Small Business Jobs Act: Implementation of Conforming and Technical Amendments, 63542-63547 [2011-26236]
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Federal Register / Vol. 76, No. 198 / Thursday, October 13, 2011 / Rules and Regulations
staff uses in evaluating specific
problems or postulated accidents, and
data that the staff needs in its review of
applications for permits and licenses.
RG 1.221 was issued with a temporary
identification as Draft Regulatory Guide,
DG–1247. This regulatory guide
provides licensees and applicants with
new guidance that the staff of the NRC
considers acceptable for use in selecting
the design-basis hurricane and designbasis hurricane-generated missiles that a
nuclear power plant should be designed
to withstand to prevent undue risk to
the health and safety of the public. This
guidance applies to the contiguous
United States but does not address the
determination of the design-basis
hurricane and hurricane missiles for
sites located along the Pacific coast or
in Alaska, Hawaii, or Puerto Rico; the
NRC will evaluate such determinations
on a case-by-case basis. This guide also
does not identify the specific structures,
systems, and components that should be
designed to withstand the effects of the
design-basis hurricane or should be
protected from hurricane-generated
missiles and remain functional. Nor
does this guide address other externally
generated hazards, such as aviation
crashes, nearby accidental explosions
resulting in blast overpressure levels
and explosion-borne debris and
missiles, and turbine missiles.
II. Further Information
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In August 2010, DG–1247 was
published with a public comment
period of 60 days from the issuance of
the guide. The public comment period
closed on November 5, 2010. Electronic
copies of Regulatory Guide 1.221 are
available through the NRC’s public Web
site under ‘‘Regulatory Guides’’ at
https://www.nrc.gov/reading-rm/doccollections/ and through the NRC’s
Agencywide Documents Access and
Management System (ADAMS) at
https://www.nrc.gov/reading-rm/
adams.html, under Accession No.
ML110940300. The regulatory analysis
may be found in ADAMS under
Accession No. ML110940303. Staff’s
responses to public comments on DG–
1247 are available under ML110940334.
Dated at Rockville, Maryland, this 3rd day
of October 2011.
For the Nuclear Regulatory Commission.
Thomas H. Boyce,
Chief, Regulatory Guide Development Branch,
Division of Engineering, Office of Nuclear
Regulatory Research.
[FR Doc. 2011–26420 Filed 10–12–11; 8:45 am]
BILLING CODE 7590–01–P
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SMALL BUSINESS ADMINISTRATION
13 CFR Parts 108, 120, 123, and 125
RIN 3245–AG15
Small Business Jobs Act:
Implementation of Conforming and
Technical Amendments
U.S. Small Business
Administration.
ACTION: Direct final rule.
AGENCY:
This direct final rule contains
various amendments conforming SBA
regulations to changes made by the
Small Business Jobs Act of 2010 to
several SBA programs, including
business lending, disaster lending, and
contract bundling. This rule also makes
additional conforming changes to
ensure that the regulations governing
certain fees payable in the business loan
programs are consistent with the related
statutory authority in the Small
Business Act.
DATES: This rule is effective on
November 28, 2011 without further
action, unless significant adverse
comment is received by November 14,
2011. If significant adverse comment is
received, SBA will publish a timely
withdrawal of the affected sections of
the rule in the Federal Register.
ADDRESSES: You may submit comments,
identified by RIN 3245–AG15, by one of
the following methods: (1) Federal
eRulemaking Portal: https://
www.regulations.gov; following the
instructions for submitting comments;
or (2) Mail/Hand Delivery/Courier: John
Russell, Office of General Counsel, 409
Third Street, SW., Mail Code 2221,
Washington, DC 20416.
SBA will post all comments to this
rule on https://www.regulations.gov. If
you wish to submit confidential
business information (CBI) as defined in
the User Notice at https://
www.regulations.gov, you must submit
such information to U.S. Small Business
Administration, John Russell, Office of
General Counsel, 409 Third Street, SW.,
Mail Code 2221, Washington, DC 20416,
or send an e-mail to
john.russell@sba.gov. You should
highlight the information that you
consider to be CBI and explain why you
believe SBA should hold this
information as confidential. SBA will
review your information and determine
whether it will make the information
public or not.
FOR FURTHER INFORMATION CONTACT: John
C. Russell, Jr., Office of General
Counsel, (202) 205–6642, e-mail:
john.russell@sba.gov.
SUMMARY:
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This
direct final rule contains several
conforming amendments to SBA
regulations resulting from the Small
Business Jobs Act of 2010 (SBJA), Public
Law 111–240, which was enacted on
September 27, 2010, SBA is making
these regulatory amendments and other
technical conforming changes to mirror
current statutory provisions and avoid
public confusion or possible
misinterpretations of SBA’s programs.
Since these are conforming
amendments, with no extraneous
interpretation or other expanded
materials, SBA expects no significant
adverse comments. Based on that fact,
SBA has decided to proceed with a
direct final rule giving the public 30
days to comment. If SBA receives a
significant adverse comment during the
comment period, SBA will withdraw
the sections of the rule receiving the
significant adverse comment, and
publish them in a proposed rule.
To minimize confusion to the reader,
the Supplementary Information section
is organized by sequential order of SBJA
sections, followed by the additional
changes that are not directly related to
the SBJA amendments but are necessary
for accuracy and consistency with the
Small Business Act.
SUPPLEMENTARY INFORMATION:
A. Small Business Jobs Act
Amendments
Section 1111. Section 7(a) Business
Loans
Section 1111 of the SBJA temporarily
increased the maximum guarantee
percentages for 7(a) business loans until
January 1, 2011. These temporary
changes do not need to be reflected in
the regulations. Section 1111 also
permanently increased the maximum
guaranteed portion and maximum loan
amount for 7(a) business loans. As a
result of this change, section 7(a)(3) of
the Small Business Act now reads: ‘‘No
loan shall be made under this
subsection—(A) if the total amount
outstanding and committed (by
participation or otherwise) to the
borrower from the business loan and
investment fund established by this Act
would exceed $3,750,000 (or if the gross
loan amount would exceed $5,000,000),
except as provided for international
trade loans, which have a different
limit.’’ 15 U.S.C. § 636(a)(3)(A). SBA is
conforming three SBA regulations to
this statutory change as follows: (1)
§ 120.151, What is the statutory limit for
total loans to a Borrower?, to reflect that
the maximum guaranteed amount is
now $3,750,000 and the maximum loan
amount is $5,000,000; (2) § 120.210,
What percentage of a loan may SBA
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guarantee?, to remove an outdated
effective date of the maximum guaranty
percentages; and (3) § 120.390,
Revolving Credit, to reflect that the
maximum guarantee and loan amount
are the same under CapLines as other
7(a) business loans and to include a
cross reference to § 120.151.
Section 1112. Maximum Loan Amounts
Under 504 Program
Section 1112 of the SBJA amended
several maximum loan amounts for the
Certified Development Company
Program (also known as the 504
Program). Due to these amendments, the
Small Business Investment Act
provision now reads: ‘‘(A) In General.
Loans made by the Administration
under this section shall be limited to—
(i) $5,000,000 for each small business
concern if the loan proceeds will not be
directed toward a goal or project
described in clause (ii), (iii), (iv) or (v);
(ii) $5,000,000 for each small business
concern if the loan proceeds will be
directed toward 1 or more of the public
policy goals described under section
501(d)(3); (iii) $5,500,000 for each
project of a small manufacturer; (iv)
$5,500,000 for each project that reduces
the borrower’s energy consumption by
at least 10 percent; and (v) $5,500,000
for each project that generates
renewable energy or renewable fuels,
such as biodiesel or ethanol
production.’’ 15 U.S.C. 696(2)(A)(i–v).
With respect to (iii) above, a small
manufacturer, as defined in the Small
Business Act, must have all of its
production facilities located in the
United States. 15 U.S.C. 696(2)(B). SBA
is conforming § 120.931, 504 Loan
Limits, to this statutory change, which
substantially increases the loan limits
for all 504 Program loans.
In implementing the loan limit for
renewable energy or renewable fuels
projects, SBA noted that 15 U.S.C.
696(2)(A)(v) was enacted at the same
time as 15 U.S.C. 695(d)(3)(K), which
describes one of the public policy
objectives of the 504 Program as projects
that achieve ‘‘plant, equipment and
process upgrades of renewable energy
sources such as the small-scale
production of energy for individual
buildings or communities consumption,
commonly known as micropower, or
renewable fuels producers including
biodiesel and ethanol producers.’’ It is
SBA’s view that the loan limit set by 15
U.S.C. 696(2)(A)(v) was intended by
Congress to accord with the
corresponding public policy goal set
forth in 15 U.S.C. 695(d)(3)(K).
Accordingly, the regulatory provision
implementing the loan limit for
renewable energy or renewable fuels
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incorporates the parameters of the more
fully articulated public policy goal.
