) the terms ‘service-disabled veteran’ and ‘small tion 7(b)(3) of the Small Business Act (15 U.S.C.
business concern’ have the meaning as in section 3 of 636(b)(3));
the Small Business Act (15 U.S.C. 632); ‘‘(II) the number of loans disbursed under that
‘‘(7) the term ‘small business development center’ section; and
means a small business development center described ‘‘(III) the total amount disbursed under that
in section 21 of the Small Business Act (15 U.S.C. 648); section; and
and ‘‘(ii) recommendations, if any, to make the pro-
‘‘(8) the term ‘women’s business center’ means a gram more effective in serving small business
women’s business center described in section 29 of the concerns that employ Reservists.’’
Small Business Act (15 U.S.C. 656).’’ RESERVIST LOANS
ESTABLISHMENT OF PRE-CONSIDERATION PROCESS AND Pub. L. 110–186, title II, § 202, Feb. 14, 2008, 122 Stat.
OUTREACH AND TECHNICAL ASSISTANCE PROGRAM 629, provided that:
‘‘(a) IN GENERAL.—The Administrator and the Sec-
Pub. L. 110–186, title II, § 201(b), (c), Feb. 14, 2008, 122 retary of Defense shall develop a joint website and
Stat. 627, 628, provided that: printed materials providing information regarding any
‘‘(b) PRE-CONSIDERATION PROCESS.— program for small business concerns that is available
‘‘(1) DEFINITION.—In this subsection, the term ‘eligi- to veterans or Reservists.
ble Reservist’ means a Reservist who— ‘‘(b) MARKETING.—The Administrator is authorized—
‘‘(A) has not been ordered to active duty; ‘‘(1) to advertise and promote the program under
‘‘(B) expects to be ordered to active duty during section 7(b)(3) of the Small Business Act [15 U.S.C.
a period of military conflict; and 636(b)(3)] jointly with the Secretary of Defense and
‘‘(C) can reasonably demonstrate that the small veterans’ service organizations; and
business concern for which that Reservist is a key ‘‘(2) to advertise and promote participation by lend-
employee will suffer economic injury in the absence ers in such program jointly with trade associations
of that Reservist. for banks or other lending institutions.’’
‘‘(2) ESTABLISHMENT.—Not later than 6 months after
the date of enactment of this Act [Feb. 14, 2008], the TEMPORARY EXTENSION AND EXPANSION OF LOAN
Administrator shall establish a pre-consideration PROGRAMS
process, under which the Administrator— Pub. L. 108–217, §§ 4–8, Apr. 5, 2004, 118 Stat. 591–594,
‘‘(A) may collect all relevant materials necessary provided for the temporary extension and expansion of
for processing a loan to a small business concern certain loan programs under 15 U.S.C. 636(a) beginning
under section 7(b)(3) of the Small Business Act (15 on Apr. 5, 2004, and ending on Sept. 30, 2004.
U.S.C. 636(b)(3)) before an eligible Reservist em-
ployed by that small business concern is activated; BUDGETARY TREATMENT OF LOANS AND FINANCINGS
and Pub. L. 107–100, § 6(c), Dec. 21, 2001, 115 Stat. 971, pro-
‘‘(B) shall distribute funds for any loan approved vided for special budgetary treatment of certain loans
under subparagraph (A) if that eligible Reservist is and financings by the Small Business Administration
activated. under 15 U.S.C. 636(a) during the 2-year period begin-
‘‘(c) OUTREACH AND TECHNICAL ASSISTANCE PRO- ning on Oct. 1, 2002.
GRAM.—
‘‘(1) IN GENERAL.—Not later than 6 months after the ENHANCED PUBLICITY DURING OPERATION ALLIED
date of enactment of this Act [Feb. 14, 2008], the Ad- FORCE
ministrator, in consultation with the Secretary of Pub. L. 106–50, title IV, § 402(c), Aug. 17, 1999, 113 Stat.
Veterans Affairs and the Secretary of Defense, may 246, provided for enhanced publicity of the availability
§ 636 TITLE 15—COMMERCE AND TRADE Page 872
of assistance during Operation Allied Force and for 120 ‘‘(A) LOAN GUARANTEES.—Loan guarantees under
days thereafter. the terms and conditions specified under this sec-
tion and other applicable law.
EVALUATION OF PREDISASTER MITIGATION PILOT ‘‘(B) NONFINANCIAL ASSISTANCE.—Other forms of
PROGRAM assistance that are not financial.
Pub. L. 106–24, § 1(c), Apr. 27, 1999, 113 Stat. 39, pro- ‘‘(c) ADMINISTRATION OF PROGRAM.—In the adminis-
vided that, on Jan. 31, 2003, the Administrator of the tration of the DELTA program under this section, the
Small Business Administration was to submit to the Administrator shall—
Committees on Small Business of the House of Rep- ‘‘(1) process applications for DELTA program loan
resentatives and the Senate a report on the effective- guarantees;
ness of the pilot program authorized by subsec. (b)(1)(C) ‘‘(2) guarantee repayment of the resulting loans in
of this section. accordance with this section; and
‘‘(3) take such other actions as are necessary to ad-
CONGRESSIONAL FINDINGS REGARDING SMALL BUSINESS minister the program.
