[Code of Federal Regulations]
[Title 13, Volume 1]
[Revised as of January 1, 2006]
From the U.S. Government Printing Office via GPO Access
[CITE: 13CFR112]
[Page 145-151]
TITLE 13--BUSINESS CREDIT AND ASSISTANCE
CHAPTER I--SMALL BUSINESS ADMINISTRATION
PART 112_NONDISCRIMINATION IN FEDERALLY ASSISTED PROGRAMS OF
SBA_EFFECTUATION OF TITLE VI OF THE CIVIL RIGHTS ACT OF 1964
--Table of Contents
Sec.
112.1 Purpose.
112.2 Application of this part.
112.3 Discrimination prohibited.
112.4 Discrimination in employment.
112.5 Discrimination in providing financial assistance.
112.6 Discrimination in accommodations or services.
112.7 Illustrative applications.
112.8 Assurances required.
112.9 Compliance information.
112.10 Conduct of investigations.
112.11 Procedure for effecting compliance.
112.12 Effect on other regulations; forms and instructions.
Appendix A to Part 112
Authority: Sec. 602, 78 Stat. 252 (42 U.S.C. 2000d-1).
Source: 30 FR 298, Jan. 9, 1965, unless otherwise noted.
Sec. 112.1 Purpose.
The purpose of this part is to effectuate the provisions of Title VI
of the Civil Rights Act of 1964 (hereinafter referred to as the Act) to
the end that no person in the United States shall, on the ground of
race, color, or national origin, be excluded from participation in, be
denied the benefits of, or be otherwise subjected to discrimination
under any financial assistance activities of the Small Business
Administration to which the Act applies.
Sec. 112.2 Application of this part.
(a) This part applies to all recipients of Federal financial
assistance administered by the Small Business Administration. (See
appendix A)
(b) The term Federal financial assistance includes: (1) Grants and
loans of Federal funds; (2) the grant or donation of Federal property
and interests in property; (3) the detail of Federal personnel; (4) the
sale and lease of, and the permission to use (on other than a casual or
transient basis), Federal property or any interest in such property
without consideration, or at a nominal consideration, or at a
consideration which is reduced for the purpose of assisting the
recipient, or in recognition of the public interest to be served by such
sale or lease to the recipient; and (5) any Federal agreement,
arrangement, or other contract which has as one of its purposes the
provision of assistance.
(c) This part does not apply to financial assistance extended by way
of insurance or guarantee.
(d) The terms applicant and recipient mean, respectively, one who
applies for and one who receives any of the financial assistance under
any of the statutes referred to in paragraph (a) of this section. The
term recipient also shall be deemed to include subrecipients of SBA
financial assistance, i.e., concerns which secondarily receive financial
assistance from the primary recipients of such financial assistance.
(e) The terms program or activity and program mean all of the
operations of any entity described in paragraphs (e)(1) through (4) of
this section, any part of which is extended Federal financial
assistance:
(1)(i) A department, agency, special purpose district, or other
instrumentality of a State or of a local government; or
(ii) The entity of such State or local government that distributes
such assistance and each such department or agency (and each other State
or local government entity) to which the assistance is extended, in the
case of assistance to a State or local government;
(2)(i) A college, university, or other postsecondary institution, or
a public system of higher education; or
(ii) A local educational agency (as defined in 20 U.S.C. 7801),
system of vocational education, or other school system;
(3)(i) An entire corporation, partnership, or other private
organization, or an entire sole proprietorship--
(A) If assistance is extended to such corporation, partnership,
private organization, or sole proprietorship as a whole; or
[[Page 146]]
(B) Which is principally engaged in the business of providing
education, health care, housing, social services, or parks and
recreation; or
(ii) The entire plant or other comparable, geographically separate
facility to which Federal financial assistance is extended, in the case
of any other corporation, partnership, private organization, or sole
proprietorship; or
(4) Any other entity which is established by two or more of the
entities described in paragraph (e)(1),(2), or (3) of this section.
[30 FR 298, Jan. 9, 1965, as amended at 38 FR 17934, July 5, 1973; 50 FR
1441 Jan. 11, 1985; 68 FR 51348, 51349, Aug. 26, 2003]
Sec. 112.3 Discrimination prohibited.
(a) General. To the extent that this part applies, no person in the
United States shall, on the ground of race, color or national origin be
excluded from participation in, be denied the benefits of, or be
otherwise subjected to discrimination by any business or other activity.