Section 1113. Maximum Loan Amounts
Under Microloan Program
Section 1113 of the SBJA amended
the maximum loan limits for the
Microloan Program by raising the
amount of a loan that a Microloan
Intermediary can make to a borrower
from $35,000 to $50,000, as well as the
amount of a loan that the Microloan
Intermediary can receive from the SBA
from $3,500,000 to $5,000,000. SBA is
revising seven of its regulations to
conform to these statutory changes: (1)
§ 120.2, Description of the Business
Loan Programs; (2) § 120.10, Definitions;
(3) § 120.701, Definitions; (4) § 120.702,
Are there limitations on who can be an
Intermediary or on where an
Intermediary may operate?; (5)
§ 120.706, What are the terms and
conditions of an SBA loan to an
Intermediary?; (6) § 120.707, What
conditions apply to loans by
Intermediaries to Microloan borrowers?;
and (7) § 120.714, How are grants made
to non-lending technical assistance
providers (NTAP)?.
In addition, SBA is making one
technical change to the regulations
governing eligibility for grants to
Microloan Intermediaries. The second
sentence of paragraph (b)(2) of § 120.712
states: ‘‘Intermediaries may not enter
into third party contracts for the
provision of technical assistance to
program clients.’’ This language is
inconsistent with paragraph (e) of that
section, which states: ‘‘An Intermediary
may use no more than 25 percent of the
grant funds it receives from SBA for
contracts with third parties for the latter
to provide technical assistance to
Microloan borrowers.’’ Paragraph (e),
which was added to § 120.712 in 2001
to implement statutory changes, reflects
current SBA policy to allow
Intermediaries to use up to 25 percent
of grant funds for contracts with third
parties. Therefore, SBA is removing the
inconsistent sentence in paragraph
(b)(2).
Section 1115. New Markets Venture
Capital Company Investment
Limitations
Section 1115 of the SBJA provides
that ‘‘except to the extent approved by
the Administrator, a covered New
Markets Venture Capital Company may
not acquire or issue commitments for
securities under this title for any single
enterprise in an aggregate amount equal
to more than 10 percent of the sum of—
(A) the regulatory capital of the covered
New Markets Venture Capital Company;
and (B) the total amount of leverage
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projected in the participation agreement
of the covered New Markets Venture
Capital.’’ 15 U.S.C. 689. The SBJA
defines the term ‘‘covered New Markets
Venture Capital Company’’ as a
company granted approval by the SBA
Administrator on or after March 1, 2002,
that has obtained financing from the
Administrator. We are conforming the
regulation to this statutory change by
amending current SBA regulation,
§ 108.740, Portfolio Diversification
(‘‘overline’’ limitation). Based on the
leverage ratio currently applicable in the
New Markets Venture Capital (NMVC)
program, the SBJA effectively increased
the overline limit for existing NMVC
companies from 20% to 25% of
regulatory capital, which will allow
these companies to invest a higher
percentage of their capital in a single
company or group of affiliated
companies. SBA intends that an NMVC
company’s calculation of an overline
limitation will retain the same
adjustments to regulatory capital that
are present in the current NMVC
program regulations.
Section 1117. Sale of 7(a) Loans in
Secondary Market
Section 1117 of the SBJA amends
SBA’s 7(a) loan program secondary
market authority by providing: ‘‘If the
amount of the guaranteed portion of any
loan under section 7(a) is more than
$500,000, the Administrator shall, upon
request of a pool assembler, divide the
loan guarantee into increments of
$500,000 and 1 increment of any
remaining amount less than $500,000,
in order to permit the maximum amount
of any loan in a pool to be not more than
$500,000. Only 1 increment of any loan
guarantee divided under this paragraph
may be included in the same pool.
Increments of loan guarantees to
different borrowers that are divided
under this paragraph may be included
in the same pool.’’ 15 U.S.C. 634(g)(6).
SBA is revising three regulations to
conform to this statutory change:
§ 120.600(a), Definitions; § 120.601, SBA
Secondary Market; and § 120.611, Pools
backing Pool Certificates. The purpose
of this statutory provision is to allow
participants in the secondary market,
specifically pool assemblers, to split the
guaranteed portion of individual 7(a)
loans into increments of $500,000 and
one increment of less than $500,000.
SBA is in the process of revising SBA
Forms 1086 and 1088, as well as the
form of Individual Certificate, to reflect
this new provision.
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Section 1119. SBA Secondary Market
Guarantee Authority
Section 1119 of the SBJA extends the
authorization for the SBA Secondary
Market Guarantee Program for First Lien
Position 504 Loan Pools from February
17, 2011 to the date ‘‘two years after the
date of the first sale of a pool of first lien
504 loans guaranteed under this section
to a third-party investor’’. The new
expiration date is, therefore, September
23, 2012. We are conforming one SBA
regulation to this statutory change:
§ 120.1701, Program purpose.
Section 1132. Public Policy Goals
Section 1132 of the SBJA adds a new
public policy goal for the Certified
Development Company Program. The
new public policy goal is ‘‘reduction of
rates of unemployment in labor surplus
areas, as such areas are determined by
the Secretary of Labor.’’ 15 U.S.C.
695(d)(3)(L). We are conforming one
regulation to this statutory change:
§ 120.862, Other economic development
objectives. This means that a project
meeting this new public policy goal
objective can qualify for a 504 loan in
an amount up to $5,000,000. It also
means that the project can be financed
by the 504 loan even if the subject
project does not create or retain jobs
pursuant to § 120.861 provided that the
CDC’s overall portfolio, including the
subject loan, meets or exceeds the CDC’s
required Job Opportunity average.
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Section 1206. International Trade
Finance Programs
Section 1206 of the SBJA made
changes to SBA’s International Trade,
Export Working Capital, and Export
Express Loan Programs. This direct final
rule addresses the changes made by
Section 1206 to these programs, except
for the Export Express Loan Program,
which will be the subject of a separate
rulemaking incorporating the now
permanent Export Express Loan
Program in the regulations for the first
time. SBA’s International Trade Loan
Program was amended by changing the
maximum loan amount, so that the
provision now reads: ‘‘No loan shall be
made under this subsection—(B) if the
total amount outstanding and
committed (on a deferred basis) solely
for the purposes provided in paragraph
(16) to the borrower from the business
loan and investment fund established by
this Act would exceed $4,500,000 (or if
the gross loan amount would exceed
$5,000,000), of which not more than
$4,000,000 may be used for working
capital, supplies or financings under
§ 7(a)(14) for export purposes.’’ 15
U.S.C. 636(a)(3)(B). Section 1206 also
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added a provision: ‘‘Participation in
International Trade Loan—In an
agreement to participate in a loan on a
deferred basis under paragraph (16), the
participation by the Administration may
not exceed 90 percent.’’ 15 U.S.C.
636(a)(2)(E). The International Trade
Loan Program also was amended to
allow such loans to be used to assist
concerns engaged in or adversely
affected by international trade to
improve their competitive position ‘‘by
providing working capital’’ and to
expand the use of loan proceeds for
refinancing to ‘‘include any debt that
qualifies for refinancing under any other
provision of this subsection.’’ 15 U.S.C.
636(a)(16)(A)(ii–iii). The collateral
required to be provided by borrowers of
International Trade Loans was also
changed. The law now allows for such
loans to ‘‘be secured by a second lien on
the property or equipment financed by
the loan or on other assets of the small
business concern, if the Administrator
determines the lien provides adequate
assurance of the payment of the loan.’’
15 U.S.C. 636(a)(16)(B)(ii). SBA is
amending four existing regulations for
the International Trade Loan program
and adding one new regulation to reflect
these statutory changes: (1) § 120.346,
Eligiblity, to delete restrictive language
regarding the use of IT loan proceeds
that is no longer applicable; (2)
§ 120.347, Use of Proceeds, to reflect
that IT loan proceeds may now be used
for working capital and to refinance
additional debt; (3) § 120.348, Amount
of Loan and Guarantee, to reflect the
new maximum loan amount and the
new maximum guaranty amount for IT
loans; and (4) new § 120.349, Collateral,
to reflect the new collateral
requirements for IT loans.
Finally, section 1206 of the SBJA
amended The Export Working Capital
(EWCP) Loan Program by increasing the
maximum loan amount to $5,000,000
(15 U.S.C. 636(a)(14)(B)(i)) and by
providing that the guaranty amount for
EWCP loans shall be 90 percent (15
U.S.C. 636(a)(2)(D)). SBA is conforming
§ 120.340, What is the Export Working
Capital Program?, to reflect the new
maximum loan amount and the new
required guaranty amount for EWCP
loans. Additionally, SBA is conforming
§ 120.130, Restrictions on uses of
proceeds, to reflect that SBA has
statutory authority to allow EWCP loan
proceeds to be used for revolving lines
of credit for export purposes. 15 U.S.C.
636(a)(14)(A).
Section 1312. Leadership and Oversight
Section 1312(a) of the SBJA provides
that: ‘‘Rationale for Contract Bundling—
Not later than 30 days after the date on
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which the head of a Federal agency
submits data certifications to the
Administrator for Federal Procurement
Policy, the head of the Federal agency
shall publish on the Web site of the
Federal agency a list and rationale for
any bundled contract for which the
Federal agency solicited bids or that was
awarded by the Federal agency.’’ 15
U.S.C. 644(q)(2)(B). SBA is conforming
one regulation to this statutory change:
§ 125.2, Prime Contracting Assistance.
The purpose of this statutory provision
is to help reduce the practice of contract
bundling. Requiring agencies to post a
list of all bundled acquisitions and the
rationale for bundling the acquisition
holds the agency accountable to the
public for its actions.
