§ 682. Capital requirements

Footnotes

1. 1 So in original. Probably should be followed by a comma.
2. 2 See References in Text note below.

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1958

   Pub. L. 85–699 title III § 302 · 72 Stat. 689

   Enacted · 15 U.S.C. § 682

   Pub. L. 85–699, title III, § 302, Aug. 21, 1958, 72 Stat. 692

   Source evidence

   Code source credit
   Pub. L. 85–699, title III, § 302, Aug. 21, 1958, 72 Stat. 692

   Enacted provision · exact public law section
   Sec. 302. capital stock and subordinate debentures (a) Each company authorized to operate under this Act shall have a paid-in capital and surplus equal to at least $300,000. In order to facilitate the formation of small business investment companies, the Administration is hereby authorized, notwithstanding any other provisions of law, to purchase the debentures of any such company in an amount equal to not more than $150,000. Any debentures purchased by the Administration under this subsection shall be subordinate to any other debenture bonds, promissory notes, or other obligations which may be issued by such companies, and shall be deemed a part of the capital and surplus of such companies for purposes of this section and sections 303 (b) and 306 of this Act. (b) Shares of stock in small business investment companies shall be eligible for purchase by national banks, and shall be eligible for purchase by other member banks of the Federal Reserve System and nonmember insured banks to the extent permitted under applicable State law; except that in no event shall any such bank hold shares in small business investment companies in an amount aggregating more than 1 percent of its capital and surplus. (c) The aggregate amount of shares in any such company or companies which may be owned or controlled by any stockholder, or by any group or class of stockholders, may be limited by the Administration.

2. 1960

   Small Business Investment Act Amendments of 1960

   Pub. L. 86–502 § 5 · 74 Stat. 196

   Substituted · 15 U.S.C. § 682(b)

   Pub. L. 86–502 substituted “Notwithstanding the provisions of section 1845(a)(1) of title 12, shares” for “Shares”

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 86–502 substituted “Notwithstanding the provisions of section 1845(a)(1) of title 12, shares” for “Shares”.

   Enacted provision · exact public law section
   Sec. 5. Subsection 302(b) of the Act is amended by deleting the first word and inserting in lieu thereof the following: “Notwithstanding the provisions of section 6(a)(1) of the Bank Holding Company Act 70 Stat. 137. 12 USC 1845. 15 USC 684. of 1956, shares”.

3. 1961

   Small Business Investment Act Amendments of 1961

   Pub. L. 87–341 § 3(a) · 75 Stat. 752

   Inserted · 15 U.S.C. § 682(a)

   Pub. L. 87–341, § 3(a), inserted “and growth”, limited the purchase of debentures to the extent that necessary funds are not available to the company involved from private sources on reasonable terms, increased the amount of purchasable debentures to not more than the lesser of $400,000 or the paid-in capital and surplus of the company from other sources, and restricted such purchases to such period as may be fixed by the Administration, but not ending more than three years after the date of issuance of the company’s license under section 681c of this title, or Oct. 3, 1961, whichever is later, and deleted provisions limiting purchase of debentures to $150,000

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 87–341, § 3(a), inserted “and growth”, limited the purchase of debentures to the extent that necessary funds are not available to the company involved from private sources on reasonable terms, increased the amount of purchasable debentures to not more than the lesser of $400,000 or the paid-in capital and surplus of the company from other sources, and restricted such purchases to such period as may be fixed by the Administration, but not ending more than three years after the date of issuance of the company’s license under section 681c of this title, or Oct. 3, 1961, whichever is later, and deleted provisions limiting purchase of debentures to $150,000.

   Enacted provision · exact public law section
   (a) Section 302(a) of the Small Business Investment Act of 15 USC 682. 1958 is amended by striking out the second sentence and inserting in lieu thereof the following: “In order to facilitate the formation and growth of small business investment companies, the Administration is hereby authorized, notwithstanding any other provisions of law (but only to the extent that the necessary funds are not available to the company involved from private sources on reasonable terms), to purchase the debentures of any such company in an amount not to exceed the lesser of $400,000 or the amount of the paid-in capital and surplus of the company from other sources; but debentures of a small business investment company may be purchased by the Administration under this subsection only during such period (in no case ending more than three years after the date of the issuance of its license under section 301(c) or the date of the enactment of the Small Business Investment Act Amendments of 1961, whichever is later) as may be fixed by the Administration.”

4. 1961

   Small Business Investment Act Amendments of 1961

   Pub. L. 87–341 § 3(b) · 75 Stat. 752

   Changed · 15 U.S.C. § 682(b)

   Pub. L. 87–341, § 3(b), increased the maximum amount of shares a bank may hold in small business investment companies to 2 percent of the capital and surplus

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 87–341, § 3(b), increased the maximum amount of shares a bank may hold in small business investment companies to 2 percent of the capital and surplus.

   Enacted provision · exact public law section
   (b) Section 302(b) of such Act is amended by striking out “1 percent of its capital and surplus” and inserting in lieu thereof “2 percent of its capital and surplus”.

5. 1964

   Small Business Investment Act Amendments of 1963

   Pub. L. 88–273 § 2 · 78 Stat. 146

   Changed · 15 U.S.C. § 682(a)

   Pub. L. 88–273 increased the limitation on Administration purchase of debentures from $400,000 to $700,000 and extended the period for such purchase from three years after date of issuance of license or date of enactment of Pub. L. 87–341, the Small Business Investment Act Amendments of 1961 (Oct. 3, 1961), whichever is later, to five years after date of issuance of license or date of enactment of Pub. L. 88–273, the Small Business Investment Act Amendments of 1963 (Feb. 28, 1964), whichever is later

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 88–273 increased the limitation on Administration purchase of debentures from $400,000 to $700,000 and extended the period for such purchase from three years after date of issuance of license or date of enactment of Pub. L. 87–341, the Small Business Investment Act Amendments of 1961 (Oct. 3, 1961), whichever is later, to five years after date of issuance of license or date of enactment of Pub. L. 88–273, the Small Business Investment Act Amendments of 1963 (Feb. 28, 1964), whichever is later.

   Enacted provision · exact public law section
   Sec. 2. The second sentence of section 302(a) of the Small Business Investment Act of 1958 is amended by striking out “$400,000” and inserting in lieu thereof “$700,000”, by striking out “three years” and inserting in lieu thereof “five years”, and by striking out “1961” and inserting in lieu thereof “1963”.

