[Congressional Record Volume 142, Number 71 (Monday, May 20, 1996)]
[Senate]
[Pages S5379-S5382]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. EXON (for himself and Mr. Kerrey):
  S. 1780. A bill to revise the boundary of the North Platte National 
Wildlife Refuge, and for other purposes; to the Committee on 
Environment and Public Works.


                north platte wildlife refuge legislation

  Mr. EXON. Mr. President, I rise today to introduce legislation along 
with Senator Kerrey to revise the boundary of the North Platte National 
Wildlife Refuge in western Nebraska. This bill, which passed the House 
on April 23 of this year, would remove 2,470 acres of land from the 
North Platte National Wildlife Refuge.
  This bill was created through the joint efforts of the community 
leaders of western Nebraska and the U.S. Fish and Wildlife Service. It 
is indeed a great example of how government works best when Federal, 
State and local governments work together.
  The refuge, located just outside Scottsbluff, NE, was established in 
the early part of this century as a preserve and breeding ground for 
native waterfowl. The refuge is also home to a Bureau of Reclamation 
irrigation project. Over the years the refuge has been managed jointly 
by the U.S. Fish and Wildlife Service and the Bureau of Reclamation. 
The Fish and Wildlife Service managed the wildlife aspects of the 
refuge and the Bureau managed the recreation. In 1986, the Bureau 
turned over management of the recreational aspects to the Fish and 
Wildlife Service.
  In 1990, a directive was issued that required the Fish and Wildlife 
Service to bring all areas of the refuge, including Lake Minatare, into 
compliance with Federal regulations. It soon became apparent to local 
residents that this directive essentially would prohibit all 
recreational and residential use of Lake Minatare, uses that had been 
commonplace under the jurisdiction of the Bureau of Reclamation.
  There was no doubt that this directive would have a significant 
impact on local tourism and the economy of the Scottsbluff area. 
Likewise, interest in maintaining the recreational use of the lake was 
very strong among local citizens. At the urging of local leaders, the 
Fish and Wildlife Service agreed to perform an environmental assessment 
of the refuge. At the end of their assessment, the Fish and Wildlife 
Service concluded that the best course of action would be to end their 
jurisdiction over portions of the refuge that were no longer as 
effective as wildlife habitat as they once were and were really better 
suited for recreational use.
  I am pleased to report, Mr. President, that this bill has the 
overwhelming support of the Department of the Interior and the U.S. 
Fish and Wildlife Service.
  I might also mention that my district office in Scottsbluff received 
numerous letters from local citizens in support of this effort. I am 
proud of the work of the citizens of western Nebraska on this issue and 
of the cooperation they received from the Fish and Wildlife Service. 
This effort is indeed a fine example of how the Federal Government and 
local citizens can and should work together to manage our Nation's 
wildlife areas to the benefit of everyone involved.
  Mr. President, I urge my colleagues to quickly support this important 
legislation.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                             Press Release

       Washington, DC--U.S. Senators Jim Exon (D-NE) and Bob 
     Kerrey (D-NE) today introduced a bill that will allow 
     continued recreational use of Lake Minatare near Scottsbluff. 
     The bill would revise the boundary of the North Platte 
     National Wildlife Refuge in western Nebraska so that the lake 
     can continue to be used by boaters, campers, and fishermen.
       The legislation is needed because of a directive issued in 
     1990 that requires the U.S. Fish and Wildlife Service to 
     bring 2,500 acres of the lake and surrounding area into 
     compliance with Federal rules governing the use of wildlife 
     refuges. The directive would declare motorized boats off 
     limits and prohibit the use of cabins near the lake.
       ``This is an example of how we can work together to change 
     a federal rule that doesn't make any sense,'' Exon and Kerrey 
     said. ``There is no doubt that the original directive would 
     have endangered local tourism and damaged the economy of the 
     Panhandle. This bill will ensure both the protection of 
     wildlife in the refuge and the continued use of Lake Minatare 
     as an important recreation area for Nebraska residents and 
     visitors.''
       The legislation was created through the joint efforts of 
     community leaders, the U.S. Fish and Wildlife Service and the 
     state's congressional delegation. Exon and Kerrey said many 
     residents have called their western Nebraska senate office in 
     support of the bill. Representative Bill Barrett introduced 
     identical legislation in the House that passed last month. It 
     is supported by both the U.S. Department of the Interior and 
     the U.S. Fish and Wildlife Service.