Section 1501. Aquaculture Business
Disaster Assistance
Section 1501 of the SBJA provides
SBA new authority to make certain
types of disaster loans to aquaculture
enterprises. Prior to this statutory
change, aquaculture enterprises were
ineligible for all SBA disaster loans.
Section 1501 provides that SBA may
provide economic injury disaster loans
to aquaculture enterprises that are small
businesses. SBA is conforming one
regulation to this statutory change:
§ 123.300, Is my business eligible to
apply for an economic injury disaster
loan?
B. Other Technical Amendments
In addition to the SBJA amendments,
SBA believes that additional changes
should be made to the business loan
program regulations in § 120.220, Fees
that Lender Pays SBA, to conform to the
statutory provisions in section
7(a)(18)(A) and section 7(a)(23)(A) of the
Small Business Act. 15 U.S.C.
636(a)(18)(A) and (23)(A). First, with
respect to the guarantee fees authorized
by section 7(a)(18(A)(i) through (iii),
SBA is amending the regulations at
§ 120.220(a)(1)(i) through (a)(1)(iii) to
accurately reflect the limitations
provided in the Small Business Act. The
statutory subsections authorize the
collection of guarantee fees in amounts
not to exceed certain percentages of the
guaranteed portion of the loan. The
regulations, however, do not reflect the
degree of flexibility provided in the
statute; rather the regulations state that
the fees are fixed at the percentages
listed. Specifically, for loans that are
$150,000 or less, section 7(a)(18)(a)(i)
will now require the lender to pay a
guarantee fee ‘‘not to exceed 2 percent’’
of the guaranteed portion of the loan.
Similarly, section 7(a)(18)(A)(ii) will
now require lenders to pay a guarantee
fee ‘‘not to exceed 3 percent’’ of the
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guaranteed portion of a loan that is more
than $150,000, but not more than
$700,000. Finally, under section
7(a)(18)(A)(iii) the guarantee fee to be
paid by the lender is ‘‘not to exceed 3.5
percent’’ of the guaranteed portion of a
loan that is more than $700,000.
SBA is also amending § 120.220(a)(1)
to add the guarantee fee authorized by
section 7(a)(18)(A)(1)(iv). This
subsection provides that in addition to
the fee payable under section
7(a)(18)(A)(iii), SBA must collect a
‘‘guarantee fee equal to 0.25 percent of
any portion of the deferred participation
share that is more than $1,000,000.’’
This particular guarantee fee is
currently being assessed on the
applicable loans consistent with the
statutory authority but was not
previously codified in the regulations.
SBA is also amending § 120.220(f)(1)
to accurately reflect the amount of the
annual service fee that is authorized by
section 7(a)(23)(A) of the Small Business
Act. This statutory provision states in
part that SBA ‘‘shall assess, collect and
retain a fee not to exceed 0.55 percent
per year of the outstanding participation
balance of the deferred participation
share of the loan * * *.’’ However, the
regulations state that this annual service
fee must be equal to 0.5 percent of the
outstanding balance of the guaranteed
portion of each loan. The amendment in
this rule will bring the regulations into
conformity with the statutory authority,
and obviate possible misunderstanding
and confusion regarding the amount
that is due annually on the service fee.
For Fiscal Year 2012, the fees
authorized by § 120.220(a)(1) and
§ 120.220(f) are set at the maximum
authorized levels. SBA will issue
notices to announce any changes in
these fees in the future.
Compliance With Executive Orders
12866, 12988, and 13132, the
Paperwork Reduction Act (44 U.S.C.
Ch. 35) and the Regulatory Flexibility
Act (5 U.S.C. 601–612)
Executive Order 12866
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The Office of Management and Budget
(OMB) has determined that this direct
final rule does not constitute a
significant regulatory action under
Executive Order 12866. This direct final
rule is also not a major rule under the
Congressional Review Act.
Executive Order 12988
This action meets applicable
standards set forth in Sections 3(a) and
3(b)(2) of Executive Order 12988, Civil
Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce
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burden. The action does not have
retroactive or preemptive effect.
Executive Order 13132
For the purposes of Executive Order
13132, this direct final rule will not
have substantial, direct effects on the
States, on the relationship between the
national government and the States, or
on the distribution of power and
responsibilities among the various
levels of government. Therefore, SBA
has determined that this direct final rule
has no federalism implications
warranting preparation of a federalism
assessment.
Paperwork Reduction Act, 44 U.S.C.,
Ch. 35
SBA has determined that this direct
final rule does not impose additional
reporting or recordkeeping requirements
under the Paperwork Reduction Act, 44
U.S.C., Chapter 35.
Regulatory Flexibility Act, 5 U.S.C. 601–
612
The Regulatory Flexibility Act (RFA),
5 U.S.C. 601, requires administrative
agencies to consider the effect of their
actions on small entities, including
small businesses. According to the RFA,
when an agency issues a rule, the
agency must prepare an analysis to
determine whether the impact of the
rule will have a significant economic
impact on a substantial number of small
entities. However, the RFA allows an
agency to certify a rule in lieu of
preparing an analysis, if the rulemaking
is not expected to have a significant
impact on a substantial number of small
entities. This rule only makes
conforming amendments to SBA
regulations to reflect recent legislation,
and does not implement new agency
policies. Some of these amendments
will affect small entities; however SBA
certifies that these amendments will not
have a significant economic impact on
a substantial number of such entities.
Community development, Grant
programs—business, Small businesses.
13 CFR Part 120
Community development, Exports,
Loan programs—business, Small
businesses.
13 CFR Part 123
Disaster assistance, Loan programs—
business, Small businesses.
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PART 108—NEW MARKETS VENTURE
CAPITAL (’’NMVC’’) PROGRAM
1. The authority citation for 13 CFR
part 108 continues to read as follows:
■
Authority: 15 U.S.C. 689–689q.
2. Amend § 108.740 as follows:
a. Revise paragraph (a) introductory
text;
■ b. Redesignate paragraph (a)(2) as (a)
(3); and
■ c. Add new paragraph (a)(2) to read as
follows:
■
■
§ 108.740 Portfolio diversification
(‘‘overline’’ limitation).
(a) Without SBA’s prior written
approval, you may provide Financing or
a Commitment to a Small Business only
if the resulting amount of your aggregate
outstanding Financings and
Commitments to such Small Business
and its Affiliates does not exceed 10
percent of the sum of:
*
*
*
*
*
(2) The total amount of leverage
projected in your participation
agreement with SBA; plus
*
*
*
*
*
PART 120—BUSINESS LOANS
3. The authority citation for 13 CFR
Part 120 continues to read as follows:
■
Authority: 15 U.S.C. 634(b)(6), (b)(7),
(b)(14), (h), and note, 636(a), (h) and (m), 650,
687(f), 696(3), and 697(a) and (e); Public Law
111–5, 123 Stat. 115, Public Law 111–240,
124 Stat. 2504.
§ 120.2
[Amended]
4. Amend § 120.2(b) by removing the
number ‘‘25,000,’’ and adding in its
place the number, ‘‘$50,000.’’
■
[Amended]
5. Amend § 120.10 by removing the
number ‘‘$25,000’’ from the definition
of ‘‘Intermediary’’ and replacing it with
the number ‘‘$50,000.’’
■ 6. Amend § 120.130 by revising
paragraph (c) to read as follows:
■
13 CFR Part 108
PO 00000
13 CFR Part 125
Government contracts, Government
procurement, Small businesses,
Technical assistance.
For the reasons stated in the
preamble, the Small Business
Administration amends 13 CFR parts
108, 120, 123, and 125 as follows:
§ 120.10
List of Subjects
63545
Sfmt 4700
§ 120.130 Restrictions on uses of
proceeds.
*
*
*
*
*
(c) Floor plan financing or other
revolving line of credit, except under
§ 120.340 or § 120.390;
*
*
*
*
*
E:\FR\FM\13OCR1.SGM
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63546
§ 120.151
Federal Register / Vol. 76, No. 198 / Thursday, October 13, 2011 / Rules and Regulations
[Amended]
§ 120.346
7. Amend § 120.151 as follows:
(a) Remove the number ‘‘$1,000,000’’
and add in its place the number
‘‘$3,750,000’’; and
■ (b) Remove the number ‘‘$2,000,000’’
and add in its place the number
‘‘$5,000,000’’.
■
■
§ 120.210
[Amended]
8. Amend § 120.210 by removing the
words ‘‘Effective December 21, 2000,
loans’’ from the third sentence and
adding in its place ‘‘Loans’’.
■ 9. Amend § 120.220 as follows:
■ a. Revise the last sentence in
paragraph (a)(1), introductory text, to
read as set forth below;
■ b. Revise paragraphs (a)(1)(i), (a)(1)(ii),
and (a)(1)(iii), and add new paragraph
(a)(1)(iv), to read as set forth below; and
■ c. Revise the first sentence of
paragraph (f)(1) to read as set forth
below.
§ 120.220
Fees that Lender pays SBA.