YEAR 2000 READINESS ‘‘(d) SELECTION AND ELIGIBILITY REQUIREMENTS FOR
Pub. L. 106–8, § 2, Apr. 2, 1999, 113 Stat. 13, provided DELTA LOAN GUARANTEES.—
‘‘(1) IN GENERAL.—The selection criteria and eligi-
that: ‘‘Congress finds that—
bility requirements set forth in this subsection shall
‘‘(1) the failure of many computer programs to rec-
be applied in the selection of small business concerns
ognize the Year 2000 may have extreme negative fi-
to receive loan guarantees under the DELTA pro-
nancial consequences in the Year 2000, and in subse-
gram.
quent years for both large and small businesses;
‘‘(2) SELECTION CRITERIA.—The criteria used for the
‘‘(2) small businesses are well behind larger busi-
selection of a small business concern to receive a
nesses in implementing corrective changes to their
loan guarantee under this section are as follows:
automated systems;
‘‘(A) The selection criteria established under the
‘‘(3) many small businesses do not have access to
memorandum of understanding referred to in sub-
capital to fix mission critical automated systems,
section (a)(3).
which could result in severe financial distress or fail-
‘‘(B) The extent to which the loans to be guaran-
ure for small businesses; and
teed would support the retention of defense workers
‘‘(4) the failure of a large number of small busi-
whose employment would otherwise be perma-
nesses due to the Year 2000 computer problem would
nently or temporarily terminated as a result of re-
have a highly detrimental effect on the economy in
ductions in expenditures by the United States for
the Year 2000 and in subsequent years.’’
defense, the termination or cancellation of a de-
TRANSFER OF FUNDS fense contract, the failure to proceed with an ap-
proved major weapon system, the merger or con-
Pub. L. 105–135, title II, § 202(b), Dec. 2, 1997, 111 Stat. solidation of the operations of a defense contractor,
2600, provided that: or the closure or realignment of a military installa-
‘‘(1) IN GENERAL.—No funds are authorized to be ap- tion.
propriated or otherwise provided to carry out the grant ‘‘(C) The extent to which the loans to be guaran-
program under section 7(m)(4)(F) of the Small Business teed would stimulate job creation and new eco-
Act (15 U.S.C. 636(m)(4)(F)) (as added by this section), nomic activities in communities most adversely af-
except by transfer from another department or agency fected by reductions in expenditures by the United
of the Federal Government to the Administration in States for defense, the termination or cancellation
accordance with this subsection. of a defense contract, the failure to proceed with an
‘‘(2) LIMITATION ON AMOUNTS.—The total amount approved major weapon system, the merger or con-
transferred to the Administration from other depart- solidation of the operations of a defense contractor,
ments and agencies of the Federal Government to carry or the closure or realignment of a military installa-
out the grant program under section 7(m)(4)(F) of the tion.
Small Business Act (15 U.S.C. 636(m)(4)(F)) (as added by ‘‘(D) The extent to which the loans to be guaran-
this section) shall not exceed— teed would be used to acquire (or permit the use of
‘‘(A) $3,000,000 for fiscal year 1998; other funds to acquire) capital equipment to mod-
‘‘(B) $4,000,000 for fiscal year 1999; and ernize or expand the facilities of the borrower to
‘‘(C) $5,000,000 for fiscal year 2000.’’ enable the borrower to remain in the national tech-
DEFENSE LOAN AND TECHNICAL ASSISTANCE PROGRAM nology and industrial base available to the Depart-
ment of Defense.
Pub. L. 105–135, title V, § 507, Dec. 2, 1997, 111 Stat. ‘‘(3) ELIGIBILITY REQUIREMENTS.—To be eligible for a
2625, provided that: loan guarantee under the DELTA program, a bor-
‘‘(a) DELTA PROGRAM AUTHORIZED.— rower must demonstrate to the satisfaction of the
‘‘(1) IN GENERAL.—The Administrator may admin- Administrator that, during any 1 of the 5 preceding
ister the Defense Loan and Technical Assistance pro- operating years of the borrower, not less than 25 per-
gram in accordance with the authority and require- cent of the value of the borrower’s sales were derived
ments of this section. from—
‘‘(2) EXPIRATION OF AUTHORITY.—The authority of ‘‘(A) contracts with the Department of Defense or
the Administrator to carry out the DELTA program the defense-related activities of the Department of
under paragraph (1) shall terminate when the funds Energy; or
referred to in subsection (g)(1) have been expended. ‘‘(B) subcontracts in support of defense-related
‘‘(3) DELTA PROGRAM DEFINED.—In this section, the prime contracts.
terms ‘Defense Loan and Technical Assistance pro- ‘‘(e) MAXIMUM AMOUNT OF LOAN PRINCIPAL.—With re-
gram’ and ‘DELTA program’ mean the Defense Loan spect to each borrower, the maximum amount of loan
and Technical Assistance program that has been es- principal for which the Administrator may provide a
tablished by a memorandum of understanding entered guarantee under this section during a fiscal year may
into by the Administrator and the Secretary of De- not exceed $1,250,000.
fense on June 26, 1995. ‘‘(f) LOAN GUARANTY RATE.—The maximum allowable
‘‘(b) ASSISTANCE.— guarantee percentage for loans guaranteed under this
‘‘(1) AUTHORITY.—Under the DELTA program, the section may not exceed 80 percent.
Administrator may assist small business concerns ‘‘(g) FUNDING.—
that are economically dependent on defense expendi- ‘‘(1) IN GENERAL.—The funds that have been made
tures to acquire dual-use capabilities. available for loan guarantees under the DELTA pro-
‘‘(2) FORMS OF ASSISTANCE.—Forms of assistance au- gram and have been transferred from the Department
thorized under paragraph (1) are as follows: of Defense to the Small Business Administration be-
Page 873 TITLE 15—COMMERCE AND TRADE § 636
fore the date of the enactment of this Act [Dec. 2, ‘‘(B) FINAL REPORT.—Not later than 120 days after
1997] shall be used for carrying out the DELTA pro- the termination of the demonstration program, the
gram under this section. Administrator shall submit to the Committees on
‘‘(2) CONTINUED AVAILABILITY OF EXISTING FUNDS.— Small Business of the House of Representatives and
The funds made available under the second proviso the Senate [Committee on Small Business of Senate
under the heading ‘RESEARCH, DEVELOPMENT, TEST now Committee on Small Business and Entrepreneur-
AND EVALUATION, DEFENSE-WIDE’ in Public Law ship of Senate] a final report on the performance of
103–335 (108 Stat. 2613) shall be available until ex- the demonstration program, together with the rec-
pended— ommendations of the Administrator for continuation,
‘‘(A) to cover the costs (as defined in section termination, or modification of the demonstration
502(5) of the Federal Credit Reform Act of 1990 (2 program.’’