  Mr. KERREY. Mr. President, I rise to the floor today to support the 
North Platte National Wildlife Refuge boundary revision. The proposed 
bill would remove about 2,470 acres of land from the refuge and 
transfer it to the Bureau of Reclamation. The U.S. Fish and Wildlife 
Service reports that the land, establish as a refuge early in this 
century, no longer serves the goals of the national refuge system. 
Although the area is no longer suitable as a wildlife refuge, it does 
offer citizens of Nebraska a valuable recreation area. Thousands of 
Nebraska's citizens enjoy both water and land recreation in the area. 
The transfer of the land to the Bureau of Reclamation will allow the 
Bureau to lease the land to the Nebraska Game and Parks Commission who 
will manage the property. The Department of the Interior strongly 
supports this legislation.
  I commend both Federal and State officials for working closely with 
the local community to achieve this coordinated agreement. It is a fine 
example of the Federal Government, the State government, and the local 
community working together to improve the quality and accessibility 
public areas.
                                 ______

      By Mr. BOND:
  S. 1784. A bill to amend the Small Business Investment Act of 1958, 
and for other purposes; to the Committee on Small Business.


     the small business investment company improvement act of 1996

 Mr. BOND. Mr. President, I introduce the Small Business 
Investment Company Improvement Act of 1996. Since 1958, firms licensed 
under the Small Business Investment Company Program have made venture 
capital investment funds available to small businesses when traditional 
lending sources, such as banks and Wall Street investment firms, would 
not meet their funding needs.
  The Small Business Investment Company Improvement Act of 1996 would 
take some significant strides to enhance the safety and soundness of 
the SBIC program. For the past year, the Committee on Small Business 
has conducted a series of hearings on the SBIC program. Government and 
private sector witnesses have testified on ways to improve the program 
and build on the legislation passed by the Congress in 1992 that 
created the Participating Security Program.
  This bill incorporates portions of the recommendations from the SBIC 
Reinvention Council, operating SBIC's and Specialized SBIC's, and the 
President's fiscal year 1997 budget request. The bill would reduce the 
risk of SBIC defaults by putting in place statutory standards governing 
the licensing and leveraging of SBIC's. In addition, it imposes 
important safeguards governing the operating practices of SBIC's by 
requiring frequent and meaningful examinations of SBIC licensees and 
their investments. This bill would also require that all SBIC's invest 
in smaller enterprises, which are small businesses at the lower end of 
the eligible size standards. Lastly, the bill would increase fees paid 
by SBIC's to help lower

[[Page S5380]]

the cost of the program to the Federal Government.
  Mr. President, I ask unanimous consent that the full text of the bill 
be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1784

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; INCORPORATED DEFINITIONS.

       This Act may be cited as the ``Small Business Investment 
     Company Improvement Act of 1996''.

      SEC. 2. DEFINITIONS.

       (a) Small Business Concern.--Section 103(5) of the Small 
     Business Investment Act of 1958 (15 U.S.C. 662(5)) is amended 
     by inserting before the semicolon the following: ``, except 
     that, for purposes of this Act, an investment by a venture 
     capital firm, investment company (including a small business 
     investment company) employee welfare benefit plan or pension 
     plan, or trust, foundation, or endowment that is exempt from 
     Federal income taxation--
       ``(A) shall not cause a business concern to be deemed not 
     independently owned and operated;
       ``(B) shall be disregarded in determining whether a 
     business concern satisfies size standards established 
     pursuant to section 3(a)(2) of the Small Business Act; and
       ``(C) shall be disregarded in determining whether a small 
     business concern is a smaller enterprise''.
       (b) Private Capital.--Section 103(9) of the Small Business 
     Investment Act of 1958 (15 U.S.C. 662(9)) is amended to read 
     as follows:
       ``(9) the term `private capital'--
       ``(A) means the sum of--
       ``(i) the paid-in capital and paid-in surplus of a 
     corporate licensee, the contributed capital of the partners 
     of a partnership licensee, or the equity investment of the 
     members of a limited liability company licensee; and
       ``(ii) unfunded binding commitments, from investors that 
     meet criteria established by the Administrator, to contribute 
     capital to the licensee; provided that such unfunded 
     commitments may be counted as private capital for purposes of 
     approval by the Administrator of any request for leverage, 
     but leverage shall not be funded based on such commitments; 
     and
       ``(B) does not include any--
       ``(i) funds borrowed by a licensee from any source;
       ``(ii) funds obtained through the issuance of leverage; or
       ``(iii) funds obtained directly or indirectly from any 
     Federal, State, or local government, or any government agency 
     or instrumentality, except for--

       ``(I) funds invested by an employee welfare benefit plan or 
     pension plan; and
       ``(II) any qualified nonprivate funds (if the investors of 
     the qualified nonprivate funds do not control, directly or 
     indirectly, the management, board of directors, general 
     partners, or members of the licensee);''.

