Public Law 90–104

Sec. 101.

This title may be cited as the “Small Business Act Amendments of 1967”.

Sec. 102.

Paragraph (4) of section 4(c) of the Small Business Act is amended—

Sec. 103.

Paragraph (4) of section 7(a) is amended by striking out “except that a loan made for the purpose of constructing facilities may have a maturity of ten years” and inserting in lieu thereof “except that such portion of a loan made for the purpose of constructing facilities may have a maturity of fifteen years”.

Sec. 104.

The subsection added to section 7 of the Small Business

80 Stat. 1319.

Act by the Disaster Relief Act of 1966 (Public Law 89–769), and designated thereby as subsection (e), is redesignated as subsection (f).

Sec. 105.

Subparagraph (B) of paragraph (1) of section 8(b) of the Small Business Act is amended to read as follows:

“(B)“(B)

in the case of any individual or group of persons cooperating with it in furtherance of the purposes of subparagraph (A), (i) to allow such an individual or group such use of the Administration’s office facilities and related materials and services as the Administration deems appropriate; and (ii) to pay the transportation expenses and a per diem allowance in accordance with

80 Stat. 499.

section 5703 of title 5, United States Code, to any such individual for travel and subsistence expenses incurred at the request of the Administration in connection with travel to a point more than fifty miles distant from the home of that individual in providing gratuitous services to small businessmen in furtherance of the purposes of subparagraph (A) or in connection with attendance at meetings sponsored by the Administration;”.

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Sec. 106.

Paragraph (13) of section 8(b) of the Small Business Act

Advisory boards.

72 Stat. 391.

15 USC 637.

is amended to read as follows:

“(13)“(13)

to establish such advisory boards and committees as may be necessary to achieve the purposes of this Act and of the Small Business Investment Act of 1958; to call meetings of such boards

72 Stat. 689.

15 USC 661 note.

and committees from time to time; to pay the transportation expenses and a per diem allowance in accordance with section 5703 of title 5, United States Code, to the members of such boards and

80 Stat. 499.

committees for travel and subsistence expenses incurred at the request of the Administration in connection with travel to points more than fifty miles distant from the homes of such members in attending the meetings of such boards and committees; and to rent temporarily, within the District of Columbia or elsewhere, such hotel or other accommodations as are needed to facilitate the conduct of such meetings; and”.

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Sec. 107.

Section 8 (b) of the Small Business Act is amended—

Sec. 108.

The subsection added to section 402 of the Economic Opportunity Act of 1964 by section 405 of the Economic Opportunity Amendments of 1966 (Public Law 89–794), and designated thereby as

80 Stat. 1465.

42 USC 2902.

subsection (b), is redesignated as subsection (c).

Sec. 201.

This title may be cited as the “Small Business Investment

Small Business Investment Act Amendments of 1967.

Articles of incorporation.

Criteria for approval.

72 Stat. 691.

15 USC 681.

Act Amendments of 1967”.

Sec. 202.

Section 301(c) of the Small Business Investment Act of 1958 is amended to read as follows:

“(c)“(c)

The articles of incorporation and amendments thereto shall be forwarded to the Administration for consideration and approval or disapproval. In determining whether to approve such a company’s articles of incorporation and permit it to operate under the provisions of this Act, the Administration shall give due regard, among other things, to the need and availability for the financing of small business concerns in the geographic area in which the proposed company is to commence business, the general business reputation and character of the proposed owners and management of the company, and the probability of successful operations of such company including adequate profitability and financial soundness. After consideration of all relevant factors, if it approves the company’s articles of incorporation, the Administration may in its discretion approve the company to operate under the provisions of this Act and issue the company a license for such operation.”.

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Sec. 203.

Sec. 204.

Section 302(b) of the Small Business Investment Act of 1958 is amended by striking “except that in no event shall any such bank hold shares in small business investment companies in an amount aggregating more than 2 percent of its capital and surplus.” and inserting

“except that in no event may any such bank acquire shares in any small business investment company if, upon the making of that acquisition,

“(1)“(1)

the aggregate amount of shares in small business investment companies then held by the bank would exceed 5 percent of its capital and surplus, or

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“(2)“(2)

the bank would hold 50 percent or more of any class of equity securities issued by that investment company and having actual or potential voting rights.”

