kets, free entry into business, and opportunities for the expression and growth of personal initiative and individual judgment be assured. The preservation and expansion of such competition is basic not only to the economic well-being but to the security of this Nation. Such security and well-being cannot be realized unless the actual and potential capacity of small business is encouraged and developed. It is the declared policy of the Congress that the Government should aid, counsel, assist, and protect, insofar as is possible, the interests of small-business concerns in order to preserve free competitive enterprise, to insure that a fair proportion of the total purchases and contracts for property and services for the Government (including but not limited to contracts for maintenance, repair, and construction) be placed with small-business enterprises, and to maintain and strengthen the overall economy of the Nation. "(b) Further, it is the declared policy of the Congress that the Government should aid and assist victims of flood and other catastrophes.

"SEC. 102. For the purposes of this Act, a small-business concern shall be deemed to be one which is independently owned and operated and which is not dominant in its field of operation. In addition to the foregoing criteria the Administration, in making a detailed definition, may use these criteria, among others: Number of employees and dollar volume of business: Provided, however, That no definition promulgated by the Administrator for any purpose whatsoever shall be based solely on the number of employees: And provided further, That without undue delay the Administrator shall establish a definition of small business which definition shall be consistent with the intent of Congress. The definition presently in use by the Administrator for financial assistance is hereby continued as the definition for all purposes until the Administrator adopts a new definition based on the criteria stated herein.

"SEC. 103. (a) In order to carry out the policies of this Act there is hereby created an agency under the name 'Small Business Administration' (herein referred to as the Administration), which Administration shall be under the general direction and supervision of the President and shall not be affiliated with or be within any other agency or department of the Federal Government. The principal office of the Administration shall be located in the District of Columbia, but the Administration may establish such branch and regional offices in other places in the United States as may be determined by the Administrator of the Administration. As used in this Act, the term 'United States' includes the several States, the Territories and possessions of the United States, the Commonwealth of Puerto Rico, and the District of Columbia.

"(b) The management of the Administration shall be vested in an Administrator who shall be appointed from civilian life by the President, by and with the advice and consent of the Senate, and who shall be a person of outstanding qualifications known to be familiar and sympathetic with small-business needs and problems. The Administrator shall not engage in any other business, vocation, or employment than that of serving as Administrator. The Administrator is authorized to appoint three Deputy Administrators to assist in the execution of the functions vested in the Administration. The Administrator and the Deputy Administrators shall receive compensation at the rates provided in the Federal Executive Pay Act of 1956, or any amendments thereof.

"(c) The Administration is authorized to obtain money from the Treasury of the United States for use in the performance of the powers and duties granted to or imposed upon it by law, not to exceed a total of $700,000,000 outstanding at any one time. For this purpose appropriations not to exceed $700,000,000 are hereby authorized to be made to a revolving fund in the Treasury. Advances shall be made to the Administration from the revolving fund when requested by the Administration. This revolving fund shall be used for the purposes enumerated subsequently in section 106 (a), (b), and section 107 (a). Not to exceed an aggregate of $500,000,000 shall be outstanding at any one time for the purposes enumerated in section 106 (a). Not to exceed an aggregate of $175,000,000 shall be outstanding at any one time for the purposes enumerated in section 106 (b). Not to exceed an aggregate of $25,000,000 shall be outstanding at any one time for the purposes enumerated in section 107 (a). The Administration shall pay into miscellaneous receipts of the Treasury at the close of each fiscal year, interest on the net amount of the cash disbursements from such advances at a rate determined by the Secretary of the Treasury, taking into consideration the current average rate on outstanding interest-bearing marketable public debt obligations of the United States of comparable maturities.

"(d) (1) There is hereby created a Policy Board of the Small Business Administration consisting of three members, the administrator as Chairman, and two other members truly representative of small business and small banking.

"(2) The Policy Board shall meet at least monthly and at such other times as the Board may determine or on the call of the Administrator to determine administrative programs and policies relating to loans, procurement, disposal, and general assistance to small business. Members of the Policy Board other than the Administrator shall be paid a per diem allowance of $100 for each day spent away from their home or regular place of business for the purpose of attendance at meetings of the Policy Board and the necessary travel; and while so engaged, they may be paid actual travel expenses and not to exceed $25 per diem in lieu of subsistence and other expenses. The maximum time spent for such attendance is not to exceed 50 days in any one calendar year.

