68 FR 215 pgs. 62862-62863 - Development Company Program Job Opportunity Requirement
Type: NOTICEVolume: 68Number: 215Pages: 62862 - 62863
FR document: [FR Doc. 03-27947 Filed 11-5-03; 8:45 am]
Agency: Small Business Administration
Official PDF Version: PDF Version
SMALL BUSINESS ADMINISTRATION
Development Company Program Job Opportunity Requirement
Title V of the Small Business Investment Act, section 501, defines the purpose of the Development Company Loan Program (504 Program) as fostering economic development and creating and preserving job opportunities in both urban and rural areas by providing long-term financing for small business concerns through the development company program. 504 loans are principally used by small businesses to build or to purchase long-term fixed assets (mostly acquiring land and constructing or renovating commercial buildings) to assist in the growth of the business. The 504 Program is required to create a certain minimum number of jobs as a result of 504 loans. A 504 loan is required to either create or retain a minimum number of jobs within two years of the disbursement of the loan as a result of the project, or to meet other defined economic development objectives (13 CFR 120.861-120.862). In the final rule published on October 7, 2003, effective November 6, 2003, 13 CFR 120.829(a) states that "A CDC's portfolio must maintain a minimum average of one Job Opportunity per an amount of 504 loan funding that will be specified by SBA from time to time in a Federal Register notice. Such Job Opportunity average remains in effect until changed by subsequent Federal Register publication." The current standard which was established in 1990 requires a CDC's portfolio to reflect an average of one Job Opportunity per $35,000 of 504 loan funding. The AA/FA may permit a CDC to average up to one per $45,000 for good cause in Alaska; Hawaii; State-designated urban or rural jobs and enterprise zones; Empowerment Zones and Enterprise Communities; and Labor Surplus Areas. During the past twelve years since the Job Opportunity requirement was last modified, the cost of acquiring real estate has increased substantially. For example, construction wages have increased more than 65 percent and the consumer price index has increased 50 percent during the same period. Due to the substantial increases in costs, SBA is modifying the requirements by approximately 43 percent effective November 6, 2003, as follows:
A CDC's portfolio must reflect an average of one Job Opportunity per $50,000 of 504 loan funding. The AA/FA may permit a CDC to average up to one per $65,000 for good cause for all 504 projects located in
(1) Alaska;
(2) Hawaii;
(3) State-designated urban or rural jobs and enterprise zones;
(4) Empowerment Zones and Enterprise Communities; and
(5) Labor Surplus Areas as listed by the Department of Labor.
James E. Rivera,
Associate Administrator for Financial Assistance.
[FR Doc. 03-27947 Filed 11-5-03; 8:45 am]
BILLING CODE 8025-01-P