       (c) New Definitions.--Section 103 of the Small Business 
     Investment Act of 1958 (15 U.S.C. 662) is amended by striking 
     paragraph (10) and inserting the following:
       ``(10) the term `leverage' includes--
       ``(A) debentures purchased or guaranteed by the 
     Administration;
       ``(B) participating securities purchased or guaranteed by 
     the Administration; and
       ``(C) preferred securities outstanding as of October 1, 
     1995;
       ``(11) the term `third party debt' means any indebtedness 
     for borrowed money, other than indebtedness owed to the 
     Administration;
       ``(12) the term `smaller enterprise' means any small 
     business concern that, together with its affiliates--
       ``(A) has--
       ``(i) a net financial worth of not more than $6,000,000, as 
     of the date on which assistance is provided under this Act to 
     that business concern; and
       ``(ii) an average net income for the 2-year period 
     preceding the date on which assistance is provided under this 
     Act to that business concern, of not more than $2,000,000, 
     after Federal income taxes (excluding any carryover losses); 
     or
       ``(B) satisfies the standard industrial classification size 
     standards established by the Administration for the industry 
     in which the small business concern is primarily engaged;
       ``(13) the term `qualified nonprivate funds' means any--
       ``(A) funds directly or indirectly invested in any 
     applicant or licensee on or before August 16, 1982, by any 
     Federal agency, other than the Administration, under a 
     provision of law explicitly mandating the inclusion of those 
     funds in the definition of the term `private capital';
       ``(B) funds directly or indirectly invested in any 
     applicant or licensee by any Federal agency under a provision 
     of law enacted after September 4, 1992, explicitly mandating 
     the inclusion of those funds in the definition of the term 
     `private capital'; and
       ``(C) funds invested in any applicant or licensee by one or 
     more State or local government entities (including any 
     guarantee extended by those entities) in an aggregate amount 
     that does not exceed--
       ``(i) 33 percent of the private capital of the applicant or 
     licensee if such funds were invested before June 30, 1996; or
       ``(ii) 20 percent of the private capital of the applicant 
     or licensee if such funds were invested on or after June 30, 
     1996;
       ``(14) the terms `employee welfare benefit plan' and 
     `pension plan' have the same meanings as in section 3 of the 
     Employee Retirement Income Security Act of 1974, and are 
     intended to include--
       ``(A) public and private pension or retirement plans 
     subject to such Act; and
       ``(B) similar plans not covered by such Act that have been 
     established and that are maintained by the Federal Government 
     or any State or political subdivision, or any agency or 
     instrumentality thereof, for the benefit of employees;
       ``(15) the term `member' means, with respect to a licensee 
     that is a limited liability company, a holder of an ownership 
     interest or a person otherwise admitted to membership in the 
     limited liability company; and
       ``(16) the term `limited liability company' means a 
     business entity that is organized and operating in accordance 
     with a State limited liability company statute approved by 
     the Administration.''.

      SEC. 3. ORGANIZATION OF SMALL BUSINESS INVESTMENT COMPANIES.

