This compilation includes

PL 108‑447, approved 12/8/04.

SMALL BUSINESS ACT

(Public Law 85‑536, as amended)

§ 1. This Act may be cited as the \"Small Business Act\".

§ 2. (a) The essence of the American economic system of private
enterprise is free competition. Only through full and free competition
can free markets, 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 or subcontracts for property and services for the Government
(including but not limited to contracts or subcontracts for maintenance,
repair, and construction) be placed with small business enterprises, to
insure that a fair proportion of the total sales of Government property
be made to such enterprises, and to maintain and strengthen the overall
economy of the Nation.

\(b\) (1) It is the declared policy of the Congress that the Federal
Government, through the Small Business Administration, acting in
cooperation with the Department of Commerce and other relevant State and
Federal agencies, should aid and assist small businesses, as defined
under this Act, to increase their ability to compete in international
markets by---

\(A\) enhancing their ability to export;

\(B\) facilitating technology transfers;

\(C\) enhancing their ability to compete effectively and efficiently
against imports;

\(D\) increasing the access of small businesses to long‑term capital for
the purchase of new plant and equipment used in the production of goods
and services involved in international trade;

\(E\) disseminating information concerning State, Federal, and private
programs and initiatives to enhance the ability of small businesses to
compete in international markets; and

\(F\) ensuring that the interests of small businesses are adequately
represented in bilateral and multilateral trade negotiations.

\(2\) The Congress recognizes that the Department of Commerce is the
principal Federal agency for trade development and export promotion and
that the Department of Commerce and the Small Business Administration
work together to advance joint interests. It is the purpose of this Act
to enhance, not alter, their respective roles.

\(c\) It is the declared policy of the Congress that the Government,
through the Small Business Administration, should aid and assist small
business concerns which are engaged in the production of food and fiber,
ranching, and raising of livestock, aquaculture, and all other farming
and agricultural related industries; and the financial assistance
programs authorized by this Act are also to be used to assist such
concerns.

\(d\) (1) The assistance programs authorized by sections 7(i) and 7(j)
of this Act are to be utilized to assist in the establishment,
preservation, and strengthening of small business concerns and improve
the managerial skills employed in such enterprises, with special
attention to small business concerns (1) located in urban or rural areas
with high proportions of unemployed or low‑income individuals; or (2)
owned by low‑income individuals; and to mobilize for these objectives
private as well as public managerial skills and resources.

\(2\) (A) With respect to the programs authorized by section 7(j) of
this Act, the Congress finds---

\(i\) that ownership and control of productive capital is concentrated
in the economy of the United States and certain groups, therefore, own
and control little productive capital;

\(ii\) that certain groups in the United States own and control little
productive capital because they have limited opportunities for small
business ownership;

\(iii\) that the broadening of small business ownership among groups
that presently own and control little productive capital is essential to
provide for the well‑being of this Nation by promoting their increased
participation in the free enterprise system of the United States;

\(iv\) that such development of business ownership among groups that
presently own and control little productive capital will be greatly
facilitated through the creation of a small business ownership
development program, which shall provide services, including, but not
limited to, financial, management, and technical assistance.

\(v\) that the power to let Federal contracts pursuant to section 8(a)
of the Small Business Act can be an effective procurement assistance
tool for development of business ownership among groups that own and
control little productive capital; and

\(vi\) that the procurement authority under section 8(a) of the Small
Business Act shall be used only as a tool for developing business
ownership among groups that own and control little productive capital.

\(B\) It is therefore the purpose of the programs authorized by section
7(j) of this Act to---

\(i\) foster business ownership and development by individuals in groups
that own and control little productive capital; and

\(ii\) promote the competitive viability of such firms in the
marketplace by creating a small business and capital ownership
development program to provide such available financial, technical, and
management assistance as may be necessary.

\(e\) Further, it is the declared policy of the Congress that the
Government should aid and assist victims of floods and other
catastrophes, and small‑business concerns which are displaced as a
result of federally aided construction programs.