6. 1967

   Pub. L. 90–104 § 203(a) · 81 Stat. 268

   Substituted · 15 U.S.C. § 682(a)

   Pub. L. 90–104, § 203(a), substituted small business investment company minimum capital requirement, a combined private paid-in capital and paid-in surplus, of $150,000 and adequate to assure reasonable prospect of sound and profitable company operations and active and prudent management in accordance with the articles of incorporation for former requirement of a paid-in capital and surplus equal to at least $300,000, and eliminated provisions for purchase of debentures of such companies in an amount not to exceed the lesser of $700,000 or the amount of paid-in capital and surplus of the company from other sources and for subordination of debentures (both incorporated in section 686(b) of this title), for such purchases by the Administration only during certain prescribed period, and deeming the debentures part of the capital and surplus for certain purposes

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 90–104, § 203(a), substituted small business investment company minimum capital requirement, a combined private paid-in capital and paid-in surplus, of $150,000 and adequate to assure reasonable prospect of sound and profitable company operations and active and prudent management in accordance with the articles of incorporation for former requirement of a paid-in capital and surplus equal to at least $300,000, and eliminated provisions for purchase of debentures of such companies in an amount not to exceed the lesser of $700,000 or the amount of paid-in capital and surplus of the company from other sources and for subordination of debentures (both incorporated in section 686(b) of this title), for such purchases by the Administration only during certain prescribed period, and deeming the debentures part of the capital and surplus for certain purposes.

   Enacted provision · exact public law section
   (a) Section 302(a) of the Small Business Investment Act Capital and surplus, minimum requirements. 15 USC 682. of 1958 is amended to read as follows: “Sec. 302. (a) Each company authorized to operate under this Act shall have a combined private paid-in capital and paid-in surplus in an amount (1) not less than $150,000, and (2) adequate to assure a reasonable prospect that the company will be operated soundly and profitably, and managed actively and prudently in accordance with its articles of incorporation.” (b) The heading of section 302 of such Act is amended to read as follows: “capital requirements”.

7. 1967

   Pub. L. 90–104 § 204 · 81 Stat. 268

   Substituted · 15 U.S.C. § 682(b)

   Pub. L. 90–104, § 204, substituted prohibition against bank acquisition of small business investment company stock if, upon such acquisition, the aggregate amount of shares in such companies then held by the bank would exceed 5 percent of the capital and surplus, or 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 for former prohibition against holding of shares in an amount aggregating more than 2 percent of its capital and surplus

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 90–104, § 204, substituted prohibition against bank acquisition of small business investment company stock if, upon such acquisition, the aggregate amount of shares in such companies then held by the bank would exceed 5 percent of the capital and surplus, or 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 for former prohibition against holding of shares in an amount aggregating more than 2 percent of its capital and surplus.

   Enacted provision · exact public law section
   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) 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 “(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.”

8. 1976

   Pub. L. 94–305 § 106(e) · 90 Stat. 663

   Struck · 15 U.S.C. § 682(a)

   Pub. L. 94–305, § 106(e), struck out “of incorporation” after “its articles”

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 94–305, § 106(e), struck out “of incorporation” after “its articles”.

   Enacted provision · exact public law section
   (e) Section 302(a) of such Act is amended by striking the words “of incorporation”.

9. 1976

   Pub. L. 94–305 § 107 · 90 Stat. 663

   Struck · 15 U.S.C. § 682(b)

   Pub. L. 94–305, § 107, struck out provisions prohibiting the bank from acquiring shares in a small business investment company if 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

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 94–305, § 107, struck out provisions prohibiting the bank from acquiring shares in a small business investment company if 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.

   Enacted provision · exact public law section
   Sec. 107. repeal of 50 percent limitation on bank investment Section 302(b) of the Small Business Investment Act of 15 USC 682. 1958 is amended by striking out all that follows “upon the making of that acquisition”, and inserting in lieu thereof the following: “the aggregate amount of shares in small business investment companies then held by the bank would exceed 5 percent of its capital surplus.”.

10. 1977

    Pub. L. 95–89 title II § 210 · 91 Stat. 553

    Inserted · 15 U.S.C. § 682(b)

    Pub. L. 95–89 inserted “and” between “capital” and “surplus”

    Source evidence

    Code amendment note
    Subsec. (b). Pub. L. 95–89 inserted “and” between “capital” and “surplus”.

    Enacted provision · exact public law section
    Sec. 210. Section 302(b) of the Small Business Investment Act 15 USC 682. of 1958 is amended by inserting the word “and” between the words “capital” and “surplus”.

11. 1978

    Pub. L. 95–507 title I § 105 · 92 Stat. 1757

    Changed · 15 U.S.C. § 682(a)

    Pub. L. 95–507 provided that the combined private paid-in capital and paid-in surplus of any company licensed on or after Oct. 1, 1979 pursuant to section 681(c) and (d) of this title would not be less than $500,000

    Source evidence

    Code amendment note
    Subsec. (a). Pub. L. 95–507 provided that the combined private paid-in capital and paid-in surplus of any company licensed on or after Oct. 1, 1979 pursuant to section 681(c) and (d) of this title would not be less than $500,000.

    Enacted provision · exact public law section
    Sec. 105. Section 302(a) of the Small Business Investment Act of 1958 is amended to read as follows: “Sec. 302 (a). The combined private paid-in capital and paid-in surplus of any company licensed pursuant to sections 301(c) and (d) of this Act shall not be less than $150,000: Provided, however, That the combined private paid-in capital and paid-in surplus of any company licensed on or after October 1, 1979 pursuant to sections 301(c) and (d) of this Act shall be not less than $500,000. In all cases, such capital and surplus shall be adequate to assure a reasonable prospect that the company will be operated soundly and profitably, and managed actively and prudently in accordance with its articles.”.

12. 1992

    Small Business Equity Enhancement Act of 1992

    Pub. L. 102–366 title IV · 106 Stat. 986

    1. Substituted · 15 U.S.C. § 682(a)

       Pub. L. 102–366 substituted “1992 pursuant to section 681(c) of this title shall be not less than $2,500,000 and pursuant to section 681(d) of this title shall be not less than $1,500,000” for “1979 pursuant to section 681(c) and (d) of this title shall be not less than $500,000”

    2. Inserted · 15 U.S.C. § 682(a)

       Pub. L. 102–366 inserted at end “The Administration shall also determine the ability of the company, both prior to licensing and prior to approving any request for financing, to make periodic payments on any debt of the company which is interest bearing and shall take into consideration the income which the company anticipates on its contemplated investments, the experience of the company’s owners and managers, the history of the company as an entity, if any, and the company’s financial resources.”

