81 FR 2129 - Economic Development Investments for Certified Development Companies

SMALL BUSINESS ADMINISTRATION

Federal Register Volume 81, Issue 10 (January 15, 2016)

Page Range		2129-2131
FR Document		2016-00731

The U.S. Small Business Administration (SBA) is soliciting comments on whether Certified Development Companies (CDCs) should be required to invest specific amounts in local economic development activities (other than lending through the CDC program) and to reserve specific amounts for their future operations. SBA is also soliciting input into what types of activities may qualify as economic development activities.

Federal Register, Volume 81 Issue 10 (Friday, January 15, 2016)

[Federal Register Volume 81, Number 10 (Friday, January 15, 2016)]
[Proposed Rules]
[Pages 2129-2131]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2016-00731]


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SMALL BUSINESS ADMINISTRATION

13 CFR Part 120

RIN 3245-AG76


Economic Development Investments for Certified Development 
Companies

AGENCY: U.S. Small Business Administration.

ACTION: Advance notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The U.S. Small Business Administration (SBA) is soliciting

[[Page 2130]]

comments on whether Certified Development Companies (CDCs) should be 
required to invest specific amounts in local economic development 
activities (other than lending through the CDC program) and to reserve 
specific amounts for their future operations. SBA is also soliciting 
input into what types of activities may qualify as economic development 
activities.

DATES: Comments must be submitted on or before March 15, 2016.

ADDRESSES: You may submit comments, identified by RIN 3245-AG76, by any 
of the following methods: (1) Federal Rulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments; 
or (2) Mail/Hand Delivery/Courier: U.S. Small Business Administration, 
Attn: Linda Reilly, Acting Director, Office of Financial Assistance, 
409 Third Street SW., 8th Floor, Washington, DC 20416. All comments 
will be posted on www.regulations.gov. If you wish to submit 
confidential business information (CBI) as defined in the User Notice 
at www.regulations.gov, you must submit such information to the U.S. 
Small Business Administration, Attn: Linda Reilly, Acting Director, 
Office of Financial Assistance, 409 Third Street SW., 8th Floor, 
Washington, DC 20416, or send an email to [email protected]. 
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.

FOR FURTHER INFORMATION CONTACT: Linda Reilly, Acting Director, Office 
of Financial Assistance, U.S. Small Business Administration, 409 3rd 
Street SW., 8th Floor, Washington, DC 20416, telephone number (202) 
205-9949 or [email protected].

SUPPLEMENTARY INFORMATION:

I. Background

    The Certified Development Company (CDC) program, also referred to 
as the 504 Loan Program, is authorized pursuant to Title V of the Small 
Business Investment Act of 1958, 15 U.S.C. 695 et seq. The 504 Loan 
Program is an SBA financing program established to target companies in 
their growth cycle to create jobs, expand the tax base, and improve 
American communities. Specifically, the core mission of the 504 Loan 
Program is to provide long-term fixed asset financing (504 Loans) to 
small businesses for the purchase or improvement of land, buildings, 
and major equipment purchases, in an effort to facilitate the creation 
of jobs and local economic development.
    Under the 504 Loan Program, loans are made to small business 
applicants by CDCs, which are SBA's community-based partners for 
providing 504 Loans. With the exception of several for-profit CDCs 
grandfathered into the 504 Loan Program, a CDC is a nonprofit 
corporation that promotes economic development within its community 
through 504 Loans. CDCs are certified and regulated by the SBA, and 
work with SBA and participating lenders (typically banks) to provide 
financing to small businesses with the goal of facilitating the 
creation and retention of jobs and local economic development. There 
are over 260 CDCs nationwide each with a defined Area of Operations 
covering a specific geographic area. The Area of Operations for most 
CDCs is the state in which they are incorporated.
    Under 13 CFR 120.825, CDCs are required to be able to sustain their 
operations continuously with reliable sources of funds, such as income 
from services rendered and contributions from government or other 
sponsors. This regulation also provides that any funds generated from 
loan activity in the 504 Loan Program that remain after payment of 
staff and overhead expenses (such funds referred to herein as 
``remaining funds'') must be retained by the CDC as a reserve for 
future operations or for investment in other local economic development 
activity in the CDC's Area of Operations. In addition, on March 21, 
2014, SBA issued a Final Rule (79 FR 15641) that requires each CDC's 
Board of Directors to ensure that the CDC establishes and maintains 
adequate reserves for operations (13 CFR 120.823(d)(9)) and invests in 
economic development in each State in its Area of Operations where the 
CDC has outstanding 504 Loans (13 CFR 120.823(d)(10)). Accordingly, in 
reading 13 CFR 120.823(d)(9) and (10) and 120.825 together, each CDC's 
Board of Directors must ensure that any remaining funds are either 
retained as a reserve or invested in the CDC's community, but the 
current rules do not require the CDC to retain or invest any specific 
amounts or percentages.
    CDCs have requested that SBA provide guidance on the acceptable 
types and amounts of investments that should apply to the remaining 
funds. To address the issue raised by the CDCs, SBA is considering 
whether to issue a future Proposed Rulemaking that would require CDCs 
to set aside a certain amount of their revenues for investing in other 
local economic development activities. SBA is also considering whether 
the rulemaking should address minimum and/or maximum requirements with 
respect to the size of the reserve that a CDC retains for its future 
operations. As stated above, 13 CFR 120.825 requires a CDC ``to be able 
to sustain its operations continuously, with reliable sources of 
funds,'' and a minimum reserve requirement would assist CDCs in 
complying with this provision. Excessive reserves, however, could limit 
the amount a CDC would have available for investing in local economic 
development activities. To develop a proposed rule to address these 
issues, SBA needs additional information and invites interested parties 
to provide it by responding to the questions set forth below.
    Finally, SBA is considering providing guidance, through an agency 
directive (e.g., Standard Operating Procedure, Procedural or Policy 
Notice), on what constitutes acceptable types of investment in other 
local economic development activities under 13 CFR 120.825, and is 
soliciting comments on how to define investments in economic 
development activity.

II. Comments Requested

    To assist SBA in addressing the above issues, SBA requests comments 
from interested parties on the following questions:
    1. What percentage of the CDC's 504 Loan Program revenues do 
remaining funds typically represent at the end of the CDC's fiscal 
year?
    2. Should SBA require CDCs to use a certain amount or percentage of 
their remaining funds to invest in other local economic development 
activity in the CDC's Area of Operations? Please provide reasons for 
your response.
    3. If the answer to question 2 is yes, how should the amount 
required to be invested in other local economic development activity in 
the CDC's Area of Operations be calculated? Some possibilities could 
include a percentage of the original loan amount of the CDC's 504 
portfolio, a percentage of the current outstanding loan amount of the 
CDC's 504 portfolio, a percentage of the annual fees received by the 
CDC as a result of its 504 lending, or a percentage of the CDC's 
remaining funds. Should the percentage vary depending upon the dollar 
value of the CDC's portfolio or other factors? If so, describe how the 
percentage should vary and upon what factors.
    4. Should SBA require CDCs to retain a minimum amount as a reserve 
for future operations if there are any remaining funds? If not, why 
not?
    5. If the answer to question 4 is yes, how should the amount of a 
CDC's

[[Page 2131]]

required reserve be calculated? Some possibilities could include a 
percentage of the original loan amount of the CDC's 504 portfolio, a 
percentage of the current outstanding loan amount of the CDC's 504 
portfolio, a percentage of the annual fees received by the CDC as a 
result of its 504 lending, or a percentage of the CDC's remaining 
funds. Another approach would be to calculate the required reserve as a 
dollar amount equal to at least six months, but no more than 12 months, 
of staff and overhead expenses of the CDC.
    6. Should SBA limit the amount that CDCs may retain as a reserve 
for future operations? If not, why not? If yes, what would be a 
reasonable maximum amount to allow as a reserve?
    7. Should a CDC be able to decide that the reserve option would be 
a more prudent use of its remaining funds than economic development 
investments to ensure that it has the ability to ``sustain its 
operations continuously''? Why or why not?
    8. Should SBA require CDCs to first apply any remaining funds to 
the reserve for future operations before using any remaining funds for 
investments? Please provide reasons for your response.
    9. What requirements, if any, should apply to a CDC's remaining 
funds if it voluntarily decertifies or is removed from the 504 Loan 
Program? Should the CDC be required to invest these funds in local 
economic development activities prior to decertification or removal?
    10. What types of economic development activities should be 
included in the definition of ``acceptable investments in economic 
development''? Are there any activities that should not be included in 
the definition? Examples of such acceptable investments in economic 
development could include loans, grants or other forms of direct 
financial support that are issued by the CDC for: (1) Other federal, 
state or local lending programs, such as microlending or revolving loan 
funds; (2) Small Business Development Centers; (3) business incubators; 
(4) industrial development; and (5) other non-profit economic 
development entities. Should the definition include business or 
technical procurement assistance provided by the CDC or paid for by the 
CDC?
    Interested parties are invited to provide any other comments that 
they may have relating to the issues described in this Advance Notice 
of Proposed Rulemaking. We ask that you provide a brief justification 
for any suggested changes.

