

ͻ
 Public Law 95-507                       
ͼ
Many laws apply to Federal procurement, and
some have special provisions about small business
and disadvantaged or minority small business
contracting. However, no law has had a more
profound effect than Public Law 95-507. This law
(enacted in October 1978) made major revisions
to the Small Business Act. In summary, the law
requires:

(1) A strong and specific commitment to
subcontracting with small and small dis-
advantaged businesses by large business prime
contractors.

(2) Detailed subcontracting plans for larger
contracts (to be explained further under the
heading of " Subcontracting Assistance"). These
may be accepted or rejected by the Government
contracting officer in a negotiated procurement
and must be carried out forcefully in either a
negotiated or sealed bid procurement by the
successful large business.

(3) Monitoring of performance against the plan by
SBA and by the procuring activity's contracting
officer.

(4) Federal buying agencies to establish special
units to assist small businesses by expanding their
contracting opportunities and by helping solve
problems.
 (5) Annual goals for small business contracting to
be set by Federal agencies.

It also makes major changes to SBA's disadvantaged
small business program in organization, program
content and procedures.

 ͻ
    Statements Required by Laws    
    and Executive Orders           
 ͼ

Federal executive agencies, including the Small Business
Administration, are required to withhold or limit financial
assistance, to impose special conditions on approved loans,
to provide special notices to applicants or borrowers and
to require special reports and data from borrowers in order
to comply with legislation passed by the Congress and
Executive Orders issued by the President and by the
provisions of various inter-agency agreements. SBA has
issued regulations and procedures that implement these laws
and executive orders and they are contained in Parts 112,
113 and 116, Title 13 Code of Federal Regulations Chapter
1, or SOP.

This form contains a brief summary of the various laws and
executive orders that affect SBA's business and disaster
loan programs and gives applicants and borrowers the
notices required by law or otherwise.

  ͻ
    Freedom of Information Act  
    (5 US.C. 552)               
  ͼ
This law provides that, with some exceptions, SBA must
supply information reflected in agency files and records to
a person requesting it. Information about approved loans
that will be automatically released includes, among   
other things, statistics on our loan programs (individual
borrowers are not identified in the statistics) and other
information such as the names of the borrowers (and their
officers, directors, stockholders or partners), the   
collateral pledged to secure the loan, the amount of the
loan, its purpose in general terms and the maturity.
Proprietary data on a borrower would not routinely be made
available to third parties. All requests under this Act are
to be addressed to the nearest SBA office and be identified
as a Freedom of Information request.
  ͻ
    Privacy Act        
    (5 us.c. 552a)     
  ͼ
Disaster home loan files are covered by this legislation
because they are normally maintained in the names of
individuals. Business loan files are maintained by        
 business name or in the name of individuals in their
entrepreneurial capacity. Thus they are not files on
individuals and, therefore, are not subject to this Act.
Any person can request to see or get copies of any personal
information that SBA has in the requestor's file. Requests
for information about another party may be denied unless
SBA has the written permission of the individual to release
the information to the requestor or unless the information
is subject to disclosure under the Freedom of Information
Act. (The "Acknowledgement" section of this form contains
the written permission of SBA to release information when
a disaster victim requests assistance under the family and
individual grant program.)               

NOTE: Any person concerned with the collection of
information, its voluntariness, disclosure or routine use
under the Privacy Act or requesting information under the
Freedom of Information Act may contact the Director,
Freedom of Information/Privacy Acts Division, Small
Business Administration, 1441 L Street, N.W., Washington,
D.C. 20416, for information about the Agency's procedures
on these two subjects.
   
SBA FORM 1261(4-89) REF:SOP 5010 USE 12/86 Edition Until
Exhausted.
   ͻ
    Right to Financial Privacy Act of 1978    
    (12 US.C. 3401)                           
   ͼ
This is notice to you, as required by the Right to
Financial Privacy Act of 1978, of SBA's access rights to
financial records held by financial institutions that are
or have been doing business with you or your business,
including any financial institution participating in a loan
or loan guarantee. The law provides that SBA shall have a
right of access to your financial records in connection
with its consideration or administration of assistance to
you in the form of a Government loan or loan guaranty
agreement. SBA is required to provide a certificate of its
compliance with the Act to a financial institution in
connection with its first request for access to your
financial records, after which no further certification is
required for subsequent accesses. The law also provides
that SBA's access rights continue for the term of any
approved loan or loan guaranty agreement. No  further
notice to you of SBA's access rights is required during the
term of any such agreement.
     
