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CHAPTER SMALL BUSINESS ADMINISTRATION

Part 101 Administration. 102 Disclosure of information. 103 Appearances and compensation of persons appearing before SBA. 104 Proceedings to suspend or revoke the privilege of any agent to appear before

SBA. 105 Standards of conduct. 106 Lease guarantee. 107

Small business investment companies. 108 Loans to State and local development companies. 109 Adjudicative proceedings; small business investment companies. 110 Investigations; small business investment companies. 111 System of account classifications for small business investment companies. 112 Nondiscrimination in Federally assisted programs of SBA-effectuation of

Title VI of the Civil Rights Act of 1964. 113 Nondiscrimination in financial assistance programs of SBA-effectuation of

policies of Federal Government and SBA Administrator. 114 Administrative claims under Federal Tort Claims Act. 119

Economic opportunity loans. 120 Loan policy. 121

Small business size standards. 122 Business loans. 123 Disaster loans. 124 Procurement and technical assistance. 125

Research and development assistance.

Defense production pools. 127 Joint set-asides. 128

Grants for small business research.

126

ABBREVIATIONS USED IN THIS CHAPTER:

SBA=Small Business Administration.
SBID=The Small Business Investment Division of SBA.

RFC=Reconstruction Finance Corporation.
CROSS REFERENCE: For regulations of the Securities and Exchange Commission, see 17 CFR,
Chapter II.

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PART 101-ADMINISTRATION Sec. 101.1 Purpose, function, general organiza

tion. 101.2 Organization of the Washington Oi

fice-Administrator. 101.2-1 General Counsel. 101.2-2 Associate Administrator for Finan

cial Assistance. 101.2-3 Associate Administrator for Invest

ment. 101.24 Associate Administrator for Pro

curement and Management As

sistance. 101.2-5 Assistant Administrator for Man

agement. 101.2–6 Assistant Administrator for Con

gressional and Public Affairs. 101.2-7 Assistant Administrator for Plan

ning, Research and Analysis. 101.2-8 Assistant Administrator for Minor

ity Enterprise. 101.2-9 Assistant Administrator (Comp

troller). 101.3 Field Ofices. 101.3-1 Listing of Field Offices. 101.4 List of public-use SBA forms. 101.5 Statutory provisions. 101.5-1 Seal. 101.5-2 Litigation. 101.5-3 Employment of lee counsel. 101.5-4 Miscellaneous.

AUTHORITY: The provisions of this part 101 issued under secs. 5, 308, 72 Stat. 385, 694, as amended; 15 U.S.C. 634, 687, 5 U.S.C. 552. $ 101.1 Purpose, function, general or

ganization. (a) Purpose. To aid, counsel, assist, and protect the interests of small business concerns; to insure that a fair proportion of the total Government purchases and contracts or subcontracts for property and services for the Government be placed with small business enterprises; to insure that a fair proportion of the total sales of Government property be made to small business enterprises; to make loans to small business concerns and to victims of floods or other catastrophes; to make loans to State and local development companies; to license and regulate small business investment companies; to make loans to small business investment companies; to improve the management skills of owners, potential owners, and managers of small business concerns with direct action programs and through established channels of business relations; and to conduct planning studies and evaluations of the economic environment and relate the forecasted environment to the need and problems of the small business community so as to protect its interests.

(b) Functions. (1) To provide financial counseling and make direct or bank participation loans to small business concerns to finance plant construction, conversion, expansion, or to finance the acquisition of equipment, facilities, machinery, supplies, or materials and to furnish such concerns with working capital if necessary; make loans to corporations formed and capitalized by a group of small business concerns with resources provided by them for the purpose of obtaining for the use of such concerns raw materials, equipment, inventories, supplies, or the benefits of research and development or for establishing facilities for such purposes; make direct or bank participation loans to aid victims of floods, riots or civil disorders, or other catastrophes to repair, rebuild or replace their homes, businesses, or other property; make direct or bank participation loans to assist small businesses which have sustained substantial economic injury resulting from a major or natural disaster; make direct or bank participation loans to assist small businesses economically injured by a federally aided urban renewal or highway construction program, or any other construction conducted with funds provided by the Federal Government; make direct or bank participation loans to assist small businesses that have suffered substantial economic injury as a result of their inability to process or market a product for human consumption because of disease or toxicity occurring in such product through natural or undetermined causes; to process and service loans for the rehabilitation of business property owners or tenants in urban renewal areas; guarantee the payment of rentals under leases entered into by small business concerns; make direct or bank participation loans on the basis of certifications made by the Secretary of Commerce to assist firms to adjust to changed economic conditions resulting from increased competition from imported articles; make loans to State and local development companies under provisions contained in sections 501 and 502 of the Small Business Investment Act; and make, participate in, or guarantee economic opportunity loans made under provisions contained in title IV of the Economic Opportunity Act.

