An Act to amend the Small Business Investment Act of 1958
PL 88-273 (S.298), enacted 02/28/1964

146 
PUBLIC LAW 88-273-FEB. 28, 1964 
[78 STAT. 
68A Stat. 357; 
75 Stat. 536. 
26 u s e 1441. 
Effective date. 
(c) WITHHOLDING f
>
F TAX ON CERTAIN Nt)NKESii)ENT ALIKXS.—Sub-
sections (a) and (b) of section 1441 (relating to witliliokling of tax 
on nonresident aliens) are amended by striking out "18 percent" and 
inserting in lieu thereof "14 percent". 
(d) EFFECTIVB DATES.—^The amendments made by subsections (a) 
and (b) of this section shall apply with respect to remuneration paid 
after the seventh day following the date of the enactment of this Act. 
The amendment made by subsection (c) of this section shall apply with 
respect to payments made after the seventh day following the dnte 
of the enactment of this Act. 
Approved February 26, 1964. 
February 28, 1964 
[S. 298] 
Public Law 88-273 
AN ACT 
To amend the Small Business Investment Act of 1958. 
Small Business 
Investment Act 
Amendmen ts of 
1963. 
7 2 Stat. 69 2; 
75 Stat. 752. 
15 u s e 682. 
Borrowing 
power. 
15 u s e 683. 
Assistance; 
limitations. 
15 u s e 686. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assemhled^ That this Act may 
be cited as the "Small Business Investment Act Amendments of 1963". 
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". 
SEC. 3. Section 303(b) of the Small Business Investment Act of 
1958 is amended to read as follows: 
"(b) To encourage the formation and growth of small business 
investment companies, the Administration is authorized (but only to 
the extent that the necessary funds are not available to the company 
involved from private sources on reasonable terms) to lend funds to 
such companies either directly or by loans made or effected in coop-
eration with banks or other lending institutions through a^eements 
to participate on an immediate or deferred (standby) basis. 
Such 
loans shall bear interest at such rate (in no case lower than the average 
investment yield, as determined by the Secretary of the Treasury, on 
marketable obligations of the United States outstanding at the time of 
the loan involved) and contain such other terms as the Administration 
may fix, and shall be subject to the following restrictions and 
limitations: 
" (1) The total amount of obligations of any one company which 
may be purchased and outstanding at any one time by the Admin-
istration under this subsection (including commitments to pur-
chase such obligations) shall not exceed 50 per centum of the paid-
in capital and surplus of such company or $4,000,000, whichever is 
less. 
" (2) All loans made under this subsection (b) shall be of such 
sound value as reasonably to assure repayment." 
SEC. 4. Section 306 of the Small Business Investment Act of 1958 is 
amended to read as follows: 
(( 
AGGREGATE LIMITATIONS 
"SEC. 306. Without the approval of the Administration, the aggre-
gate amount of obligations and securities acquired and for which com-
mitments may be issued by any small business investment company 
78 STAT. ] 
PUBLIC LAW 88-274-FEB. 29, 1964 
147 
under the provisions of this Act for any single enterprise shall not 
exceed 20 per centum of the combined capital and surplus of such 
small business investment company authorized bv this Act." 
SEC. 5. The last sentence of section 308(b) of the Small Business 
Investment Act of 1958 is amended to read as follows: "Such compa-
nies may invest funds not reasonably needed for their current opera-
tions in direct obligations of, or obligations guaranteed as to principal 
and interest by, the United States, or in insured savings accounts (up 
to the amount of the insurance) in any institution the accounts of 
which are insured by the Federal Savings and Loan Insurance 
Corporation." 
SEC. 6. (a) The Small Business Invesnuent Act of 1958 is further 
amended by adding at the end of title 111 a new se<;tion as follows: 
"•a)NFLICTS OF INTKKEvST 
"SEC. 312. For the purjx)se of controlling conflicts of interest which 
may be detrimental to small l)usiness ccmcenis, to small business invest-
ment companies, t o the shareholders of either, or to the purposes of 
this Act, the Administration shall adopt regulations to govern trans-
actions with any officer, director, or shai-eholdei- of any small business 
investment company, or with any pereou or concei-n, in which any 
interest, direct or indirect, financial or otherwise, is held by any offi-
cer, director, or shareholder of (1) any small business investment 
company, or (2) any |)erson or concern with an interest, direct or 
indirect, financial or otherwise, in any small business investment com-
pany. 
Such regulations shall include appi-opriate requirements for 
public disclosure (including disclosure in the locality most directly 
affected by the transaction) necessai-y to the purposes of this section.'' 
(b) That part of the Table of (^ontents of such Act which describes 
the matter included in title I I I is amended by adding at the end thereof 
the following: 
"Sec. 312. Conflicts of interest." 
Approved February 28, 1964. 
Investment of 
funds. 
15 u s e 687. 
72 Stat. 691; 
75 Stat. 7 53. 
15 u s e 681-
687c. 
Public Law 88-274 
AN A C T 
February 29, 1964 
To r«'Ii*!V«r (IM- Velerjins' Adiniuistnitinii from pjiyiug interest on (he amount of 
[S. 2064] 
csiiiital fuiuls tniiisferrefl in lisciil yeur VM'2 from this direct loan revolving 
fund to tlie li^Hii Ktiaranty revolvinjr fund. 
fie it eMdctrd hy the Senate <ind Honm of liepre^ientdtlveH of the 
United Stdtea of Amerka in Congress a^f^eitibled^ I'hat section 1823(b) 
of title 38, United States Code, is amended by adding at the end 
thereof the following sentence: "Tlie .\diniiiistrator shall not be 
required to pay interest oii transfei'S made pursuant to the Act of 
February 13, 19(52 (76 Stat. 8), from the capital of the 'direct loans 
to veterans and reserves revolving fiuid' to the 'loan guaranty revolv-
ing fund' ajid adjustments shall be made for payments of interest on 
such transfers l>efore the date of enactment of this sentence." 
Approved February 29, 1964. 
Veterans* Ad-
ministration. 
Interest on cap-
ital funds. 
72 Stat. 1214.