The law also authorizes SBA to transfer to another
Government authority any financial records included in an
application for a loan, or concerning an approved         
loan or loan guarantee, as necessary to process, service or
foreclose a loan or loan guarantee or to collect on a
defaulted loan or loan guarantee. No other transfer       
  of your financial records to another Government authority
will be permitted by SBA except as required or permitted by
law.
  ͻ
    Flood Disaster Protection Act   
    (42 US.C. 4011)                 
  ͼ    
Regulations have been issued by the Federal Insurance
Administration (FIA) and by SBA implementing this Act and
its amendments. These regulations prohibit SBA from making
certain loans in an FIA designated floodplain unless
Federal flood insurance is purchased as a condition of the
loan. Failure to maintain the required level of flood
insurance makes the applicant ineligible for any future
financial assistance from SBA under any program, including
disaster assistance.
ͻ
 EXECUTIVE ORDERS -- FLOODPLAIN MANAGEMENT AND WETLAND  
 PROTECTION (42 F.R. 26951 and 42 F.R. 2961)           
ͼ
The SBA discourages any settlement in or development of a
floodplain or a wetland. This statement is to notify all
SBA loan applicants that such actions are hazardous to both
life and property and should be avoided. The additional
cost of flood preventive construction must be considered in
addition to the possible loss of all assets and investments
in future floods.

 ͻ        
  Lead-Based Paint Poisoning Prevention Act             
  (42 US.C. 4821 et. seq.)                      
 ͼ        

Borrowers using SBA funds for the construction or
rehabilitation of a residential structure are prohibited
from using lead-based paint (as defined in SBA regulations)
on all interior surfaces, whether accessible or not, and
exterior surfaces, such as stairs, decks, porches,
railings, windows and doors, which are readily accessible
to children under 7 years of age. A"residential structure"
is any home, apartment, hotel, motel, orphanage, boarding
school, dormitory, day care center, extended care facility,
college or other school housing, hospital, group practice
or community facility and all other residential or
institutional structures where persons reside.

   ͻ
    Equal Credit Opportunity Act   
    (15 US.C. 1691)                
   ͼ
The Federal Equal Credit Opportunity Act prohibits
creditors from discriminating against credit applicants on
the basis of race, color, religion, national origin, sex,
marital status or age (provided that the applicant has the
capacity to enter into a binding contract); because all or
part of the applicant's income drives from any public
assistance program, or because the applicant has in good
faith exercised any right under the Consumer Credit
Protection Act.  The Federal agency that administers
compliance with this law concerning this creditor is the
Federal Trade Commission, Equal Credit Opportunity, Room
500, 633 Indiana Avenue, N.W., Washington, D.C. 20580.  

   ͻ
    Civil Rights Legislation 
   ͼ
All businesses receiving SBA financial assistance must
agree not to discriminate in any business practice,
including employment practices and services to the public,
on the basis of categories cited in 13 C.F.R., Parts 112
and 113 of SBA Regulations. This includes making their
goods and services available to handicapped clients or
customers. All business borrowers will be required to
display the "Equal Employment Opportunity Poster"
prescribed by SBA.

ͻ
  Executive Order 11738 -- Environmental Protection  
   (38 F.R. 25161)                                    
ͼ

The Executive Order charges SBA with administering its loan
programs in a manner that will result in effective
enforcement of the Clean Air Act, the Federal Water
Pollution Act and other environmental protection
legislation. SBA must, therefore, impose conditions on some
loans. By acknowledging receipt of this form and presenting
the application, the principals of all small businesses
borrowing $100,000 or more in direct funds stipulate to the
following:

1.   That any facility used, or to be used, by the subject
     firm is not listed on the EPA list of Violating
     Facilities.