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Sec. 205.

Section 303(b) of the Small Business Investment Act of 1958 is amended to read as follows:

“(b)“(b)

To encourage the formation and growth of small business investment companies the Administration is authorized (but only to the extent that the necessary funds are not available to the company involved from private sources on reasonable terms) to purchase, either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate basis, the debentures of any such company. Debentures purchased by the Administration under this subsection shall be subordinate to any other debenture bonds, promissory notes, or other debts and obligations of such companies, unless the Administration in its exercise of reasonable investment

Term; interest rate.

prudence and in considering the financial soundness of such company determines otherwise. Such debentures may be issued for a term of not to exceed fifteen years and shall bear interest at a rate not less than a rate determined by the Secretary of the Treasury taking into consideration the current average market yield on outstanding marketable obligations of the United States with remaining periods to maturity comparable to the average maturities on such debentures, adjusted to the nearest one-eighth of 1 per centum, plus such additional charge, if any, toward covering other costs of the program as the

Restrictions.

Administration may determine to be consistent with its purposes. The debentures shall also contain such other terms as the Administration may fix, and shall be subject to the following restrictions and limitations:

“(1)“(1)

The total amount of debentures purchased and outstanding at any one time from a company which does not qualify under the terms of paragraph (2) of this subsection, shall not exceed 200 percent of the combined paid-in capital and paid-in surplus of such company. In no event shall the debentures of any such company purchased and outstanding under this paragraph exceed $7,500,000.

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“(2)“(2)

The total amount of debentures which may be purchased and outstanding at any one time from a company which (A) has a combined paid-in capital and paid-in surplus of $1,000,000 or more and (B) has investments or legally binding commitments of 65 percent or more of its total funds available for investment in small business concerns invested or committed in venture capital, shall not exceed $2,000,000 plus 300 percent of that portion of the company’s paid-in capital and paid-in surplus which exceeds $1,000,000. In no event shall the debentures of any such company purchased and outstanding under this paragraph exceed $10,-000,000. Such additional purchases which the Administration makes under this paragraph shall contain conditions to insure appropriate maintenance by the company receiving such assistance of the described ratio during the period in which debentures under this paragraph are outstanding.

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“(3)“(3)

Outstanding amounts of financial assistance provided to a company by the Administration prior to the effective date of the Small Business Investment Act Amendments of 1967 shall be

Post, p. 272.

deducted from the maximum amount of debentures which the Administration would otherwise be authorized to purchase under this subsection.

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For purposes of this subsection, the term ‘venture capital’ includes

“Venture capital.”

such common stock, preferred stock, or other financing with subordination or nonamortization characteristics as the Administration determines to be substantially similar to equity financing.”

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Sec. 206.

Section 304(c) of the Small Business Investment Act of

Repeal.

1958 is repealed.

Sec. 207.

Section 306 of the Small Business Investment Act of 1958 is amended to read as follows:

74 Stat. 196.

15 USC 684.

Obligations and commitments, limitations.

78 Stat. 146.

15 USC 686.

“Sec. 306.

(a)(a)

Without the approval of the Administration, the aggregate amount of obligations and securities acquired and for which commitments may be issued by any small business investment company under the provisions of this Act for any single enterprise shall not exceed 20 percent of the combined paid-in capital and paid-in surplus of such company.

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“(b)“(b)

For the purpose of this section, the combined paid-in capital and paid-in surplus of any company licensed prior to January 1, 1968, shall consist of (1) the paid-in capital and paid-in surplus of such company and (2) the following portions of the funds outstanding from the Administration through the issuance of subordinated debentures as of the effective date of the Small Business Investment Act Amendments of 1967, or on January 1 of each of the following calendar years,

Post, p. 272.

whichever is less: (A) 100 percent, during 1968; (B) 75 percent, during 1969; (C) 50 percent, during 1970; (D) 25 percent, during 1971; and (E) zero, during 1972 and thereafter.

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“(c)“(c)

With respect to obligations or securities acquired prior to the effective date of the Small Business Investment Act Amendments of 1967, and with respect to legally binding commitments issued prior to such date, the provisions of this section as in effect immediately prior to such effective date shall continue to apply.”