    Source evidence

    Code amendment note
    Subsec. (a). Pub. L. 102–366 substituted “1992 pursuant to section 681(c) of this title shall be not less than $2,500,000 and pursuant to section 681(d) of this title shall be not less than $1,500,000” for “1979 pursuant to section 681(c) and (d) of this title shall be not less than $500,000” and inserted at end “The Administration shall also determine the ability of the company, both prior to licensing and prior to approving any request for financing, to make periodic payments on any debt of the company which is interest bearing and shall take into consideration the income which the company anticipates on its contemplated investments, the experience of the company’s owners and managers, the history of the company as an entity, if any, and the company’s financial resources.”

    Enacted provision · exact public law
    TITLE IV— SMALL BUSINESS INVESTMENT ACT AMENDMENTS SECTION 401. SHORT TITLE. This Act may be cited as the “Small Business Equity Enhancement Act of 1992”. SEC. 402. LEVERAGE (MATCHING FUNDS) FORMULA. Section 303 of the Small Business Investment Act of 1958 (15 U.S.C. 683) is amended— (1) by inserting after the word “debentures” in the first and sixth sentences of subsection (b) the following: “or participating securities”; (2) by striking paragraphs (1) through (3) of subsection (b) and inserting in lieu thereof the following: “(1) The total amount of debentures and participating securities that may be guaranteed by the Administration and outstanding from a company licensed under section 301(c) of this Act shall not exceed 300 per centum of the private capital of such company: Provided, That nothing in this paragraph shall require any such company that on March 31, 1993, has outstanding debentures in excess of 300 per centum of its private capital to prepay such excess: And provided further, That any such company may apply for an additional debenture guarantee or participating security guarantee with the proceeds to be used solely to pay the amount due on such maturing debenture, but the maturity of the new debenture or security shall be not later than September 30, 2002. “(2) After March 31, 1993, the maximum amount of outstanding leverage made available to a company licensed under section 301(c) of this Act shall be determined by the amount of such company’s private capital— “(A) if the company has private capital of not more than $15,000,000, the total amount of leverage shall not exceed 300 per centum of private capital; “(B) if the company has private capital of more than $15,000,000 but not more than $30,000,000, the total amount of leverage shall not exceed $45,000,000 plus 200 per centum of the amount of private capital over $15,000,000; and “(C) if the company has private capital of more than $30,000,000, the total amount of leverage shall not exceed $75,000,000 plus 100 per centum of the amount of private capital over $30,000,000 but not to exceed an additional $15,000,000. “(3) Subject to the foregoing dollar and percentage limits, a company licensed under section 301(c) of this Act may issue and have outstanding both guaranteed debentures and participating securities: Provided, That the total amount of participating securities outstanding shall not exceed 200 per centum of private capital. “(4) In no event shall the aggregate amount of outstanding leverage of any such company or companies which are commonly controlled as determined by the Administration exceed $90,000,000, unless the Administration determines on a case-by-case basis to permit a higher amount for companies under common control and imposes such additional terms and conditions as it determines appropriate to minimize the risk of loss to the Administration in the event of default.”; (3) by inserting before the period at the end of subsection (c)(6) the following: “, except as provided in paragraph (7)”; and (4) by adding the following at the end of subsection (c): “(7) The Administration may guarantee debentures or may guarantee the payment of the redemption price and prioritized payments on participating securities under subsection (g) from a company operating under section 301(d) of this Act in amounts above $35,000,000 but not to exceed the maximum amounts specified in section 303(b) subject to the following: “(A) The interest rate on debentures and the rate of prioritized payments on participating securities shall be that specified in subsection 303(g)(2) without any reductions. “(B) Any outstanding assistance under paragraphs (1) to (6) of this subsection shall be subtracted from such company’s eligibility under section 303(b)(2)(A).”. SEC. 403. PARTICIPATING SECURITIES. Section 303 of the Small Business Investment Act of 1958 (15 U.S.C. 683) is further amended by adding the following new subsections: “(g) In order to encourage small business investment companies to provide equity capital to small businesses, the Administration is authorized to guarantee the payment of the redemption price and prioritized payments on participating securities issued by such companies which are licensed pursuant to section 301(c) of this Act, and a trust or a pool acting on behalf of the Administration is authorized to purchase such securities. Such guarantees and Regulations. purchases shall be made on such terms and conditions as the Administration shall establish by regulation. For purposes of this section, (A) the term ‘participating securities’ includes preferred stock, a preferred limited partnership interest or a similar instrument, including debentures under the terms of which interest is payable only to the extent of earnings and (B) the term ‘prioritized payments’ includes dividends on stock, interest on qualifying debentures, or priority returns on preferred limited partnership interests which are paid only to the extent of earnings. Participating securities guaranteed under this subsection shall be subject to the following restrictions and limitations, in addition to such other restrictions and limitations as the Administration may determine: “(1) Participating securities shall be redeemed not later than 15 years after their date of issuance for an amount equal to 100 per centum of the original issue price plus the amount of any accrued prioritized payment: Provided, That if, at the time the securities are redeemed, whether as scheduled or in advance, the issuing company (A) has not paid all accrued prioritized payments in full as provided in paragraph (2) below and (B) has not sold or otherwise disposed of all investments subject to profit distributions pursuant to paragraph (11), the company’s obligation to pay accrued and unpaid prioritized payments shall continue and payment shall be made from the realized gain, if any, on the disposition of such investments, but if on disposition there is no realized gain, the obligation to pay accrued and unpaid prioritized payments shall be extinguished: Provided further, That in the interim, the company shall not make any in-kind distributions of such investments unless it pays to the Administration such sums, up to the amount of the unrealized appreciation on such investments, as may be necessary to pay in full the accrued prioritized payments. “(2) Prioritized payments on participating securities shall be preferred and cumulative and payable out of the retained earnings available for distribution, as defined by the Administration, of the issuing company at 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 securities, adjusted to the nearest one-eighth of 1 per centum, plus, at the time the guarantee is issued, such additional charge, if any, toward covering other costs of the program as the Administration may determine to be consistent with its purposes, but not to exceed 2 per centum. “(3) In the event of liquidation of the company, participating securities shall be senior in priority for all purposes to all other equity interests in the issuing company, whenever created. “(4) Any company issuing a participating security under this subsection shall commit to invest or shall invest and maintain an amount equal to the outstanding face value of such security solely in equity capital. As used in this subsection, ‘equity capital’ means common or preferred stock or a similar instrument, including subordinated debt with equity features which is not amortized and which provides for interest payments contingent upon and limited to the extent of earnings. “(5) The only debt (other than leverage obtained in accordance with this title) which any company issuing a participating security under this subsection may have outstanding shall be temporary debt in amounts limited to not more than 50 per centum of private capital. “(6) The Administration may permit the proceeds of a participating security to be used to pay the principal amount due on outstanding debentures guaranteed by the Administration, if (A) the company has outstanding equity capital invested in an amount equal to the amount of the debentures being refinanced and (B) the Administration receives profit participation on such terms and conditions as it may determine, but not to exceed the per centums