Small Business Investment Companies: Passive Business Expansion and Technical Clarifications, 8499 [2017-01809]

Download as PDF 8499 Rules and Regulations Federal Register Vol. 82, No. 16 Thursday, January 26, 2017 This section of the FEDERAL REGISTER contains regulatory documents having general applicability and legal effect, most of which are keyed to and codified in the Code of Federal Regulations, which is published under 50 titles pursuant to 44 U.S.C. 1510. The Code of Federal Regulations is sold by the Superintendent of Documents. Prices of new books are listed in the first FEDERAL REGISTER issue of each week. SMALL BUSINESS ADMINISTRATION 13 CFR Part 107 RIN 3245–AG67 Small Business Investment Companies: Passive Business Expansion and Technical Clarifications U.S. Small Business Administration. ACTION: Final rule; delay of effective date and opportunity for public comment. AGENCY: On December 28, 2016, the Small Business Administration (SBA) published a final rule to expand permitted investments in passive businesses and provide further clarification with regard to investments in such businesses for the Small Business Investment Company (SBIC) Program, with an effective date of January 27, 2017. In the meantime, a memorandum dated January 20, 2017 from the Assistant to the President and Chief of Staff, entitled ‘‘Regulatory Freeze Pending Review’’ calls for agencies to temporarily postpone the effective date of rules not yet effective and invite new public comment. In view of this development, SBA is delaying the effective date of this rule until March 21, 2017, and is inviting additional public comment on the final rule. Any timely public comments received will be considered and any changes to the final rule will be published in the Federal Register. DATES: The effective date of the SBA final rule published December 28, 2016 (81 FR 95419) is delayed until March 21, 2017. Comments must be received on or before February 19, 2017. ADDRESSES: You may submit comments, identified by RIN 3245–AG67, by any of the following methods: Federal eRulemaking Portal: http:// www.regulations.gov. Follow the instructions for submitting comments. jstallworth on DSK7TPTVN1PROD with RULES SUMMARY: VerDate Sep<11>2014 09:46 Jan 25, 2017 Jkt 241001 Mail, Hand Delivery/Courier: Theresa Jamerson, Office for Investment and Innovation, U.S. Small Business Administration, 409 Third Street SW., Washington, DC 20416. SBA will post comments on http:// www.regulations.gov. If you wish to submit confidential business information (CBI) as defined in the User Notice at http://www.regulations.gov, please submit the information to Theresa Jamerson, Office of Investment and Innovation, 409 Third Street SW., Washington, DC 20416. Highlight the information that you consider to be CBI and explain why you believe this information should be held confidential. SBA will review the information and make the final determination of whether it will publish the information or not. FOR FURTHER INFORMATION CONTACT: Theresa Jamerson, Office of Investment and Innovation, (202) 205–7563 or sbic@ sba.gov. SUPPLEMENTARY INFORMATION: The U.S. Small Business Administration (SBA) is revising the regulations for the Small Business Investment Company (SBIC) program to expand permitted investments in passive businesses and provide further clarification with regard to investments in such businesses. SBICs are generally prohibited from investing in passive businesses under the Small Business Investment Act of 1958, as amended (Act). SBIC program regulations provide for two exceptions that allow an SBIC to structure an investment utilizing a passive small business as a pass-through. The first exception provides conditions under which an SBIC may structure an investment through up to two levels of passive entities to make an investment in a non-passive business that is a subsidiary of the passive business directly financed by the SBIC. The second exception, prior to this final rule, enabled a partnership SBIC, with SBA’s prior approval, to provide financing to a small business through a passive, wholly-owned C corporation (commonly known as a blocker corporation), but only if a direct financing would cause the SBIC’s investors to incur Unrelated Business Taxable Income (UBTI). This final rule clarifies several aspects of the first exception and in the second exception eliminates the prior approval requirement and expands the purposes for which a blocker corporation may be PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 formed. The final rule also adds new reporting and other requirements for passive investments to help protect SBA’s financial interests and ensure adequate oversight and makes minor technical amendments. Finally, this rule makes a conforming change to the regulations regarding the amount of leverage available to SBICs under common control. This change is necessary for consistency with the Consolidated Appropriations Act, 2016, which increased the maximum amount of such leverage to $350 million. Dated: January 23, 2017. Michele Schimpp, Deputy Associate Administrator, Office of Investment and Innovation. [FR Doc. 2017–01809 Filed 1–25–17; 8:45 am] BILLING CODE 8025–01–P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 22, 51, 52, 61, 68, 80, 81, 124, 147, 171, 239, 259, 300, and 770 [FRL–9958–87–OP] Delay of Effective Date for 30 Final Regulations Published by the Environmental Protection Agency Between October 28, 2016 and January 17, 2017 Environmental Protection Agency (EPA). ACTION: Final rule; delay of effective dates. AGENCY: In accordance with the Presidential directive as expressed in the memorandum of January 20, 2017, from the Assistant to the President and Chief of Staff, entitled ‘‘Regulatory Freeze Pending Review,’’ this action temporarily delays until March 21, 2017, the effective date of the regulations listed in the table below. EPA identified 30 regulations that meet those criteria. DATES: This regulation is effective January 26, 2017. The effective date of each regulation listed in the table below is delayed to a new effective date of March 21, 2017. FOR FURTHER INFORMATION CONTACT: Sarah Rees, Director, Office of Regulatory Policy and Management, Office of Policy, Mail code 1804, U.S. Environmental Protection Agency, 1200 Pennsylvania Ave NW., Washington, DC SUMMARY: E:\FR\FM\26JAR1.SGM 26JAR1