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Sec. 208.

Section 310(b) of the Small Business Investment Act of

Examinations.

1958 is amended by adding after the first sentence thereof the following

80 Stat. 1360.

15 USC 687b.

new sentence: “Each such company shall be examined at least once each year, except that the Administrator may waive examination in the case of a company whose operations have been suspended by reason of the fact that the company is involved in litigation or is in receivership.”

Sec. 209.

The first sentence of section 401(a) of the Small Business

Lease guarantees.

79 Stat. 482.

15 USC 692.

15 USC 636.

Investment Act of 1958 is amended by striking out “that are (1) eligible for loans under section 7(b) (3) of the Small Business Act, or (2) eligible for loans under title IV of the Economic Opportunity Act of 1964,”.

42 USC 2901–2907.

Annual report, contents.

80 Stat. 1359.

15 USC 687.

Sec. 210.

Section 308(g) of the Small Business Investment Act of 1958 is amended (1) by inserting the paragraph designation “(1)” after “(g)”; and (2) by adding the following new subparagraph:

“(2)“(2)

In its annual report for the year ending December 31, 1967, and in each succeeding annual report made pursuant to section 10(a) of the Small Business Act, the Administration shall include full and detailed accounts relative to the following matters:

“(A)“(A)

The Administration’s recommendations with respect to the feasibility and organization of a small business capital bank to encourage private financing of small business investment companies to replace Government financing of such companies.

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“(B)“(B)

The Administration’s plans to insure the provision of small business investment company financing to all areas of the country and to all eligible small business concerns including steps taken to accomplish same.

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“(C)“(C)

Steps taken by the Administration to maximize recoupment of Government funds incident to the inauguration and administration of the small business investment company program and to insure compliance with statutory and regulatory standards relating thereto.

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“(d)“(d)

An accounting by the Bureau of the Budget with respect to Federal expenditures to business by executive agencies, specifying the proportion of said expenditures going to business concerns falling above and below small business size standards applicable to small business investment companies.

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“(E)“(E)

An accounting by the Treasury Department with respect to tax revenues accruing to the Government from business concerns, incorporated and unincorporated, specifying the source of such revenues by concerns falling above and below the small business size standards applicable to small business investment companies.

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“(F)“(F)

An accounting by the Treasury Department with respect to both tax losses and increased tax revenues related to small business investment company financing of both individual and corporate business taxpayers.

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“(G)“(G)

Recommendations of the Treasury Department with respect to additional tax incentives to improve and facilitate the operations of small business investment companies and to encourage the use of their financing facilities by eligible small business concerns.

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“(H)“(H)

A report from the Securities and Exchange Commission enumerating actions undertaken by that agency to simplify and minimize the regulatory requirements governing small business investment companies under the Federal securities laws and to eliminate overlapping regulation and jurisdiction as between the Securities and Exchange Commission, the Administration, and other agencies of the executive branch.

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“(I)“(I)

A report from the Securities and Exchange Commission with respect to actions taken to facilitate and stabilize the access of small business concerns to the securities markets.

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“(J)“(J)

Actions undertaken by the Securities and Exchange Commission to simplify compliance by small business investment companies with the requirements of the Investment Company Act

54 Stat. 789.

15 USC 80a–1 et seq.

68A Stat. 268.

of 1940 and to facilitate the election to be taxed as regulated investment companies pursuant to section 851 of the Internal Revenue Code of 1954.”

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Sec. 211.

The effective date of this title shall be ninety days after enactment, except that, with respect to section 207, it shall be January 1, 1968.

Sec. 301.

This title may be cited as the “Small Business Protection Act of 1967”.

Sec. 302.

The Administrator of the Small Business Administration shall conduct a special study of the impact on small business concerns of robbery, burglary, shoplifting, vandalism, and other criminal activities, with a view to determining ways in which such concerns may best protect themselves against such activities.

Sec. 303.

The Administrator shall report to the President and to the

Report to President and Congress.

Congress the results of the study conducted pursuant to this title, including such recommendations as he may deem appropriate for administrative and legislative action, within one year after the date of enactment of this title.