     Dated: January 7, 2016.
Maria Contreras-Sweet,
Administrator.
[FR Doc. 2016-00731 Filed 1-14-16; 8:45 am]
 BILLING CODE 8025-01-P

Federal Register / Vol. 81, No. 10 / Friday, January 15, 2016 / Proposed Rules 2129

TABLE 5 TO § 431.97—MINIMUM COOLING EFFICIENCY STANDARDS FOR DOUBLE-DUCT AIR-CONDITIONING AND HEATING
EQUIPMENT
Compliance
Efficiency date: equipment
Equipment type Cooling capacity Sub-category Heating type level manufactured
starting on. . .

Small Double-Duct Commercial ≥65,000 Btu/h and AC Electric Resistance Heat- EER = 11.2 .. January 1, 2010.
Packaged Air Conditioning and <135,000 Btu/h. ing or No Heating.
Heating Equipment (Air-Cooled).
All Other Types of Heating EER = 11.0 .. January 1, 2010.
HP Electric Resistance Heat- EER = 11.0 .. January 1, 2010.
ing or No Heating.
All Other Types of Heating EER = 10.8 .. January 1, 2010.
Large Commercial Double-Duct ≥135,000 Btu/h and AC Electric Resistance Heat- EER = 11.0 .. January 1, 2010.
Packaged Air Conditioning and <240,000 Btu/h. ing or No Heating.
Heating Equipment (Air-Cooled).
All Other Types of Heating EER = 10.8 .. January 1, 2010.
HP Electric Resistance Heat- EER = 10.6 .. January 1, 2010.
ing or No Heating.
All Other Types of Heating EER = 10.4 .. January 1, 2010.
Very Large Double-Duct Commer- ≥240,000 Btu/h and AC Electric Resistance Heat- EER = 10.0 .. January 1, 2010.
cial Packaged Air Conditioning <300,000 Btu/h. ing or No Heating.
and Heating Equipment (Air-
Cooled).
All Other Types of Heating EER = 9.8 .... January 1, 2010.
HP Electric Resistance Heat- EER = 9.5 .... January 1, 2010.
ing or No Heating.
All Other Types of Heating EER = 9.3 .... January 1, 2010.

TABLE 6 TO § 431.97—MINIMUM HEATING EFFICIENCY STANDARDS FOR DOUBLE-DUCT AIR-COOLED AIR CONDITIONING
AND HEATING EQUIPMENT
[Heat pumps]

Compliance date:
Efficiency
Equipment type Cooling capacity Heating type Equipment manufactured
level 1 starting on . . .

Small Commercial Packaged Air Conditioning ≥65,000 Btu/h and Electric Resistance COP = 3.3 .... January 1, 2010.
and Heating Equipment (Air-Cooled). <135,000 Btu/h Heating or No Heat-
ing.
All Other Types of COP = 3.3 .... January 1, 2010.
Heating.
Large Commercial Packaged Air-Conditioning ≥135,000 Btu/h and Electric Resistance COP = 3.2 .... January 1, 2010.
and Heating Equipment (Air-Cooled). <240,000 Btu/h Heating or No Heat-
ing.
All Other Types of COP = 3.2 .... January 1, 2010.
Heating
Very Large Commercial Packaged Air Condi- ≥240,000 Btu/h and Electric Resistance COP = 3.2 January 1, 2010.
tioning and Heating Equipment (Air-Cooled). <300,000 Btu/h Heating or No Heat-
ing.
All Other Types of COP = 3.2 January 1, 2010.
Heating.
1 For units tested using the relevant AHRI Standards, all COP values must be rated at 47 °F outdoor dry-bulb temperature for air-cooled
equipment.