       (a) Limited Liability Companies.--Section 301(a) of the 
     Small Business Investment Act of 1958 (15 U.S.C. 681(a)) is 
     amended in the first sentence, by striking ``body or'' and 
     inserting ``body, a limited liability company, or''.
       (b) Issuance of License.--Section 301(c) of the Small 
     Business Investment Act of 1958 (15 U.S.C. 681(c)) is amended 
     to read as follows:
       ``(c) Issuance of License.--
       ``(1) Submission of application.--Each applicant for a 
     license to operate as a small business investment company 
     under this Act shall submit to the Administrator an 
     application, in a form and including such documentation as 
     may be prescribed by the Administrator.
       ``(2) Procedures.--
       ``(A) Status.--Not later than 90 days after the initial 
     receipt by the Administrator of an application under this 
     subsection, the Administrator shall provide the applicant 
     with a written report detailing the status of the application 
     and any requirements remaining for completion of the 
     application.
       ``(B) Approval or disapproval.--Within a reasonable time 
     after receiving a completed application submitted in 
     accordance with this subsection and in accordance with such 
     requirements as the Administrator may prescribe by 
     regulation, the Administrator shall--
       ``(i) approve the application and issue a license for such 
     operation to the applicant if the requirements of this 
     section are satisfied; or
       ``(ii) disapprove the application and notify the applicant 
     in writing of the disapproval.
       ``(3) Matters considered.--In reviewing and processing any 
     application under this subsection, the Administrator--
       ``(A) shall determine whether--
       ``(i) the applicant meets the requirements of subsections 
     (a) and (c) of section 302; and
       ``(ii) the management of the applicant is qualified and has 
     the knowledge, experience, and capability necessary to comply 
     with this Act;
       ``(B) shall take into consideration--
       ``(i) the need for and availability of financing for small 
     business concerns in the geographic area in which the 
     applicant is to commence business;
       ``(ii) the general business reputation of the owners and 
     management of the applicant; and
       ``(iii) the probability of successful operations of the 
     applicant, including adequate profitability and financial 
     soundness; and
       ``(C) shall not take into consideration any projected 
     shortage or unavailability of leverage.
       ``(4) Exception.--
       ``(A) In general.--Notwithstanding any other provision of 
     this Act, the Administrator may, in the discretion of the 
     Administrator and based on a showing of special circumstances 
     and good cause, approve an application and issue a license 
     under this subsection with respect to any applicant that--
       ``(i) has private capital of not less than $3,000,000;
       ``(ii) would otherwise be issued a license under this 
     subsection, except that the applicant does not satisfy the 
     requirements of section 302(a); and
       ``(iii) has a viable business plan reasonably projecting 
     profitable operations and a reasonable timetable for 
     achieving a level of private capital that satisfies the 
     requirements of section 302(a).
       ``(B) Leverage.--An applicant licensed pursuant to the 
     exception provided in this paragraph shall not be eligible to 
     receive leverage as a licensee until the applicant satisfies 
     the requirements of section 302(a).''.
       (c) Specialized Small Business Investment Companies.--
     Section 301(d) of the Small Business Investment Act of 1958 
     (15 U.S.C. 681(d)) is repealed.

     SEC. 4. CAPITAL REQUIREMENTS.

       (a) Increased Minimum Capital Requirements.--Section 302(a) 
     of the Small Business Investment Act of 1958 (15 U.S.C. 
     682(a)) is amended by striking ``(a)'' and all that follows 
     through ``The Administration shall also determine the ability 
     of the company,'' and inserting the following:
       ``(a) Amount.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     private capital of each licensee shall be not less than--

[[Page S5381]]

       ``(A) $5,000,000; or
       ``(B) $10,000,000, with respect to each licensee authorized 
     or seeking authority to issue participating securities to be 
     purchased or guaranteed by the Administration under this Act.
       ``(2) Exception.--The Administrator may, in the discretion 
     of the Administrator and based on a showing of special 
     circumstances and good cause, permit the private capital of a 
     licensee authorized or seeking authorization to issue 
     participating securities to be purchased or guaranteed by the 
     Administration to be less than $10,000,000, but not less than 
     $5,000,000, if the Administrator determines that such action 
     would not create or otherwise contribute to an unreasonable 
     risk of default or loss to the Federal Government.
       ``(3) Adequacy.--In addition to the requirements of 
     paragraph (1), the Administrator shall--
       ``(A) determine whether the private capital of each 
     licensee is adequate to assure a reasonable prospect that the 
     licensee will be operated soundly and profitably, and managed 
     actively and prudently in accordance with its articles; and
       ``(B) determine that the licensee will be able''.
       (b) Exemption for Certain Licensees.--Section 302(a) of the 
     Small Business Investment Act of 1958 (15 U.S.C. 682(a)) is 
     amended by adding at the end the following new paragraph:
       ``(4) Exemption from capital requirements.--
       ``(A) Authority to exempt.--The Administrator may, in the 
     discretion of the Administrator, exempt from the capital 
     requirements in paragraph (1) any licensee licensed under 
     subsection (c) or (d) of section 301 before the date of 
     enactment of the Small Business Investment Company 
     Improvement Act of 1996, if--
       ``(i) the private capital of the licensee is not less than 
     $2,500,000;
       ``(ii) the licensee certifies in writing that not less than 
     50 percent of the aggregate dollar amount of its financings 
     after the date of enactment of the Small Business Investment 
     Company Improvement Act of 1996 will be provided to smaller 
     enterprises; and
       ``(iii) the Administrator determines that the licensee--

       ``(I) has a record of profitable operations; and
       ``(II) has not committed any serious or continuing 
     violation of any applicable provision of Federal or State law 
     or regulation.

