504 Loan Program Modernization Act of 2006 - Amends the Small Business Act to extend through FY2009 the authorization of appropriations for the 504 Loan Program (a program initiated under title V of the Small Business Investment Act of 1958 that provides long-term financing to small businesses for expansion or modernization, delivered through nonprofit certified development companies (CDCs) established in the communities of such small businesses).
Amends the Small Business Investment Act of 1958 to outline requirements for development companies to qualify as CDCs for purposes of small business loans guaranteed by and administered through the Small Business Administration (SBA). Includes among such requirements that such companies: (1) employ fewer than 500 employees; (2) have a primary function of providing long-term financing to small businesses under the 504 Loan Program; and (3) maintain nonprofit status. Outlines additional requirements concerning board of directors, staffing, areas of operations (including multistate operation), and conflicts of interests. Includes as a goal of CDC projects the expansion of business in low-income communities.
Provides for, among other things: (1) the repeal of the sunset on reserve requirements for premier certified lenders; (2) permissible debt refinancing for state and local development companies; (3) a report from the SBA Administrator assessing the impact on fostering economic development caused by changes in fees for SBA-guaranteed small business loans; (4) additional equity for small business loans; (5) CDC contracting with a qualified third party to perform foreclosures and liquidations of defaulted small business loans; and (6) a report from the Administrator on the operation of the Premier Certified Lenders Program during the previous three-year period.