2012 US Code
Title 15 - Commerce and Trade
Chapter 14B - SMALL BUSINESS INVESTMENT PROGRAM (§§ 661 - 697g)
Subchapter V - LOANS TO STATE AND LOCAL DEVELOPMENT COMPANIES (§§ 695 - 697g)
Section 696 - Loans for plant acquisition, construction, conversion and expansion
Publication Title | United States Code, 2012 Edition, Title 15 - COMMERCE AND TRADE |
Category | Bills and Statutes |
Collection | United States Code |
SuDoc Class Number | Y 1.2/5: |
Contained Within | Title 15 - COMMERCE AND TRADE CHAPTER 14B - SMALL BUSINESS INVESTMENT PROGRAM SUBCHAPTER V - LOANS TO STATE AND LOCAL DEVELOPMENT COMPANIES Sec. 696 - Loans for plant acquisition, construction, conversion and expansion |
Contains | section 696 |
Date | 2012 |
Laws in Effect as of Date | January 15, 2013 |
Positive Law | No |
Disposition | standard |
Source Credit | Pub. L. 85-699, title V, §502, Aug. 21, 1958, 72 Stat. 697; Pub. L. 87-27, §26, May 1, 1961, 75 Stat. 63; Pub. L. 87-341, §10, Oct. 3, 1961, 75 Stat. 756; Pub. L. 94-305, title I, §§108(a), 110, June 4, 1976, 90 Stat. 666, 667; Pub. L. 95-507, title I, §112, Oct. 24, 1978, 92 Stat. 1760; Pub. L. 97-35, title XIX, §1909, Aug. 13, 1981, 95 Stat. 778; Pub. L. 100-418, title VIII, §8007(b), Aug. 23, 1988, 102 Stat. 1561; Pub. L. 100-590, title I, §116(a), (b)(1), Nov. 3, 1988, 102 Stat. 2997, 2998; Pub. L. 101-574, title II, §214(c), Nov. 15, 1990, 104 Stat. 2822; Pub. L. 104-208, div. D, title II, §202(a), Sept. 30, 1996, 110 Stat. 3009-734; Pub. L. 105-135, title II, §221, Dec. 2, 1997, 111 Stat. 2603; Pub. L. 106-554, §1(a)(9) [title II, §208(b), title III, §303, title VIII, <!-- PDFPage:989 -->§802(b)], Dec. 21, 2000, 114 Stat. 2763, 2763A-683, 2763A-684, 2763A-702; Pub. L. 108-447, div. K, title I, §104, Dec. 8, 2004, 118 Stat. 3444; Pub. L. 110-140, title XII, §1204(b), Dec. 19, 2007, 121 Stat. 1772; Pub. L. 111-5, div. A, title V, §504(a), Feb. 17, 2009, 123 Stat. 155; Pub. L. 111-240, title I, §§1112, 1122, Sept. 27, 2010, 124 Stat. 2508, 2510. |
Statutes at Large References | 72 Stat. 697 75 Stat. 63, 756 90 Stat. 666 92 Stat. 1760 95 Stat. 778 102 Stat. 1561, 2997 104 Stat. 2822 110 Stat. 3009-734 111 Stat. 2603 114 Stat. 2763 118 Stat. 3444 121 Stat. 1772 123 Stat. 155 124 Stat. 2508, 2512 |
Public Law References | Public Law 85-699, Public Law 87-27, Public Law 87-341, Public Law 94-305, Public Law 95-507, Public Law 97-35, Public Law 100-418, Public Law 100-590, Public Law 101-574, Public Law 104-208, Public Law 105-135, Public Law 106-554, Public Law 108-447, Public Law 110-140, Public Law 111-5, Public Law 111-240 |
Download PDF
The Administration may, in addition to its authority under section 695 of this title, make loans for plant acquisition, construction, conversion or expansion, including the acquisition of land, to State and local development companies, and such loans may be made or effected either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred basis: Provided, however, That the foregoing powers shall be subject to the following restrictions and limitations:
(1)
(2)
(A)
(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 695(d)(3) of this title;
(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.
(B)
(i) the primary business of which is classified in sector 31, 32, or 33 of the North American Industrial Classification System; and
(ii) all of the production facilities of which are located in the United States.
(3)
(A)
(B)
(i)
(I) State or local governments;
(II) banks or other financial institutions;
(III) foundations or other not-for-profit institutions; or
(IV) the small business concern (or its owners, stockholders, or affiliates) receiving assistance through a body authorized by this subchapter.