       ``(B) Reduction of private capital requirement.--If the 
     Administrator determines that such action would not create or 
     otherwise contribute to an unreasonable risk of default or 
     loss to the United States Government, the Administrator, in 
     the discretion of the Administrator and based on a showing of 
     special circumstances and good cause, may reduce the private 
     capital requirement under subparagraph (A)(i) with respect to 
     any licensee.''.
       (c) Diversification of Ownership.--Section 302(c) of the 
     Small Business Investment Act of 1958 (15 U.S.C. 682(c)) is 
     amended to read as follows:
       ``(c) Diversification of Ownership.--The Administrator 
     shall ensure that the management of each licensee licensed 
     after the date of enactment of the Small Business Investment 
     Company Improvement Act of 1996 is sufficiently diversified 
     from and unaffiliated with the ownership of the licensee in a 
     manner that ensures independence and objectivity in the 
     financial management and oversight of the investments and 
     operations of the licensee.''.

     SEC. 5. BORROWING.

       (a) Debentures.--Section 303(b) of the Small Business 
     Investment Act of 1958 (15 U.S.C. 683(b)) is amended in the 
     first sentence, by striking ``(but only'' and all that 
     follows through ``terms)''.
       (b) Third Party Debt.--Section 303(c) of the Small Business 
     Investment Act of 1958 (15 U.S.C. 683(c)) is amended to read 
     as follows:
       ``(c) Third Party Debt.--The Administrator--
       ``(1) shall not permit a licensee having outstanding 
     leverage to incur third party debt that would create or 
     contribute to an unreasonable risk of default or loss to the 
     Federal Government; and
       ``(2) shall permit such licensees to incur third party debt 
     only on such terms and subject to such conditions as may be 
     established by the Administrator, by regulation or 
     otherwise.''.
       (c) Requirement To Finance Smaller Enterprises.--Section 
     303(d) of the Small Business Investment Act of 1958 (15 
     U.S.C. 683(d)) is amended to read as follows:
       ``(d) Requirement To Finance Smaller Enterprises.--The 
     Administrator shall require each licensee, as a condition of 
     approval of an application for leverage, to certify in 
     writing that not less than 20 percent of the aggregate dollar 
     amount of the financings of the licensee will be provided to 
     smaller enterprises.''.
       (d) Capital Impairment Requirements.--Section 303(e) of the 
     Small Business Investment Act of 1958 (15 U.S.C. 683(e)) is 
     amended to read as follows:
       ``(e) Capital Impairment.--Before approving any application 
     for leverage submitted by a licensee under this Act, the 
     Administrator--
       ``(1) shall determine that the private capital of the 
     licensee meets the requirements of section 302(a); and
       ``(2) shall determine, taking into account the nature of 
     the assets of the licensee, the amount and terms of any third 
     party debt owed by such licensee, and any other factors 
     determined to be relevant by the Administrator, that the 
     private capital of the licensee has not been impaired to such 
     an extent that the issuance of additional leverage would 
     create or otherwise contribute to an unreasonable risk of 
     default or loss to the Federal Government.''.
       (e) Equity Investment Requirement.--Section 303(g)(4) of 
     the Small Business Investment Act of 1958 (15 U.S.C. 
     683(g)(4)) is amended by striking ``and maintain''.
       (f) Fees.--Section 303 of the Small Business Investment Act 
     of 1958 (15 U.S.C. 683) is amended--
       (1) in subsection (b), in the fifth sentence, by striking 
     ``1 per centum,'' and all that follows before the period at 
     the end of the sentence and inserting the following: ``1 
     percent, plus an additional charge of .50 percent per annum 
     which shall be paid to and retained by the Administration'';
       (2) in subsection (g)(2), by striking ``1 per centum,'' and 
     all that follows before the period at the end of the 
     paragraph and inserting the following: ``1 percent, plus an 
     additional charge of .50 percent per annum which shall be 
     paid to and retained by the Administration''; and
       (3) by adding at the end the following new subsections:
       ``(i) Leverage Fee.--With respect to leverage granted by 
     the Administration to a licensee, the Administration shall 
     collect from the licensee a nonrefundable fee in an amount 
     equal to 3 percent of the face amount of leverage granted to 
     the licensee, payable upon the earlier of the date of entry 
     into any commitment for such leverage or the date on which 
     the leverage is drawn by the licensee.
       ``(j) Calculation of Subsidy Rate.--All fees, interest, and 
     profits received and retained by the Administration under 
     this section shall be included in the calculations made by 
     the Director of the Office of Management and Budget to offset 
     the cost (as that term is defined in section 502 of the 
     Federal Credit Reform Act of 1990) to the Administration of 
     purchasing and guaranteeing debentures and participating 
     securities under this Act.''.