specified in paragraph (11). “(7) For purposes of computing profit participation under paragraph (11), except as otherwise determined by the Administration, the management expenses of any company which issues participating securities shall not be greater than 2.5 per centum per annum of the combined capital of the company, plus $125,000 if the company’s combined capital is less than $20,000,000. For purposes of this paragraph, (A) the term ‘combined capital’ means the aggregate amount of private capital and outstanding leverage and (B) the term ‘management expenses’ includes salaries, office expenses, travel, business development, office and equipment rental, bookkeeping and the development, investigation and monitoring of investments, but does not include the cost of services provided by specialized outside consultants, outside lawyers and outside auditors, who perform services not generally expected of a venture capital company nor does such term include the cost of services provided by any affiliate of the company which are not part of the normal process of making and monitoring venture capital investments. “(8) Notwithstanding paragraph (9), if a company is operating as a limited partnership or as a subchapter s corporation or an equivalent pass-through entity for tax purposes and if there are no accumulated and unpaid prioritized payments, the company may make annual distributions to the partners or shareholders in amounts not greater than each partner’s or shareholder’s maximum tax liability. For purposes of this paragraph, the term ‘maximum tax liability’ means the amount of income allocated to each partner or shareholder (including an allocation to the Administration as if it were a taxpayer) for Federal income tax purposes in the income tax return filed or to be filed by the company with respect to the fiscal year of the company immediately preceding such distribution, multiplied by the highest combined marginal Federal and State income tax rates for corporations or individuals, whichever is higher, on each type of income included in such return. For purposes of this paragraph, the term ‘State income tax’ means the income tax of the State where the company’s principal place of business is located. “(9) After making any distributions as provided in paragraph (8), a company with participating securities outstanding may distribute the balance of income to its investors, specifically including the Administration, in the per centums specified in paragraph (11), if there are no accumulated and unpaid prioritized payments and if all amounts due the Administration pursuant to paragraph (11) have been paid in full, subject to the following conditions: “(A) As of the date of the proposed distribution, if the amount of leverage outstanding is more than 200 per centum of the amount of private capital, any amounts distributed shall be made to private investors and to the Administration in the ratio of leverage to private capital. “(B) As of the date of the proposed distribution, if the amount of leverage outstanding is more than 100 per centum but not more than 200 per centum of the amount of private capital, 50 per centum of any amounts distributed shall be made to the Administration and 50 per centum shall be made to the private investors. “(C) If the amount of leverage outstanding is 100 per centum, or less, of the amount of private capital, the ratio shall be that for distribution of profits as provided in paragraph (11). “(D) Any amounts received by the Administration under subparagraph (A) or (B) shall be applied first as profit participation as provided in paragraph (11) and any remainder shall be applied as a prepayment of the principal amount of the participating securities or debentures. “(10) After making any distributions pursuant to paragraph (8), a company with participating securities outstanding may return capital to its investors, specifically including the Administration, if there are no accumulated and unpaid prioritized payments and if all amounts due the Administration pursuant to paragraph (11) have been paid in full. Any distributions under this paragraph shall be made to private investors and to the Administration in the ratio of private capital to leverage as of the date of the proposed distribution: Provided, That if the amount of leverage outstanding is less than 50 per centum of the amount of private capital or $10,000,000, whichever is less, no distribution shall be required to be made to the Administration unless the Administration determines, on a case-by-case basis, to require distributions to the Administration to reduce the amount of outstanding leverage to an amount less than $10,000,000. “(11) (A) A company which issues participating securities shall agree to allocate to the Administration a share of its profits determined by the relationship of its private capital to the amount of participating securities guaranteed by the Administration in accordance with the following: “(i) If the total amount of participating securities is 100 per centum of private capital or less, the company shall allocate to the Administration a per centum share computed as follows: the amount of participating securities divided by private capital times 9 per centum. “(ii) If the total amount of participating securities is more than 100 per centum but not greater than 200 per centum of private capital, the company shall allocate to the Administration a per centum share computed as follows: “(I) 9 per centum, plus “(II) 3 per centum of the amount of participating securities minus private capital divided by private capital. “(B) Notwithstanding any other provision of this paragraph— “(i) in no event shall the total per centum required by this paragraph exceed 12 per centum, unless required pursuant to the provisions of (ii) below, “(ii) if, on the date the participating securities are marketed, the interest rate on Treasury bonds with a maturity of 10 years is a rate other than 8 per centum, the Administration shall adjust the rate specified in paragraph (A) above, either higher or lower, by the same per centum by which the Treasury bond rate is higher or lower than 8 per centum, and “(iii) this paragraph shall not be construed to create any ownership interest of the Administration in the company. “(12) A company may elect to make an in-kind distribution of securities only if such securities are publicly traded and marketable. The company shall deposit the Administration’s share of such securities for disposition with a trustee designated by the Administration or, at its option and with the agreement of the company, the Administration may direct the company to retain the Administration’s share. If the company retains the Administration’s share, it shall sell the Administration’s share and promptly remit the proceeds to the Administration. As used in this paragraph, the term ‘trustee’ means a person who is knowledgeable about and proficient in the marketing of thinly traded securities. “(h) The computation of amounts due the Administration under participating securities shall be subject to the following terms and conditions: “(1) The formula in subsection (g)(ll) shall be computed annually and the Administration shall receive distributions of its profit participation at the same time as other investors in the company. “(2) The formula shall not be modified due to an increase in the private capital unless the increase is provided for in a proposed business plan submitted to and approved by the Administration. “(3) After distributions have been made, the Administration’s share of such distributions shall not be recomputed or reduced. “(4) If the company prepays or repays the participating securities, the Administration shall receive the requisite participation upon the distribution of profits due to any investments held by the company on the date of the repayment or prepayment. “(5) If a company is licensed on or before March 31, 1993, it may elect to exclude from profit participation all investments held on that date and in such case the Administration shall determine the amount of the future expenses attributable to such prior investment: Provided, That if the company issues participating securities to refinance debentures as authorized m subsection (g)(6), it may not elect to exclude profits on existing investments under this paragraph.”