
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 15USC694-1]

 
                      TITLE 15--COMMERCE AND TRADE
 
             CHAPTER 14B--SMALL BUSINESS INVESTMENT PROGRAM
 
                       SUBCHAPTER IV-A--GUARANTEES
 
Part A--Commercial or Industrial Lease and Qualified Contract Guarantees
 
Sec. 694-1. Planning design or installation of pollution control 
        facilities
        

(a) Definitions

    For purposes of this section, the term--
        (1) ``pollution control facilities'' means such property (both 
    real and personal) as the Administration in its discretion 
    determines is likely to help prevent, reduce, abate, or control 
    noise, air or water pollution or contamination by removing, 
    altering, disposing or storing pollutants, contaminants, wastes, or 
    heat, and such property (both real and personal) as the 
    Administration determines will be used for the collection, storage, 
    treatment, utilization, processing, or final disposal of solid or 
    liquid waste.
        (2) ``person'' includes corporations, companies, associations, 
    firms, partnerships, societies, joint stock companies, States, 
    territories, and possessions of the United States, or subdivisions 
    of any of the foregoing, and the District of Columbia, as well as 
    individuals.
        (3) ``qualified contract'' means a lease, sublease, loan 
    agreement, installment sales contract, or similar instrument, 
    entered into between a small business concern and any person.

(b) Financing disadvantage; guarantee of payment by Administration; 
        restrictions and limitations

    The Administration may, whenever it determines that small business 
concerns are or are likely to be at an operational or financing 
disadvantage with other business concerns with respect to the planning, 
design, or installation of pollution control facilities, or the 
obtaining of financing therefor (including financing by means of revenue 
bonds issued by States, political subdivisions thereof, or other public 
bodies), guarantee the payment of rentals or other amounts due under 
qualified contracts. Any such guarantee may be made or effected either 
directly or in cooperation with any qualified surety company or other 
qualified company through a participation agreement with such company. 
The foregoing powers shall be subject, however, to the following 
restrictions and limitations:
        (1) Notwithstanding any other law, rule, or regulation or fiscal 
    policy to the contrary, the guarantee authorized in the case of 
    pollution control facilities or property shall be issued when such 
    property is acquired by the use of proceeds from industrial revenue 
    bonds which provide the holders interest which is exempt from 
    Federal income tax, and the Administration is expressly prohibited 
    from denying such guarantee due to the property being so acquired.
        (2) Any such guarantee shall be for the full amount of the 
    payments due under such qualified contract and shall be a full faith 
    and credit obligation of the United States.
        (3) No guarantee shall be issued by the Administration unless 
    the Administration determines that there exists a reasonable 
    expectation that the small business concern in behalf of which the 
    guarantee is issued will perform the covenants and conditions of the 
    qualified contract.

(c) Uniform annual fees; processing fees; time and condition for 
        payment; periodic review

    The Administration shall fix a uniform annual fee for any guarantee 
issued under this section which shall be payable at such time and under 
such conditions as may be prescribed by the Administrator. The fee shall 
be set at an amount which the Administration deems reasonable and 
necessary and shall be subject to periodic review in order that the 
lowest fee that experience under the program shows to be justified will 
be placed into effect. In no case shall such amount be less than 1 per 
centum or more than 3\1/2\ per centum per annum of the minimum annual 
guaranteed rental payable under any qualified contract guaranteed under 
this section. The Administration may also fix such uniform fees for the 
processing of applications for guarantees under this section as the 
Administrator determines are reasonable and necessary to pay the 
administrative expenses that are incurred in connection therewith.

(d) Requirements of Administration; escrow; default; discretionary 
        provisions

    In connection with the guarantee of rentals under any qualified 
contract pursuant to authority conferred by this section, the 
Administrator may require, in order to minimize the financial risk 
assumed under such guarantee--
        (1) that the lessee pay an amount, not to exceed one-fourth of 
    the average annual payments for which a guarantee is issued under 
    this section, which shall be held in escrow and shall be available 
    (A) to meet rental charges accruing in any month for which the 
    lessee is in default, or (B) if no default occurs during the term of 
    the qualified contract, for application (with accrued interest) 
    toward final payments of rental charges under the qualified 
    contract;
        (2) that upon occurrence of a default under the qualified 
    contract, the lessor shall, as a condition precedent to enforcing 
    any claim under the qualified contract guarantee, utilize the entire 
    period, for which there are funds available in escrow for payment of 
    rentals, in reasonable diligent efforts to eliminate or minimize 
    losses, by releasing the property covered by the qualified contract 
    to another qualified lessee, and no claim shall be made or paid 
    under the guarantee until such effort has been made and such escrow 
    funds have been exhausted;
        (3) that any guarantor of the qualified contract will become a 
    successor of the lessor for the purpose of collecting from a lessee 
    in default rentals which are in arrears and with respect to which 
    the lessor has received payment under a guarantee made pursuant to 
    this section; and
        (4) such other provisions, not inconsistent with the purposes of 
    this section as the Administrator may in his discretion require.

(e) Assignment of guarantee

    Any guarantee issued under this section may be assigned with the 
permission of the Administration by the person to whom the payments 
under qualified contracts are due.

(f) Application of section 693 of this title

    Section 693 of this title shall apply to the administration of this 
section.

(Pub. L. 85-699, title IV, Sec. 404, as added Pub. L. 94-305, title I, 
Sec. 102, June 4, 1976, 90 Stat. 663; amended Pub. L. 98-473, title I, 
Sec. 115, Oct. 12, 1984, 98 Stat. 1967.)


                               Amendments

    1984--Subsec. (b)(1). Pub. L. 98-473, Sec. 115(1), (2), substituted 
``shall be issued'' for ``may be issued'' and inserted ``, and the 
Administration is expressly prohibited from denying such guarantee due 
to the property being so acquired''.
    Subsec. (c). Pub. L. 98-473, Sec. 115(3), substituted ``be less than 
1 per centum or more than 3\1/2\ per centum'' for ``exceed 3\1/2\ per 
centum''.

                  Section Referred to in Other Sections

    This section is referred to in sections 636, 694-2 of this title.