*
*
*
*
(a) * * * For a loan with a maturity
of more than twelve (12) months, the
guarantee fee is payable as follows:
(i) Not more than 2 percent of the
guaranteed portion of a loan if the total
amount of the loan is not more than
$150,000;
(ii) Not more than 3 percent of the
guaranteed portion of a loan if the total
amount of the loan is more than
$150,000 but not more than $700,000;
(iii) Except as provided in paragraph
(a)(1)(iv) of this section, not more than
3.5 percent of the guaranteed portion of
a loan if the total amount of the loan is
more than $700,000; and
(iv) An additional 0.25 percent of the
guaranteed portion of a loan if the total
amount of the loan is more than
$1,000,000.
*
*
*
*
*
(f) * * *
(1) In general. Except to the extent
paragraph (f)(2) of this section applies,
the lender shall pay SBA an annual
service fee in an amount not to exceed
0.55 percent of the outstanding balance
of the guaranteed portion of each loan.
* * *
*
*
*
*
*
■ 10. Amend § 120.340 by adding two
new sentences at the end of the
paragraph to read as follows:
erowe on DSK2VPTVN1PROD with RULES
*
§ 120.340 What is the Export Working
Capital Program?
* * * The maximum loan amount for
any one EWCP loan is $5,000,000.
EWCP loans shall receive a guaranty of
90 percent, not to exceed $4,500,000.
■ 11. Amend § 120.346 by revising
paragraph (a)(3) to read as follows:
VerDate Mar<15>2010
13:23 Oct 12, 2011
Jkt 226001
all of the guaranteed portion of an
individual 7(a) guaranteed loan
(Individual Certificate).
*
*
*
*
*
17. Revise § 120.601 to read as
follows:
■
§ 120.601
§ 120.347
■
Eligibility.
(a) * * *
(3) The loan will improve the
applicant’s competitive position.
*
*
*
*
*
■ 12. Amend § 120.347 by adding a new
sentence at the end to read as follows:
Use of proceeds.
* * * The Borrower may also use
proceeds in the refinancing of existing
indebtedness that is not structured with
reasonable terms and conditions,
including any debt that qualifies for
refinancing under 7(a) Loan Program
Requirements, and to provide working
capital.
■ 13. Revise § 120.348 to read as
follows:
§ 120.348
Amount of guarantee.
The maximum loan amount for any
one International Trade (IT) loan is
$5,000,000. IT loans may receive a
maximum guaranty of 90 percent or
$4,500,000, except that the maximum
guaranty amount for any working
capital component of an IT loan is
limited to $4,000,000. To the extent that
the Borrower has a separate EWCP loan
or any other 7(a) loan for working
capital, the guaranty amount for the
other loan is counted against the
$4,000,000 guaranty limit for the IT
loan.
■ 14. Add new § 120.349 to read as
follows:
§ 120.349
Collateral.
Each IT loan must be secured either
by a first lien position or first mortgage
on the property or equipment financed
by the IT loan or on other assets of the
Borrower, except that an IT loan may be
secured by a second lien position on the
property or equipment financed by the
IT loan or on other assets of the
Borrower, if the SBA determines the
second lien position provides adequate
assurance of the payment of the IT loan.
■ 15. Amend § 120.390(a) by revising
the third sentence to read as follows:
§ 120.390
Revolving credit.
(a) * * * The maximum guaranteed
amount and the maximum loan amount
are the same under CapLines as other
7(a) loans, as stated in § 120.151.
*
*
*
*
*
■ 16. Amend § 120.600 by revising
paragraph (a) to read as follows:
§ 120.600
Definitions.
(a) Certificate is the document the
FTA issues representing either a
beneficial fractional undivided interest
in a Pool (Pool Certificate), or a
fractional undivided interest in some or
PO 00000
Frm 00010
Fmt 4700
Sfmt 4700
SBA Secondary Market.
The SBA secondary market
(‘‘Secondary Market’’) consists of the
sale of Certificates, representing either a
fractional undivided interest in some or
all of the guaranteed portion of an
individual 7(a) guaranteed loan or a
fractional undivided interest in a Pool
consisting of the SBA guaranteed
portions of a number of 7(a) guaranteed
loans. Transactions involving interests
in Pools or the sale of individual
guaranteed portions of loans are
governed by the contracts entered into
by the parties, SBA’s Secondary Market
Program Guide, and this subpart. See
sections 5(f), (g), and (h) of the Small
Business Act (15 U.S.C. 634(f), (g), and
(h)).
18. Amend § 120.611 by adding a new
paragraph (c) to read as follows:
■
§ 120.611
Pools backing Pool Certificates.
*
*
*
*
*
(c) Increments of guaranteed portion.
If the amount of the guaranteed portion
of an individual 7(a) guaranteed loan is
more than $500,000, a Pool Assembler
may elect to divide the guaranteed
portion into increments of $500,000 and
one increment of any remaining amount
less than $500,000, in order to permit
the maximum amount of any guaranteed
portion in a Pool to be not more than
$500,000. Only one increment from a
loan to a specific borrower may be
included in a Pool.
§ 120.701
[Amended]
19. Amend § 120.701 as follows:
a. Remove the word ‘‘Demonstration’’
from the definition of ‘‘Intermediary’’ in
paragraph (e); and
■ b. Remove the number ‘‘$35,000’’
from the definition of ‘‘Microloan’’ in
paragraph (f) and add in its place the
number ‘‘$50,000.’’
■
■
§ 120.702
[Amended]
20. Amend § 120.702 by removing the
number ‘‘$35,000’’ in paragraph (a)(1)
and adding in its place the number
‘‘$50,000.’’.
■
§ 120.706
[Amended]
21. Amend § 120.706 by removing the
number ‘‘$3.5 million’’ in paragraph (a)
and adding in its place the number ‘‘$5
million.’’
■
E:\FR\FM\13OCR1.SGM
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Federal Register / Vol. 76, No. 198 / Thursday, October 13, 2011 / Rules and Regulations
§ 120.707
[Amended]
§ 120.712 How does an Intermediary get a
grant to assist Microloan borrowers?
*
*
*
*
*
(b) * * *
(2) Grant monies may be used to
attend training required by SBA.
*
*
*
*
*
§ 120.714
[Amended]
§ 120.862 Other economic development
objectives.
*
*
*
*
(b) * * *
(10) Reduction of rates of
unemployment in labor surplus areas, as
such areas are determined by the
Secretary of Labor.
■ 26. Revise § 120.931 to read as
follows:
erowe on DSK2VPTVN1PROD with RULES
Coast Guard
Program purpose.
* * * The Program’s authorization
expires on September 23, 2012 and the
Administrator may guarantee not more
than $3,000,000,000 of pools under this
authority pursuant to section
503(c)(B)(iii) of the Recovery Act, as
amended by section 1119 of the Small
Business Jobs Act of 2010.
504 Lending limits.
504 loan amounts shall be limited to:
(a) An outstanding balance of
$5,000,000 for each Borrower and its
affiliates if the loan proceeds will not be
directed towards a Project in paragraph
(c) of this section,
(b) An outstanding balance of
$5,000,000 for each Borrower and its
affiliates if one or more of the public
policy goals enumerated in § 120.862(b)
applies to the Project; and
(c) $5,500,000 for each Project for:
(1) Small Manufacturers (NAICS
Codes 31–33) with all production
facilities located in the United States;
(2) Reduction of the Borrower’s, or if
the Borrower is an Eligible Passive
Company, the Operating Company’s
energy consumption by at least 10%; or
(3) Plant, equipment and process
upgrades of renewable energy sources
such as the small-scale production of
energy for individual buildings’ or
communities’ consumption, commonly
known as micropower, or renewable
fuel producers including biodiesel and
ethanol producers.
28. The authority citation for 13 CFR
part 123 is revised to read as follows:
Jkt 226001
Authority: 15 U.S.C. 632, 634(b)(6), 636(b),
636(d), 657n; Pub. L. 102–395, 106 Stat.
1828, 1864; and Pub. L. 103–75, 107 Stat.
739; and Pub. L. 106–50, 113 Stat. 245.
29. Amend § 123.300 by removing the
word ‘‘and’’ at the end of paragraph
(c)(2); and adding a new paragraph (c)(4)
to read as follows:
■
§ 123.300 Is my business eligible to apply
for an economic injury disaster loan?
*
*
*
*
(c) * * *
(4) Small aquaculture enterprises.
*
*
*
*
*
PART 125—GOVERNMENT
CONTRACTING PROGRAMS
30. The authority citation for 13 CFR
part 125 continues to read as follows:
■
Authority: 15 U.S.C. 632(p), (q); 634(b)(6);
637; 644 and 657(f).
31. Amend § 125.2 by adding new
paragraph (d)(9) to read as follows:
■
§ 125.2
Prime contracting assistance.
*
*
*
*
*
(d) * * *
(9) Identifying and justifying bundled
contracts. Not later than 30 days after
the date on which the head of a Federal
agency submits data certifications to the
Administrator for Federal Procurement
Policy, the head of the Federal agency
shall publish on the Web site of the
Federal agency a list and rationale for
any bundled contract for which the
Federal agency solicited bids or that was
awarded by the Federal agency.
*
*
*
*
*
Karen G. Mills,
Administrator.
[FR Doc. 2011–26236 Filed 10–12–11; 8:45 am]
BILLING CODE 8025–01–P
PO 00000
Frm 00011
Fmt 4700
Sfmt 4700
33 CFR Part 165
[Docket No. USCG–2011–0939]
RIN 1625–AA87
Security Zone; Columbia and
Willamette Rivers, Dredge Vessels
Patriot and Liberty
Coast Guard, DHS.