\(f\) (1) With respect to the Administration\'s business development
programs the Congress finds---

\(A\) that the opportunity for full participation in our free enterprise
system by socially and economically disadvantaged persons is essential
if we are to obtain social and economic equality for such persons and
improve the functioning of our national economy;

\(B\) that many such persons are socially disadvantaged because of their
identification as members of certain groups that have suffered the
effects of discriminatory practices or similar invidious circumstances
over which they have no control;

\(C\) that such groups include, but are not limited to, Black Americans,
Hispanic Americans, Native Americans, Indian tribes, Asian Pacific
Americans, Native Hawaiian Organizations, and other minorities;

\(D\) that it is in the national interest to expeditiously ameliorate
the conditions of socially and economically disadvantaged groups;

\(E\) that such conditions can be improved by providing the maximum
practicable opportunity for the development of small business concerns
owned by members of socially and economically disadvantaged groups;

\(F\) that such development can be materially advanced through the
procurement by the United States of articles, equipment, supplies,
services, materials, and construction work from such concerns; and

\(G\) that such procurements also benefit the United States by
encouraging the expansion of suppliers for such procurements, thereby
encouraging competition among such suppliers and promoting economy in
such procurements.

\(2\) It is, therefore, the purpose of section 8(a) to---

\(A\) promote the business development of small business concerns owned
and controlled by socially and economically disadvantaged individuals so
that such concerns can compete on an equal basis in the American
economy;

\(B\) promote the competitive viability of such concerns in the
marketplace by providing such available contract, financial, technical,
and management assistance as may be necessary; and

\(C\) clarify and expand the program for the procurement by the United
States of articles, equipment, supplies, services, materials, and
construction work from small business concerns owned by socially and
economically disadvantaged individuals.

\(g\) In administering the disaster loan program authorized by section 7
of this Act, to the maximum extent possible, the Administration shall
provide assistance and counseling to disaster victims in filing
applications, providing information relevant to loan processing, and in
loan closing and prompt disbursement of loan proceeds and shall give the
disaster program a high priority in allocating funds for administrative
expenses.

\(h\) (1) With respect to the programs and activities authorized by this
Act, the Congress finds that---

\(A\) women owned business has become a major contributor to the
American economy by providing goods and services, revenues, and jobs;

\(B\) over the past two decades there have been substantial gains in the
social and economic status of women as they have sought economic
equality and independence;

\(C\) despite such progress, women, as a group, are subjected to
discrimination in entrepreneurial endeavors due to their gender;

\(D\) such discrimination takes many overt and subtle forms adversely
impacting the ability to raise or secure capital, to acquire managerial
talents, and to capture market opportunities;

\(E\) it is in the national interest to expeditiously remove
discriminatory barriers to the creation and development of small
business concerns owned and controlled by women;

\(F\) the removal of such barriers is essential to provide a fair
opportunity for full participation in the free enterprise system by
women and to further increase the economic vitality of the Nation;

\(G\) increased numbers of small business concerns owned and controlled
by women will directly benefit the United States Government by expanding
the potential number of suppliers of goods and services to the
Government; and

\(H\) programs and activities designed to assist small business concerns
owned and controlled by women must be implemented in such a way as to
remove such discriminatory barriers while not adversely affecting the
rights of socially and economically disadvantaged individuals.

\(2\) It is, therefore, the purpose of those programs and activities
conducted under the authority of this Act that assist women
entrepreneurs to‑‑

\(A\) vigorously promote the legitimate interests of small business
concerns owned and controlled by women;

\(B\) remove, insofar as possible, the discriminatory barriers that are
encountered by women in accessing capital and other factors of
production; and

\(C\) require that the Government engage in a systematic and sustained
effort to identify, define and analyze those discriminatory barriers
facing women and that such effort directly involve the participation of
women business owners in the public/private sector partnership.

\(i\) PROHIBITION ON THE USE OF FUNDS FOR INDIVIDUALS NOT LAWFULLY
WITHIN THE UNITED STATES.---None of the funds made available pursuant to
this Act may be used to provide any direct benefit or assistance to any
individual in the United States if the Administrator or the official to
which the funds are made available receives notification that the
individual is not lawfully within the United States.

\(j\) CONTRACT BUNDLING.---In complying with the statement of
congressional policy expressed in subsection (a), relating to fostering
the participation of small business concerns in the contracting
opportunities of the Government, each Federal agency, to the maximum
extent practicable, shall---

\(1\) comply with congressional intent to foster the participation of
small business concerns as prime contractors, subcontractors, and
suppliers;

\(2\) structure its contracting requirements to facilitate competition
by and among small business concerns, taking all reasonable steps to
eliminate obstacles to their participation; and

\(3\) avoid unnecessary and unjustified bundling of contract
requirements that precludes small business participation in procurements
as prime contractors.

