[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR314.10]

[Page 515-516]
 
                TITLE 13--BUSINESS CREDIT AND ASSISTANCE
 
CHAPTER III--ECONOMIC DEVELOPMENT ADMINISTRATION, DEPARTMENT OF COMMERCE
 
PART 314--PROPERTY--Table of Contents
 
                      Subpart C--Personal Property
 
Sec. 314.10  Revolving loan funds.

    (a) With EDA's consent, recipients holding revolving loan fund (RLF) 
property (including but not limited to money, notes, and security 
interests) may sell such property or encumber such property as part of a 
securitization of the RLF portfolio. The net transaction proceeds must 
be used for additional loans as part of the RLF project;
    (b) When a recipient determines that it is no longer necessary or 
desirable to operate an RLF, the RLF may be terminated; provided that, 
unless otherwise stated in the award, the recipient must compensate the 
Federal Government for the Federal share of the value of the RLF 
property. The Federal share is that percentage of the capitalized RLF 
contributed by EDA applied to all RLF property, including the present 
value of all outstanding loans. However, with EDA's prior approval, upon 
termination the recipient may use for other economic development 
purposes that portion of such RLF property that EDA determines is 
attributable to the payment of interest.

[[Page 516]]

    (c) In the event of the sale, collection, or liquidation of RLF 
loans, any proceeds, net of repaid principal and reasonable 
administrative costs incurred, up to the amount of the outstanding loan 
principal, must be returned to the RLF for relending. Any net proceeds 
from loan sales above the outstanding loan principal is considered RLF 
income and must either be added to the RLF capital base for lending or 
used to cover eligible costs for administering the RLF in accordance 
with the rules for use of RLF income. The net transaction proceeds must 
be used for additional loans as part of the RLF project.

[64 FR 5476, Feb. 3, 1999, as amended at 65 FR 2536, Jan. 18, 2000]