"(3) The Policy Board shall establish general policies with respect to the financial assistance, procurement, disposal, and general assistance to small business programs of the Administration.

"(4) The members of the Policy Board representative of small banks and small-business concerns shall be appointed from civilian life by the President by and with the advice and consent of the Senate, and they shall be persons of outstanding qualifications in their respective fields of operation known to be familiar and sympathetic with the needs and problems of small business. The members of the Policy Board other than the Administrator shall be actively engaged as full-time operating officials of (1) a small bank and (2) a smallbusiness concern which shall be small business as defined in section 102 of this Act.

"(e) The Administrator shall establish regional offices of the Administration in the Territories of Alaska and Hawaii and in the Commonwealth of Puerto Rico.

"SEC. 104. (a) The Administration shall have power to adopt, alter, and use a seal, which shall be judicially noticed. 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 this Act; to define their authority and duties, to provide bonds for them in such amounts as the Administrator shall determine, and to pay the costs of qualification of certain of them as notaries public. The Administration, with the consent of any board, commission, independent establishment, or executive department of the Government, may avail itself on a reimbursable or nonreimbursable basis of the use of information, services, facilities, including any field service thereof, officers, and employees thereof, in carrying out the provisions of this Act. Subject to the standards and procedures under section 505 of the Classification Act of 1949, as amended, not to exceed fifteen positions in the Small Business Administration may be placed in grades 16, 17, and 18 of the General Schedule established by that Act, and any such positions shall be additional to the number authorized by such section. “(b) In the performance of, and with respect to, the functions, powers, and duties vested in him by this Act the Administrator may

"(1) sue and be sued in any court of record of a State having general jurisdiction, or in any United States district court, and jurisdiction is conferred upon such district court to determine such controversies without regard to the amount in controversy: Provided, That no attachment, injunction, garnishment, or other similar process, mesne or final, shall be issued against the Administrator or his property;

“(2) under regulations prescribed by him, assign or sell at public or private sale, or otherwise dispose of for cash or credit, in his discretion and upon such terms and conditions and for such consideration as the Administrator shall determine to be reasonable, any evidence of debt, contract, claim, personal property, or security assigned to or held by him in connection with the payment of loans granted under this Act, and to collect or compromise all obligations assigned to or held by him and all legal or equitable rights accruing to him in connection with the payment of such loans until such time as such obligations may be referred to the Attorney General for suit or collection;

"(3) deal with, complete, renovate, improve, modernize, insure, or rent, or sell for cash or credit upon such terms and conditions and for such consideration as the Administrator shall determine to be reasonable, any real property conveyed to or otherwise acquired by him in connection with the payment of loans granted under this Act;

"(4) pursue to final collection, by way of compromise or otherwise, all claims against third parties assigned to the Administrator in connection 92432-57-2

with loans made by him. This shall include authority to obtain deficiency judgments or otherwise in the case of mortgages assigned to the Administrator. Section 3709 of the Revised Statutes, as amended (41 U. S. C. 5), shall not be construed to apply to any contract of hazard insurance or to any purchase or contract for services or supplies on account of property obtained by the Administrator as a result of loans made under this Act if the premium therefor or the amount thereof does not exceed $1,000. The power to convey and to execute in the name of the Administrator deeds of conveyance, deeds of release, assignments and satisfactions of mortgages, and any other written instrument relating to real property or any interest therein acquired by the Administrator pursuant to the provisions of this Act may be exercised by the Administrator or by any officer or agent appointed by him without the execution of any express delegation of power or power of attorney. Nothing in this section shall be construed to prevent the Administrator from delegating such power by order or by power of attorney, in his discretion, to any officer or agent he may appoint;

"(5) acquire, in any lawful manner, any property (real, personal, or mixed, tangible or intangible), whenever deemed necessary or appropriate to the conduct of the activities authorized in sections 105 and 106 (a) of this Act.