U.S.C. 661a(5))) of loan guarantees issued under this
section; and INCREASE OF AMOUNTS FOR DISASTER LOANS
‘‘(B) to cover the reasonable costs of the adminis- Pub. L. 103–75, Aug. 12, 1993, 107 Stat. 740, provided in
tration of the loan guarantees.’’ part: ‘‘That notwithstanding any other provision of
law, the $500,000 limitation on the amounts outstanding
TRADE ASSISTANCE PROGRAM FOR SMALL BUSINESS and committed to a borrower provided in paragraph
CONCERNS ADVERSELY AFFECTED BY NAFTA
7(c)(6) [now 7(d)(6)] of the Small Business Act [15 U.S.C.
Section 509 of Pub. L. 105–135 provided that: ‘‘The Ad- 636(d)(6)] shall be increased to $1,500,000 for disasters
ministrator shall coordinate Federal assistance in commencing on or after April 1, 1993.’’
order to provide counseling to small business concerns
adversely affected by the North American Free Trade CONGRESSIONAL FINDINGS OF MICROLENDING EXPANSION
ACT OF 1992
Agreement.’’
Pub. L. 102–366, title I, § 112, Sept. 4, 1992, 106 Stat. 989,
PRIVATE SECTOR LOAN SERVICING DEMONSTRATION provided that: ‘‘The Congress finds that—
PROGRAM ‘‘(1) nationwide, there are many individuals who
Pub. L. 104–208, div. D, title I, § 104(a), Sept. 30, 1996, possess skills that, with certain short-term assist-
110 Stat. 3009–729, provided that: ance, could enable them to become successfully self-
‘‘(1) IN GENERAL.— employed;
‘‘(A) DEMONSTRATION PROGRAM REQUIRED.—Notwith- ‘‘(2) many talented and skilled individuals who are
standing any other provision of law, the Administra- employed in low-wage occupations could, with suffi-
tion shall conduct a demonstration program, within cient opportunity, start their own small business
the parameters described in paragraph (2), to evalu- concerns, which could provide them with an improved
ate the comparative costs and benefits of having the standard of living;
Administration’s portfolio of disaster loans serviced ‘‘(3) most such individuals have little or no savings,
under contract rather than directly by employees of a nonexistent or poor credit history, and no access to
the Administration. All costs of the demonstration credit or capital with which to start a business ven-
program shall be paid from amounts made available ture;
for the Salaries and Expenses Account of the Admin- ‘‘(4) women, minorities, and individuals residing in
istration. areas of high unemployment and high levels of pov-
‘‘(B) INITIATION DATE.—Not later than 90 days after erty have particular difficulty obtaining access to
the date of enactment of this Act [Sept. 30, 1996], the credit or capital;
Administration shall issue a request for proposals for ‘‘(5) providing such individuals with small-scale,
the program parameters described in paragraph (2). short-term financial assistance in the form of
‘‘(2) DEMONSTRATION PROGRAM PARAMETERS.— microloans, together with intensive marketing, man-
‘‘(A) LOAN SAMPLE.—The sample of loans for the agement, and technical assistance, could enable them
demonstration program shall be randomly drawn to start or maintain small businesses, to become self-
from the Administration’s portfolio of loans made sufficient, and to raise their standard of living;
pursuant to section 7(b) of the Small Business Act [15 ‘‘(6) banking institutions are reluctant to provide
U.S.C. 636(b)] and shall include a representative group such assistance because of the administrative costs
of not less than 30 percent of all loans for residential associated with processing and servicing the loans
properties, including 30 percent of all loans made dur- and because they lack experience in providing the
ing the demonstration program after the date of en- type of marketing, management, and technical as-
actment of this Act, which loans shall be selected by sistance needed by such borrowers;
the Administration on the basis of geographic dis- ‘‘(7) many organizations that have had successful
tribution and such other factors as the Administra- experiences in providing microloans and marketing,
tion determines to be appropriate. management, and technical assistance to such bor-
‘‘(B) CONTRACT AND OPTIONS.—The Administration rowers exist throughout the Nation; and
shall solicit and competitively award one or more ‘‘(8) loans from the Federal Government to inter-
contracts to service the loans included in the sample mediaries for the purpose of relending to start-up,
of loans described in subparagraph (A) for a term of newly established and growing small business con-
not less than one year, with 3 one-year contract re- cerns are an important catalyst to attract private
newal options, each of which shall be exercised by the sector participation in microlending.’’
Administration unless the Administration terminates
DISADVANTAGED SMALL BUSINESS STATUS DECISIONS
the contractor or contractors for good cause.
‘‘(3) TERM OF DEMONSTRATION PROGRAM.—The dem- Pub. L. 102–366, title II, § 221, Sept. 4, 1992, 106 Stat.
onstration program shall commence not later than Oc- 999, provided that:
tober 1, 1997. ‘‘(a) PUBLICATION OF DECISIONS.—A decision issued
‘‘(4) REPORTS.— pursuant to section 7(j)(11)(F)(vii) of the Small Busi-
‘‘(A) INTERIM REPORTS.—Not later than 120 days be- ness Act (15 U.S.C. 636(j)(11)(F)(vii)) shall—
fore the expiration of the initial 4-year contract per- ‘‘(1) be made available to the protestor, the pro-
formance period, the Administrator shall submit to tested party, the contracting officer (if not the
the Committees on Small Business of the House of protestor), and all other parties to the proceeding,
Representatives and the Senate [Committee on Small and published in full text; and
Business of Senate now Committee on Small Business ‘‘(2) include findings of fact and conclusions of law,
and Entrepreneurship of Senate] an interim report on with specific reasons supporting such findings or con-
the conduct of the demonstration program. The con- clusions, upon each material issue of fact and law of
tractor shall be afforded a reasonable opportunity to decisional significance regarding the disposition of
attach comments to each such report. the protest.