(ii)
(C)
(i) at least 15 percent of the total cost of the project financed, if the small business concern has been in operation for a period of 2 years or less;
(ii) at least 15 percent of the total cost of the project financed if the project involves the construction of a limited or single purpose building or structure;
(iii) at least 20 percent of the total cost of the project financed if the project involves both of the conditions set forth in clauses (i) and (ii); or
(iv) at least 10 percent of the total cost of the project financed, in all other circumstances, at the discretion of the development company.
(D)
(E)
(i)
(ii)
(I) shall be required by the Administration before disbursement of the loan if the estimated value of that property is more than $250,000; or
(II) may be required by the Administration or the lender before disbursement of the loan if the estimated value of that property is $250,000 or less, and such appraisal is necessary for appropriate evaluation of creditworthiness.
(4) If the project is to construct a new facility, up to 33 per centum of the total project may be leased, if reasonable projections of growth demonstrate that the assisted small business concern will need additional space within three years and will fully utilize such additional space within ten years.
(5)
(6)
(7)
(A)
(B)
(i) the proceeds of the indebtedness were used to acquire land, including a building situated thereon, to construct a building thereon, or to purchase equipment;
(ii) the existing indebtedness is collateralized by fixed assets;
(iii) the existing indebtedness was incurred for the benefit of the small business concern;
(iv) the financing under this subchapter will be used only for refinancing existing indebtedness or costs relating to the project financed under this subchapter;
(v) the financing under this subchapter will provide a substantial benefit to the borrower when prepayment penalties, financing fees, and other financing costs are accounted for;
(vi) the borrower has been current on all payments due on the existing debt for not less than 1 year preceding the date of refinancing; and
(vii) the financing under section 697a of this title will provide better terms or rate of interest than the existing indebtedness at the time of refinancing.
(Pub. L. 85–699, title V, §502, Aug. 21, 1958, 72 Stat. 697; Pub. L. 87–27, §26, May 1, 1961, 75 Stat. 63; Pub. L. 87–341, §10, Oct. 3, 1961, 75 Stat. 756; Pub. L. 94–305, title I, §§108(a), 110, June 4, 1976, 90 Stat. 666, 667; Pub. L. 95–507, title I, §112, Oct. 24, 1978, 92 Stat. 1760; Pub. L. 97–35, title XIX, §1909, Aug. 13, 1981, 95 Stat. 778; Pub. L. 100–418, title VIII, §8007(b), Aug. 23, 1988, 102 Stat. 1561; Pub. L. 100–590, title I, §116(a), (b)(1), Nov. 3, 1988, 102 Stat. 2997, 2998; Pub. L. 101–574, title II, §214(c), Nov. 15, 1990, 104 Stat. 2822; Pub. L. 104–208, div. D, title II, §202(a), Sept. 30, 1996, 110 Stat. 3009–734; Pub. L. 105–135, title II, §221, Dec. 2, 1997, 111 Stat. 2603; Pub. L. 106–554, §1(a)(9) [title II, §208(b), title III, §303, title VIII, §802(b)], Dec. 21, 2000, 114 Stat. 2763, 2763A–683, 2763A–684, 2763A–702; Pub. L. 108–447, div. K, title I, §104, Dec. 8, 2004, 118 Stat. 3444; Pub. L. 110–140, title XII, §1204(b), Dec. 19, 2007, 121 Stat. 1772; Pub. L. 111–5, div. A, title V, §504(a), Feb. 17, 2009, 123 Stat. 155; Pub. L. 111–240, title I, §§1112, 1122, Sept. 27, 2010, 124 Stat. 2508, 2510.)
Amendments2010—Par. (2)(A)(i). Pub. L. 111–240, §1122(c), substituted “clause (ii), (iii), (iv), or (v)” for “subparagraph (B) or (C)”.
Pub. L. 111–240, §1112(1), substituted “$5,000,000” for “$1,500,000”.
Par. (2)(A)(ii). Pub. L. 111–240, §1112(2), substituted “$5,000,000” for “$2,000,000”.
Par. (2)(A)(iii) to (v). Pub. L. 111–240, §1112(3)–(5), substituted “$5,500,000” for “$4,000,000”.
Par. (7)(C). Pub. L. 111–240, §1122(b), struck out subpar. (C) relating to refinancing not involving expansions.
Pub. L. 111–240, §1122(a), added subpar. (C).
2009—Par. (7). Pub. L. 111–5 added par. (7).
2007—Par. (2)(A)(iv), (v). Pub. L. 110–140 added cls. (iv) and (v).
2004—Par. (2). Pub. L. 108–447 amended par. (2) generally. Prior to amendment, par. (2) read as follows: “Loans made by the Administration under this section shall be limited to $1,000,000 for each such identifiable small business concern, except loans meeting the criteria specified in section 695(d)(3) of this title, which shall be limited to $1,300,000 for each such identifiable small business concern.”
