15 U.S.C. § 697a — Private debenture sales

Page 1143 TITLE 15—COMMERCE AND TRADE § 697a ‘‘(e) EFFECTIVE DATE.—The amendments made by this section [amending this section and section 636 of this title] shall become effective on October 1, 2002.’’ EFFECTIVE DATE OF 1997 AMENDMENT Amendment by Pub. L. 105–135 effective Oct. 1, 1997, see section 3 of Pub. L. 105–135, set out as a note under section 631 of this title. EFFECTIVE DATE OF 1996 AMENDMENT Amendment by Pub. L. 104–208 effective Oct. 1, 1996, see section 3 of Pub. L. 104–208, set out as a note under section 633 of this title. EFFECTIVE DATE OF 1995 AMENDMENT Amendment by Pub. L. 104–36 inapplicable to loans made or guaranteed under Small Business Act or Small Business Investment Act of 1958 before Oct. 12, 1995, un- less such loans are refinanced, extended, restructured, or renewed on or after Oct. 12, 1995, see section 8 of Pub. L. 104–36, set out as a note under section 634 of this title. TERMINATION DATE OF 1988 AMENDMENT Pub. L. 100–590, title I, § 112(c), Nov. 3, 1988, 102 Stat. 2996, as amended by Pub. L. 101–515, title V, § 3, Nov. 5, 1990, 104 Stat. 2140; Pub. L. 103–317, title IV, Aug. 26, 1994, 108 Stat. 1755, which provided that the amendment made by paragraph (1), amending this section, was to be repealed on Oct. 1, 1997, was repealed by Pub. L. 103–403, title II, § 213(2), Oct. 22, 1994, 108 Stat. 4184. EFFECTIVE DATE Section effective Oct. 1, 1980, see section 507 of Pub. L. 96–302, set out as an Effective Date of 1980 Amend- ment note under section 631 of this title. TEMPORARY FEE ELIMINATION FOR THE 504 LOAN PROGRAM Pub. L. 116–260, div. N, title III, § 327(b), Dec. 27, 2020, 134 Stat. 2037, provided that: ‘‘(1) IN GENERAL.—During the period beginning on the date of enactment of this Act [Dec. 27, 2020] and ending on September 30, 2021, and to the extent the cost of such elimination in fees is offset by appropriations, with respect to each project or loan guaranteed by the Administrator [of the Small Business Administration] pursuant to title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.) for which an applica- tion is approved or pending approval on or after the date of enactment of this Act— ‘‘(A) the Administrator shall, in lieu of the fee oth- erwise applicable under section 503(d)(2) of the Small Business Investment Act of 1958 (15 U.S.C. 697(d)(2)), collect no fee; and ‘‘(B) a development company shall, in lieu of the processing fee under section 120.971(a)(1) of title 13, Code of Federal Regulations (relating to fees paid by borrowers), or any successor regulation, collect no fee. ‘‘(2) REIMBURSEMENT FOR WAIVED FEES.— ‘‘(A) IN GENERAL.—To the extent that the cost of such payments is offset by appropriations, the Ad- ministrator shall reimburse each development com- pany that does not collect a processing fee pursuant to paragraph (1)(B). ‘‘(B) AMOUNT.—The payment to a development com- pany under clause (i) shall be in an amount equal to 1.5 percent of the net debenture proceeds for which the development company does not collect a proc- essing fee pursuant to paragraph (1)(B).’’ § 697a. Private debenture sales (a) Notwithstanding any other law, rule, or regulation, the Administration shall sell to in- vestors, either publicly or by private placement, debentures pursuant to section 697 of this title as follows: (1) Of the program levels otherwise author- ized by law for fiscal year 1986, an amount not to exceed $200,000,000. (2) Of the program levels otherwise author- ized by law for each of fiscal years 1987 and 1988, an amount not to exceed $425,000,000. (3) All of the program levels authorized for fiscal year 1989 and subsequent fiscal years. (b) Nothing in any provision of law shall be construed to authorize the Federal Financing Bank to acquire— (1) any obligation the payment of principal or interest on which at any time has been guaranteed in whole or in part under section 697 of this title and which is being sold pursu- ant to the provisions of the program author- ized in this section; (2) any obligation which is an interest in any obligation described in paragraph (1); or (3) any obligation which is secured by, or