(2) To certify to Government procurement officers as to the capacity and credit of a small business concern to perform a specific Government contract;

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encourage letting of subcontracts by Government prime contractors to small business concerns; participate with other Government agencies in establishing total Government goals for awards to small business; to review procurement procedures, records, and contract files of other Government agencies for the purpose of checking the effectiveness of the set-aside program and its administration; consult with other Government agencies in connection with their issuance of orders or in the formulation of policies affecting small business concerns; establish “size standards" to designate what business enterprises shall be designated small business concerns with respect to: Government procurement, lending, disposal of property, and allocation or distribution of materials or supplies, and assistance from licensed small business investment companies and State and local development companies; approve small business defense production pools and research and development pools; enter into Government prime contracts and sublet their performance to small business concerns; inventory productive facilities of small business concerns; consult with Government agencies to insure fair and reasonable treatment for small business concerns; ascertain and coordinate the means whereby the productive capacity of small business concerns can be utilized most effectively; to cosponsor small business management courses and conferences; encourage research into the management problems of small business concerns, prepare leaflets and booklets containing new and pertinent information on management; counsel individual small businessmen, as well as prospective businessmen, on their management problems; conduct workshops for prospective business owners; work with large manufacturers, wholesalers and trade associations for the purpose of encouraging them to initiate or expand improved management development programs for their small customers, suppliers, or mem, bers; enlist the volunteer aid of retired executives for assisting small businessmen in overcoming their management and related problems; assist small business concerns to obtain Government contracts for research and development, to obtain the benefits of Government-sponsored research and development and to provide technical assistance to small

(3) To license, regulate, and provide financial assistance to small business investment companies for the purpose of improving and stimulating the national economy and the small business segment therof. The sole function of such small business investment companies is to provide venture capital in the form of equity financing and long-term loan funds, and advisory services to small business concerns.

(4) To conduct economic and statistical research pertaining to matters materially affecting the competitive strength of small business, and of the effect on small business of Federal laws, programs, and regulations, and makes recommendations to appropriate Federal agencies for the adjustment of such programs and regulations to the need of small business; analyze the economic and social effects of SBA activities and prepare recommendations concerning long-term legislative requirements; maintain liaison with universities, research groups, and other bodies that are conducting research and studying economic factors pertaining to small business, and to furnish economic data and statistical information to aid such parties in carrying out these types of studies.

(c) General organization. (1) Management of the Small Business Administration is vested in an Administrator appointed by the President with the advice and consent of the Senate. The Administrator is authorized to appoint two associate administrators under the Small Business Act and one associate administrator under the Small Business Investment Act. The Administrator is authorized to appoint a Deputy Administrator who shall be Acting Administrator of the Administration during the absence or disability of the Administrator or in the event of a vacancy in the Office of the Administrator. The Administrator is authorized, subject to the Civil Service and Classification Laws, to select, employ, appoint, and fix the compensation of such officers, employees, attorneys, and agents as shall be necessary to carry out the provisions of the Small Business Act and the Small Business Investment Act.

(2) The headquarter's office of the Small Business Administration is located at 1441 L Street NW., Washington, D.C. 20416. Further information concerning the activities of SBA can be obtained by calling the Office of Public Information, 382-4901.

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(d) Applicable law. (1) Loans made by SBA are authorized and executed pursuant to Federal programs adopted by Congress to achieve national purposes of the U.S. Government.

(2) Instruments evidencing a loan, obligation of security interest in real or personal property payable to or held by the Administration or the Administrator, such as promissory notes, bonds, guaranty agreements, mortgages, deeds of trust, and other evidences of debt or security shall be construed and enforced in accordance with applicable Federal law.

(3) In order to implement and facilitate these Federal loan programs, the application of local procedures, especially for recordation and notification purposes, may be utilized to the fullest extent feasible and practicable. However, the use of local procedures shall not be deemed or construed to be any waiver by SBA of any Federal immunity from any local control, penalty, or liability.

(4) Any person, corporation, or organization that applies for and receives any benefit or assistance from SBA, or that offers any assurance or security upon which SBA relies for the granting of such benefit or assistance, shall not be entitled to claim or assert any local immunity to defeat the obligation such party incurred in obtaining or assuring such Federal benefit or assistance. [34 F.R. 15452, Oct. 4, 1969) § 101.2 Organization of the Washing

ton Office Administrator. All offices heading $ $ 101.2 to 101.2–9 are located in Washington, D.C., and their heads report directly to the Administrator. The Administrator is responsible to the President and Congress for exercising direction, authority, and control over the Small Business Administration. Determines and approves all policies covering the Agency's programs to aid, counsel, assist, and protect the interests of the Nation's small business concerns. He delegates responsibility and authority, except the authority to make or decline pool loans; applied research programs; and defense production pools, as set forth in sections 7(a) (6), 9(d), and 11 of the Small Business Act, to the Deputy Administrator, associate administrators, other Central Office officials reporting directly to him, and the area administrators. He consults with Federal, State, and local agencies in behalf of small business interests in the national

economy. Reports to the President and Congress on Agency program accomplishments and problems. He directs the execution of authority delegated to the Administrator by the Secretary of Housing and Urban Development with respect to performance of SBA's responsibilities under section 312 of the Housing Act of 1964, as amended. He maintains as a responsibility of his office the activities related to equal employment opportunity within SBA, formal review of size appeals cases, Agency participation and representation in the Interagency Program, and the SBA Program Advisory Council. He periodically evaluates the performance, accomplishments, and short-range and long-range planning goals of the Central Office officials reporting directly to him, and the area administrators.