(b) Specific discriminatory actions prohibited. (1) To the extent
that this part applies, a business or other activity may not, directly
or through contractual or other arrangements, on ground of race, color
or national origin:
(i) Deny an individual any services, financial aid or other benefit
provided by the business or other activity;
(ii) Provide any service, financial aid or other benefit to an
individual which is different or is provided in a different manner, from
that provided to others by the business or other activity;
(iii) Subject an individual to segregation or separate treatment in
any manner related to his receipt of any service, financial aid or other
benefit from the business or other activity;
(iv) Restrict an individual in any way in the enjoyment of any
advantage or privilege enjoyed by others receiving any service,
financial aid or other benefit from the business or other activity;
(v) Treat an individual differently from others in determining
whether he satisfies any admission, enrollment, quota, eligibility,
membership or other requirement or condition which individuals must meet
in order to be provided any service, financial aid or other benefit
provided by the business or other activity.
(2) The enumeration of specific forms of prohibited discrimination
in this paragraph does not limit the generality of the prohibition in
paragraph (a) of this section.
(3) This regulation does not prohibit the consideration of race,
color, or national origin if the purpose and effect are to remove or
overcome the consequences of practices or impediments which have
restricted the availability of, or participation in, a program or
activity receiving Federal financial assistance, on the grounds of race,
color, or national origin. Where previous discriminatory practice or
usage tends, on the grounds of race, color, or national origin, to
exclude individuals from participation in, to deny them the benefits of,
or to subject them to discrimination under any program or activity to
which this regulation applies, the applicant or recipient has an
obligation to take reasonable action to remove or overcome the
consequences of the prior discriminatory practice or usage, and to
accomplish the purposes of the Act.
[30 FR 298, Jan. 9, 1965, as amended at 38 FR 17934, July 5, 1973; 68 FR
51349, Aug. 26, 2003]
Sec. 112.4 Discrimination in employment.
Small business concerns and development companies which apply for or
receive any financial assistance of the kind described in Sec. 112.2(a)
(1) and (2), including concerns which are identifiable beneficiaries of
loans made under Sec. 112.2(a)(2), may not discriminate on the grounds
of race, color, or national origin in their employment practices. Such
assistance is deemed to have as a primary objective the providing of
employment. Where a primary objective of the Federal financial
assistance is not to provide employment, but discrimination on the
grounds of race, color, or national origin in the employment practices
of the recipient or other persons subject to the regulation tends, on
the grounds of race, color, or national origin, to exclude individuals
from participation in, to deny them the benefits of, or to subject them
to discrimination under any program to which this regulation applies,
the provisions of Sec. 112.7(a) shall apply to the employment practices
of the recipient
[[Page 147]]
or other persons subject to the regulation, to the extent necessary to
assure equality of opportunity and nondiscriminatory treatment.
[38 FR 17934, July 5, 1973]
Sec. 112.5 Discrimination in providing financial assistance.
Development companies and small business investment companies which
apply for or receive any of the financial assistance described in Sec.
112.2(a) may not discriminate, on the ground of race, color or national
origin, in providing financial assistance to small business concerns.
Sec. 112.6 Discrimination in accommodations or services.
Small business concerns which apply for or receive any financial
assistance of the kind described in Sec. 112.2(a)(1), concerns which
are identifiable beneficiaries of loans made under Sec. 112.2(a)(2),
and physicians, hospitals, schools, libraries, and other individuals or
organizations which apply for or receive financial assistance of the
kind described in Sec. 112.2(a)(5), may not discriminate in the
treatment accommodations or services they provide to their patients,
students, visitors, guests, members, passengers, or patrons in the
conduct of such businesses or other enterprises, whether or not operated
for profit.
[31 FR 2374, Feb. 4, 1966]
Sec. 112.7 Illustrative applications.
(a) Employment. The discrimination prohibited by Sec. 112.4
includes but is not limited to any action (taken directly or through
contractual or other arrangements) which subjects an individual to
discrimination on the ground of race, color or national origin in any
employment practice, including recruitment or recruitment advertising,
employment, layoff or termination, upgrading, demotion, or transfer,
rates of pay or other forms of compensation, and use of facilities.
(b) Financial assistance. The discrimination prohibited by Sec.
112.5 includes but is not limited to the failure or refusal, because of
the race, color, or national origin of a person, to extend a loan or
equity financing to him or to any business concern of which he is an
owner or employee; or, in the case of financing which has actually been
extended, the failure or refusal, because of the race, color, or
national origin of the borrower or of an owner or employee of the
borrower, to accord the borrower fair treatment and the customary
courtesies regarding such matters as default, grace periods and the
like.