2000—Par. (2). Pub. L. 106–554, §1(a)(9) [title III, §303], amended par. (2) generally. Prior to amendment, par. (2) read as follows: “Loans made by the Administration under this section shall be limited to $750,000 for each such identifiable small-business concern, except loans meeting the criteria specified in section 695(d)(3) of this title shall be limited to $1,000,000 for each such identifiable small business concern.”
Par. (3)(E). Pub. L. 106–554, §1(a)(9) [title II, §208(b)], designated existing provisions as cl. (i), inserted heading, and added cl. (ii).
Par. (6). Pub. L. 106–554, §1(a)(9) [title VIII, §802(b)], added par. (6).
1997—Par. (1). Pub. L. 105–135, §221(1), added par. (1) and struck out former par. (1) which read as follows: “The proceeds of any such loan shall be used solely by such borrower to assist in identifiable small-business concern and for a sound business purpose approved by the Administration.”
Par. (3)(D), (E). Pub. L. 105–135, §221(2), added subpars. (D) and (E).
Par. (5). Pub. L. 105–135, §221(3), added par. (5).
1996—Par. (3). Pub. L. 104–208 inserted heading and amended text of par. (3) generally. Prior to amendment, text read as follows: “Any development company assisted under this section must meet criteria established by the Administration, including the extent of participation to be required or amount of paid-in capital to be used in each instance as is determined to be reasonable by the Administration. Community injection funds may be derived, in whole or in part, from—
“(A) State or local governments;
“(B) banks or other financial institutions;
“(C) foundations or other not-for-profit institutions; or
“(D) a small business concern (or its owners, stockholders, or affiliates) receiving assistance through bodies authorized under this subchapter.”
1990—Par. (2). Pub. L. 101–574 struck out period at end and inserted “, except loans meeting the criteria specified in section 695(d)(3) of this title shall be limited to $1,000,000 for each such identifiable small business concern.”
1988—Pub. L. 100–590, §116(b)(1), inserted “Loans for plant acquisition, construction, conversion, and expansion” as section catchline.
Par. (2). Pub. L. 100–418 substituted “$750,000” for “$500,000”.
Par. (4). Pub. L. 100–590, §116(a), added par. (4).
1981—Pars. (1) to (4). Pub. L. 97–35 redesignated pars. (2) to (4) as (1) to (3), respectively. Former par. (1), which provided that all loans made shall be so secured as reasonably to assure repayment and that in agreements to participate in loans on a deferred basis, such participation by the Administration shall not be in excess of 90 per centum of the balance of the loan outstanding at the time of disbursement, was struck out.
Par. (5). Pub. L. 97–35 struck out par. (5) which provided that loans, including extensions and renewals, may be made for a period not exceeding twenty-five years and that an extension may be granted up to ten years, if such extension will aid in the orderly liquidation of the loan, and that the Administration may fix the rate of interest.
1978—Par. (4). Pub. L. 95–507 inserted provisions relating to derivation of community injection funds.
1976—Pub. L. 94–305, §108(a), inserted “acquisition,” after “plant” in introductory text.
Par. (3). Pub. L. 94–305, §110, substituted “$500,000” for “$350,000”.
1961—Par. (3). Pub. L. 87–341, §10(1), substituted “$350,000” for “$250,000”.
Par. (5). Pub. L. 87–341, §10(2), substituted “twenty-five” for “ten” before “years plus such additional period”.
Par. (6). Pub. L. 87–27 struck out par. (6) which provided for termination of authority of the Administration to make loans to local development companies after June 30, 1961.
Effective Date of 2010 AmendmentPub. L. 111–240, title I, §1122(b), Sept. 27, 2010, 124 Stat. 2512, provided that the amendment made by section 1122(b) is effective 2 years after Sept. 27, 2010.
Effective Date of 2007 AmendmentAmendment by Pub. L. 110–140 effective on the date that is 1 day after Dec. 19, 2007, see section 1601 of Pub. L. 110–140, set out as an Effective Date note under section 1824 of Title 2, The Congress.
Effective Date of 1997 AmendmentAmendment 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 AmendmentAmendment 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 1981 AmendmentAmendment by Pub. L. 97–35 effective Oct. 1, 1981, see section 1918 of Pub. L. 97–35, set out as a note under section 631 of this title.
1 So in original. Probably should be “clause”.
Disclaimer: These codes may not be the most recent version. The United States Government Printing Office may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the US site. Please check official sources.