. SEC. 404. POOLING. Section 321 of the Small Business Investment Act of 1958 (15 U.S.C. 6871) is amended to read as follows: “SEC. 321. ISSUANCE AND GUARANTEE OF TRUST CERTIFICATES. “(a) The Administration is authorized to issue trust certificates representing ownership of all or a fractional part of debentures issued by small business investment companies, including companies operating under the authority of section 301(d), and guaranteed by the Administration under this Act, or participating securities which are issued by such companies and purchased and guaranteed pursuant to section 303(g): 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 or guaranteed participating securities. “(b) 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 or the redemption price of and priority payments on the participating securities, which compose the trust or pool. In the event that a debenture in such trust or pool is prepaid, or participating securities are redeemed, either voluntarily or involuntarily, or in the event of default of a debenture or voluntary or involuntary redemption of a participating security, 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 or redeemed participating security and priority payments represent in the trust or pool. Interest on prepaid or defaulted debentures, or priority payments on participating securities, 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 or redemption, whether voluntary or involuntary, of all participating securities residing in the pool. “(c) 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) The Administration shall not collect a 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) (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 or participating securities residing in a trust or pool against which trust certificates are issued. “(f) (1) The Administration shall provide for a central registration of all trust certificates sold pursuant to this section. Such central registration shall include with respect to each sale— “(A) identification of each small business investment company; “(B) the interest rate or prioritized payment rate paid by the small business investment company; “(C) commissions, fees, or discounts paid to brokers and dealers in trust certificates; “(D) identification of each purchaser of the trust certificate; “(E) the price paid by the purchaser for the trust certificate; “(F) the interest rate on the trust certificate; “(G) the fee of any agent for carrying out the functions described in paragraph (2); and “(H) such other information as the Administration deems appropriate. “(2) The Administrator shall contract with an agent or agents to carry out on behalf of the Administration the pooling and the central registration functions of this section including, notwithstanding any other provision of law, maintenance on behalf of and under the direction of the Administration, such commercial bank accounts as may be necessary to facilitate trusts or pools backed by debentures or participating securities guaranteed under this Act, and the issuance of trust certificates to facilitate such poolings. Such agent or agents 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. “(3) Prior to any sale, the Administrator shall 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. “(4) The Administrator is authorized to regulate brokers and dealers in trust certificates sold pursuant to this section.”. SEC. 405. AUTHORIZATIONS. Section 20 of the Small Business Act (15 U.S.C. 631 note) is amended— (1) by striking in subsection (g)(3) “stock and $221,000,000 in guarantees of debentures” and inserting in lieu thereof the following: “securities, $221,000,000 in guarantees of debentures, of which $40,000,000 is authorized in guarantees of debentures from companies operating pursuant to section 301(d) of such Act, and $100,000,000 in guarantees of participating securities”; (2) by striking in subsection (i)(3) “stock and $232,000,000 in guarantees of debentures” and inserting in lieu thereof the following: “securities, $232,000,000 in guarantees of debentures, of which $42,000,000 is authorized in guarantees of debentures from companies operating pursuant to section 301(d) of such Act, and $250,000,000 in guarantees of participating securities”; and (3) by adding the following new subsections at the end thereof: “(k) The following program levels are authorized for fiscal year 1995: “(1) For the programs authorized by title III of the Small Business Investment Act of 1958, the Administration is authorized to make $23,000,000 in purchases of preferred securities, $244,000,000 in guarantees of debentures, of which $44,000,000 is authorized in guarantees of debentures from companies operating pursuant to section 301(d) of such Act, and $400,000,000 in guarantees of participating securities. “(l) There are authorized to be appropriated to the Administration for fiscal year 1995 such sums as may be necessary to carry out subsection (k), including salaries and expenses of the Administration. “(m) The following program levels are authorized for fiscal year 1996: “(1) For the programs authorized by title III of the Small Business Investment Act of 1958, the Administration is authorized to make $24,000,000 in purchases of preferred securities, $256,000,000 in guarantees of debentures, of which $46,000,000 is authorized in guarantees of debentures from companies operating pursuant to section 301(d) of such Act, and $550,000,000 in guarantees of participating securities. “(n) There are authorized to be appropriated to the Administration for fiscal year 1996 such sums as may be necessary to carry out subsection (m), including salaries and expenses of the Administration. “(o) The following program levels are authorized for fiscal year 1997: “(1) For the programs authorized by title III of the Small Business Investment Act of 1958, the Administration is authorized to make $25,000,000 in purchases of preferred securities, $268,000,000 in guarantees of debentures, of which $48,000,000 is authorized in guarantees of debentures from companies operating pursuant to section 301(d) of such Act, and $700,000,000 in guarantees of participating securities. “(p) There are authorized to be appropriated to the Administration for fiscal year 1997 such sums as may be necessary to carry out subsection (o), including salaries and expenses of the Administration.”. SEC. 406. SAFETY AND SOUNDNESS. (a) Financial Viability Determined.— Section 302 of the Small Business Investment Act of 1958 (15 U.S.C. 682) is amended by adding the following at the end of subsection (a): “The Administration shall also determine the ability of the company, both prior to licensing and prior to approving any request for financing, to make periodic payments on any debt of the company which is interest bearing and shall take into consideration the income which the company anticipates on its contemplated investments, the experience of the company’s owners and managers, the history of the company as an entity, if any, and the company’s financial resources.”. (b) Valuation Guidelines and Responsibility.— Section 310 of the Small Business Investment Act of 1958 (15 U.S.C. 687b) is amended by adding at the end thereof the following new subsection: “(d) Each small business investment company shall adopt written guidelines for determination of the value of investments made by such company. The board of directors of corporations and the general partners of partnerships shall have the sole responsibility for making a good faith determination of the fair market value of the investments made by such company. Determinations shall be made and reported to the Administration not less than semiannually or at more frequent intervals as the Administration determines appropriate: Provided, That any company which does not have outstanding financial assistance under the provisions of this title shall be required to make such determinations and reports to the Administration annually, unless the Administration, in its discretion, determines otherwise.”. SEC. 407. EXAMINATIONS. (a) Examination by Investment Division.— Section 310 of the Small Business Investment Act of 1958 (15 U.S.C. 687b) is amended by striking from subsection (b) “Administration by examiners selected or approved by” and by inserting in lieu thereof the following: “Investment Division of”. (b) Transfer of Resources.— Effective October 1, 1992, the personnel, assets, liabilities, contracts, property, records, and unexpended balances of appropriations, authorizations, and other funds employed, held, used, arising from, available or to be made available, which are related to the examination function provided by section 310 of the Small Business Investment Act or 1958 shall be transferred by the Inspector General of the Small Business Administration to the Investment Division of the Small Business Administration. SEC. 408. NON-FINANCED SBICS. (a) Investment Limitation.— Section 306(a) of the Small Business Investment Act of 1958 (15 U.S.C. 686(a)) is amended to read as follows: “(a) If any small business investment company has obtained financing from the Administration and such financing remains outstanding, the aggregate amount of obligations and securities acquired and for which commitments may be issued by such company under the provisions of this title for any single enterprise shall not exceed 20 per centum of the private capital of such company, without the approval of the Administration.”. (b) Conforming Amendment.— Section 310 of the Small Business Investment Act of 1958 (15 U.S.C. 687b) is amended by inserting before the semicolon at the end of subsection (c)(5) the following: “, if such restriction is applicable”. (c) Temporary Investment of Funds.— Section 308(b) of the Small Business Investment Act of 1958 (15 U.S.C. 687(b)) is amended by inserting after “Such companies” in the third sentence the following: “with outstanding financings”. (d) Regulatory Review.