
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: 15USC697b]

 
                      TITLE 15--COMMERCE AND TRADE
 
             CHAPTER 14B--SMALL BUSINESS INVESTMENT PROGRAM
 
      SUBCHAPTER V--LOANS TO STATE AND LOCAL DEVELOPMENT COMPANIES
 
Sec. 697b. Pooling of debentures


(a) Issuance; debentures composing trust or pool

    The Administration is authorized to issue trust certificates 
representing ownership of all or a fractional part of debentures issued 
by State or local development companies and guaranteed by the 
Administration under this chapter: Provided, That such trust 
certificates shall be based on and backed by a trust or pool approved by 
the Administration and composed solely of guaranteed debentures.

(b) Terms and conditions of guarantee; payment of principal and interest

    The Administration is authorized, upon such terms and conditions as 
are deemed appropriate, to guarantee the timely payment of the principal 
of and interest on trust certificates issued by the Administration or 
its agent for purposes of this section. Such guarantee shall be limited 
to the extent of principal and interest on the guaranteed debentures 
which compose the trust or pool. In the event that a debenture in such 
trust or pool is prepaid, either voluntarily or in the event of default, 
the guarantee of timely payment of principal and interest on the trust 
certificates shall be reduced in proportion to the amount of principal 
and interest such prepaid debenture represents in the trust or pool. 
Interest on prepaid or defaulted debentures shall accrue and be 
guaranteed by the Administration only through the date of payment on the 
guarantee. During the term of the trust certificate, it may be called 
for redemption due to prepayment or default of all debentures 
constituting the pool.

(c) Full faith and credit of United States

    The full faith and credit of the United States is pledged to the 
payment of all amounts which may be required to be paid under any 
guarantee of such trust certificates issued by the Administration or its 
agent pursuant to this section.

(d) Collection of fees

    The Administration shall not collect any fee for any guarantee under 
this section: Provided, That nothing herein shall preclude any agent of 
the Administration from collecting a fee approved by the Administration 
for the functions described in subsection (f)(2) of this section.

(e) Subrogation rights; ownership rights in debentures

    (1) In the event the Administration pays a claim under a guarantee 
issued under this section, it shall be subrogated fully to the rights 
satisfied by such payment.
    (2) No State or local law, and no Federal law, shall preclude or 
limit the exercise by the Administration of its ownership rights in the 
debentures constituting the trust or pool against which the trust 
certificates are issued.

(f) Central registration requirements; regulation of brokers and 
        dealers; electronic registration

    (1) The Administration shall--
        (A) provide for a central registration of all trust certificates 
    sold pursuant to this section;
        (B) contract with an agent to carry out on behalf of the 
    Administration the central registration functions of this section 
    and the issuance of trust certificates to facilitate poolings; such 
    agent shall provide a fidelity bond or insurance in such amounts as 
    the Administration determines to be necessary to fully protect the 
    interests of the Government;
        (C) prior to any sale, require the seller to disclose to a 
    purchaser of a trust certificate issued pursuant to this section, 
    information on the terms, conditions, and yield of such instrument; 
    and
        (D) have the authority to regulate brokers and dealers in trust 
    certificates sold pursuant to this section.

    (2) Nothing in this subsection shall prohibit the utilization of a 
book-entry or other electronic form of registration for trust 
certificates.

(Pub. L. 85-699, title V, Sec. 505, as added Pub. L. 99-272, title 
XVIII, Sec. 18008(c), Apr. 7, 1986, 100 Stat. 367; amended Pub. L. 100-
590, title I, Sec. 111(d)(1), (2), Nov. 3, 1988, 102 Stat. 2995; Pub. L. 
104-208, div. D, title II, Sec. 205(c), Sept. 30, 1996, 110 Stat. 3009-
738.)

                       References in Text

    For definition of ``this chapter'', referred to in subsec. (a), see 
References in Text note set out under section 661 of this title.


                               Amendments

    1996--Subsec. (f). Pub. L. 104-208 designated existing provisions as 
par. (1), redesignated former pars. (1) to (4) as subpars. (A) to (D), 
respectively, of par. (1), in subpar. (A) substituted ``provide for a 
central registration of all trust certificates sold pursuant to this 
section;'' for ``provide for a central registration of all trust 
certificates sold pursuant to this section; such central registration 
shall include with respect to each sale, identification of each 
development company; the interest rate paid by the development company; 
commissions, fees, or discounts paid to brokers and dealers in trust 
certificates; identification of each purchaser of the trust certificate; 
the price paid by the purchaser for the trust certificate; the interest 
rate paid on the trust certificate; the fees of any agent for carrying 
out the functions described in paragraph (2); and such other information 
as the Administration deems appropriate;'', and added par. (2).
    1988--Pub. L. 100-590, Sec. 111(d)(2), inserted ``Pooling of 
debentures'' as section catchline.
    Subsec. (a). Pub. L. 100-590, Sec. 111(d)(1), substituted ``all or 
a'' for ``all of a''.


                    Effective Date of 1996 Amendment

    Amendment by Pub. L. 104-208 effective Oct. 1, 1996, see section 3 
of Pub. L. 104-208, set out as a note under section 633 of this title.


Rules and Regulations for Implementation of Central Registration, Pilot 
         Program and Trust Certificate Provisions; Consultation

    Section 18008(d) of Pub. L. 99-272 provided that:
    ``(1) Notwithstanding any law, rule, or regulation, within 60 days 
after the date of enactment of this Act [Apr. 7, 1986], the Small 
Business Administration shall develop and promulgate final rules and 
regulations to implement the central registration provisions provided 
for in section 505(f)(1) of the Small Business Investment Act [15 U.S.C. 
697b(f)(1)], and shall contract with an agent for an initial period of 
not to exceed two years to carry out the functions provided for in 
section 505(f)(2) of such Act.
    ``(2) Notwithstanding any law, rule or regulation, within 60 days 
after the date of enactment of this Act [Apr. 7, 1986], the Small 
Business Administration also shall consult with representatives of 
appropriate Federal and State agencies and officials, the securities 
industry, financial institutions and lenders, and small business 
persons, and shall develop and promulgate final rules and regulations to 
implement sections 504 and 505 of the Small Business Investment Act [15 
U.S.C. 697a, 697b].''

                  Section Referred to in Other Sections

    This section is referred to in section 697f of this title.