§ 636 TITLE 15—COMMERCE AND TRADE Page 874
‘‘(b) PRECEDENTIAL VALUE OF PRIOR DECISIONS.—A de- ‘‘(3) the term ‘Business Opportunity Specialist’
cision issued under section 7(j)(11)(F)(vii) of the Small means the Administration employee responsible for
Business Act that is issued prior to the date of enact- providing business development assistance to Pro-
ment of this Act [Sept. 4, 1992] shall not have value as gram Participants pursuant to sections 7(j) and 8(a)
precedent in deciding any subsequent protest until such of the Small Business Act (15 U.S.C. 636(j), 637(a));
time as the decision is published in full text.’’ ‘‘(4) the term ‘disadvantaged owners’ means those
individuals upon whom eligibility is based for partici-
REAUTHORIZATION OF BOND WAIVER TEST PROGRAM
pation in the Program and the award of subcontracts
Pub. L. 102–190, div. A, title VIII, § 813(a)–(e), Dec. 5, pursuant to section 8(a) of the Small Business Act (15
1991, 105 Stat. 1424, authorized the Secretary of Defense U.S.C. 637(a));
to grant surety bond exemptions to certain partici- ‘‘(5) the term ‘minority owned businesses’ means
pants in the Minority Small Business and Capital Own- business concerns that are at least 51 percent owned
ership Development Program who were awarded con- and controlled by one or more individuals who belong
struction contracts by the Department of Defense be- to those groups described or identified pursuant to
fore Oct. 1, 1994. section 2(e)(1)(C) of the Small Business Act (15 U.S.C.
631(e)(1)(C));
EMERGENCY DIRECT LOANS FOR SMALL BUSINESS CON-
‘‘(6) the term ‘Program’ means the Minority Small
CERNS LOCATED IN COMMUNITIES ADVERSELY AF-
Business and Capital Ownership Development Pro-
FECTED BY TROOP DEPLOYMENTS DURING PERSIAN
gram established by section 7(j)(10) of the Small Busi-
GULF CONFLICT
ness Act (15 U.S.C. 636(j)(10)), unless otherwise indi-
Pub. L. 102–190, div. A, title X, § 1087, Dec. 5, 1991, 105 cated;
Stat. 1483, authorized emergency direct loans to small ‘‘(7) the term ‘Program Participant’ means a small
business concerns located in counties in which at least business concern participating in the Program; and
5 small business concerns suffered severe economic in- ‘‘(8) the term ‘Program Participation Term’ means
jury resulting from deployment, after July 31, 1990, of the fixed period of time assigned to a Program Par-
troops in connection with Persian Gulf conflict, pro- ticipant pursuant to section 7(j)(10)(A)(i) of the Small
vided that loan amounts could not exceed $50,000 to any Business Act (15 U.S.C. 636(j)(10)(A)(i)) prior to the
small business concern, and provided for source of loan date of enactment of this Act [Nov. 15, 1988].’’
funds, applications for loans, definitions, regulations to
CONGRESSIONAL FINDINGS AND DECLARATION OF
implement loan program, and expiration of loan au-
PURPOSES OF PUB. L. 100–656
thority at end of 270-day period beginning on date on
which loan applications were first accepted. Pub. L. 100–656, title I, § 101, Nov. 15, 1988, 102 Stat.
3855, provided that:
TERMINATION OF MICROLOAN DEMONSTRATION PROGRAM ‘‘(a) FINDINGS.—The Congress finds that—
Pub. L. 102–140, title VI, § 609(j), Oct. 28, 1991, 105 Stat. ‘‘(1) the Capital Ownership Development Program
831, as amended by Pub. L. 103–403, title II, § 203, Oct. 22, administered by the Small Business Administration
1994, 108 Stat. 4181, provided that: ‘‘The demonstration and the award of contracts pursuant to section 8(a) of
program established by subsection (h) [amending this the Small Business Act [15 U.S.C. 637(a)] remain a pri-
section] shall terminate on October 1, 1997.’’ mary tool for improving opportunities for small busi-
ness concerns owned and controlled by socially and
REFERENCES IN OTHER LAWS TO GS–16, 17, OR 18 PAY economically disadvantaged individuals in the Fed-
RATES eral procurement process and bringing such concerns
References in laws to the rates of pay for GS–16, 17, into the nation’s economic mainstream;
or 18, or to maximum rates of pay under the General ‘‘(2) although some progress has resulted from the
Schedule, to be considered references to rates payable Program, it has generally failed to meet its objec-
under specified sections of Title 5, Government Organi- tives, which remain as valid now as when the Pro-
zation and Employees, see section 529 [title I, § 101(c)(1)] gram was initiated;
of Pub. L. 101–509, set out in a note under section 5376 ‘‘(3) too few concerns that have exited the Program
of Title 5. have been prepared to compete successfully in the
open marketplace on competitive procurements, and
TEST PROGRAM FOR USE OF BOND WAIVER AUTHORITY many concerns have developed an unhealthy depend-
TO ASSIST CERTAIN SMALL DISADVANTAGED BUSINESS ency on sole-source contracts by the time they are
CONCERNS required to leave the Program;
Pub. L. 101–189, div. A, title VIII, § 833, Nov. 29, 1989, ‘‘(4) the application and certification process for ad-
103 Stat. 1509, which directed Secretary of Defense and mitting new participants to the Program is inordi-
Small Business Administration to establish a program nately lengthy and burdensome;
for fiscal years 1990 and 1991 to test use of authority ‘‘(5) the Administration has often not efficiently
provided by subsec. (j)(13)(D) of this section, and that and equitably administered and managed the Pro-
under the test program, the Secretary of Defense was gram in a manner that provided clear lines of respon-
to make every reasonable effort during each such fiscal sibility for implementing and monitoring many of
year to award not less than 30 contracts for construc- the administrative duties under the Program;
tion projects (including repair and alteration of exist- ‘‘(6) the Administration and some program partici-
ing facilities) to participants in Minority Small Busi- pants have given insufficient attention and support
ness and Capital Ownership Development Program of to the business development goals of the Program
Small Business Administration granted surety bond ex- and instead have focused almost entirely on the size
emptions under such authority, was repealed by Pub. L. of contract awards or the number of firms certified to
102–190, div. A, title VIII, § 813(f), Dec. 5, 1991, 105 Stat. participate in the Program;
1424. ‘‘(7) many Federal procuring agencies have failed to
identify and offer the necessary amount of contract
DEFINITION OF TERMS USED IN PUB. L. 100–656 support in order to allow for diversification and
Pub. L. 100–656, § 2, Nov. 15, 1988, 102 Stat. 3854, as growth of disadvantaged businesses participating in
amended by Pub. L. 101–37, § 3, June 15, 1989, 103 Stat. 70, the Program;
provided that: ‘‘For the purposes of this Act [see Short ‘‘(8) contract support as well as business develop-
Title of 1988 Amendment note set out under section 631 ment expenses have been misused both by the Admin-
of this title]— istration and Program participants and have not been
‘‘(1) the term ‘Administration’ means the Small equitably distributed pursuant to objective criteria;
Business Administration; ‘‘(9) the widespread perception of undue political in-
‘‘(2) the term ‘Administrator’ means the Adminis- fluence in the operation and administration of the
trator of the Small Business Administration, unless Program has significantly contributed to the Pro-
otherwise indicated; gram’s poor image and has deterred utilization of the
Page 875 TITLE 15—COMMERCE AND TRADE § 636
Program by socially and economically disadvantaged ists to perform the negotiations required pursuant to
concerns and by Federal procuring agencies; and paragraph (2).
‘‘(10) it is imperative that increased competition ‘‘(4) To the extent practicable, the Administrator
and other substantial reforms be accomplished in the shall ensure that the performance appraisal system ap-
Program in order to promote the Congressionally plicable to a Business Opportunity Specialist employed
mandated business development objectives and pur- in a region designated pursuant to paragraph (1) affords
poses. substantial recognition to how well such Specialist’s
‘‘(b) PURPOSES.—The purposes of this Act [see Short assigned portfolio of concerns participating in the pro-
Title of 1988 Amendment note set out under section 631 gram established by section 7(j)(10) of the Small Busi-
of this title] therefore are to— ness Act (15 U.S.C. 636(j)(10)) are achieving competitive-
‘‘(1) affirm that the Capital Ownership Develop- ness and furthering the business development purposes
ment Program and the section 8(a) [15 U.S.C. 637(a)] of the program.
authority shall be used exclusively for business devel- ‘‘(5) The Administration shall establish personnel po-
opment purposes to help small businesses owned and sitions for Business Opportunity Specialists employed
controlled by the socially and economically disadvan- in the regions designated pursuant to paragraph (1)
taged to compete on an equal basis in the main- that are classified at a grade level of the General
stream of the American economy; Schedule that are sufficient, in the opinion of the Ad-
‘‘(2) affirm that the measure of success of the Cap- ministrator, to attract and retain highly qualified per-
ital Ownership Development Program, and the sec- sonnel.
tion 8(a) authority, shall be the number of competi- ‘‘(c) REPORT AND PILOT PROGRAM TERMINATION.—(1)
tive firms that exit the Program without being un- Within 120 days after the termination of the pilot pro-
reasonably reliant on section 8(a) contracts and that gram conducted pursuant to subsection (b), the Admin-
are able to compete on an equal basis in the main- istration shall issue a report to the Committees on
stream of the American economy; Small Business of the Senate and of the House of Rep-
‘‘(3) ensure that program benefits accrue to individ- resentatives [Committee on Small Business of Senate
uals who are both socially and economically dis- now Committee on Small Business and Entrepreneur-
advantaged; ship of Senate] on the effectiveness of the pilot. Such
‘‘(4) increase the number of small businesses owned report shall contain such recommendations for admin-
and controlled by such individuals from which the istrative or legislative change as may be appropriate.
United States may purchase products and services ‘‘(2) The pilot program conducted pursuant to sub-
(including construction work); and section (b) shall be terminated three years after the
‘‘(5) ensure integrity, competence, and efficiency in date on which the Committees on Small Business of the
the administration of business development services Senate and of the House of Representatives [Committee
and the Federal contracting opportunities made on Small Business of Senate now Committee on Small
available to eligible small businesses.’’ Business and Entrepreneurship of Senate] receive writ-
EMPLOYEE TRAINING AND EVALUATION ten notification from the Administrator that the pilot
is in full operation in each of the three designated pilot
Pub. L. 100–656, title IV, § 410, Nov. 15, 1988, 102 Stat. regions.’’
3879, as amended by Pub. L. 101–37, § 18, June 15, 1989, 103
Stat. 74, provided that: GENERAL ACCOUNTING OFFICE REPORT
‘‘(a) TRAINING REQUIREMENTS FOR BUSINESS OPPOR-
Pub. L. 100–656, title V, § 504, Nov. 15, 1988, 102 Stat.
TUNITY SPECIALISTS.—(1) In each Small Business Ad-
3882, directed Comptroller General of the United States
ministration field office responsible for assisting one or
to conduct a review of operation of Minority Small
more Program Participants there shall be a position
Business and Capital Ownership Development Program
designated as a Business Opportunity Specialist. To the
authorized by subsec. (j)(10) of this section and contract
maximum extent practicable the Administration shall
assistance provided pursuant to section 637(a)(15) of
assure that an adequate number of Business Oppor-
this title commencing within 180 days of Nov. 15, 1988,
tunity Specialists are assigned to each district office to
and concluding Sept. 30, 1991, such review to report on
carry out the responsibilities of sections 7(j) and 8(a) of
implementation of provisions of Pub. L. 100–656 by
the Small Business Act (15 U.S.C. 636(j), 637(a)) and to
Small Business Administration and various executive
assist Program Participants.
departments and agencies providing contracting oppor-
‘‘(2) The Administration shall take such actions as
tunities to the Program, and directed Comptroller Gen-
may be appropriate to ensure that any person employed
eral to prepare a report summarizing findings of re-
as a Business Opportunity Specialist receives adequate
view, make such recommendations as may be appro-
periodic training to assure such employee is capable of
priate, and transmit report to Committees on Small
assisting Program Participants to fully utilize the Pro-
Business of the Senate and House of Representatives by
gram and to meet the requirements of the Small Busi-
Feb. 1, 1992.
ness Act [15 U.S.C. 631 et seq.], as amended by this Act.