substantially all of the value of which is at- tributable to, any obligation described in paragraph (1) or (2). (Pub. L. 85–699, title V, § 504, as added Pub. L. 99–272, title XVIII, § 18008(a), Apr. 7, 1986, 100 Stat. 366; amended Pub. L. 100–72, § 2 July 11, 1987, 101 Stat. 477; Pub. L. 100–590, title I, § 112(a), Nov. 3, 1988, 102 Stat. 2996.) Editorial Notes AMENDMENTS 1988—Pub. L. 100–590 inserted ‘‘Private debenture sales’’ as section catchline and amended text generally. Prior to amendment, text read as follows: ‘‘(a) Notwithstanding any other law, rule, or regula- tion, the Administration shall conduct a pilot program involving the sale to investors, either publicly or by private placement, of debentures guaranteed pursuant to section 697 of this title as follows— ‘‘(1) of the program levels otherwise authorized by law for fiscal year 1986, an amount not to exceed $200,000,000; ‘‘(2) of the program levels otherwise authorized by law for fiscal year 1987, an amount not to exceed $425,000,000; and ‘‘(3) of the program levels otherwise authorized by law for fiscal year 1988, an amount not to exceed $425,000,000. ‘‘(b) Nothing in any provision of law shall be con- strued to authorize the Federal Financing Bank to ac- quire— ‘‘(1) any obligation the payment of principal or in- terest on which at any time has been guaranteed in whole or in part under section 697 of this title and which is being sold pursuant to the provisions of the pilot program authorized in this section, ‘‘(2) any obligation which is an interest in any obli- gation described in paragraph (1), or ‘‘(3) any obligation which is secured by, or substan- tially all of the value of which is attributable to, any obligation described in paragraph (1) or (2).’’ 1987—Subsec. (a). Pub. L. 100–72 struck out ‘‘and’’ at end of par. (1), substituted ‘‘$425,000,000; and’’ for ‘‘$295,000,000.’’ in par. (2), and added par. (3). Statutory Notes and Related Subsidiaries REGULATIONS Small Business Administration to promulgate final rules and regulations to implement this section within 60 days of Apr. 7, 1986, see section 18008(d)(2) of Pub. L. 99–272, set out as a note under section 697b of this title. PILOT PROGRAM REPORT Pub. L. 99–272, title XVIII, § 18008(b), Apr. 7, 1986, 100 Stat. 367, required the Small Business Administration Page 1144 TITLE 15—COMMERCE AND TRADE § 697b to report to the President and Congress on the pilot program under former 15 U.S.C. 697a involving deben- ture sales to investors not later than 90 days after the date of the last debenture sale in each fiscal year, and unless a report was made by Oct. 1 of 1986 and 1987, the Administration was to make an interim report by such dates. § 697b. Pooling of debentures (a) Issuance; debentures composing trust or pool The Administration is authorized to issue trust certificates representing ownership of all or a fractional part of debentures issued by State or local development companies and guar- anteed by the Administration under this chap- ter: Provided, That such trust certificates shall be based on and backed by a trust or pool ap- proved by the Administration and composed solely of guaranteed debentures. (b) Terms and conditions of guarantee; payment of principal and interest The Administration is authorized, upon such terms and conditions as are deemed appropriate, to guarantee the timely payment of the prin- cipal of and interest on trust certificates issued by the Administration or its agent for purposes of this section. Such guarantee shall be limited to the extent of principal and interest on the guaranteed debentures which compose the trust or pool. In the event that a debenture in such trust or pool is prepaid, either voluntarily or in the event of default, the guarantee of timely payment of principal and interest on the trust certificates shall be reduced in proportion to the amount of principal and interest such prepaid debenture represents in the trust or pool. Inter- est on prepaid or defaulted debentures shall ac- crue and be guaranteed by the Administration only through the date of payment on the guar- antee. During the term of the trust certificate, it may be called for