§ 3 (a) (1) For the purposes of this Act, a small‑business concern,
including but not limited to enterprises that are engaged in the
business of production of food and fiber, ranching and raising of
livestock, aquaculture, and all other farming and agricultural related
industries, shall be deemed to be one which is independently owned and
operated and which is not dominant in its field of operation:
[Provided]{.underline}, That notwithstanding any other provision of law,
an agricultural enterprise shall be deemed to be a small business
concern if it (including its affiliates) has annual receipts not in
excess of \$750,000.

\(2\) ESTABLISHMENT OF SIZE STANDARDS.---

\(A\) IN GENERAL.---In addition to the criteria specified in paragraph
(1), the Administrator may specify detailed definitions or standards by
which a business concern may be determined to be a small business
concern for the purposes of this Act or any other Act.

\(B\) ADDITIONAL CRITERIA.---The standards described in paragraph (1)
may utilize number of employees, dollar volume of business, net worth,
net income, a combination thereof, or other appropriate factors.

\(C\) REQUIREMENTS.---Unless specifically authorized by statute, no
Federal department or agency may prescribe a size standard for
categorizing a business concern as a small business concern, unless such
proposed size standard---

\(i\) is proposed after an opportunity for public notice and comment;

\(ii\) provides for determining---

\(I\) the size of a manufacturing concern as measured by the
manufacturing concern\'s average employment based upon employment during
each of the manufacturing concern\'s pay periods for the preceding 12
months;

\(II\) the size of a business concern providing services on the basis of
the annual average gross receipts of the business concern over a period
of not less than 3 years;

\(III\) the size of other business concerns on the basis of data over a
period of not less than 3 years; or

\(IV\) other appropriate factors; and

\(iii\) is approved by the Administrator.

\(3\) When establishing or approving any size standard pursuant to
paragraph (2), the Administrator shall ensure that the size standard
varies from industry to industry to the extent necessary to reflect the
differing characteristics of the various industries and consider other
factors deemed to be relevant by the Administrator.

\(b\) for purposes of this Act, any reference to an agency or department
of the United States, and the term \" Federal agency\", shall have the
meaning given the term \"agency\" by section 551(1) of title 5, United
States Code, but does not include the United States Postal Service or
the General Accounting Office.

\(c\) (1) For purposes of this Act, a qualified employee trust shall be
eligible for any loan guarantee under section 7(a) with respect to a
small business concern on the same basis as if such trust were the same
legal entity as such concern.

\(2\) For purposes of this Act, the term \"qualified employee trust\"
means, with respect to a small business concern, a trust---

\(A\) which forms part of an employee stock ownership plan (as defined
in section 4975(e)(7) of the Internal Revenue Code of 1954)---

\(i\) which is maintained by such concern, and

\(ii\) which provides that each participant in the plan is entitled to
direct the plan as to the manner in which voting rights under qualifying
employer securities (as defined in section 4975(e)(8) of such Code)
which are allocated to the account of such participant are to be
exercised with respect to a corporate matter which (by law or charter)
must be decided by a majority vote of outstanding common shares voted;
and

\(B\) in the case of any loan guarantee under section 7(a), the trustee
of which enters into an agreement with the Administrator which is
binding on the trust and on such small business concern and which
provides that---

\(i\) the loan guaranteed under section 7(a) shall be used solely for
the purchase of qualifying employer securities of such concern,

\(ii\) all funds acquired by the concern in such purchase shall be used
by such concern solely for the purposes for which such loan was
guaranteed,

\(iii\) such concern will provide such funds as may be necessary for the
timely repayment of such loan, and the property of such concern shall be
available as security for repayment of such loan, and

\(iv\) all qualifying employer securities acquired by such trust in such
purchase shall be allocated to the accounts of participants in such plan
who are entitled to share in such allocation, and each participant has a
nonforfeitable right, not later than the date such loan is repaid, to
all such qualifying employer securities which are so allocated to the
participant\'s account.