(c) Each packaged terminal air starting on October 7, 2010, must meet SMALL BUSINESS ADMINISTRATION
conditioner (PTAC) and packaged the applicable minimum energy
terminal heat pump (PTHP) efficiency standard level(s) set forth in 13 CFR Part 120
manufactured starting on January 1, Table 6 of this section. RIN 3245–AG76
1994, but before October 8, 2012 (for * * * * *
standard size PTACs and PTHPs) and [FR Doc. 2015–33069 Filed 1–14–16; 8:45 am] Economic Development Investments
before October 7, 2010 (for non-standard for Certified Development Companies
tkelley on DSK3SPTVN1PROD with PROPOSALS

BILLING CODE 6450–01–P
size PTACs and PTHPs) must meet the AGENCY: U.S. Small Business
applicable minimum energy efficiency Administration.
standard level(s) set forth in Table 7 of
ACTION: Advance notice of proposed
this section. Each standard size PTAC rulemaking.
and PTHP manufactured starting on
October 8, 2012, and each non-standard SUMMARY: The U.S. Small Business
size PTAC and PTHP manufactured Administration (SBA) is soliciting

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Federal Register / Vol. 81, No. 10 / Friday, January 15, 2016 / Proposed Rules 2131

required reserve be calculated? Some Dated: January 7, 2016. Washington, DC 20590, between 9 a.m.
possibilities could include a percentage Maria Contreras-Sweet, and 5 p.m., Monday through Friday,
of the original loan amount of the CDC’s Administrator. except Federal holidays.
504 portfolio, a percentage of the [FR Doc. 2016–00731 Filed 1–14–16; 8:45 am] For service information identified in
current outstanding loan amount of the BILLING CODE 8025–01–P this proposed rule, contact B/E
CDC’s 504 portfolio, a percentage of the Aerospace, Inc., Commercial Aircraft
annual fees received by the CDC as a Products Group, 10800 Pflumm Road,
result of its 504 lending, or a percentage DEPARTMENT OF TRANSPORTATION Lenexa, Kansas 66215; telephone: (913)
of the CDC’s remaining funds. Another 338–9800; fax: (913) 338–8419; Internet:
approach would be to calculate the Federal Aviation Administration www.beaerospace.com. You may review
required reserve as a dollar amount this referenced service information at
equal to at least six months, but no more 14 CFR Part 39 the FAA, Small Airplane Directorate,
than 12 months, of staff and overhead 901 Locust, Kansas City, Missouri
expenses of the CDC. [Docket No. FAA–2015–2134; Directorate
Identifier 2015–CE–012–AD] 64106. For information on the
6. Should SBA limit the amount that availability of this material at the FAA,
CDCs may retain as a reserve for future RIN 2120–AA64 call (816) 329–4148.
operations? If not, why not? If yes, what
would be a reasonable maximum Airworthiness Directives; B/E Examining the AD Docket
amount to allow as a reserve? Aerospace Protective Breathing
Equipment Part Number 119003–11 You may examine the AD docket on
7. Should a CDC be able to decide that the Internet at http://
the reserve option would be a more AGENCY: Federal Aviation www.regulations.gov by searching for
prudent use of its remaining funds than Administration (FAA), DOT. and locating Docket No. FAA–2015–
economic development investments to ACTION: Supplemental notice of 2134; or in person at the Docket
ensure that it has the ability to ‘‘sustain proposed rulemaking (NPRM); Management Facility between 9 a.m.
its operations continuously’’? Why or reopening of comment period. and 5 p.m., Monday through Friday,
why not? except Federal holidays. The AD docket
SUMMARY: We are revising an earlier
8. Should SBA require CDCs to first contains this proposed AD, the
proposed airworthiness directive (AD)
apply any remaining funds to the regulatory evaluation, any comments
for certain B/E Aerospace protective
reserve for future operations before received, and other information. The
breathing equipment (PBE) that is
using any remaining funds for street address for the Docket Office
installed on airplanes. The NPRM
investments? Please provide reasons for (telephone: 800–647–5527) is in the
proposed inspecting the PBE to
your response. ADDRESSES section. Comments will be
determine if the pouch has the proper
9. What requirements, if any, should available in the AD docket shortly after