redemption due to prepay- ment or default of all debentures constituting the pool. (c) Full faith and credit of United States The full faith and credit of the United States is pledged to the payment of all amounts which may be required to be paid under any guarantee of such trust certificates issued by the Adminis- tration or its agent pursuant to this section. (d) Collection of fees The Administration shall not collect any fee for any guarantee under this section: Provided, That nothing herein shall preclude any agent of the Administration from collecting a fee ap- proved by the Administration for the functions described in subsection (f)(2) of this section. (e) Subrogation rights; ownership rights in de- bentures (1) In the event the Administration pays a claim under a guarantee issued under this sec- tion, it shall be subrogated fully to the rights satisfied by such payment. (2) No State or local law, and no Federal law, shall preclude or limit the exercise by the Ad- ministration of its ownership rights in the de- bentures constituting the trust or pool against which the trust certificates are issued. (f) Central registration requirements; regulation of brokers and dealers; electronic registra- tion (1) The Administration shall— (A) provide for a central registration of all trust certificates sold pursuant to this section; (B) contract with an agent to carry out on behalf of the Administration the central reg- istration functions of this section and the issuance of trust certificates to facilitate poolings; such agent shall provide a fidelity bond or insurance in such amounts as the Ad- ministration determines to be necessary to fully protect the interests of the Government; (C) prior to any sale, require the seller to disclose to a purchaser of a trust certificate issued pursuant to this section, information on the terms, conditions, and yield of such in- strument; and (D) have the authority to regulate brokers and dealers in trust certificates sold pursuant to this section. (2) Nothing in this subsection shall prohibit the utilization of a book-entry or other elec- tronic form of registration for trust certificates. (Pub. L. 85–699, title V, § 505, as added Pub. L. 99–272, title XVIII, § 18008(c), Apr. 7, 1986, 100 Stat. 367; amended Pub. L. 100–590, title I, § 111(d)(1), (2), Nov. 3, 1988, 102 Stat. 2995; Pub. L. 104–208, div. D, title II, § 205(c), Sept. 30, 1996, 110 Stat. 3009–738.) Editorial Notes REFERENCES IN TEXT For definition of ‘‘this chapter’’, referred to in sub- sec. (a), see References in Text note set out under sec- tion 661 of this title. AMENDMENTS 1996—Subsec. (f). Pub. L. 104–208 designated existing provisions as par. (1), redesignated former pars. (1) to (4) as subpars. (A) to (D), respectively, of par. (1), in subpar. (A) substituted ‘‘provide for a central registra- tion of all trust certificates sold pursuant to this sec- tion;’’ for ‘‘provide for a central registration of all trust certificates sold pursuant to this section; such central registration shall include with respect to each sale, identification of each development company; the interest rate paid by the development company; com- missions, fees, or discounts paid to brokers and dealers in trust certificates; identification of each purchaser of the trust certificate; the price paid by the purchaser for the trust certificate; the interest rate paid on the trust certificate; the fees of any agent for carrying out the functions described in paragraph (2); and such other in- formation as the Administration deems appropriate;’’, and added par. (2). 1988—Pub. L. 100–590, § 111(d)(2), inserted ‘‘Pooling of debentures’’ as section catchline. Subsec. (a). Pub. L. 100–590, § 111(d)(1), substituted ‘‘all or a’’ for ‘‘all of a’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1996 AMENDMENT Amendment by Pub. L. 104–208 effective Oct. 1, 1996, see section 3 of Pub. L. 104–208, set out as a note under section 633 of this title. RULES AND REGULATIONS FOR IMPLEMENTATION OF CENTRAL REGISTRATION, PILOT PROGRAM AND TRUST CERTIFICATE PROVISIONS; CONSULTATION Pub. L. 99–272, title XVIII, § 18008(d), Apr. 7, 1986, 100 Stat. 368, provided that: