15 U.S.C. § 697b — Pooling of debentures

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: Page 1145 TITLE 15—COMMERCE AND TRADE § 697d ‘‘(1) Notwithstanding any law, rule, or regulation, within 60 days after the date of enactment of this Act [Apr. 7, 1986], the Small Business Administration shall develop and promulgate final rules and regulations to implement the central registration provisions provided for in section 505(f)(1) of the Small Business Investment Act [15 U.S.C. 697b(f)(1)], and shall contract with an agent for an initial period of not to exceed two years to carry out the functions provided for in section 505(f)(2) of such Act. ‘‘(2) Notwithstanding any law, rule or regulation, within 60 days after the date of enactment of this Act [Apr. 7, 1986], the Small Business Administration also shall consult with representatives of appropriate Fed- eral and State agencies and officials, the securities in- dustry, financial institutions and lenders, and small business persons, and shall develop and promulgate final rules and regulations to implement sections 504 and 505 of the Small Business Investment Act [15 U.S.C. 697a, 697b].’’ § 697c. Restrictions on development company as- sistance NOTWITHSTANDING ANY OTHER PROVISION OF LAW: (1) on or after May 1, 1991, no development company may accept funding from any source, including but not limited to any department or agency of the United States Government, if such funding includes any conditions, priorities or re- strictions upon the types of small businesses to which they may provide financial assistance under this subchapter or if it includes any con- ditions or imposes any requirements, directly or indirectly, upon any recipient of assistance under this subchapter; and (2) before such date, no department or agency of the United States Government which provides funding to any de- velopment company shall impose any condition, priority or restriction upon the type of small business which receives financing under this subchapter nor shall it include any condition or impose any requirement, directly or indirectly, upon any recipient of assistance under this sub- chapter: Provided, That the foregoing shall not affect any such conditions, priorities or restric- tions if the department or agency also provides all of the financial assistance to be delivered by the development company to the small business and such conditions, priorities or restrictions are limited solely to the financial assistance so provided. (Pub. L. 85–699, title V, § 506, as added Pub. L. 100–590, title I, § 117(b), Nov. 3, 1988, 102 Stat. 2998.) § 697d. Accredited Lenders Program (a) Establishment The Administration is authorized to establish an Accredited Lenders Program for qualified State and local development companies that meet the requirements of subsection (b). (b) Requirements The Administration may designate a qualified State or local development company as an ac- credited lender if such company— (1) has been an active participant in the De- velopment Company Program authorized by sections 696, 697, and 697a of this title for not less than the preceding 12 months; (2) has well-trained, qualified personnel who are knowledgeable in the Administration’s lending policies and procedures for such Devel- opment Company Program; (3) has the ability to process, close, and serv- ice financing for plant and equipment under such Development Company Program; (4) has a loss rate on the company’s deben- tures that is reasonable and acceptable to the Administration; (5) has a history of submitting to the Admin- istration complete and accurate debenture guaranty application packages; and (6) has demonstrated the ability to serve small business credit needs for financing plant and equipment through the Development Com- pany Program. (c) Expedited processing of loan applications The Administration shall develop an expedited procedure for processing a loan application or servicing action submitted by a qualified State or local development company that has been designated as an accredited lender in accordance with subsection (b). (d) Suspension or revocation of designation (1) In general The designation of a qualified State or local development company as an accredited lender may be suspended or revoked if the Adminis- tration determines that— (A) the development company has not con- tinued to meet the criteria for eligibility under subsection (b); or (B) the development company has failed to adhere to the Administration’s rules and regulations or is violating any other applica- ble provision of law. (2) Effect A suspension or revocation under paragraph (1) shall not affect any outstanding debenture guarantee. (e) Definition In this section, the term ‘‘qualified State or local development company’’ has the meaning given the term in section 697(e) of this title. (Pub. L. 85–699, title V, § 507, as added Pub. L. 103–403, title II, § 212(a), Oct. 22, 1994, 108 Stat. 4183; amended Pub. L. 116–260, div. N, title III, § 328(b), Dec. 27, 2020, 134 Stat. 2040.) Editorial Notes AMENDMENTS 2020—Subsecs. (e), (f). Pub. L. 116–260, § 328(b)(2), added subsec. (e) and struck out former subsec. (e) which re- lated to express loan authority of a local development company designated as an accredited lender, and sub- sec. (f) which defined terms ‘‘accredited lender certified company’’, ‘‘covered loan’’, and ‘‘qualified State or local development company’’ in this section. Pub. L. 116–260, § 328(b)(1), added subsecs. (e) and (f) and struck out former subsec. (e) which defined ‘‘quali- fied State or local development company’’ for purposes of this section. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2020 AMENDMENT Pub. L. 116–260, div. N, title III, § 328(b)(2), Dec. 27, 2020, 134 Stat. 2040, provided in part that the amend- ment made by section 328(b)(2) is effective on Sept. 30, 2023.