‘‘(b) PILOT PROGRAM.—(1) Within 180 days after the ef- COMMISSION ON MINORITY BUSINESS DEVELOPMENT
fective date of this subsection [Nov. 15, 1988] the Ad-
ministrator shall designate three regions of the Admin- Pub. L. 100–656, title V, § 505(a)–(g), Nov. 15, 1988, 102
istration to conduct a pilot program pursuant to the Stat. 3883, as amended by Pub. L. 101–37, § 20, June 15,
provisions of this subsection. The designated regions 1989, 103 Stat. 74; Pub. L. 101–574, title II, § 211, Nov. 15,
shall contain approximately 30 per centum of the total 1990, 104 Stat. 2821; Pub. L. 102–366, title II, § 231(a),
number of Program Participants as of the time of des- Sept. 4, 1992, 106 Stat. 1001; Pub. L. 103–160, div. A, title
ignation. IX, § 904(f), Nov. 30, 1993, 107 Stat. 1729, established the
‘‘(2) A Business Opportunity Specialist employed in a Commission on Minority Business Development, set
Region designated pursuant to paragraph (1), in addi- out its duties, powers, membership, administration,
tion to other assigned duties and responsibilities, and personnel, and provided that it cease to exist with-
shall— in 90 days after the date that it transmitted its final re-
‘‘(A) conduct contract negotiations on behalf of the port to Congress and to the President or Sept. 30, 1992,
Administration for contracts awarded pursuant to whichever was later.
section 8(a) of the Small Business Act (15 U.S.C. LIMITATIONS ON SPENDING AUTHORITY
637(a)) when performance will be rendered by one or
more firms in such Specialist’s assigned portfolio; Pub. L. 100–656, title VIII, § 802(f), Nov. 15, 1988, 102
‘‘(B) facilitate and otherwise assist such firms in Stat. 3899, provided that:
negotiating for the receipt of contracts to be let pur- ‘‘(1) Any new credit authority or authority to enter
suant to such section. into contracts provided for in this Act [see Short Title
‘‘(3) The Administration shall take such actions as of 1988 Amendment note set out under section 631 of
may be appropriate to train and qualify such Special- this title] is to be effective for any fiscal year only to
§ 636 TITLE 15—COMMERCE AND TRADE Page 876
such extent or in such amounts as are provided in ap- Business Administration within two months after the
propriation Acts. promulgation of final regulations issued within one
‘‘(2) No funds are authorized to be appropriated in hundred and twenty days after the enactment of this
subsequent appropriation Acts to the Administration Act [Oct. 21, 1981] the business plan required under sec-
for the purpose of making grants of financial assistance tion 7(j)(10)(A)(i) of the Small Business Act, as amended
under the so called ‘Business Development Expense’ by subsection (a) of this section [subsec. (j)(10)(A)(i) of
program to any firm participating in the programs au- this section]: Provided however, That the period of time
thorized by section 7(j)(10) or section 8(a) of the Small required under section 7(j)(10)(A)(i) of the Small Busi-
Business Act (15 U.S.C. 636(j)(10) and 637(a)).’’ ness Act, as amended by subsection (a) of this section,
shall be fixed as mutually agreed upon by the program
CERTIFIED LOAN PROGRAM; EXPANDED PARTICIPATION; participant and the Small Business Administration
REPORTS TO CONGRESS prior to the awarding or extending of contracts to such
Pub. L. 100–590, title I, § 102(b), Nov. 3, 1988, 102 Stat. concern pursuant to section 8(a) of the Small Business
2992, provided that: ‘‘The Administration shall take ap- Act after June 1, 1981, but the period shall be fixed in
propriate steps to expand participation in the certified no case later than eighteen months after the effective
loan program and shall report to the Small Business date of this Act: Provided further, That no determina-
Committees of the Senate and the House of Representa- tion made under this paragraph shall be considered a
tives on the amount of loans approved and the amount denial of total participation for the purposes of section
of losses sustained under the provisions of section 8(a)(9) of the Small Business Act.’’
7(a)(19) of the Small Business Act [15 U.S.C. 636(a)(19)].
An interim report shall be submitted not later than one SMALL BUSINESS EMPLOYEE OWNERSHIP;
year after date of enactment of this Act [Nov. 3, 1988] CONGRESSIONAL FINDINGS AND PURPOSES
and a final report shall be submitted not later than 18 Pub. L. 96–302, title V, §§ 502, 503, July 2, 1980, 94 Stat.