"(6) make such rules and regulations as he deems necessary to carry out the authority vested in him by or pursuant to this Act;

"(7) in addition to any powers, functions, privileges, and immunities otherwise vested in him, take any and all actions, including the procurement of the services of attorneys by contract, determined by him to be necessary or desirable in making, servicing, comprising, modifying, liquidating, or otherwise dealing with or realizing on loans made under the provisions of this Act: Provided, That no attorneys' services shall be procured by contract in any office where an attorney or attorneys are or can be economically employed full time to render such services; and

"(8) pay the transportation expenses and per diem in lieu of subsistence expenses, in accordance with the Travel Expense Act of 1949, for travel of any person employed by the Administration to render temporary services not in excess of six months in connection with any disaster referred to in section 106 (b) of this Act, from place of appointment to, and while at, the disaster area and any other temporary posts of duty and return upon completion of the assignment;

"(9) to accept the services and facilities of Federal, State, and local agencies and groups, both public and private, and utilize such gratuitous services and facilities as may, from time to time, be necessary to further the objectives of this section;

"(c) To such extent as he finds necessary to carry out the provisions of this Act, the Administrator is hereby authorized to procure the temporary (not in excess of six months) services of experts or consultants or organization thereof including stenographic reporting services, by contract or appointment, and in such cases such service shall be without regard to the civil-service and classification laws, and, except in the case of stenographic reporting services by organizations, without regard to section 3709, Revised Statutes, as amended (41 U. S. C. 5). Any individual so employed may be compensated at a rate not in excess of $50 per diem, and, while such individual is away from his home or regular place of business, he may be allowed transportation and not to exceed $15 per diem in lieu of subsistence and other expenses.

"Sec. 105. (a) All moneys of the Administration not otherwise employed may be deposited with the Treasurer of the United States subject to check by authority of the Administration. The Federal Reserve banks are authorized and directed to act as depositaries, custodians, and fiscal agents for the Administration in the general performance of its powers conferred by this Act. Any banks insured by the Federal Deposit Insurance Corporation, when designated by the Secretary of the Treasury, shall act as custodians and financial agents for the Administration. Each Federal Reserve bank, when designated by the Administrator as fiscal agent for the Administration, shall be entitled to be reimbursed for all expenses incurred as such fiscal agent.

"(b) The Administrator shall contribute to the civil-service retirement and disability fund, on the basis of annual billings as determined by the Civil Service Commission, for the Government's share of the cost of the civil-service retirement system applicable to the employees engaged in carrying out the functions of this Act or the beneficiaries of such employees. The Administrator shall also

contribute to the employees' compensation fund, on the basis of annual billings as determined by the Secretary of Labor, for the benefit payments made from such funds on account of employees engaged in carrying out the functions financed by such revolving fund. The annual billings shall also include a statement of the fair portion of the cost of the administration of the respective funds, which shall be paid by the Administrator into the Treasury as miscellaneous receipts. "SEC. 106. (a) The Administration is empowered to make loans (i) to enable small-business concerns to finance plant construction, conversion, or expansion, including the acquisition of land; or (ii) to finance the acquisition of equipment, facilities, machinery, supplies, or materials; or (iii) to supply such concerns with workng capital to be used in the manufacture of articles, equipment, supplies, or materials for war, defense, or civilian production; or (iv) as may be necessary to insure a well-balanced national economy; and such loans may be made or effected either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred basis: Provided, however, That the foregoing powers shall be subject to the following restrictions and limitations:

"(1) No financial assistance shall be extended pursuant to this subsection unless the financial assistance applied for is not otherwise available on reasonable terms.

"(2) No immediate participation may be purchased unless it is shown that a deferred participation is not available; and no loan may be made unless it is shown that a participation is not available.

"(3) In agreements to participate in loans on a deferred basis under this subsection or under subsection (b) of this section, such participation by the Administration shall not be in excess of 90 per centum of the balance of the loan outstanding at the time of disbursement.

"(4) No loan shall be extended if the total amount outstanding and committed (by participation or otherwise) to the borrower from the revolving fund established by this title would exceed $250,000. The maximum rate of interest for the Small Business Administration's share of participating or direct business loans shall be no more than 5 per centum or the prevailing rate if lower than 5 per centum. The standard for the determination for prevailing rates shall mean the prevailing rate within the respective Federal Reserve districts where the money loaned is to be used. The foregoing limitation of $250,000 shall not apply to any loan extended to any corporation 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, or supplies, or for establishing facilities for such purpose. For any such corporation the limit of any loan extended or made as provided for in this section shall be $250,000 multiplied by the number of separate small businesses which have formed and capitalized a corporation as hereinbefore provided.