— Not later than 90 days after the effective 15 USC 681 note. date of this Act, the Small Business Administration shall complete a review of those regulations intended to provide for the safety and soundness of those small business investment companies which obtain financing from the Administration under the provisions of the Small Business Investment Act of 1958. The Administration is directed to exempt from such regulations, or to separately regulate, those companies which do not obtain financing from the Administration. (e) Report to Congress.— The Administration, within 180 days 15 USC 681 note. after the effective date of this Act, shall report on actions taken pursuant to section 8(d) of this Act to the Committees on Small Business of the Senate and the House of Representatives, including the rationale for its actions. SEC. 409. MINIMUM CAPITAL. Section 302 of the Small Business Investment Act of 1958 (15 U.S.C. 682) is amended by striking from subsection (a) “1979 pursuant to sections 301(c) and (d) of this Act shall be not less than $500,000” and inserting in lieu thereof the following: “1992 pursuant to section 301(c) of this title shall be not less than $2,500,000 and pursuant to section 301(d) of this title shall be not less than $1,500,000”. SEC. 410. DEFINITIONS. Section 103 of the Small Business Investment Act of 1958 (15 U.S.C. 662) is amended as follows: (1) by striking “and” at the end of paragraph (7); (2) by striking the period at the end of paragraph (8) and inserting in lieu thereof a semicolon; and (3) by adding at the end the following new paragraphs: “(9) notwithstanding any other provision of law, the term ‘private capital’ means the private paid-in capital and paid- in surplus of a corporate licensee, or the private partnership capital of an unincorporate licensee, inclusive of (A) any funds invested in the licensee by a public or private pension fund, (B) any funds invested in the licensee by State or local government entities, to the extent that such investment does not exceed 33 percent of a licensee’s total private capital and other-wise meets criteria established by the Administration, and (C) unfunded commitments from institutional investors that meet criteria established by the Administration, but it excludes any funds which are borrowed by the licensee from any source or which are obtained or derived, directly or indirectly, from any Federal source, including the Administration: Provided, That no unfunded commitment from an institutional investor may be used for the purpose of meeting the minimum amount of private capital required by this Act or as the basis for the Administration to issue obligations to provide financing; and “(10) the term ‘leverage’ includes debentures purchased or guaranteed by the Administration, participating securities purchased or guaranteed by the Administration, or preferred securities issued by companies licensed under section 301(d) of this Act and which have been purchased by the Administration.”. SEC. 411. INTEREST RATE CEILING. Section 305 of the Small Business Investment Act of 1958 (15 U.S.C. 685) is amended by striking the period at the end of subsection (c) and by inserting in lieu thereof the following: “: Provided, That the Administration also shall permit those companies which have issued debentures pursuant to this Act to charge a maximum rate of interest based upon the coupon rate of interest on the outstanding debentures, determined on an annual basis, plus such other expenses of the company as may be approved by the Administration.”. SEC. 412. PREFERRED PARTNERSHIP INTERESTS. Section 303(c) of the Small Business Investment Act of 1958 (15 U.S.C. 683(c)) is amended— (1) by striking from the first sentence the word “preferred”; (2) by inserting after the second sentence the following: “As used in this subsection, the term ‘securities’ means snares of nonvoting stock or other corporate securities or limited partnership interests which have similar characteristics.”; and (3) by striking from paragraph (1) “shares of nonvoting stock (or other corporate securities having similar characteristics)” and inserting in lieu thereof “such securities”. SEC. 413. INDIRECT FUNDS FROM STATE OR LOCAL GOVERNMENTS. Section 303(e) of the Small Business Investment Act of 1958 (15 U.S.C. 683(e)) is amended— (1) by inserting after the word “company” the following: “licensed under section 301(d) and notwithstanding section 103(9)”; and (2) by striking “prior” and all that follows through the period at the end and inserting “to November 21, 1989: Provided, That such companies may include in private capital for any purpose funds indirectly obtained from State or local governments. As used in this subsection, the term ‘capital indirectly obtained’ includes income generated by a State financing authority or similar State institution or agency or from the investment of State or local money or amounts originally provided to nonprofit institutions or corporations which such institutions or corporations, in their discretion, determine to invest in a company licensed under section 301(d).”. SEC. 414. SBIC APPROVALS. Section 20 of the Small Business Act (15 U.S.C. 631 note) is amended by adding the following at the end of subsection (a)(2): “Subject to approval in appropriations Acts, amounts authorized for preferred securities, debentures or participating securities under title III of the Small Business Investment Act of 1958 may be obligated in one fiscal year and disbursed or guaranteed in the following fiscal year.”. SEC. 415. IMPLEMENTATION. Notwithstanding any law, rule, regulation or administrative moratorium, except as otherwise expressly provided in this Act, the Small Business Administration shall— (1) within 90 days after the date of enactment of this Act, publish in the Federal Register proposed rules and regulations implementing this Act and the amendments made by this Act; and (2) within 180 days after the date of enactment of this Act, publish in the Federal Register final rules and regulations implementing this Act, and enter such contracts as are necessary to implement this Act and the amendments made by this Act. SEC. 416. BUY AMERICA. Section 102 of the Small Business Investment Act of 1958 (15 15 USC 661. U.S.C. 1661) is amended by adding at the end the following: “It is the intention of the Congress that in the award of financial assistance under this Act, when practicable, priority be accorded to small business concerns which lease or purchase equipment and supplies which are produced in the United States and that small business concerns receiving such assistance be encouraged to continue to lease or purchase such equipment and supplies.”. SEC. 417. STUDIES AND REPORTS. (a) SBA Annual Report.— Section 308(g) of the Small Business Investment Act of 1958 (12 U.S.C. 687(g)) is amended by adding 15 USC 687. at the end the following new paragraph: “(3) In its annual report for the year ending on December 31, 1993, and in each succeeding annual report made pursuant to section 10(a) of the Small Business Act, the Administration shall include a full and detailed description or account relating to— “(A) the number of small business investment companies the Administration licensed, the number of licensees that have been placed in liquidation, and the number of licensees that have surrendered their licenses in the previous year, identifying the amount of government leverage each has received and the type of leverage instruments each has used; “(B) the amount of government leverage that each licensee received in the previous year and the types of leverage instruments each licensee used; “(C) for each type of financing instrument, the sizes, geographic locations, and other characteristics of the small business investment companies using them, including the extent to which the investment companies have used the leverage from each instrument to make small business loans, equity investments, or both; and “(D) the frequency with which each type of investment instrument has been used in the current year and a comparison of the current year with previous years.”. (b) Report of the Comptroller General.— Not later than 4 15 USC 681 note. years after the date of enactment of this Act, the Comptroller General of the United States shall transmit to the Committees on Small Business of the House of Representatives and the Senate a report that reviews the Small Business Investment Company program (established under the Small Business Investment Act of 1958) for the 3-year period following the date of enactment of this Act, with respect to each item listed in section 308(g)(3) of the Small Business Investment Act of 1958, as amended by subsection (a). SEC. 418. NO EFFECT ON SECURITIES LAWS. Nothing in this Act (and no amendment made by this Act) shall be construed to affect the applicability of the securities laws, as that term is defined in section 3(a)(47) of the Securities Exchange Act of 1934, or any of the rules and regulations thereunder, or otherwise supersede or limit the jurisdiction of the Securities and Exchange Commission or the authority at any time conferred under the securities laws.