\(3\) Under regulations which may be prescribed by the Administrator, a
trust may be treated as a qualified employee trust with respect to a
small business concern if---

\(A\) the trust is maintained by an employee organization which
represents at least 51 percent of the employees of such concern, and

\(B\) such concern maintains a plan---

\(i\) which is an employee benefit plan which is designed to invest
primarily in qualifying employer securities (as defined in section
4975(e)(8) of the Internal Revenue Code of 1954),

\(ii\) which provides that each participant in the plan is entitled to
direct the plan as to the manner in which voting rights under qualifying
employer securities which are allocated to the account of such
participant are to be exercised with respect to a corporate matter which
(by law or charter) must be decided by a majority vote of the
outstanding common shares voted,

\(iii\) which provides that each participant who is entitled to
distribution from the plan has a right, in the case of qualifying
employer securities which are not readily tradable on an established
market, to require that the concern repurchase such securities under a
fair valuation formula, and

\(iv\) which meets such other requirements (similar to requirements
applicable to employee stock ownership plans as defined in section
4975(e)(7) of the Internal Revenue Code of 1954) as the Administrator
may prescribe, and

\(C\) in the case of a loan guarantee under section 7(a), such
organization enters into an agreement with the Administration which is
described in paragraph (2)(B).

\(d\) For purposes of section 7 of this Act, the term \"qualified Indian
tribe\" means an Indian tribe as defined in section 4(a) of the Indian
Self-Determination and Education Assistance Act, which owns and controls
100 per centum of a small business concern.

\(e\) For purposes of section 7 of this Act, the term \"public or
private organization for the handicapped\" means one---

\(1\) which is organized under the laws of the United States or of any
State, operated in the interest of handicapped individuals, the net
income of which does not inure in whole or in part to the benefit of any
shareholder or other individual;

\(2\) which complies with any applicable occupational health and safety
standard prescribed by the Secretary of Labor; and

\(3\) which, in the production of commodities and in the provision of
services during any fiscal year in which it received financial
assistance under this subsection, employs handicapped individuals for
not less than 75 per centum of the man‑hours required for the production
or provision of the commodities or services.

\(f\) For purposes of section 7 of this Act, the term "handicapped
individual" means an individual---

\(1\) who has a physical, mental, or emotional impairment, defect,
ailment, disease, or disability of a permanent nature which in any way
limits the selection of any type of employment for which the person
would otherwise be qualified or qualifiable; or

\(2\) who is a service-disabled veteran.

\(g\) For purposes of section 7 of this Act, the term \"energy
measures\" includes---

\(1\) solar thermal energy equipment which is either of the active type
based upon mechanically forced energy transfer or of the passive type
based on convective, conductive, or radiant energy transfer or some
combination of these types;

\(2\) photovoltaic cells and related equipment;

\(3\) a product or service the primary purpose of which is conservation
of energy through devices or techniques which increase the energy
efficiency of existing equipment, methods of operation, or systems which
use fossil fuels, and which is on the Energy Conservation Measures list
of the Secretary of Energy or which the Administrator determines to be
consistent with the intent of this subsection;

\(4\) equipment the primary purpose of which is production of energy
from wood, biological waste, grain or other biomass source of energy;

\(5\) equipment the primary purpose of which is industrial cogeneration
of energy, district heating, or production of energy from industrial
waste;

\(6\) hydroelectric power equipment;

\(7\) wind energy conversion equipment; and

\(8\) engineering, architectural, consulting, or other professional
services which are necessary or appropriate to aid citizens in using any
of the measures described in paragraph (1) through (7).

\(h\) For purposes of this Act, the term \"credit elsewhere\" means the
availability of credit from non‑Federal sources on reasonable terms and
conditions taking into consideration the prevailing rates and terms in
the community in or near where the concern transacts business, or the
homeowner resides, for similar purposes and periods of time.

\(i\) For purposes of section 7 of this Act, the term \"homeowners\"
includes owners and lessees of residential property and also includes
personal property.

\(j\) For the purposes of this Act, the term \"small agricultural
cooperative\" means an association (corporate or otherwise) acting
pursuant to the provisions of the Agricultural Marketing Act (12 U.S.C.
1141(j), whose size does not exceed the size standard established by the
Administration for other similar agricultural small business concerns.
In determining such size, the Administration shall regard the
association as a business concern and shall not include the income or
employees of any member shareholder of such cooperative.