vacuum seal and replacing if necessary.
apply to a CDC’s remaining funds if it receipt.
The NPRM was prompted by reports of
voluntarily decertifies or is removed a compromise in the vacuum seal of the FOR FURTHER INFORMATION CONTACT:
from the 504 Loan Program? Should the pouch that contains the PBE. This David Enns, Aerospace Engineer,
CDC be required to invest these funds in action revises the NPRM by requiring Wichita Aircraft Certification Office,
local economic development activities replacement of the PBE following newly FAA, 1801 S. Airport Road, Room 100,
prior to decertification or removal? issued service information regardless of Wichita, Kansas 67209; telephone: (316)
10. What types of economic inspection results. We are proposing 946–4147; fax: (316) 946–4107; email:
development activities should be this supplemental NPRM (SNPRM) to david.enns@faa.gov.
included in the definition of correct the unsafe condition on these
SUPPLEMENTARY INFORMATION:
‘‘acceptable investments in economic products. Since these actions impose an
development’’? Are there any activities additional burden over that proposed in Comments Invited
that should not be included in the the NPRM, we are reopening the
definition? Examples of such acceptable comment period to allow the public the We invite you to send any written
investments in economic development chance to comment on these proposed relevant data, views, or arguments about
could include loans, grants or other changes. this proposed AD. Send your comments
forms of direct financial support that are DATES: We must receive comments on
to an address listed under the
issued by the CDC for: (1) Other federal, ADDRESSES section. Include ‘‘Docket No.
this SNPRM by February 29, 2016.
state or local lending programs, such as FAA–2015–2134; Directorate Identifier
ADDRESSES: You may send comments,
microlending or revolving loan funds; 2015–CE–012–AD’’ at the beginning of
using the procedures found in 14 CFR
(2) Small Business Development your comments. We specifically invite
11.43 and 11.45, by any of the following
Centers; (3) business incubators; (4) comments on the overall regulatory,
methods:
industrial development; and (5) other economic, environmental, and energy
• Federal eRulemaking Portal: Go to
non-profit economic development aspects of this proposed AD. We will
http://www.regulations.gov. Follow the
entities. Should the definition include consider all comments received by the
instructions for submitting comments.
business or technical procurement • Fax: 202–493–2251. closing date and may amend this
assistance provided by the CDC or paid • Mail: U.S. Department of proposed AD because of those
for by the CDC? comments.
tkelley on DSK3SPTVN1PROD with PROPOSALS

Transportation, Docket Operations, M–
Interested parties are invited to 30, West Building Ground Floor, Room We will post all comments we
provide any other comments that they W12–140, 1200 New Jersey Avenue SE., receive, without change, to http://
may have relating to the issues Washington, DC 20590. www.regulations.gov, including any
described in this Advance Notice of • Hand Delivery: U.S. Department of personal information you provide. We
Proposed Rulemaking. We ask that you Transportation, Docket Operations, M– will also post a report summarizing each
provide a brief justification for any 30, West Building Ground Floor, Room substantive verbal contact we receive
suggested changes. W12–140, 1200 New Jersey Avenue SE., about this proposed AD.

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Document Created: 2018-02-02 12:32:16
Document Modified: 2018-02-02 12:32:16

Category		Regulatory Information
Collection		Federal Register
sudoc Class		AE 2.7: GS 4.107: AE 2.106:
Publisher		Office of the Federal Register, National Archives and Records Administration
Section		Proposed Rules
Action		Advance notice of proposed rulemaking.
Dates		Comments must be submitted on or before March 15, 2016.
Contact		Linda Reilly, Acting Director, Office of Financial Assistance, U.S. Small Business Administration, 409 3rd Street SW., 8th Floor, Washington, DC 20416, telephone number (202) 205-9949 or [email protected]
FR Citation		81 FR 2129
RIN Number		3245-AG76