ACTION: Temporary final rule.
AGENCY:
*
*
13:23 Oct 12, 2011
§ 120.1701
■
24. Amend § 120.714 by removing the
number ‘‘$35,000’’in paragraph (a) and
adding in its place the number
‘‘$50,000’’
■ 25. Amend § 120.862 as follows:
■ a. Remove the word ‘‘or’’ at the end
of paragraph (b)(8);
■ b. Remove the ‘‘.’’ at the end of
paragraph (b)(9) and add ‘‘; or’’ in its
place; and
■ c. Add a new paragraph (b)(10) to read
as follows:
VerDate Mar<15>2010
DEPARTMENT OF HOMELAND
SECURITY
PART 123—DISASTER LOAN
PROGRAM
■
§ 120.931
27. Amend § 120.1701 by revising the
third sentence to read as follows:
■
22. Amend § 120.707 by removing the
number ‘‘$35,000’’ each time it appears
in paragraph (b) and adding in its place
the number ‘‘$50,000.’’
■ 23. Amend § 120.712 by revising
paragraph (b)(2) to read as follows:
■
63547
The Coast Guard is
establishing a temporary security zone
within 200 yards of the Dredge Vessels
Patriot and Liberty while the vessels are
underway, anchored, or conducting
dredging operations in the vicinity of
Willamette River Mile 2 and Columbia
River Mile 105. Entry into this zone is
prohibited unless authorized by the
Captain of the Port, Columbia River or
his designated representative. The Coast
Guard is establishing this temporary
security zone around the vessels to
provide security during operations and
this will be done so by prohibiting all
persons or vessels from operating within
200 yards of the vessel.
DATES: This rule is effective from
October 13, 2011, through October 31,
2011. The security zone has been
enforced with actual notice since from
7 a.m. on October 1, 2011.
ADDRESSES: Documents indicated in this
preamble as being available in the
docket are part of docket USCG–2011–
0939 and are available online by going
to https://www.regulations.gov, inserting
USCG–2011–0939 in the ‘‘Keyword’’
box, and then clicking ‘‘Search.’’ They
are also available for inspection or
copying at the Docket Management
Facility (M–30), U.S. Department of
Transportation, West Building Ground
Floor, Room W12–140, 1200 New Jersey
Avenue, SE., Washington, DC 20590,
between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
FOR FURTHER INFORMATION CONTACT: If
you have questions on this temporary
rule, call or e-mail BM1 Silvestre Suga
III, Waterways Management Division,
Coast Guard MSU Portland; telephone
503–240–9319, e-mail
Silvestre.g.suga@uscg.mil. If you have
questions on viewing the docket, call
Renee V. Wright, Program Manager,
Docket Operations, telephone 202–366–
9826.
SUPPLEMENTARY INFORMATION:
SUMMARY:
E:\FR\FM\13OCR1.SGM
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]]>Agencies
[Federal Register Volume 76, Number 198 (Thursday, October 13, 2011)]
[Rules and Regulations]
[Pages 63542-63547]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-26236]
=======================================================================
-----------------------------------------------------------------------
SMALL BUSINESS ADMINISTRATION
13 CFR Parts 108, 120, 123, and 125
RIN 3245-AG15
Small Business Jobs Act: Implementation of Conforming and
Technical Amendments
AGENCY: U.S. Small Business Administration.
ACTION: Direct final rule.
-----------------------------------------------------------------------
SUMMARY: This direct final rule contains various amendments conforming
SBA regulations to changes made by the Small Business Jobs Act of 2010
to several SBA programs, including business lending, disaster lending,
and contract bundling. This rule also makes additional conforming
changes to ensure that the regulations governing certain fees payable
in the business loan programs are consistent with the related statutory
authority in the Small Business Act.
DATES: This rule is effective on November 28, 2011 without further
action, unless significant adverse comment is received by November 14,
2011. If significant adverse comment is received, SBA will publish a
timely withdrawal of the affected sections of the rule in the Federal
Register.
ADDRESSES: You may submit comments, identified by RIN 3245-AG15, by one
of the following methods: (1) Federal eRulemaking Portal: https://www.regulations.gov; following the instructions for submitting
comments; or (2) Mail/Hand Delivery/Courier: John Russell, Office of
General Counsel, 409 Third Street, SW., Mail Code 2221, Washington, DC
20416.
SBA will post all comments to this rule on https://www.regulations.gov. If you wish to submit confidential business
information (CBI) as defined in the User Notice at https://www.regulations.gov, you must submit such information to U.S. Small
Business Administration, John Russell, Office of General Counsel, 409
Third Street, SW., Mail Code 2221, Washington, DC 20416, or send an e-
mail to john.russell@sba.gov. You should highlight the information that
you consider to be CBI and explain why you believe SBA should hold this
information as confidential. SBA will review your information and
determine whether it will make the information public or not.
FOR FURTHER INFORMATION CONTACT: John C. Russell, Jr., Office of
General Counsel, (202) 205-6642, e-mail: john.russell@sba.gov.
SUPPLEMENTARY INFORMATION: This direct final rule contains several
conforming amendments to SBA regulations resulting from the Small
Business Jobs Act of 2010 (SBJA), Public Law 111-240, which was enacted
on September 27, 2010, SBA is making these regulatory amendments and
other technical conforming changes to mirror current statutory
provisions and avoid public confusion or possible misinterpretations of
SBA's programs. Since these are conforming amendments, with no
extraneous interpretation or other expanded materials, SBA expects no
significant adverse comments. Based on that fact, SBA has decided to
proceed with a direct final rule giving the public 30 days to comment.
If SBA receives a significant adverse comment during the comment
period, SBA will withdraw the sections of the rule receiving the
significant adverse comment, and publish them in a proposed rule.
To minimize confusion to the reader, the Supplementary Information
section is organized by sequential order of SBJA sections, followed by
the additional changes that are not directly related to the SBJA
amendments but are necessary for accuracy and consistency with the
Small Business Act.
A. Small Business Jobs Act Amendments
Section 1111. Section 7(a) Business Loans
Section 1111 of the SBJA temporarily increased the maximum
guarantee percentages for 7(a) business loans until January 1, 2011.
These temporary changes do not need to be reflected in the regulations.
Section 1111 also permanently increased the maximum guaranteed portion
and maximum loan amount for 7(a) business loans. As a result of this
change, section 7(a)(3) of the Small Business Act now reads: ``No loan
shall be made under this subsection--(A) if the total amount
outstanding and committed (by participation or otherwise) to the
borrower from the business loan and investment fund established by this
Act would exceed $3,750,000 (or if the gross loan amount would exceed
$5,000,000), except as provided for international trade loans, which
have a different limit.'' 15 U.S.C. Sec. 636(a)(3)(A). SBA is
conforming three SBA regulations to this statutory change as follows:
(1) Sec. 120.151, What is the statutory limit for total loans to a
Borrower?, to reflect that the maximum guaranteed amount is now
$3,750,000 and the maximum loan amount is $5,000,000; (2) Sec.
120.210, What percentage of a loan may SBA
[[Page 63543]]
guarantee?, to remove an outdated effective date of the maximum
guaranty percentages; and (3) Sec. 120.390, Revolving Credit, to
reflect that the maximum guarantee and loan amount are the same under
CapLines as other 7(a) business loans and to include a cross reference
to Sec. 120.151.
Section 1112. Maximum Loan Amounts Under 504 Program
Section 1112 of the SBJA amended several maximum loan amounts for
the Certified Development Company Program (also known as the 504
Program). Due to these amendments, the Small Business Investment Act
provision now reads: ``(A) In General. Loans made by the Administration
under this section shall be limited to--(i) $5,000,000 for each small
business concern if the loan proceeds will not be directed toward a
goal or project described in clause (ii), (iii), (iv) or (v); (ii)
$5,000,000 for each small business concern if the loan proceeds will be
directed toward 1 or more of the public policy goals described under
section 501(d)(3); (iii) $5,500,000 for each project of a small
manufacturer; (iv) $5,500,000 for each project that reduces the
borrower's energy consumption by at least 10 percent; and (v)
$5,500,000 for each project that generates renewable energy or
renewable fuels, such as biodiesel or ethanol production.'' 15 U.S.C.
696(2)(A)(i-v). With respect to (iii) above, a small manufacturer, as
defined in the Small Business Act, must have all of its production
facilities located in the United States. 15 U.S.C. 696(2)(B). SBA is
conforming Sec. 120.931, 504 Loan Limits, to this statutory change,
which substantially increases the loan limits for all 504 Program
loans.
In implementing the loan limit for renewable energy or renewable
fuels projects, SBA noted that 15 U.S.C. 696(2)(A)(v) was enacted at
the same time as 15 U.S.C. 695(d)(3)(K), which describes one of the
public policy objectives of the 504 Program as projects that achieve
``plant, equipment and process upgrades of renewable energy sources
such as the small-scale production of energy for individual buildings
or communities consumption, commonly known as micropower, or renewable
fuels producers including biodiesel and ethanol producers.'' It is
SBA's view that the loan limit set by 15 U.S.C. 696(2)(A)(v) was
intended by Congress to accord with the corresponding public policy
goal set forth in 15 U.S.C. 695(d)(3)(K). Accordingly, the regulatory
provision implementing the loan limit for renewable energy or renewable
fuels incorporates the parameters of the more fully articulated public
policy goal.