(c) Accommodations or services. The discrimination prohibited by
Sec. 112.6 includes but is not limited to the failure or refusal,
because of the race, color, or national origin of a person, to accept
him on a nonsegregated basis as a patient, student, visitor, guest,
member, customer, passenger or patron.
(d) Affirmative action. (1) In some situations even though past
discriminatory practices have been abandoned, the consequences of such
practices continue to impede the full availability of equal opportunity.
If the efforts required of the applicant or recipient under Sec.
112.3(b)(3) to provide information as to the availability of equal
opportunity, and the rights of individuals under this regulation, have
failed to overcome these consequences, it will become necessary for such
applicant or recipient to take additional steps to make equal
opportunity fully available to racial and nationality groups previously
subjected to discrimination.
(2) Even though an applicant or recipient has never used
discriminatory policies, the opportunities in the business it operates
may not in fact be equally available to some racial or nationality
groups. In such circumstances a recipient may properly give special
consideration to race, color, or national origin to make opportunity
more widely available to such groups.
[30 FR 298, Jan. 9, 1965, as amended at 38 FR 17934, July 5, 1973]
Sec. 112.8 Assurances required.
An application for any of the financial assistance described in
Sec. 112.2(a) shall, as a condition to its approval and the extension
of such assistance, contain or be accompanied by an assurance that the
recipient will comply with this part. Such an assurance shall
[[Page 148]]
contain provisions authorizing the acceleration of the maturity of the
recipient's financial obligation to the SBA in the event of a failure to
comply, and provisions which give the United States a right to seek
judicial enforcement of the terms of the assurance. SBA shall specify
the form of the foregoing assurance, and the extent to which like
assurances will be required of contractors and subcontractors,
transferees, successors in interest, and other participants.
[30 FR 298, Jan. 9, 1965, as amended at 68 FR 51349, Aug. 26, 2003]
Sec. 112.9 Compliance information.
(a) Cooperation and assistance. SBA shall to the fullest extent
practicable seek the cooperation of applicants and recipients in
obtaining compliance with this part and shall provide assistance and
guidance to applicants and recipients to help them comply voluntarily
with this part.
(b) Compliance reports. Each applicant or recipient shall keep such
records and submit to SBA timely, complete and accurate compliance
reports at such times, and in such form and containing such information,
as SBA may determine to be necessary to enable SBA to ascertain whether
the applicant or recipient has complied or is complying with this part.
In the case of a small business concern which receives financial
assistance from a development company or from a small business
investment company, such concern shall submit to the company such
information as may be necessary to enable the company to meet its
reporting requirements under this part.
(c) Access to sources of information. Each applicant or recipient
shall permit access by SBA during normal business hours to such of its
books, records, accounts, and other sources of information, and its
facilities as may be pertinent to ascertain compliance with this part.
Where any information required of an applicant or recipient is in the
exclusive possession of any other agency, institution or person and this
agency, institution or person shall fail or refuse to furnish this
information, the applicant or recipient shall so certify in its report
and shall set forth what efforts it has made to obtain this information.
(d) Information to the public. Each recipient shall make available
to persons entitled under the Act and under this part to protection
against discrimination by the recipient such information as SBA may find
necessary to apprise them of their rights to such protection.
[30 FR 298, Jan. 9, 1965, as amended at 38 FR 17934, July 5, 1973]
Sec. 112.10 Conduct of investigations.
(a) Periodic compliance reviews. SBA shall from time to time review
the practices of recipients to determine whether they are complying with
this part.
(b) Complaints. Any person who believes himself or any specific
class of individuals to be subjected to discrimination prohibited by
this part may, by himself or by a representative, file with SBA a
written complaint. A complaint must be filed not later than 180 days
from the date of the alleged discrimination, unless the time for filing
is extended by SBA.
(c) Investigations. SBA will make a prompt investigation whenever a
compliance review, report, complaint, or any other information indicates
a possible failure to comply with this part. The investigation should
include, where appropriate, a review of the pertinent practices and
policies of the applicant or recipient, the circumstances under which
the possible noncompliance with this part occurred, and other factors
relevant to a determination as to whether the applicant or recipient has
failed to comply with this part.
(d) Resolution of matters. (1) If an investigation pursuant to
paragraph (c) of this section indicates a failure to comply with this
part, SBA will so inform the applicant or recipient and the matter will
be resolved by informal means whenever possible. If it has been
determined that the matter cannot be resolved by informal means, action
will be taken as provided for in Sec. 112.11.