13. 1996

    Department of Commerce and Related Agencies Appropriations Act, 1997

    Pub. L. 104–208 § 208(c)(1) · 110 Stat. 3009

    1. Inserted · 15 U.S.C. § 682(a)

       Pub. L. 104–208, § 208(c)(1), inserted heading

    2. Substituted · 15 U.S.C. § 682(a)

       Pub. L. 104–208, § 208(c)(1), substituted pars. (1) to (3)(A) and “determine that the licensee will be able” in par. (3)(B) for “The combined private paid-in capital and paid-in surplus of any company licensed pursuant to section 681(c) and (d) of this title shall not be less than $150,000: Provided, however, That the combined private paid-in capital and paid-in surplus of any company licensed on or after October 1, 1992 pursuant to section 681(c) of this title shall be not less than $2,500,000 and pursuant to section 681(d) of this title shall be not less than $1,500,000. In all cases, such capital and surplus shall be adequate to assure a reasonable prospect that the company will be operated soundly and profitably, and managed actively and prudently in accordance with its articles. The Administration shall also determine the ability of the company,”

    Source evidence

    Code amendment note
    Subsec. (a). Pub. L. 104–208, § 208(c)(1), inserted heading and substituted pars. (1) to (3)(A) and “determine that the licensee will be able” in par. (3)(B) for “The combined private paid-in capital and paid-in surplus of any company licensed pursuant to section 681(c) and (d) of this title shall not be less than $150,000: Provided, however, That the combined private paid-in capital and paid-in surplus of any company licensed on or after October 1, 1992 pursuant to section 681(c) of this title shall be not less than $2,500,000 and pursuant to section 681(d) of this title shall be not less than $1,500,000. In all cases, such capital and surplus shall be adequate to assure a reasonable prospect that the company will be operated soundly and profitably, and managed actively and prudently in accordance with its articles. The Administration shall also determine the ability of the company,”.

    Enacted provision · exact public law section
    Sec. 208. None of the funds appropriated under this Act or 16 USC 1851 note. any other Act henceforth may be used to develop new fishery management plans, amendments, or regulations which create new individual fishing quota programs (whether such quotas are transferable or not) or to implement any such plans, amendments or regulations approved by a Regional Fishery Management Council or the Secretary after January 4, 1995, until offsetting fees to pay for the cost of administering such plans, amendments, or regulations are expressly authorized under the Magnuson Fishery Conservation and Management Act (16 U.S.C. 1801 et seq.). This restriction shall also apply to any program relating to the Gulf of Mexico commercial red snapper fishery that authorizes the consolidation of licenses, permits or endorsements that result in different trip limits for vessels in the same class. This restriction shall not apply in any way to the North Pacific halibut and sablefish, South Atlantic wreckfish, or the Mid-Atlantic surfclam and ocean (including mahogany) quohog individual fishing quota programs. The term “individual fishing quota” does not include a community development quota.

14. 1996

    Department of Commerce and Related Agencies Appropriations Act, 1997

    Pub. L. 104–208 § 208(c)(2) · 110 Stat. 3009

    Added · 15 U.S.C. § 682(a)(4)

    Pub. L. 104–208, § 208(c)(2), added par. (4)

    Source evidence

    Code amendment note
    Subsec. (a)(4). Pub. L. 104–208, § 208(c)(2), added par. (4).