Section 1113. Maximum Loan Amounts Under Microloan Program
Section 1113 of the SBJA amended the maximum loan limits for the
Microloan Program by raising the amount of a loan that a Microloan
Intermediary can make to a borrower from $35,000 to $50,000, as well as
the amount of a loan that the Microloan Intermediary can receive from
the SBA from $3,500,000 to $5,000,000. SBA is revising seven of its
regulations to conform to these statutory changes: (1) Sec. 120.2,
Description of the Business Loan Programs; (2) Sec. 120.10,
Definitions; (3) Sec. 120.701, Definitions; (4) Sec. 120.702, Are
there limitations on who can be an Intermediary or on where an
Intermediary may operate?; (5) Sec. 120.706, What are the terms and
conditions of an SBA loan to an Intermediary?; (6) Sec. 120.707, What
conditions apply to loans by Intermediaries to Microloan borrowers?;
and (7) Sec. 120.714, How are grants made to non-lending technical
assistance providers (NTAP)?.
In addition, SBA is making one technical change to the regulations
governing eligibility for grants to Microloan Intermediaries. The
second sentence of paragraph (b)(2) of Sec. 120.712 states:
``Intermediaries may not enter into third party contracts for the
provision of technical assistance to program clients.'' This language
is inconsistent with paragraph (e) of that section, which states: ``An
Intermediary may use no more than 25 percent of the grant funds it
receives from SBA for contracts with third parties for the latter to
provide technical assistance to Microloan borrowers.'' Paragraph (e),
which was added to Sec. 120.712 in 2001 to implement statutory
changes, reflects current SBA policy to allow Intermediaries to use up
to 25 percent of grant funds for contracts with third parties.
Therefore, SBA is removing the inconsistent sentence in paragraph
(b)(2).
Section 1115. New Markets Venture Capital Company Investment
Limitations
Section 1115 of the SBJA provides that ``except to the extent
approved by the Administrator, a covered New Markets Venture Capital
Company may not acquire or issue commitments for securities under this
title for any single enterprise in an aggregate amount equal to more
than 10 percent of the sum of--(A) the regulatory capital of the
covered New Markets Venture Capital Company; and (B) the total amount
of leverage projected in the participation agreement of the covered New
Markets Venture Capital.'' 15 U.S.C. 689. The SBJA defines the term
``covered New Markets Venture Capital Company'' as a company granted
approval by the SBA Administrator on or after March 1, 2002, that has
obtained financing from the Administrator. We are conforming the
regulation to this statutory change by amending current SBA regulation,
Sec. 108.740, Portfolio Diversification (``overline'' limitation).
Based on the leverage ratio currently applicable in the New Markets
Venture Capital (NMVC) program, the SBJA effectively increased the
overline limit for existing NMVC companies from 20% to 25% of
regulatory capital, which will allow these companies to invest a higher
percentage of their capital in a single company or group of affiliated
companies. SBA intends that an NMVC company's calculation of an
overline limitation will retain the same adjustments to regulatory
capital that are present in the current NMVC program regulations.
Section 1117. Sale of 7(a) Loans in Secondary Market
Section 1117 of the SBJA amends SBA's 7(a) loan program secondary
market authority by providing: ``If the amount of the guaranteed
portion of any loan under section 7(a) is more than $500,000, the
Administrator shall, upon request of a pool assembler, divide the loan
guarantee into increments of $500,000 and 1 increment of any remaining
amount less than $500,000, in order to permit the maximum amount of any
loan in a pool to be not more than $500,000. Only 1 increment of any
loan guarantee divided under this paragraph may be included in the same
pool. Increments of loan guarantees to different borrowers that are
divided under this paragraph may be included in the same pool.'' 15
U.S.C. 634(g)(6). SBA is revising three regulations to conform to this
statutory change: Sec. 120.600(a), Definitions; Sec. 120.601, SBA
Secondary Market; and Sec. 120.611, Pools backing Pool Certificates.
The purpose of this statutory provision is to allow participants in the
secondary market, specifically pool assemblers, to split the guaranteed
portion of individual 7(a) loans into increments of $500,000 and one
increment of less than $500,000. SBA is in the process of revising SBA
Forms 1086 and 1088, as well as the form of Individual Certificate, to
reflect this new provision.
[[Page 63544]]
Section 1119. SBA Secondary Market Guarantee Authority
Section 1119 of the SBJA extends the authorization for the SBA
Secondary Market Guarantee Program for First Lien Position 504 Loan
Pools from February 17, 2011 to the date ``two years after the date of
the first sale of a pool of first lien 504 loans guaranteed under this
section to a third-party investor''. The new expiration date is,
therefore, September 23, 2012. We are conforming one SBA regulation to
this statutory change: Sec. 120.1701, Program purpose.
Section 1132. Public Policy Goals
Section 1132 of the SBJA adds a new public policy goal for the
Certified Development Company Program. The new public policy goal is
``reduction of rates of unemployment in labor surplus areas, as such
areas are determined by the Secretary of Labor.'' 15 U.S.C.
695(d)(3)(L). We are conforming one regulation to this statutory
change: Sec. 120.862, Other economic development objectives. This
means that a project meeting this new public policy goal objective can
qualify for a 504 loan in an amount up to $5,000,000. It also means
that the project can be financed by the 504 loan even if the subject
project does not create or retain jobs pursuant to Sec. 120.861
provided that the CDC's overall portfolio, including the subject loan,
meets or exceeds the CDC's required Job Opportunity average.
Section 1206. International Trade Finance Programs
Section 1206 of the SBJA made changes to SBA's International Trade,
Export Working Capital, and Export Express Loan Programs. This direct
final rule addresses the changes made by Section 1206 to these
programs, except for the Export Express Loan Program, which will be the
subject of a separate rulemaking incorporating the now permanent Export
Express Loan Program in the regulations for the first time. SBA's
International Trade Loan Program was amended by changing the maximum
loan amount, so that the provision now reads: ``No loan shall be made
under this subsection--(B) if the total amount outstanding and
committed (on a deferred basis) solely for the purposes provided in
paragraph (16) to the borrower from the business loan and investment
fund established by this Act would exceed $4,500,000 (or if the gross
loan amount would exceed $5,000,000), of which not more than $4,000,000
may be used for working capital, supplies or financings under Sec.
7(a)(14) for export purposes.'' 15 U.S.C. 636(a)(3)(B). Section 1206
also added a provision: ``Participation in International Trade Loan--In
an agreement to participate in a loan on a deferred basis under
paragraph (16), the participation by the Administration may not exceed
90 percent.'' 15 U.S.C. 636(a)(2)(E). The International Trade Loan
Program also was amended to allow such loans to be used to assist
concerns engaged in or adversely affected by international trade to
improve their competitive position ``by providing working capital'' and
to expand the use of loan proceeds for refinancing to ``include any
debt that qualifies for refinancing under any other provision of this
subsection.'' 15 U.S.C. 636(a)(16)(A)(ii-iii). The collateral required
to be provided by borrowers of International Trade Loans was also
changed. The law now allows for such loans to ``be secured by a second
lien on the property or equipment financed by the loan or on other
assets of the small business concern, if the Administrator determines
the lien provides adequate assurance of the payment of the loan.'' 15
U.S.C. 636(a)(16)(B)(ii). SBA is amending four existing regulations for
the International Trade Loan program and adding one new regulation to
reflect these statutory changes: (1) Sec. 120.346, Eligiblity, to
delete restrictive language regarding the use of IT loan proceeds that
is no longer applicable; (2) Sec. 120.347, Use of Proceeds, to reflect
that IT loan proceeds may now be used for working capital and to
refinance additional debt; (3) Sec. 120.348, Amount of Loan and
Guarantee, to reflect the new maximum loan amount and the new maximum
guaranty amount for IT loans; and (4) new Sec. 120.349, Collateral, to
reflect the new collateral requirements for IT loans.
Finally, section 1206 of the SBJA amended The Export Working
Capital (EWCP) Loan Program by increasing the maximum loan amount to
$5,000,000 (15 U.S.C. 636(a)(14)(B)(i)) and by providing that the
guaranty amount for EWCP loans shall be 90 percent (15 U.S.C.
636(a)(2)(D)). SBA is conforming Sec. 120.340, What is the Export
Working Capital Program?, to reflect the new maximum loan amount and
the new required guaranty amount for EWCP loans. Additionally, SBA is
conforming Sec. 120.130, Restrictions on uses of proceeds, to reflect
that SBA has statutory authority to allow EWCP loan proceeds to be used
for revolving lines of credit for export purposes. 15 U.S.C.
636(a)(14)(A).