     SEC. 6. LIABILITY OF THE UNITED STATES.

       Section 308(e) of the Small Business Investment Act of 1958 
     (15 U.S.C. 687(e)) is amended by striking ``Nothing'' and 
     inserting ``Except as expressly provided otherwise in this 
     Act, nothing''.

     SEC. 7. EXAMINATIONS; VALUATIONS.

       (a) Examinations.--Section 310(b) of the Small Business 
     Investment Act of 1958 (15 U.S.C. 687b(b)) is amended in the 
     first sentence by inserting ``which may be conducted with the 
     assistance of a private sector entity that has both the 
     qualifications to conduct and expertise in conducting such 
     examinations,'' after ``Investment Division of the 
     Administration,''.
       (b) Valuations.--Section 310(d) of the Small Business 
     Investment Act of 1958 (15 U.S.C. 687b(d)) is amended to read 
     as follows:
       ``(d) Valuations.--
       ``(1) Frequency of valuations.--
       ``(A) In general.--Each licensee shall submit to the 
     Administrator a written valuation of the loans and 
     investments of the licensee not less often than semiannually 
     or otherwise upon the request of the Administrator, except 
     that any licensee with no leverage outstanding shall submit 
     such valuations annually, unless the Administrator determines 
     otherwise.
       ``(B) Material adverse changes.--Not later than 30 days 
     after the end of a fiscal quarter of a licensee during which 
     a material adverse change in the aggregate valuation of the 
     loans and investments or operations of the licensee occurs, 
     the licensee shall notify the Administrator in writing of the 
     nature and extent of that change.
       ``(C) Independent certification.--
       ``(i) In general.--Not less than once during each fiscal 
     year, each licensee shall submit to the Administrator the 
     financial statements of the licensee, audited by an 
     independent certified public accountant approved by the 
     Administrator.
       ``(ii) Audit requirements.--Each audit conducted under 
     clause (i) shall include--

       ``(I) a review of the procedures and documentation used by 
     the licensee in preparing the valuations required by this 
     section; and
       ``(II) a statement by the independent certified public 
     accountant that such valuations were prepared in conformity 
     with the valuation criteria applicable to the licensee 
     established in accordance with paragraph (2).

       ``(2) Valuation criteria.--Each valuation submitted under 
     this subsection shall be prepared by the licensee in 
     accordance with valuation criteria, which shall--
       ``(A) be established or approved by the Administrator; and
       ``(B) include appropriate safeguards to ensure that the 
     noncash assets of a licensee are not overvalued.''.

     SEC. 8. TRUSTEE OR RECEIVERSHIP OVER LICENSEES.

       (a) In General.--Section 311 of the Small Business 
     Investment Act of 1958 (15 U.S.C. 687c) is amended by adding 
     at the end the following new subsection:
       ``(d) Appointment of Principal Receivers and Agents.--
       ``(1) In general.--Upon appointment as a receiver, as 
     described in subsection (c), the Administrator may appoint 
     principal receivers and receiver's agents.
       ``(2) Compensation.--A receiver's agent appointed under 
     paragraph (1) may be paid--

[[Page S5382]]

