MODIFICATIONS TO DEVELOPMENT COMPANY DEBENTURE PROGRAM.

SEC. 202. MODIFICATIONS TO DEVELOPMENT COMPANY DEBENTURE PROGRAM. (a) Decreased Loan to Value Ratios.— Section 502(3) (15 U.S.C. 696(3)) is amended to read as follows: “(3) Criteria for assistance.— “(A) In general.— Any development company assisted under this section or section 503 of this title must meet the 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. “(B) Community injection funds.— “(i) Sources of funds.— Community injection funds may be derived, in whole or in part, from— “(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 title. “(ii) Funding from institutions.— Not less than 50 percent of the total cost of any project financed pursuant to clauses (i), (ii), or (iii) of subparagraph (C) shall come from the institutions described in subclauses (I), (II), and (III) of clause (i). “(C) Funding from a small business concern.— The small business concern (or its owners, stockholders, or affiliates) receiving assistance through a body authorized by this title shall provide— “(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.”. 110 STAT. 3009–735 (b) Guarantee Fee for Development Company Debentures.— Section 503(b)(7)(A) (15 U.S.C. 697(b)(7)(A)) is amended by striking “equal to 0.125 percent” and all that follows before the semicolon and inserting the following: “equal to the lesser of— “(i) 0.9375 percent per year of the outstanding balance of the loan; or “(ii) such percentage per year of the outstanding balance of the loan as the Administrator may determine to be necessary to reduce the cost (as that term is defined in section 502 of the Federal Credit Reform Act of 1990) to the Administration of purchasing and guaranteeing debentures under this Act to an amount that, taking into consideration any available appropriated funds, would permit the Administration to purchase or guarantee $2,000,000,000 of debentures in fiscal year 1997”. (c) Fees To Offset Subsidy Cost.— Section 503(d) (15 U.S.C. 697(d)) is amended to read as follows: “(d) Charges for Administration Expenses.— “(1) Level of charges.— The Administration may impose an additional charge for administrative expenses with respect to each debenture for which payment of principal and interest is guaranteed under subsection (a). “(2) Participation fee.— The Administration shall collect a one-time fee in an amount equal to 50 basis points on the total participation in any project of any institution described in subclause (I), (II), or (III) of section 502(3)(B)(i). Such fee shall be imposed only when the participation of the institution will occupy a senior credit position to that of the development company. All proceeds of the fee shall be used to offset the cost (as that term is defined in section 502 of the Credit Reform Act of 1990) to the Administration of making guarantees under subsection (a). “(3) Development company fee.— The Administration shall collect annually from each development company a fee of 0.125 percent of the outstanding principal balance of any guaranteed debenture authorized by the Administration after September 30, 1996. Such fee shall be derived from the servicing fees collected by the development company pursuant to regulation, and shall not be derived from any additional fees imposed on small business concerns. All proceeds of the fee shall be used to offset the cost (as that term is defined in section 502 of the Credit Reform Act of 1990) to the Administration of making guarantees under subsection (a).”. (d) Effective Date.— Section 503 (15 U.S.C. 697) is amended by adding at the end the following new subsection: “(f) Effective Date.— The fees authorized by subsections (b) and (c) shall apply to financings approved by the Administration on or after October 1, 1996, but shall not apply to financings approved by the Administration on or after October 1, 1997.”. (e) Calculation of Subsidy Rate.— Section 503 (15 U.S.C. 697a) is amended by adding at the end the following new subsection: “(g) Calculation of Subsidy Rate.— All fees, interest, and profits received and retained by the Administration under this section shall be included in the calculations made by the Director of the Office of Management and Budget to offset the cost (as 110 STAT. 3009–736that term is defined in section 502 of the Federal Credit Reform Act of 1990) to the Administration of purchasing and guaranteeing debentures under this Act.”.