Page:United States Statutes at Large Volume 110 Part 4.djvu/899

This page needs to be proofread.

PUBLIC LAW 104-208—SEPT. 30, 1996 110 STAT. 3009-736 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.". SEC. 203. REQUIRED ACTIONS UPON DEFAULT. Section 503 (15 U.S.C. 697) is amended by adding at the end the following new subsection: "(h) REQUIRED ACTIONS UPON DEFAULT.— "(1) INITIAL ACTIONS.— Not later than the 45th day after the date on which a payment on a loan funded through a debenture guaranteed under this section is due and not received, the Administration shall— "(A) take all necessary steps to bring such a loan current; or "(B) implement a formal written deferral agreement. "(2) PURCHASE OR ACCELERATION OF DEBENTURE.—Not later than the 65th day after the date on which a payment on a loan described in paragraph (1) is due and not received, and absent a formal written deferral agreement, the administration shall take all necessary steps to purchase or accelerate the debenture. "(3) PREPAYMENT PENALTIES. —With respect to the portion of any project derived from funds set forth in section 502(3), the Administration— "(A) shall negotiate the elimination of any prepayment penalties or late fees on defaulted loans made prior to September 30, 1996; "(B) shall not pay any prepayment penalty or late fee on the default based purchase of loans issued after September 30, 1996; and "(C) for any project financed after September 30, 1996, shall not pay any default interest rate higher than the interest rate on the note prior to the date of default.". SEC. 204. LOAN LIQUIDATION PILOT PROGRAM. 15 USC 695 note. (a) IN GENERAL. —The Administrator shall carry out a loan liquidation pilot program (in this section referred to as the "pilot program") in accordance with the requirements of this section. (b) SELECTION OF DEVELOPMENT COMPANIES.— (1) IN GENERAL.— Not later than 90 days after the date of the enactment of this Act, the Administrator shall establish a pilot program under which certain development companies authorized to make loans and issue debentures under title V of the Small Business Investment Act of 1958 are selected by the Administrator in accordance with this subsection to carry out loan liquidations. (2) CONFLICTS OF INTEREST. —The development companies selected under paragraph (1) shall agree not to take any action that would create a potential conflict of interest involving the development company, the third party lender, or an associate of the third party lender. (3) QUALIFICATIONS.— In order to qualify to participate in the pilot program under this section, each development company shall— (A) have not less than 6 years of experience in the program established by title V of the Small Business Investment Act of 1958;