"(5) The Administrator of the Small Business Administration is authorized to consult with representatives of small-business concerns with a view to encouraging the formation by such concerns of the corporations referred to in paragraph (4) of this section. No act, or omission to act, if requested by the Administrator pursuant to this paragraph, and if found and approved by the Small Business Administration as contributing to the needs of small business, shall be construed to be within the provisions of the antitrust laws or Federal Trade Commission Act of the United States. A copy of the statement of any such finding and approval intended to be within the coverage of this section, and any modification or withdrawal thereof, shall be furnished to the Attorney General and the Chairman of the Federal Trade Commission when made, and it shall be published in the Federal Register. The authority granted in this paragraph shall be exercised only (A) by the Administrator, (B) upon the condition that the Administrator consult with the Attorney General and with the Chairman of the Federal Trade Commission, and (C) upon the condition that the Administrator obtain the approval of the Attorney General before exercising such author. ity. Upon withdrawal of any request or finding hereunder or upon withdrawal by the Attorney General of his approval of the voluntary agreement or program upon which the request or finding is based, the provisions of this paragraph shall not apply to any subsequent act or omission to act by reason of such finding or request.

"(6) No loan, including renewals or extensions thereof, may be made for a period or periods exceeding ten years, except that (A) any loan made for the purpose of constructing facilities may have a maturity of ten years plus such additional period as is estimated may be required to complete such construction,

and (B) any loan extended to corporations formed and capitalized by a group of small-business concerns for the purpose of constructing facilities may have a maturity of twenty years plus such additional time as is required to complete such construction and at an interest rate not less than 3 nor more than 5 per centum per annum.

“(7) All loans made shall in the judgment of the Administrator offer reasonable assurance of repayment.

(b) The Administration also is empowered—

"(1) to make such loans (either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred basis) as the Administration may determine to be necessary or appropriate because of floods or other catastrophes ;

"(2) to make such loans (either directly or in cooperation with banks or other lending institutions through agreements to participate on an immediate or deferred basis) as the Administration may determine to be necessary or appropriate to any small-business concern located in an area affected by a drought, if the Administration determines that the smallbusiness concern has suffered a substantial economic injury as a result of such drought and the President has determined under the Act entitled 'An Act to authorize Federal assistance to States and local governments in major disasters, and for other purposes', approved September 30, 1950, as amended (42 U. S. C., secs. 1855-1855g), that such drought is a major disaster, or the Secretary of Agriculture has found under the Act entitled 'An Act to abolish the Regional Agricultural Credit Corporation of Washington, District of Columbia, and transfer its functions to the Secretary of Agriculture, to authorize the Secretary of Agriculture to make disaster loans, and for other purposes', approved April 6, 1949, as amended (12) U. S. C., secs. 1148a-1 1148a-3), that such drought constitutes a production or economic disaster in such area.

"(3) No loans, including renewals and extensions thereof, made pursuant to this subsection may be made for a period or periods exceeding twenty years;

(4) The interest rate on the Administration's share of loans made pursuant to this subsection shall not exceed 3 per centum per annum. "(c) The Administration may further extend the maturity of or renew any loan made pursuant to this section beyond the periods stated therein, or any loan transferred to the Administration pursuant to Reorganization Plan Numbered 2 of 1954, for additional periods not to exceed ten years, if such extension or renewal will aid in the orderly liquidation of such loan.

"SEC. 107. It shall be the duty of the Administration and it is hereby empowered, whenever it determines such action is necessary

*(a) (1) to enter into contracts with United States Government and any department, agency, or officer thereof having procurement powers obligating the Administration to furnish articles, equipment, supplies, or materials to the Government. In any case in which the Administration certifies to any officer of the Government having procurement powers that the Administration is competent to perform any specific Government procurement contract to be let by any such officer, such officer shall be authorized in his discretion to let such procurment contract to the Administration upon such terms and conditions as may be agreed upon between the Administration and the procurement officer;

"(2) to arrange for the performance of such contracts by negotiating or otherwise letting subcontracts to small-business concerns or others for the manufacture, supply, or assembly of such articles, equipment, supplies, or materials, or parts thereof, or servicing or processing in connection therewith, or such management services as may be necessary to enable the Administration to perform such contracts;

(b) to provide technical and managerial aids to small-business concerns, by advising and counseling on matters in connection with Government procurement and on policies, principles, and practices of good management. including but not limited to cost accounting, methods of financing, business insurance, accident control, wage incentives, and methods engineering, by cooperating and advising with voluntary business, professional, educational. and other nonprofit organizations, associations, and institutions and with other Federal and State agencies, by maintaining a clearing house for information concerning the managing, financing, and operation of small-business enterprises, by disseminating such information, and by such other activities as are deemed appropriate by the Administration;