(2) If an investigation does not warrant action pursuant to
paragraph (d)(1) of this section, SBA will so inform the applicant or
recipient and the complainant, if any, in writing.
(e) Intimidatory or retaliatory acts prohibited. No applicant or
recipient or
[[Page 149]]
other person shall intimidate, threaten, coerce, or discriminate against
any individual for the purpose of interfering with any right or
privilege secured by section 601 of the Act or by this part or because
he has made a complaint, testified, assisted, or participated in any
manner in an investigation, proceeding, or hearing under this part. The
identity of complainants shall be kept confidential except to the extent
necessary to carry out the purposes of this part, including the conduct
of any investigation, hearing, or judicial proceeding arising
thereunder.
[30 FR 298, Jan. 9, 1965, as amended at 38 FR 17934, July 5, 1973]
Sec. 112.11 Procedure for effecting compliance.
(a) General. (1) If there appears to be a failure or threatened
failure to comply with this part and if the noncompliance or threatened
noncompliance cannot be corrected by informal means, compliance with
this part may be effected by suspending, terminating, or refusing any
financial assistance approved but not yet disbursed to an applicant or,
in the case of a loan which has been partially disbursed, by refusing to
make further disbursements. In addition, compliance may be effected by
any other means authorized by law.
(2) Such other means may include but are not limited to (i) legal
action by SBA to enforce its right, embodied in the assurances described
in Sec. 112.8, to accelerate the maturity of the recipient's
obligation; (ii) a reference to the Department of Justice with a
recommendation that appropriate proceedings be brought to enforce any
rights of the United States under any law of the United States,
including other titles of the Act; and (iii) any applicable proceedings
under State or local law.
(b) Noncompliance with Sec. 112.8. If an applicant fails or refuses
to furnish an assurance required under Sec. 112.8 or otherwise fails or
refuses to comply with a requirement imposed by or pursuant to that
section Federal financial assistance may be refused in accordance with
the procedures of paragraph (c) of this section. SBA shall not be
required to provide assistance in such a case during the pendency of the
administrative proceedings under such paragraph except that SBA shall
continue assistance during the pendency of such proceedings where such
assistance is due and payable pursuant to an application therefor
approved prior to the effective date of this part. Such proceedings
shall be conducted in accordance with the provisions of part 134 of this
chapter by an Administrative Law Judge of the Office of Hearings and
Appeals, who shall issue an initial decision in the case. The
Administrator shall be the reviewing official for purposes of Sec.
134.228. The applicant's failure to file a timely motion in accordance
with Sec. Sec. 134.222 and 134.211, requesting that the matter be
scheduled for an oral hearing, shall constitute waiver of the right to
an oral hearing but shall not prevent the submission of written
information and argument for the record in accordance with the
provisions of part 134.
(c) Conditions precedent. No order suspending, terminating, or
refusing financial assistance shall become effective until (1) SBA has
advised the applicant or recipient of his failure to comply and has
determined that compliance cannot be secured by voluntary means; (2)
there has been an express finding on the record after an opportunity for
an oral hearing, of a failure by the applicant or recipient to comply
with a requirement imposed by or pursuant to this part; (3) the initial
decision has become final pursuant to Sec. 134.227(b); and (4) the
expiration of 30 days after SBA has filed with the committee of the
House and the committee of the Senate having legislative jurisdiction of
the form of financial assistance involved, a full written report of the
circumstances and the grounds for such action.
(d) Other means authorized by law. No action to effect compliance by
any other means authorized by law shall be taken until (1) SBA has
determined that compliance cannot be secured by voluntary means; (2) the
action has been approved by the Administrator or his designee; (3) the
applicant or recipient or other person has been notified of its failure
to comply and of the action to be taken to effect compliance; and (4)
the expiration of at least 10 days from the mailing of such notice to
the
[[Page 150]]
applicant or recipient or other person. During this period of at least
10 days from the mailing of such notice to the applicant or recipient or
other person. During this period of at least 10 days additional efforts
shall be made to persuade the applicant or recipient or other person to
comply with this part and to take such corrective action as may be
appropriate.
[30 FR 298, Jan. 9, 1965, as amended at 38 FR 17934, July 5, 1973; 49 FR
33629, Aug. 24, 1984; 61 FR 2691, Jan. 29, 1996]
Sec. 112.12 Effect on other regulations; forms and instructions.