Agencies

[Federal Register Volume 82, Number 16 (Thursday, January 26, 2017)]
[Rules and Regulations]
[Page 8499]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-01809]



========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 
Prices of new books are listed in the first FEDERAL REGISTER issue of each 
week.

========================================================================


Federal Register / Vol. 82, No. 16 / Thursday, January 26, 2017 / 
Rules and Regulations

[[Page 8499]]



SMALL BUSINESS ADMINISTRATION

13 CFR Part 107

RIN 3245-AG67


Small Business Investment Companies: Passive Business Expansion 
and Technical Clarifications

AGENCY: U.S. Small Business Administration.

ACTION: Final rule; delay of effective date and opportunity for public 
comment.

-----------------------------------------------------------------------

SUMMARY: On December 28, 2016, the Small Business Administration (SBA) 
published a final rule to expand permitted investments in passive 
businesses and provide further clarification with regard to investments 
in such businesses for the Small Business Investment Company (SBIC) 
Program, with an effective date of January 27, 2017. In the meantime, a 
memorandum dated January 20, 2017 from the Assistant to the President 
and Chief of Staff, entitled ``Regulatory Freeze Pending Review'' calls 
for agencies to temporarily postpone the effective date of rules not 
yet effective and invite new public comment. In view of this 
development, SBA is delaying the effective date of this rule until 
March 21, 2017, and is inviting additional public comment on the final 
rule. Any timely public comments received will be considered and any 
changes to the final rule will be published in the Federal Register.

DATES: The effective date of the SBA final rule published December 28, 
2016 (81 FR 95419) is delayed until March 21, 2017. Comments must be 
received on or before February 19, 2017.

ADDRESSES: You may submit comments, identified by RIN 3245-AG67, by any 
of the following methods:
    Federal eRulemaking Portal: http://www.regulations.gov. Follow the 
instructions for submitting comments.
    Mail, Hand Delivery/Courier: Theresa Jamerson, Office for 
Investment and Innovation, U.S. Small Business Administration, 409 
Third Street SW., Washington, DC 20416.
    SBA will post comments on http://www.regulations.gov. If you wish 
to submit confidential business information (CBI) as defined in the 
User Notice at http://www.regulations.gov, please submit the 
information to Theresa Jamerson, Office of Investment and Innovation, 
409 Third Street SW., Washington, DC 20416. Highlight the information 
that you consider to be CBI and explain why you believe this 
information should be held confidential. SBA will review the 
information and make the final determination of whether it will publish 
the information or not.

FOR FURTHER INFORMATION CONTACT: Theresa Jamerson, Office of Investment 
and Innovation, (202) 205-7563 or sbic@sba.gov.

SUPPLEMENTARY INFORMATION: The U.S. Small Business Administration (SBA) 
is revising the regulations for the Small Business Investment Company 
(SBIC) program to expand permitted investments in passive businesses 
and provide further clarification with regard to investments in such 
businesses. SBICs are generally prohibited from investing in passive 
businesses under the Small Business Investment Act of 1958, as amended 
(Act). SBIC program regulations provide for two exceptions that allow 
an SBIC to structure an investment utilizing a passive small business 
as a pass-through. The first exception provides conditions under which 
an SBIC may structure an investment through up to two levels of passive 
entities to make an investment in a non-passive business that is a 
subsidiary of the passive business directly financed by the SBIC. The 
second exception, prior to this final rule, enabled a partnership SBIC, 
with SBA's prior approval, to provide financing to a small business 
through a passive, wholly-owned C corporation (commonly known as a 
blocker corporation), but only if a direct financing would cause the 
SBIC's investors to incur Unrelated Business Taxable Income (UBTI). 
This final rule clarifies several aspects of the first exception and in 
the second exception eliminates the prior approval requirement and 
expands the purposes for which a blocker corporation may be formed. The 
final rule also adds new reporting and other requirements for passive 
investments to help protect SBA's financial interests and ensure 
adequate oversight and makes minor technical amendments. Finally, this 
rule makes a conforming change to the regulations regarding the amount 
of leverage available to SBICs under common control. This change is 
necessary for consistency with the Consolidated Appropriations Act, 
2016, which increased the maximum amount of such leverage to $350 
million.

    Dated: January 23, 2017.
Michele Schimpp,
Deputy Associate Administrator, Office of Investment and Innovation.
[FR Doc. 2017-01809 Filed 1-25-17; 8:45 am]
 BILLING CODE 8025-01-P