Section 1312. Leadership and Oversight
Section 1312(a) of the SBJA provides that: ``Rationale for Contract
Bundling--Not later than 30 days after the date on which the head of a
Federal agency submits data certifications to the Administrator for
Federal Procurement Policy, the head of the Federal agency shall
publish on the Web site of the Federal agency a list and rationale for
any bundled contract for which the Federal agency solicited bids or
that was awarded by the Federal agency.'' 15 U.S.C. 644(q)(2)(B). SBA
is conforming one regulation to this statutory change: Sec. 125.2,
Prime Contracting Assistance. The purpose of this statutory provision
is to help reduce the practice of contract bundling. Requiring agencies
to post a list of all bundled acquisitions and the rationale for
bundling the acquisition holds the agency accountable to the public for
its actions.
Section 1501. Aquaculture Business Disaster Assistance
Section 1501 of the SBJA provides SBA new authority to make certain
types of disaster loans to aquaculture enterprises. Prior to this
statutory change, aquaculture enterprises were ineligible for all SBA
disaster loans. Section 1501 provides that SBA may provide economic
injury disaster loans to aquaculture enterprises that are small
businesses. SBA is conforming one regulation to this statutory change:
Sec. 123.300, Is my business eligible to apply for an economic injury
disaster loan?
B. Other Technical Amendments
In addition to the SBJA amendments, SBA believes that additional
changes should be made to the business loan program regulations in
Sec. 120.220, Fees that Lender Pays SBA, to conform to the statutory
provisions in section 7(a)(18)(A) and section 7(a)(23)(A) of the Small
Business Act. 15 U.S.C. 636(a)(18)(A) and (23)(A). First, with respect
to the guarantee fees authorized by section 7(a)(18(A)(i) through
(iii), SBA is amending the regulations at Sec. 120.220(a)(1)(i)
through (a)(1)(iii) to accurately reflect the limitations provided in
the Small Business Act. The statutory subsections authorize the
collection of guarantee fees in amounts not to exceed certain
percentages of the guaranteed portion of the loan. The regulations,
however, do not reflect the degree of flexibility provided in the
statute; rather the regulations state that the fees are fixed at the
percentages listed. Specifically, for loans that are $150,000 or less,
section 7(a)(18)(a)(i) will now require the lender to pay a guarantee
fee ``not to exceed 2 percent'' of the guaranteed portion of the loan.
Similarly, section 7(a)(18)(A)(ii) will now require lenders to pay a
guarantee fee ``not to exceed 3 percent'' of the
[[Page 63545]]
guaranteed portion of a loan that is more than $150,000, but not more
than $700,000. Finally, under section 7(a)(18)(A)(iii) the guarantee
fee to be paid by the lender is ``not to exceed 3.5 percent'' of the
guaranteed portion of a loan that is more than $700,000.
SBA is also amending Sec. 120.220(a)(1) to add the guarantee fee
authorized by section 7(a)(18)(A)(1)(iv). This subsection provides that
in addition to the fee payable under section 7(a)(18)(A)(iii), SBA must
collect a ``guarantee fee equal to 0.25 percent of any portion of the
deferred participation share that is more than $1,000,000.'' This
particular guarantee fee is currently being assessed on the applicable
loans consistent with the statutory authority but was not previously
codified in the regulations.
SBA is also amending Sec. 120.220(f)(1) to accurately reflect the
amount of the annual service fee that is authorized by section
7(a)(23)(A) of the Small Business Act. This statutory provision states
in part that SBA ``shall assess, collect and retain a fee not to exceed
0.55 percent per year of the outstanding participation balance of the
deferred participation share of the loan * * *.'' However, the
regulations state that this annual service fee must be equal to 0.5
percent of the outstanding balance of the guaranteed portion of each
loan. The amendment in this rule will bring the regulations into
conformity with the statutory authority, and obviate possible
misunderstanding and confusion regarding the amount that is due
annually on the service fee.
For Fiscal Year 2012, the fees authorized by Sec. 120.220(a)(1)
and Sec. 120.220(f) are set at the maximum authorized levels. SBA will
issue notices to announce any changes in these fees in the future.
Compliance With Executive Orders 12866, 12988, and 13132, the Paperwork
Reduction Act (44 U.S.C. Ch. 35) and the Regulatory Flexibility Act (5
U.S.C. 601-612)
Executive Order 12866
The Office of Management and Budget (OMB) has determined that this
direct final rule does not constitute a significant regulatory action
under Executive Order 12866. This direct final rule is also not a major
rule under the Congressional Review Act.
Executive Order 12988
This action meets applicable standards set forth in Sections 3(a)
and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize
litigation, eliminate ambiguity, and reduce burden. The action does not
have retroactive or preemptive effect.
Executive Order 13132
For the purposes of Executive Order 13132, this direct final rule
will not have substantial, direct effects on the States, on the
relationship between the national government and the States, or on the
distribution of power and responsibilities among the various levels of
government. Therefore, SBA has determined that this direct final rule
has no federalism implications warranting preparation of a federalism
assessment.
Paperwork Reduction Act, 44 U.S.C., Ch. 35
SBA has determined that this direct final rule does not impose
additional reporting or recordkeeping requirements under the Paperwork
Reduction Act, 44 U.S.C., Chapter 35.
Regulatory Flexibility Act, 5 U.S.C. 601-612
The Regulatory Flexibility Act (RFA), 5 U.S.C. 601, requires
administrative agencies to consider the effect of their actions on
small entities, including small businesses. According to the RFA, when
an agency issues a rule, the agency must prepare an analysis to
determine whether the impact of the rule will have a significant
economic impact on a substantial number of small entities. However, the
RFA allows an agency to certify a rule in lieu of preparing an
analysis, if the rulemaking is not expected to have a significant
impact on a substantial number of small entities. This rule only makes
conforming amendments to SBA regulations to reflect recent legislation,
and does not implement new agency policies. Some of these amendments
will affect small entities; however SBA certifies that these amendments
will not have a significant economic impact on a substantial number of
such entities.
List of Subjects
13 CFR Part 108
Community development, Grant programs--business, Small businesses.
13 CFR Part 120
Community development, Exports, Loan programs--business, Small
businesses.
13 CFR Part 123
Disaster assistance, Loan programs--business, Small businesses.
13 CFR Part 125
Government contracts, Government procurement, Small businesses,
Technical assistance.
For the reasons stated in the preamble, the Small Business
Administration amends 13 CFR parts 108, 120, 123, and 125 as follows:
PART 108--NEW MARKETS VENTURE CAPITAL (''NMVC'') PROGRAM
0
1. The authority citation for 13 CFR part 108 continues to read as
follows:
Authority: 15 U.S.C. 689-689q.
0
2. Amend Sec. 108.740 as follows:
0
a. Revise paragraph (a) introductory text;
0
b. Redesignate paragraph (a)(2) as (a) (3); and
0
c. Add new paragraph (a)(2) to read as follows:
Sec. 108.740 Portfolio diversification (``overline'' limitation).
(a) Without SBA's prior written approval, you may provide Financing
or a Commitment to a Small Business only if the resulting amount of
your aggregate outstanding Financings and Commitments to such Small
Business and its Affiliates does not exceed 10 percent of the sum of:
* * * * *
(2) The total amount of leverage projected in your participation
agreement with SBA; plus
* * * * *
PART 120--BUSINESS LOANS
0
3. The authority citation for 13 CFR Part 120 continues to read as
follows:
Authority: 15 U.S.C. 634(b)(6), (b)(7), (b)(14), (h), and note,
636(a), (h) and (m), 650, 687(f), 696(3), and 697(a) and (e); Public
Law 111-5, 123 Stat. 115, Public Law 111-240, 124 Stat. 2504.
Sec. 120.2 [Amended]
0
4. Amend Sec. 120.2(b) by removing the number ``25,000,'' and adding
in its place the number, ``$50,000.''
Sec. 120.10 [Amended]
0
5. Amend Sec. 120.10 by removing the number ``$25,000'' from the
definition of ``Intermediary'' and replacing it with the number
``$50,000.''
0
6. Amend Sec. 120.130 by revising paragraph (c) to read as follows:
Sec. 120.130 Restrictions on uses of proceeds.
* * * * *
(c) Floor plan financing or other revolving line of credit, except
under Sec. 120.340 or Sec. 120.390;
* * * * *
[[Page 63546]]
Sec. 120.151 [Amended]
0
7. Amend Sec. 120.151 as follows:
0
(a) Remove the number ``$1,000,000'' and add in its place the number
``$3,750,000''; and
0
(b) Remove the number ``$2,000,000'' and add in its place the number
``$5,000,000''.
Sec. 120.210 [Amended]
0
8. Amend Sec. 120.210 by removing the words ``Effective December 21,
2000, loans'' from the third sentence and adding in its place
``Loans''.
0
9. Amend Sec. 120.220 as follows:
0
a. Revise the last sentence in paragraph (a)(1), introductory text, to
read as set forth below;
0
b. Revise paragraphs (a)(1)(i), (a)(1)(ii), and (a)(1)(iii), and add
new paragraph (a)(1)(iv), to read as set forth below; and
0
c. Revise the first sentence of paragraph (f)(1) to read as set forth
below.
Sec. 120.220 Fees that Lender pays SBA.