\(k\) For the purposes of this Act, the term \"disaster\" means a sudden
event which causes severe damage including, but not limited to, floods,
hurricanes, tornadoes, earthquakes, fires, explosions, volcanoes,
windstorms, landslides or mudslides, tidal waves, commercial fishery
failures or fishery resource disasters (as determined by the Secretary
of Commerce under section 308(b) of the Interjurisdictional Fisheries
Act of 1986), ocean conditions resulting in the closure of customary
fishing waters, riots, civil disorders or other catastrophes, except it
does not include economic dislocations.

\(l\) For purposes of this Act---

\(1\) The term \"computer crime\" means---

\(A\) any crime committed against a small business concern by means of
the use of a computer; and

\(B\) any crime involving the illegal use of, or tampering with, a
computer owned or utilized by a small business concern.

\(m\) For purposes of this Act, the term \"simplified acquisition
threshold\" has the meaning given such term in section 4(11) of the
Office of Federal Procurement Policy Act (41 USC 403(11)).

\(n\) For the purposes of this Act, a small business concern is a small
business concern owned and controlled by women if---

\(1\) at least 51 percent of small business concern is owned by one or
more women or, in the case of any publicly owned business at least 51
percent of the stock of which is owned by one or more women; and

\(2\) the management and daily business operations of the business are
controlled by one or more women.

\(o\) DEFINITIONS OF BUNDLING OF CONTRACT REQUIREMENTS AND RELATED
TERMS.---In this Act:

\(1\) BUNDLED CONTRACT.---The term "bundled contract" means a contract
that is entered into to meet requirements that are consolidated in a
bundling of contract requirements.

\(2\) BUNDLING OF CONTRACT REQUIREMENTS.---The term "bundling of
contract requirements" means consolidating 2 or more procurement
requirements for goods or services previously provided or performed
under separate smaller contracts into a solicitation of offers for a
single contract that is likely to be unsuitable for award to a
small-business concern due to---

\(A\) the diversity, size, or specialized nature of the elements of the
performance specified;

\(B\) the aggregate dollar value of the anticipated award;

\(C\) the geographical dispersion of the contract performance sites; or

\(D\) any combination of the factors described in subparagraphs (A),
(B), and (C).

\(3\) SEPARATE SMALL CONTRACT.---The term "separate smaller contract",
with respect to a bundling of contract requirements, means a contract
that has been performed by 1 or more small business concerns or was
suitable for award to 1 or more small business concerns.

\(p\) DEFINITIONS RELATING TO HUBZONES.---In this Act:

\(1\) HISTORICALLY UNDERUTILIZED BUSINESS ZONE.---The term "historically
underutilized business zone" means any area located within 1 or more---

\(A\) qualified census tracts;

\(B\) qualified nonmetropolitan counties;

\(C\) lands within the external boundaries of an Indian reservation;

\(D\) redesignated areas; or

\(E\) base closure areas.

\(2\) HUBZONE.---The term "HUBZone" means a historically underutilized
business zone.

\(3\) HUBZONE SMALL BUSINESS CONCERN.---The term "HUBZone small business
concern" means---

\(A\) a small business concern that is at least 51 percent owned and
controlled by United States citizens;

\(B\) a small business concern that is---

\(i\) an Alaska Native Corporation owned and controlled by Natives (as
determined pursuant to section 29(e)(1) of the Alaska Native Claims
Settlement Act (43 U.S.C. 1626(e)(1))); or

\(ii\) a direct or indirect subsidiary corporation, joint venture, or
partnership of an Alaska Native Corporation qualifying pursuant to
section 29(e)(1) of the Alaska Native Claims Settlement Act (43 U.S.C.
1626(e)(1)), if that subsidiary, joint venture, or partnership is owned
and controlled by Natives (as determined pursuant to section 29(e)(2) of
the Alaska Native Claims Settlement Act (43 U.S.C. 1626(e)(2)));

\(C\) a small business concern---

\(i\) that is wholly owned by 1 or more Indian tribal governments, or by
a corporation that is wholly owned by 1 or more Indian tribal
governments; or

\(ii\) that is owned in part by 1 or more Indian tribal governments, or
by a corporation that is wholly owned by 1 or more Indian tribal
governments, if all other owners are either United States citizens or
small business concerns;