months after the date of enactment.’’ 850, 851, provided that:
Similar provisions were contained in Pub. L. 100–533, ‘‘SEC. 502. The Congress hereby finds and declares
title III, § 302(b), Oct. 25, 1988, 102 Stat. 2693. that—
PIPELINE LOANS OR PREVIOUS DISASTERS ‘‘(1) employee ownership of firms provides a means
for preserving jobs and business activity;
Pub. L. 99–272, title XVIII, § 18006(b), Apr. 7, 1986, 100 ‘‘(2) employee ownership of firms provides a means
Stat. 366, as amended by Pub. L. 99–349, title I, July 2, for keeping a small business small when it might oth-
1986, 100 Stat. 718, provided that: ‘‘Notwithstanding the erwise be sold to a conglomerate or other large enter-
amendments made by this section [amending sections prise;
636 and 647 of this title], sections 18002 [amending provi- ‘‘(3) employee ownership of firms provides a means
sions set out as a note under section 631 of this title] for creating a new small business from the sale of a
and 18016 [amending section 632 of this title], or any subsidiary of a large enterprise;
other provision of law, the Small Business Administra- ‘‘(4) unemployment insurance programs, welfare
tion shall continue to accept, process, and approve loan payments, and job creation programs are less desir-
applications under paragraphs (1) through (4) of sub- able and more costly for both the Government and
section [section] 7(b) of the Small Business Act [15 program beneficiaries than loan guarantee programs
U.S.C. 636(b)(1) to (4)] and shall obligate and disburse to maintain employment in firms that would other-
loan funds on account of disasters which occurred prior wise be closed, liquidated, or relocated; and
to October 1, 1985, and with respect to which a disaster ‘‘(5) by guaranteeing loans to qualified employee
declaration application was submitted prior to October trusts and similar employee organizations, the Small
1, 1985, even if any such application is filed after the Business Administration can provide feasible and de-
date of the enactment of this Act [Apr. 7, 1986].’’ sirable methods for the transfer of all or part of the
DETERMINATION OF NATURAL DISASTER BY SECRETARY ownership of a small business concern to its employ-
OF AGRICULTURE TO BE DEEMED DISASTER DECLARA- ees.
TION BY ADMINISTRATOR OF SMALL BUSINESS ADMIN- ‘‘SEC. 503. (a) The purposes of this title [enacting sec-
ISTRATION; DISASTERS COMMENCING BETWEEN JANU- tions 632(c) and 636(a)(8) of this title and provisions set
ARY 1, 1983, AND SEPTEMBER 30, 1983 out as notes under sections 631 and 636 of this title]
are—
Pub. L. 98–166, title I, § 101, Nov. 28, 1983, 97 Stat. 1079, ‘‘(1) to provide that a qualified employee trust shall
provided that for disasters commencing between Jan. 1, be eligible for loan guarantees under section 7(a) of
1983, through Sept. 30, 1983, determination of a natural the Small Business Act [subsec. (a) of this section]
disaster by the Secretary of Agriculture pursuant to 7 with respect to a small business concern, regardless
U.S.C. 1961 would be deemed a disaster declaration by of the percentage of stock of the concern held by the
the Administrator of the Small Business Administra- trust, and
tion for purposes of determining eligibility for assist- ‘‘(2) to provide in section 505 of this Act [enacting
ance under 15 U.S.C. 636(b)(1) for agricultural enter- subsec. (a)(8) of this section] authority to address the
prises as defined in 15 U.S.C. 647(b). specific case in which the Small Business Adminis-
REPORTS TO CONGRESS; DEFAULT RATE OF LOANS tration guarantees loans under section 7(a) of the
Small Business Act [subsec. (a) of this section] for
Pub. L. 97–35, title XIX, § 1907 Aug. 13, 1981, 95 Stat. purposes of providing funds to a qualified employee
777, required the Small Business Administration to sub- trust (and other employee organizations which are
mit to Congress, not later than Feb. 28, 1984, and 1985, treated as qualified employee trusts) for the pur-
reports containing specific information on the aggre- chase, by at least 51 percent of the employees, of at
gate number, dollar value, and default rate of all loans least 51 percent of the stock of business which is op-
with respect to 15 U.S.C. 636(a)(5), (6)(C), (8)(A). erated for profit and which is—
‘‘(A) a small business concern, or
BUSINESS PLANS; SUBMITTAL BY CONCERNS ELIGIBLE
‘‘(B) a corporation which is controlled by another
TO RECEIVE CONTRACTS
person if, after the plan for the purchase of such
Pub. L. 96–481, title I, § 106(b), Oct. 21, 1980, 94 Stat. corporation is carried out, such corporation would
2322, provided that: ‘‘Notwithstanding the provisions of be a small business concern.
subsection (a) of this section [amending subsec. ‘‘(b) Nothing in this title shall be construed to pro-
(j)(10)(A)(i) of this section], for concerns eligible to re- hibit the Small Business Administration from making
ceive contracts pursuant to section 8(a) of the Small loan guarantees under section 7(a) of the Small Busi-
Business Act [section 637(a) of this title] on the effec- ness Act [subsec. (a) of this section] to qualified em-
tive date of the amendment made by this section [Oct. ployee trusts which own less than 51 percent of the
21, 1980], each such concern shall submit to the Small stock of a continuing business.’’
Page 877 TITLE 15—COMMERCE AND TRADE § 636b
DISASTER RELIEF AUTHORITY; STUDY AND REPORT ON LOANS FOR MODIFICATIONS OF MINING FACILITIES AND
CONSOLIDATION EQUIPMENT
Pub. L. 94–305, title I, § 101, June 4, 1976, 90 Stat. 663, Pub. L. 91–173, title V, § 504(d), Dec. 30, 1969, 83 Stat.
required the President to comprehensively review all 802, authorized loans under 15 U.S.C. 636(b)(5) for modi-
Federal disaster loan authorities and to report to Con- fications of mining facilities and equipment pursuant
gress by Dec. 1, 1976, with recommendations and legis- to former section 202 of the Public Works and Economic
lative proposals for the most effective and efficient de- Development Act of 1965 (former 42 U.S.C. 3142), which
livery of disaster relief, including possible consolida- was repealed by Pub. L. 105–393, title I, §102(a), Nov. 13,
tion of authorities. 1998, 112 Stat. 3602.