(a) Effect on other regulations. All regulations, orders or like
directions heretofore issued by SBA which impose requirements designed
to prohibit any discrimination against individuals on the grounds of
race, color, or national origin and which authorize the suspension or
termination of or refusal to grant to or to continue financial
assistance to any applicant for or recipient of such assistance for
failure to comply with such requirements, are hereby superseded to the
extent that such discrimination is prohibited by this part, except that
nothing in this part shall be deemed to relieve any person of any
obligation assumed or imposed under any such superseded regulation,
order, instruction, or like direction prior to the effective date of
this part. Nothing in this part, however, shall be deemed to supersede
any of the following (including future amendments thereof):
(1) Executive Order 11246 and regulations issued thereunder, or (2)
any other orders, regulations or instructions, insofar as such order,
regulations, or instructions prohibit discrimination on the grounds of
race, color, or national origin in any program or situation to which
this part is inapplicable or prohibit discrimination on any other
ground.
(b) Forms and instructions. SBA shall issue and promptly make
available to interested persons forms and detailed instructions and
procedures for effectuating this part.
(c) Supervision and coordination. The Administrator may from time to
time assign to officials of SBA or to officials of other agencies of the
Government with the consent of such agencies, responsibilities in
connection with the effectuation of the purpose of Title VI of the Act
and this part (other than responsibility for final decision as provided
in Sec. 112.13), including the achievement of effective coordination
and maximum uniformity within SBA and within the Executive Branch of the
Government in the application of Title VI and this part to similar
programs and in similar situations. Any action taken, determination
made, or requirement imposed by an official of another Department or
agency acting pursuant to an assignment of responsibility under this
subsection shall have the same effect as though such action had been
taken by the Administrator of SBA.
[30 FR 298, Jan. 9, 1965, as amended at 38 FR 17935, July 5, 1973.
Redesignated at 49 FR 33629, Aug. 24, 1984]
Appendix A to Part 112
------------------------------------------------------------------------
Name of Federal financial assistance Authority
------------------------------------------------------------------------
Federal Financial Assistance Involving Grants of Funds
------------------------------------------------------------------------
Regular business loans.................... Small Business Act, sec.
7(a) and 7(a)(11).
Handicapped assistance loans.............. Small Business Act, sec.
7(a)(10)
Small business energy loans............... Small Business Act, sec.
7(a)(12).
Small general contractors................. Small Business Act, sec.
7(a)(9).
Vietnam-era and Disabled Veterans Loan Pub. L. 97-72.
Program.
Debtor State development company loans Small Business Investment
(501) and their small business concerns. Act, title V, and Small
Business Act, sec.
7(a)(13).
Debtor small business investment companies Small Business Investment
and their small business concerns. Act, title III.
------------------------------------------------------------------------
Disaster Loans
------------------------------------------------------------------------
Physical.................................. Small Business Act, sec.
7(b)(1).
Economic injury (EIDL).................... Small Business Act, sec.
7(b)(2).
Federal action--economic injury........... Small Business Act, sec.
7(b)(3).
Currency fluctuation--economic injury..... Small Business Act, sec.
7(b)(4).
------------------------------------------------------------------------
Other Federal Financial Assistance
------------------------------------------------------------------------
Women's business enterprise............... Executive Order 12138.
Small business innovation and research.... Small Business Act, sec. 9.
Procurement automated source system....... Small Business Act, sec. 8
and Pub. L. 96-302.
Business Development Program.............. Small Business Act, sec.
8(a) and Pub. L. 95-507, as
amended by Pub. L. 96-481.
[[Page 151]]
Small Business Institute Program.......... Small Business Act, sec.
8(b)(1) and Pub. L. 85-536.
Certificate of competency................. Small Business Act, sec.
8(b)(7) and Pub. L 95-89.
Subcontracting Assistance Program......... Small Business Act, sec.
8(d) and Pub. L. 95-507.
Technology Assistance Program............. Small Business Act, sec. 9.
Small business development centers........ Small Business Act, sec. 21
and Pub. L. 96-302.
International Trade Program............... Small Business Act, sec. 22
and Pub. L. 96-481.
Service Corps of Retired Executives and Small Business Act, secs.
Active Corps of Executives. 101 and 8(b)(1) and Pub. L.
95-510.
Veterans affairs programs................. Pub. L. 93-237.
Private sector initiatives................ Small Business Act, sec.
8(b)(1).
------------------------------------------------------------------------
Note: All types of Federal financial assistance listed above are
also covered by part 113 of title 13 of the Code of Federal Regulations.
[50 FR 1441, Jan. 11, 1985, as amended at 68 FR 51348, 51349, Aug. 26,
2003]