2.   That subject firm will comply with all the
     requirements of Section 114 of the Clean Air Act (42
     U.S.C. 7414) and Section 308 of the Water-Act (33
     U.S.C. 1318) relating to inspection, monitoring,
     entry, reports and information, as well as all other
     requirements specified in Section 114 and Section 308
     of the respective Acts, and all regulations and
     guidelines issued thereunder.

3.   That subject firm will notify SBA of the receipt of
     any communication from the Director of the 
     Environmental Protection Agency indicating that a
     facility utilized, or to be utilized, by subject firm
     is under consideration to be listed on EPA List of
     Violating Facilities.   ͻ
    Occupational Safety and Health Act  
    (15 US.C. 651 et seq.)              
   ͼ
This legislation authorizes the Occupational Safety and
Health Administration in the Department of Labor to require
businesses to modify facilities and procedures to protect
employees or pay penalty fees. In some instances the
business can be forced to cease operations or be prevented
from starting operations in a new facility. Therefore, in
some instances SBA may require additional information from
an applicant to determine whether the business will be in
compliance with OSHA regulations and allowed to operate its
facility after the loan is approved and disbursed.
   
In all instances, signing this form as borrower is a
certification that the OSHA requirements that apply to the
borrower's business have been determined and the borrower
is, to the best of its knowledge, in compliance.


ͻ 
 Debt Collection Act of 1982 Deficit Reduction Act 
 of 1984  (31 U5.C. 3701 et seq. and other titles)  
ͼ
These laws require SBA to aggressively collect any loan
payments which become delinquent. SBA must obtain your
taxpayer identification number when you apply for a loan.
If you receive a loan, and do not make payments as they
come due, SBA may take one or more of the following
actions:

     -    Report the status of your loan(s) to credit
          bureaus                     
     -    Hire a collection agency to collect your loan
     -    Offset your income tax refund or other amounts
          due to you from the  Federal Government 
     -    Suspend or debar you or your company from doing
          business with the Federal Government 
     -    Refer your loan to the Department of Justice or
          other attorneys for litigation 
     -    Foreclose on collateral or take other action
          permitted in the loan                           
          instruments.  

   ͻ
    Consumer Credit Protection Act   
    (15 US.C. 1601 et seq.)          
   ͼ              
This legislation gives an applicant who is refused credit
because of adverse information about the applicant's
credit, reputation, character or mode of living an
opportunity to refute or challenge the accuracy of such
reports. Therefore, whenever SBA declines a loan in whole
or in part because of adverse information in a credit
report, the applicant will be given the name and address of
the reporting agency so the applicant can seek to have that
agency correct its report, if inaccurate. If SBA declines
a loan in whole or in part because of adverse information
received from a source other than a credit reporting
agency, the applicant will be given information about the
nature of the adverse information but not the source of the
report. 

A recipient of an SBA disaster home loan may rescind such
a loan within 3 days after the consummation of the
transaction, in accordance with "Regulation Z" of the
Federal Reserve Board (12 C.F.R. Part 226). This right of
rescission is not applicable to other SBA loans which are
extended primarily for business, commercial or agricultural
purposes. 

ͻ
 Applicant's Acknowledgement             
ͼ
My (our) signature(s) acknowledge(s) receipt of this form,
that I (we) have read it and that I (we) have a copy for my
(our) files. My (our) signature(s) represents my (our)
agreement to comply with the requirements the Small
Business Administration makes in connection with the
approval of my (our) loan request and to comply, whenever
applicable, with the hazard insurance, lead-based paint,
civil rights or other limitations contained in this notice.

My (our) signature(s) also represent written permission, as
required by the Privacy Act, for the SBA to release any
information in my (our) disaster loan application to the
Governor of my (our) State or the Governor's designated
representative in conjunction with the State's processing
of my (our) application for assistance under the Individual
and Family Grant Program that is available in certain major
disaster areas declared by the President.
 
  Business Name _______________________________________

                                                     By
     Date ____________________________          Name and Title        

    Proprietor, Partners, Principals and Guarantors
     
     Date ________       Signature _______________________     
     Date ________       Signature _______________________     
     Date ________       Signature _______________________     
     Date ________       Signature _______________________     

     SBA FORM 1261 (4-89)  *U.S.GPO:1989-0-622-810
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