    Enacted provision · exact public law section
    Sec. 208. None of the funds appropriated under this Act or 16 USC 1851 note. any other Act henceforth may be used to develop new fishery management plans, amendments, or regulations which create new individual fishing quota programs (whether such quotas are transferable or not) or to implement any such plans, amendments or regulations approved by a Regional Fishery Management Council or the Secretary after January 4, 1995, until offsetting fees to pay for the cost of administering such plans, amendments, or regulations are expressly authorized under the Magnuson Fishery Conservation and Management Act (16 U.S.C. 1801 et seq.). This restriction shall also apply to any program relating to the Gulf of Mexico commercial red snapper fishery that authorizes the consolidation of licenses, permits or endorsements that result in different trip limits for vessels in the same class. This restriction shall not apply in any way to the North Pacific halibut and sablefish, South Atlantic wreckfish, or the Mid-Atlantic surfclam and ocean (including mahogany) quohog individual fishing quota programs. The term “individual fishing quota” does not include a community development quota.

15. 1996

    Department of Commerce and Related Agencies Appropriations Act, 1997

    Pub. L. 104–208 § 208(c)(3) · 110 Stat. 3009

    1. Inserted · 15 U.S.C. § 682(c)

       Pub. L. 104–208, § 208(c)(3), inserted heading

    2. Amended · 15 U.S.C. § 682(c)

       Pub. L. 104–208, § 208(c)(3), amended text of subsec. (c) generally. Prior to amendment, text read as follows: “The aggregate amount of shares in any such company or companies which may be owned or controlled by any stockholder, or by any group or class of stockholders, may be limited by the Administration.”

    Source evidence

    Code amendment note
    Subsec. (c). Pub. L. 104–208, § 208(c)(3), inserted heading and amended text of subsec. (c) generally. Prior to amendment, text read as follows: “The aggregate amount of shares in any such company or companies which may be owned or controlled by any stockholder, or by any group or class of stockholders, may be limited by the Administration.”

    Enacted provision · exact public law section
    Sec. 208. None of the funds appropriated under this Act or 16 USC 1851 note. any other Act henceforth may be used to develop new fishery management plans, amendments, or regulations which create new individual fishing quota programs (whether such quotas are transferable or not) or to implement any such plans, amendments or regulations approved by a Regional Fishery Management Council or the Secretary after January 4, 1995, until offsetting fees to pay for the cost of administering such plans, amendments, or regulations are expressly authorized under the Magnuson Fishery Conservation and Management Act (16 U.S.C. 1801 et seq.). This restriction shall also apply to any program relating to the Gulf of Mexico commercial red snapper fishery that authorizes the consolidation of licenses, permits or endorsements that result in different trip limits for vessels in the same class. This restriction shall not apply in any way to the North Pacific halibut and sablefish, South Atlantic wreckfish, or the Mid-Atlantic surfclam and ocean (including mahogany) quohog individual fishing quota programs. The term “individual fishing quota” does not include a community development quota.

16. 1997

    Small Business Reauthorization Act of 1997

    Pub. L. 105–135 title II § 215(a) · 111 Stat. 2592

    Substituted · 15 U.S.C. § 682(b)

    Pub. L. 105–135 substituted “any national bank, or any member bank of the Federal Reserve System or nonmember insured bank to the extent permitted under applicable State law, may invest in any 1 or more small business investment companies, or in any entity established to invest solely in small business investment companies, except that in no event shall the total amount of such investments of any such bank exceed 5 percent of the capital and surplus of the bank.” for “shares of stock in small business investment companies shall be eligible for purchase by national banks, and shall be eligible for purchase by other member banks of the Federal Reserve System and nonmember insured banks to the extent permitted under applicable State law; except that in no event may any such bank acquire shares in any small business investment company if, upon the making of that acquisition, the aggregate amount of shares in small business investment companies then held by the bank would exceed 5 percent of its capital and surplus.”

    Source evidence

    Code amendment note
    Subsec. (b). Pub. L. 105–135 substituted “any national bank, or any member bank of the Federal Reserve System or nonmember insured bank to the extent permitted under applicable State law, may invest in any 1 or more small business investment companies, or in any entity established to invest solely in small business investment companies, except that in no event shall the total amount of such investments of any such bank exceed 5 percent of the capital and surplus of the bank.” for “shares of stock in small business investment companies shall be eligible for purchase by national banks, and shall be eligible for purchase by other member banks of the Federal Reserve System and nonmember insured banks to the extent permitted under applicable State law; except that in no event may any such bank acquire shares in any small business investment company if, upon the making of that acquisition, the aggregate amount of shares in small business investment companies then held by the bank would exceed 5 percent of its capital and surplus.”

    Enacted provision · exact public law section
    (a) Bank Investments.— Section 302(b) of the Small Business Investment Act of 1958 (15 U.S.C. 682(b)) is amended by striking “1956,” and all that follows before the period and inserting the following: “1956, any national bank, or any member bank of the Federal Reserve System or nonmember insured bank to the extent permitted under applicable State law, may invest in any 1 or more small business investment companies, or in any entity established to invest solely in small business investment companies, except that in no event shall the total amount of such investments of any such bank exceed 5 percent of the capital and surplus of the bank”.

    Effective date note
    Amendment by Pub. L. 105–135 effective Oct. 1, 1997, see section 3 of Pub. L. 105–135, set out as a note under section 631 of this title.

17. 2000

    Consolidated Appropriations Act, 2001

    Pub. L. 106–554 § 1(a)(9)(tIV)(s403) · 114 Stat. 2763

    1. Inserted · 15 U.S.C. § 682(b)

       Pub. L. 106–554 inserted subsec. heading

    2. Amended · 15 U.S.C. § 682(b)

       Pub. L. 106–554 designated existing provisions as par. (1)

    3. Inserted · 15 U.S.C. § 682(b)

       Pub. L. 106–554 inserted par. heading

    4. Added · 15 U.S.C. § 682(b)

       Pub. L. 106–554 added par. (2)

    Source evidence

    Code amendment note
    Subsec. (b). Pub. L. 106–554 inserted subsec. heading, designated existing provisions as par. (1), inserted par. heading, and added par. (2).

    Enacted provision · exact public law section
    (9) H.R. 5667, as introduced on December 15, 2000.

21 of 23 references resolved to an enrolled provision · 2 partial