DISASTER LOANS; SPECIAL PROVISIONS FOR APPLICA- Executive Documents
TIONS RECEIVED ON OR BEFORE MARCH 19, 1981; AS-
SISTANCE TO HARDSHIP APPLICANTS EXECUTIVE ORDER NO. 12190
Pub. L. 97–35, title XIX, § 1916, Aug. 13, 1981, 95 Stat. Ex. Ord. No. 12190, Feb. 1, 1980, 45 F.R. 7773, estab-
780, provided for special provisions for applications for lished the Advisory Committee on Small and Minority
disaster loans under 15 U.S.C. 1636(b)(1), (2), or (4) re- Business Ownership to assist in monitoring and encour-
ceived on or before Mar. 19, 1981, with assistance to aging the placement of subcontracts by the private sec-
hardship applicants. tor with eligible small businesses, to study and propose
incentives and assistance needed by the private sector
DISASTER LOANS; INTEREST RATE; CANCELLATION OF to help in the training, development, and upgrading of
LOANS such businesses, to make periodic reports and rec-
ommendations to the President, and to report annually
Pub. L. 93–24, § 9, Apr. 20, 1973, 87 Stat. 25, provided to the President and to the Congress on the activities
that: ‘‘Notwithstanding the provisions of any other of the Committee and provided for termination of the
law, any loan made by the Small Business Administra- Committee on Dec. 31, 1980.
tion in connection with any disaster occurring on or
after the date of enactment of this Act [Apr. 20, 1973] EXTENSION OF TERM OF ADVISORY COMMITTEE ON SMALL
under sections 7(b)(1), (2), or (4) of the Small Business AND MINORITY BUSINESS OWNERSHIP
Act (15 U.S.C. 636(b)(1), (2), or (4)) [subsec. (b)(1), (2), or
Term of Advisory Committee on Small and Minority
(4) of this section] shall bear interest at the rate deter-
Business Ownership extended until Sept. 30, 1991, by Ex.
mined under section 324 of the Consolidated Farm and
Ord. No. 12692, Sept. 29, 1989, 54 F.R. 40627, formerly set
Rural Development Act, as amended by section 4 of this
out as a note under section 1013 of Title 5, Government
Act [section 1964 of Title 7, Agriculture]. No portion of
Organization and Employees, which extension was re-
any such loan shall be subject to cancellation under the
voked by the amendment of Ex. Ord. No. 12692 made by
provisions of any law.’’
Ex. Ord. No. 12704, Feb. 26, 1990, 55 F.R. 6969.
Previous extensions of term of Advisory Committee
INTEREST RATES ON LOANS TO MEET REGULATORY on Small and Minority Business Ownership were con-
STANDARDS
tained in the following prior Executive Orders:
Pub. L. 93–237, § 2(d), Jan. 2, 1974, 87 Stat. 1024, pro- Ex. Ord. No. 12610, Sept. 30, 1987, 52 F.R. 36901, ex-
vided that: ‘‘In no case shall the interest rate charged tended term until Sept. 30, 1989.
for loans to meet regulatory standards be lower than Ex. Ord. No. 12534, Sept. 30, 1985, 50 F.R. 40319, ex-
loans made in connection with physical disasters.’’ tended term until Sept. 30, 1987.
Ex. Ord. No. 12489, Sept. 28, 1984, 49 F.R. 38927, ex-
ELECTION OF BENEFITS tended term until Sept. 30, 1985.
Ex. Ord. No. 12399, Dec. 31, 1982, 48 F.R. 379, extended
Pub. L. 92–385, § 1(c), Aug. 16, 1972, 86 Stat. 555, pro- term until Sept. 30, 1984.
vided that: ‘‘Any person who (1) suffers any loss or Ex. Ord. No. 12258, Dec. 31, 1980, 46 F.R. 1251, extended
damage as a result of a major disaster as determined by term until Dec. 31, 1982.
the President which occurred prior to the date of enact-
ment of this Act [August 16, 1972], (2) is eligible for as- § 636a. Repealed. Pub. L. 97–35, title XIX, § 1917,
sistance under the amendment made by subsection (a),
Aug. 13, 1981, 95 Stat. 781
and (3) is otherwise eligible for benefits greater than
those provided by the amendment made by subsection Section, Pub. L. 91–606, title II, § 231, Dec. 31, 1970, 84
(a), may elect to receive such greater benefits.’’ Stat. 1752; Pub. L. 92–385, § 6, Aug. 16, 1972, 86 Stat. 559,
related to small business disaster loans.
FUND FOR MANAGEMENT COUNSELING
Pub. L. 85–699, title VI, § 602(a), (b), Aug. 21, 1958, 72 Statutory Notes and Related Subsidiaries
Stat. 698, provided that:
‘‘(a) Within sixty days after the enactment of this EFFECTIVE DATE OF REPEAL
Act [Aug. 21, 1958], each Federal Reserve bank shall pay Repeal effective Aug. 13, 1981, but not to affect any fi-
to the United States the aggregate amount which the nancing made, obligated, or committed under this
Secretary of the Treasury has heretofore paid to such chapter or chapter 14B of this title prior to Aug. 13,
bank under the provisions of section 13b of the Federal 1981, see section 1918 of Pub. L. 97–35, set out as an Ef-
Reserve Act [12 U.S.C. 352a]; and such payment shall fective Date of 1981 Amendment note under section 631
constitute a full discharge of any obligation or liability of this title.
of the Federal Reserve bank to the United States or to
the Secretary of the Treasury arising out of subsection § 636b. Disaster loan interest rates
(e) of said section 13b [12 U.S.C. 352a(e)] or out of any
agreement thereunder. Any loan made under section 636a 1 of this title
‘‘(b) The amounts repaid to the United States pursu- and section 4452 1 of title 42 shall not exceed the
ant to subsection (a) of this section shall be covered current cost of repairing or replacing the dis-
into a special fund in the Treasury which shall be avail- aster injury, loss, or damage in conformity with
able for grants under section 7(d) of the Small Business current codes and specifications. Any loan made
Act [subsec. (d) of this section]. Any remaining balance under sections 636a 1 and 636d of this title, and
of funds set aside in the Treasury for payments under
section 13b of the Federal Reserve Act [12 U.S.C. 352a]
sections 3538 and 4452 1 of title 42 shall bear in-
shall be covered into the Treasury as miscellaneous re-
ceipts.’’ 1 See References in Text note below.
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