       ``(A) at any time from salaries and expense amounts 
     appropriated for the Administration, and the Administration 
     may be reimbursed for such amounts from amounts recovered 
     from the liquidation of any assets of the licensee at the 
     conclusion of the receivership; or
       ``(B) from amounts recovered from the liquidation of any 
     assets of the licensee, but only at the conclusion of the 
     receivership.''.
       (b) Contracts With Private Sector Entities.--
       (1) In general.--Not later than June 30, 1997, the Small 
     Business Administration shall enter into one or more 
     contracts or arrangements with private sector entities to 
     provide for the orderly liquidation of all licensee assets in 
     liquidation, including assets of licensees in receivership or 
     in trust with respect to which the court has appointed the 
     Administration as receiver or trustee under section 311 of 
     the Small Business Investment Act of 1958.
       (2) Definition.--For purposes of this subsection, the term 
     ``licensee'' has the same meaning as in section 103 of the 
     Small Business Investment Act of 1958.

     SEC. 9. BOOK ENTRY REGISTRATION.

       Subsection 321(f) of the Small Business Investment Act of 
     1958 (15 U.S.C. 687l) is amended by adding at the end the 
     following new paragraph:
       ``(5) Nothing in this subsection shall prohibit the 
     utilization of a book entry or other electronic form of 
     registration for trust certificates.''.

      SEC. 10. TECHNICAL AND CONFORMING AMENDMENTS.

       The Small Business Investment Act of 1958 (15 U.S.C. 661 et 
     seq.) is amended--
       (1) in section 303--
       (A) in subsection (a), by striking ``debenture bonds,'' and 
     inserting ``securities,'';
       (B) by striking subsection (f) and inserting the following:
       ``(f) Redemption or Repurchase of Preferred Stock.--
     Notwithstanding any other provision of law--
       ``(1) the Administrator may allow the issuer of any 
     preferred stock sold to the Administration before November 1, 
     1989 to redeem or repurchase such stock, upon the payment to 
     the Administration of an amount less than the par value of 
     such stock, for a repurchase price determined by the 
     Administrator after consideration of all relevant factors, 
     including--
       ``(A) the market value of the stock;
       ``(B) the value of benefits provided and anticipated to 
     accrue to the issuer;
       ``(C) the amount of dividends paid, accrued, and 
     anticipated; and
       ``(D) the Administrator's estimate of any anticipated 
     redemption; and
       ``(2) any moneys received by the Administration from the 
     repurchase of preferred stock shall be available solely to 
     provide debenture leverage to licensees having 50 percent or 
     more in aggregate dollar amount of their financings invested 
     in smaller enterprises.''; and
       (C) in subsection (g)(8)--
       (i) by striking ``partners or shareholders'' and inserting 
     ``partners, shareholders, or members'';
       (ii) by striking ``partner's or shareholder's'' and 
     inserting ``partner's, shareholder's, or member's''; and
       (iii) by striking ``partner or shareholder'' and inserting 
     ``partner, shareholder, or member'';
       (2) in section 308(h), by striking ``subsection (c) or (d) 
     of section 301'' each place that term appears and inserting 
     ``section 301'';
       (3) in section 310(c)(4), by striking ``not less than four 
     years in the case of section 301(d) licensees and in all 
     other cases,'';
       (4) in section 312--
       (A) by striking ``shareholders or partners'' and inserting 
     ``shareholders, partners, or members''; and
       (B) by striking ``shareholder, or partner'' each place that 
     term appears and inserting ``shareholder, partner, or 
     member'';
       (5) by striking sections 317 and 318, and redesignating 
     sections 319 through 322 as sections 317 through 320, 
     respectively;
       (6) in section 319, as redesignated--
       (A) in subsection (a), by striking ``, including companies 
     operating under the authority of section 301(d),''; and
       (B) in subsection (f)(2), by inserting ``or investments in 
     obligations of the United States'' after ``accounts'';
       (7) in section 320, as redesignated, by striking ``section 
     321'' and inserting ``section 319''; and
       (8) in section 509--
       (A) in subsection (a)(1), by striking the second sentence; 
     and
       (B) in subsection (e)(1)(B), by striking ``subsection (c) 
     or (d) of section 301'' and inserting ``section 301''.

     SEC. 11. AUTHORIZATION OF APPROPRIATIONS.

       Section 20(p)(3) of the Small Business Act (15 U.S.C. 631 
     note) is amended by striking subparagraph (B) and inserting 
     the following:
       ``(B) $300,000,000 in guarantees of debentures; and''.

     SEC. 12. EFFECTIVE DATE.

       This Act and the amendments made by this Act shall become 
     effective on the date of enactment of this Act.

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