(a) Hearing Examiner. Presides at hearings and examinations conducted in accordance with proceedings of section 11 of the Administrative Procedures Act. These hearings and examinations involve the enforcement of compliance with the provisions of the Small Business Investment Act, policies and regulations issued by SBA under the act, in addition to compliance matters involving the SBA civil rights program and regulations pursuant to the provisions of the Civil Rights Act of 1964. Also conducts hearings relative to dispute article in the administration of SBA contracts. Administers oaths, subpoenas witnesses; takes testimony; rules on the admissibility of evidence, offers of proof and other disputed matters; rules upon motions and procedural requests; and takes all necessary precautions to protect the rights of all parties. Makes decisions based upon the evidence in the record, the arguments and contentions made, and the application of law and regulations to the facts.

(b) National Advisory Council-Small Business Administration. The National Advisory Council of the Small Business Administration is composed of representatives from each of the Regional Advisory Councils and Members-atLarge from each of the Agency areas. These representatives are persons actively engaged in small business or finance, or in services or professions related to small business including the fields of labor, law, accounting, insurance, education, real estate, and the news media. These members particularly qualified by their knowledge of and interest in small business are able to contribute sub

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stantially to the Agency and the small tions conducted at Central and field office business community. All members are levels, and initiates corrective policies selected by the Administrator and serve where required. Prepares documents at his pleasure without compensation. for publication in the FEDERAL REGISTER, The council meets with and advises the and interprets the Administrative ProAdministrator on the development, ex- cedure Act. Serves as legal adviser to the ecution, and evaluation of present or Size Appeals Board. proposed SBA programs. All functions (a) Administrative Operations Staff. are purely advisory and all determina- Prepares budget estimates and develops tions of actions to be taken are made supporting data for offices for which solely by the responsible SBA officials. General Counsel is responsible. CooperThe Administrator appoints the chair- ates with the Budget Division in budget man of the council.

preparation, presentation and control. (34 F.R. 15453, Oct. 4, 1969)

Maintains liaison with the Budget Divi

sion in connection with budgetary mat§ 101.2-1 General Counsel.

ters. Coordinates and recommends proAdvises the Administrator and other cedures and other instructions for the officials as to the legal aspects of the administration of legal activities. Coopdevelopment and execution of SBA poli- erates with the Assistant Administrator cies and programs. Analyzes and inter- (Comptroller) and his staff with reprets legislation, regulations, and orders spect to such activities. In cooperation relating to the operation of the Agency with the Work Measurement Division, for compliance with statutory and regu- Office of Reports, develops work measlatory requirements. Reviews legislative urement system for Central and field proposals affecting small business and office legal staff. Analyzes workload and develops recommendations for the Ad- work measurement data submitted by ministrator for submission to Bureau of Central Office and field attorneys. Dithe Budget and congressional commit- rects, recommends, coordinates, and contees. Prepares legislative proposals re

trols all administrative directives, prolating to SBA, and develops reports for cedures, and practices relating to the congressional hearings or the Office of

functions and activities of General the President. Represents the Adminis

Counsel. Initiates and conducts studies trator in negotiations with other Gov- designed to facilitate staff operations ernment agencies as to the legal aspects

and leading to solution of special probof matters pertaining to responsibilities lems as they arise. Advises the General of SBA. Develops legal theories incor- Counsel or Deputy General Counsel on porated in requests to the Comptroller all administrative matters, and on all General or to other Government agen

personnel and training matters involvcies for decisions in matters of interest ing field office legal personnel. Conducts to small business. Assists and participates

studies and prepares recommendations with the Department of Justice in liti- with respect to manpower utilization, gation arising from delinquent loans,

staffing requirements, and delegations criminal matters, and other SBA pro

of authority. Coordinates and prepares gram activities. Prosecutes administra- planning-programing-budgeting system tive proceedings pursuant to the Small statements, statistics, and reports for Business Investment Act. Provides legal submission by GC to the Administrator, counsel and assistance, including draft

and Assistant Administrator (Comping of legal instruments, to Agency offi

troiler). Plans, prepares, and coordinates cials in the development of policies,

the preparation of reports for the Genoperating procedures, and interagency

eral Counsel. Reviews administrative deagreements relating to the financial, in

ficiencies and problems and recommends vestment, administrative, technical, and

corrective action. Coordinates followup procurement assistance programs. Also,

actions and replies on reports of audit provides legal advice in connection with

examinations of legal operations. Esprogram operations on such matters as

tablishes and directs the maintenance the formation of defense production

of all files and records for the General pools and research and development

Counsel, including the official litigation pools; eligibility of applicants for assist

files of the Agency. ance from SBA; and servicing and

(b) Office of Loans. Provides legal liquidation of loans. Plans, directs, and

counsel to Agency officials in the developprovides for the development of adequate

ment of policies and operating procecontrols over the legal assistance opera

dures relating to the financial assistance

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