There is one summary for S.1929. Bill summaries are authored by CRS.

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Introduced in Senate (12/08/1987)

Corporation for Small Business Investment Charter Act - Amends the Small Business Investment Act of 1958 to give a licensee in good standing three months from the date the Small Business Administration receives notice that it is ready to conduct business to qualify for conducting business with the Corporation for Small Business Investment and a special-purpose trust established by this Act.

Requires the Administration, within six months after receiving notice that a licensee is ready to conduct business, to promulgate regulations to effect the termination of operations of any licensee which has not qualified for conducting business with the Corporation for Small Business Investment and the Trust. Sets forth the requirements for the final regulations for termination of the operations of any licensee and directs the Administration to furnish to the Corporation all books and records necessary to carry out the provisions of this Act.

Establishes the Corporation for Small Business Investment and requires it to maintain its principal office in the District of Columbia.

Requires the President to appoint an interim board of directors for the Corporation. Sets forth procedures for selecting the Corporation's permanent board of directors. Requires the board to determine the Corporation's general policies and to select persons to fill the offices provided for in the bylaws.

Describes the Corporation's stock structure.

Authorizes any depository institution to: (1) make payments to the Corporation of capital contributions; (2) receive the Corporation's stock as evidence of capital contributions; and (3) dispose of such stock. Authorizes the Corporation to issue nonvoting preferred stock.

Sets forth limitations on obligations and securities issued by the Corporation. Authorizes the Secretary of the Treasury to purchase obligations issued by the Corporation. Sets forth limitations on the amount and yield of such purchases and requires advance approval of the Congress.

Makes all obligations issued by the Corporation acceptable as security for all fiduciary, trust, and public funds controlled by the United States.

Authorizes the Corporation to issue commitments or otherwise deal in small business investment securities after the permanent board has been duly constituted. Sets forth the procedure for perfecting a security or ownership interest in small business investment securities created by the Corporation. Authorizes the Corporation to guarantee specified securities.

Sets forth criteria for the qualifications of small business investment companies to conduct business with the Corporation.

Authorizes the Corporation to enter into agreements with small business investment companies. Authorizes such companies to provide equity capital and loans to small-business concerns. Limits small business investment companies to activities contemplated by this Act and sets forth procedures for eliminating conflicts of interest. Requires the Corporation to adopt a rule prohibiting small business investment companies from assuming control over small-business concerns except on a temporary basis. Sets forth restrictions on the financing of small business investment companies, including a limitation on the aggregate amount of obligations and securities acquired for such companies and a prohibition on providing financing for relending and purchasing or guaranteeing securities that would exceed a specified percentage of the Corporation's assets.

Provides that loans from small business investment companies to small business concerns are exempt from the provisions of the Constitution or State laws that limit the terms of such loan, unless the exemption is overriden by a State.

Requires the Corporation to adopt criteria for making investments in disadvantaged small business concerns.

Establishes a special-purpose trust which shall operate in accordance with a trust agreement between the trust and the Corporation. Sets forth procedures for appointing the trustees. Requires the trust to establish separate accounting for all preferred securities, debentures, loss reserves, and other funds acquired and to make an annual accounting of the trust's operations to the Secretary of the Treasury. Sets forth the powers of the trustees.

Requires the Administration, within 30 days after receiving notice from the Corporation that it is prepared to conduct business, to convey to the Corporation all of the right, title, and interest to all securities and outstanding debentures issued by small business investment companies which are not in liquidation.

Requires the trust to apply all of the funds held in trust and income to: (1) cover any losses realized on debentures purchased or guaranteed by the Corporation; (2) reduce the interest rate on debentures issued by special small business investment companies; (3) purchase preferred securities issued by special small business investment companies; and (4) cover the operating costs of administering the trust.

Authorizes the trustees of the trust to purchase preferred securities and the Corporation to purchase or guarantee the payment of principal and interest on debentures issued by special small business investment companies. Sets forth the terms and conditions for small purchases.

Authorizes a special small business investment company to request the Corporation to purchase or guarantee debentures issued by such company. Provides that such debentures shall be subordinate to any other obligations of such companies. Provides that if the Corporation purchases or guarantees debentures issued by special small business investment companies, in addition to such debentures acquired in lieu of the trust purchasing nonvoting stock, they shall be subordinate to any other obligations unless the Corporation determines otherwise. Sets forth restrictions on the interest rate on and total amount of such debentures.

Provides that all outstanding preferred securities purchased by the trust from special small business investment companies shall be redeemed and transferred to the U.S. Treasury 50 years after the effective date of this Act.

Gives the Administration review authority over the Corporation. Authorizes the Administration to examine the Corporation's books and records. Requires that the corporation's books be audited annually and that a report of each such audit be made by the Secretary of the Treasury to the President and to the Congress' small business committees. Provides that the Corporation's books and records shall be subject to audit by the General Accounting Office at the request of either of the Congress' small business committees and by the Administration's Office of Inspector General while specified debentures remain outstanding. Requires the Corporation to transmit to the President and the Congress' small business committees an annual report.

Authorizes the Secretary of the Treasury to sell to the Corporation on September 30, 1988, its interest in small business investment company securities guaranteed by the Administration and held by the Federal Financing Bank, providing such securities are due in FY 1989 or any subsequent year and are not in default. Sets an upper limit on the purchase price.

Requires the Secretary of the Treasury, within ten days of receiving notice that the Corporation is ready to conduct business, to propose the sale price for the securities which the Corporation is to purchase. Sets forth procedures for determining the purchase price if the board finds the Secretary's proposal unacceptable.

Requires the Corporation to submit a report, within 30 days of the completion of the purchase of the securities, to the Committee on Small Business of the House and of the Senate setting forth the activities of the Secretary, the Corporation, and their representatives under this Act.

Prohibits the Administration from making any payments to the Department of the Treasury on debentures guaranteed under the Small Business Investment Act after they are sold to the Corporation. Prohibits the Administration from selling or encumbering loans or debentures it has made or issued, except as specified in this Act.

Requires the General Accounting Office, by January 1, 1993, to prepare a report for the House and Senate Small Business Committees on the Corporation's impact in achieving the purposes of this Act.