* * * * *
(a) * * * For a loan with a maturity of more than twelve (12)
months, the guarantee fee is payable as follows:
(i) Not more than 2 percent of the guaranteed portion of a loan if
the total amount of the loan is not more than $150,000;
(ii) Not more than 3 percent of the guaranteed portion of a loan if
the total amount of the loan is more than $150,000 but not more than
$700,000;
(iii) Except as provided in paragraph (a)(1)(iv) of this section,
not more than 3.5 percent of the guaranteed portion of a loan if the
total amount of the loan is more than $700,000; and
(iv) An additional 0.25 percent of the guaranteed portion of a loan
if the total amount of the loan is more than $1,000,000.
* * * * *
(f) * * *
(1) In general. Except to the extent paragraph (f)(2) of this
section applies, the lender shall pay SBA an annual service fee in an
amount not to exceed 0.55 percent of the outstanding balance of the
guaranteed portion of each loan. * * *
* * * * *
0
10. Amend Sec. 120.340 by adding two new sentences at the end of the
paragraph to read as follows:
Sec. 120.340 What is the Export Working Capital Program?
* * * The maximum loan amount for any one EWCP loan is $5,000,000.
EWCP loans shall receive a guaranty of 90 percent, not to exceed
$4,500,000.
0
11. Amend Sec. 120.346 by revising paragraph (a)(3) to read as
follows:
Sec. 120.346 Eligibility.
(a) * * *
(3) The loan will improve the applicant's competitive position.
* * * * *
0
12. Amend Sec. 120.347 by adding a new sentence at the end to read as
follows:
Sec. 120.347 Use of proceeds.
* * * The Borrower may also use proceeds in the refinancing of
existing indebtedness that is not structured with reasonable terms and
conditions, including any debt that qualifies for refinancing under
7(a) Loan Program Requirements, and to provide working capital.
0
13. Revise Sec. 120.348 to read as follows:
Sec. 120.348 Amount of guarantee.
The maximum loan amount for any one International Trade (IT) loan
is $5,000,000. IT loans may receive a maximum guaranty of 90 percent or
$4,500,000, except that the maximum guaranty amount for any working
capital component of an IT loan is limited to $4,000,000. To the extent
that the Borrower has a separate EWCP loan or any other 7(a) loan for
working capital, the guaranty amount for the other loan is counted
against the $4,000,000 guaranty limit for the IT loan.
0
14. Add new Sec. 120.349 to read as follows:
Sec. 120.349 Collateral.
Each IT loan must be secured either by a first lien position or
first mortgage on the property or equipment financed by the IT loan or
on other assets of the Borrower, except that an IT loan may be secured
by a second lien position on the property or equipment financed by the
IT loan or on other assets of the Borrower, if the SBA determines the
second lien position provides adequate assurance of the payment of the
IT loan.
0
15. Amend Sec. 120.390(a) by revising the third sentence to read as
follows:
Sec. 120.390 Revolving credit.
(a) * * * The maximum guaranteed amount and the maximum loan amount
are the same under CapLines as other 7(a) loans, as stated in Sec.
120.151.
* * * * *
0
16. Amend Sec. 120.600 by revising paragraph (a) to read as follows:
Sec. 120.600 Definitions.
(a) Certificate is the document the FTA issues representing either
a beneficial fractional undivided interest in a Pool (Pool
Certificate), or a fractional undivided interest in some or all of the
guaranteed portion of an individual 7(a) guaranteed loan (Individual
Certificate).
* * * * *
0
17. Revise Sec. 120.601 to read as follows:
Sec. 120.601 SBA Secondary Market.
The SBA secondary market (``Secondary Market'') consists of the
sale of Certificates, representing either a fractional undivided
interest in some or all of the guaranteed portion of an individual 7(a)
guaranteed loan or a fractional undivided interest in a Pool consisting
of the SBA guaranteed portions of a number of 7(a) guaranteed loans.
Transactions involving interests in Pools or the sale of individual
guaranteed portions of loans are governed by the contracts entered into
by the parties, SBA's Secondary Market Program Guide, and this subpart.
See sections 5(f), (g), and (h) of the Small Business Act (15 U.S.C.
634(f), (g), and (h)).
0
18. Amend Sec. 120.611 by adding a new paragraph (c) to read as
follows:
Sec. 120.611 Pools backing Pool Certificates.
* * * * *
(c) Increments of guaranteed portion. If the amount of the
guaranteed portion of an individual 7(a) guaranteed loan is more than
$500,000, a Pool Assembler may elect to divide the guaranteed portion
into increments of $500,000 and one increment of any remaining amount
less than $500,000, in order to permit the maximum amount of any
guaranteed portion in a Pool to be not more than $500,000. Only one
increment from a loan to a specific borrower may be included in a Pool.
Sec. 120.701 [Amended]
0
19. Amend Sec. 120.701 as follows:
0
a. Remove the word ``Demonstration'' from the definition of
``Intermediary'' in paragraph (e); and
0
b. Remove the number ``$35,000'' from the definition of ``Microloan''
in paragraph (f) and add in its place the number ``$50,000.''
Sec. 120.702 [Amended]
0
20. Amend Sec. 120.702 by removing the number ``$35,000'' in paragraph
(a)(1) and adding in its place the number ``$50,000.''.
Sec. 120.706 [Amended]
0
21. Amend Sec. 120.706 by removing the number ``$3.5 million'' in
paragraph (a) and adding in its place the number ``$5 million.''
[[Page 63547]]
Sec. 120.707 [Amended]
0
22. Amend Sec. 120.707 by removing the number ``$35,000'' each time it
appears in paragraph (b) and adding in its place the number
``$50,000.''
0
23. Amend Sec. 120.712 by revising paragraph (b)(2) to read as
follows:
Sec. 120.712 How does an Intermediary get a grant to assist Microloan
borrowers?
* * * * *
(b) * * *
(2) Grant monies may be used to attend training required by SBA.
* * * * *
Sec. 120.714 [Amended]
0
24. Amend Sec. 120.714 by removing the number ``$35,000''in paragraph
(a) and adding in its place the number ``$50,000''
0
25. Amend Sec. 120.862 as follows:
0
a. Remove the word ``or'' at the end of paragraph (b)(8);
0
b. Remove the ``.'' at the end of paragraph (b)(9) and add ``; or'' in
its place; and
0
c. Add a new paragraph (b)(10) to read as follows:
Sec. 120.862 Other economic development objectives.
* * * * *
(b) * * *
(10) Reduction of rates of unemployment in labor surplus areas, as
such areas are determined by the Secretary of Labor.
0
26. Revise Sec. 120.931 to read as follows:
Sec. 120.931 504 Lending limits.
504 loan amounts shall be limited to:
(a) An outstanding balance of $5,000,000 for each Borrower and its
affiliates if the loan proceeds will not be directed towards a Project
in paragraph (c) of this section,
(b) An outstanding balance of $5,000,000 for each Borrower and its
affiliates if one or more of the public policy goals enumerated in
Sec. 120.862(b) applies to the Project; and
(c) $5,500,000 for each Project for:
(1) Small Manufacturers (NAICS Codes 31-33) with all production
facilities located in the United States;
(2) Reduction of the Borrower's, or if the Borrower is an Eligible
Passive Company, the Operating Company's energy consumption by at least
10%; or
(3) Plant, equipment and process upgrades of renewable energy
sources such as the small-scale production of energy for individual
buildings' or communities' consumption, commonly known as micropower,
or renewable fuel producers including biodiesel and ethanol producers.
0
27. Amend Sec. 120.1701 by revising the third sentence to read as
follows:
Sec. 120.1701 Program purpose.
* * * The Program's authorization expires on September 23, 2012 and
the Administrator may guarantee not more than $3,000,000,000 of pools
under this authority pursuant to section 503(c)(B)(iii) of the Recovery
Act, as amended by section 1119 of the Small Business Jobs Act of 2010.
PART 123--DISASTER LOAN PROGRAM
0
28. The authority citation for 13 CFR part 123 is revised to read as
follows:
Authority: 15 U.S.C. 632, 634(b)(6), 636(b), 636(d), 657n; Pub.
L. 102-395, 106 Stat. 1828, 1864; and Pub. L. 103-75, 107 Stat. 739;
and Pub. L. 106-50, 113 Stat. 245.
0
29. Amend Sec. 123.300 by removing the word ``and'' at the end of
paragraph (c)(2); and adding a new paragraph (c)(4) to read as follows:
Sec. 123.300 Is my business eligible to apply for an economic injury
disaster loan?
* * * * *
(c) * * *
(4) Small aquaculture enterprises.
* * * * *
PART 125--GOVERNMENT CONTRACTING PROGRAMS
0
30. The authority citation for 13 CFR part 125 continues to read as
follows:
Authority: 15 U.S.C. 632(p), (q); 634(b)(6); 637; 644 and
657(f).
0
31. Amend Sec. 125.2 by adding new paragraph (d)(9) to read as
follows:
Sec. 125.2 Prime contracting assistance.
* * * * *
(d) * * *
(9) Identifying and justifying bundled contracts. Not later than 30
days after the date on which the head of a Federal agency submits data
certifications to the Administrator for Federal Procurement Policy, the
head of the Federal agency shall publish on the Web site of the Federal
agency a list and rationale for any bundled contract for which the
Federal agency solicited bids or that was awarded by the Federal
agency.
* * * * *
Karen G. Mills,
Administrator.
[FR Doc. 2011-26236 Filed 10-12-11; 8:45 am]
BILLING CODE 8025-01-P