\(D\) a small business concern that is---

\(i\) wholly owned by a community development corporation that has
received financial assistance under Part 1 of Subchapter A of the
Community Economic Development Act of 1981 (41 U.S.C. 9805 et seq.); or

\(ii\) owned in part by 1 or more community development corporations, if
all other owners are either United States citizens or small business
concerns; or

\(E\) a small business concern that is---

\(i\) a small agricultural cooperative organized or incorporated in the
United States;

\(ii\) wholly owned by 1 or more small agricultural cooperatives
organized or incorporated in the United States; or

\(iii\) owned in part by 1 or more small agricultural cooperatives
organized or incorporated in the United States, if all owners are small
business concerns or United States citizens.

\(4\) QUALIFIED AREAS---

\(A\) QUALIFIED CENSUS TRACT.---The term "qualified census tract" has
the meaning given that term in section 42(d)(5)(C)(ii) of the Internal
Revenue Code of 1986.

\(B\) QUALIFIED NONMETROPOLITAN COUNTY.---The term "qualified
nonmetropolitan county" means any county---

\(i\) that was not located in a metropolitan statistical area (as
defined in section 143(k)(2)(B) of the Internal Revenue Code of 1986) at
the time of the most recent census taken for purposes of selecting
qualified census tracts under section 42(d)(5)(C)(ii) of the Internal
Revenue Code of 1986; and

\(ii\) in which---

\(I\) the median household income is less than 80 percent of the
nonmetropolitan State median household income, based on the most recent
data available from the Bureau of the Census of the Department of
Commerce; or

\(II\) the unemployment rate is not less than 140 percent of the average
unemployment rate for the United States or for the State in which such
county is located, whichever is less, based on the most recent data
available from the Secretary of Labor.

\(C\) REDESIGNATED AREA.---The term "redesignated area" means any census
tract that ceases to be qualified under subparagraph (A) and any
nonmetropolitan county that ceases to be qualified under subparagraph
(B), except that a census tract or a nonmetropolitan county may be a
"redesignated area" only until the later of---

\(i\) the date on which the Census Bureau publicly releases the first
results from the 2010 decennial census; or

\(ii\) 3 years after the date on which the census tract or
nonmetropolitan county ceased to be so qualified.

\(D\) BASE CLOSURE AREA.---The term "base closure area" means lands
within the external boundaries of a military installation that were
closed through a privatization process under the authority of---

\(i\) the Defense Base Closure and Realignment Act of 1990 (part A of
title XXIX of division B of Public Law 101-510; 10 U.S.C. 2687 note);

\(ii\) title II of the Defense Authorization Amendments and Base Closure
and Realignment Act (Public Law 100-526; 10 U.S.C. 2687 note);

\(iii\) section 2687 of title 10, United States Code; or

\(iv\) any other provision of law authorizing or directing the Secretary
of Defense or the Secretary of a military department to dispose of real
property at the military installation for purposes relating to base
closures of \[sic\] redevelopment, while retaining the authority to
enter into a leaseback of all or a portion of the property for military
use.

\(5\) QUALIFIED HUBZONE SMALL BUSINESS CONCERN---

\(A\) IN GENERAL.---A HUBZone small business concern is "qualified",
if---

\(i\) the small business concern has certified in writing to the
Administrator (or the Administrator otherwise determines, based on
information submitted to the Administrator by the small business
concern, or based on certification procedures, which shall be
established by the Administration by regulation) that---

\(I\) it is a HUBZone small business concern---

(aa) pursuant to subparagraph (A), (B), (C), (D) or (E) of paragraph
(3), and that its principal office is located in a HUBZone and not fewer
than 35 percent of its employees reside in a HUBZone; or

(bb) pursuant to paragraph (3)(C), and not fewer than 35 percent of its
employees engaged in performing a contract awarded to the small business
concern on the basis of a preference provided under section 31(b) reside
within any Indian reservation governed by 1 or more of the tribal
government owners, or reside within any HUBZone adjoining any such
Indian reservation;

\(II\) the small business concern will attempt to maintain the
applicable employment percentage under subclause (I) during the
performance of any contract awarded to the small business concern on the
basis of a preference provided under section 31(b); and

\(III\) with respect to any subcontract entered into by the small
business concern pursuant to a contract awarded to the small business
concern under section 31, the small business concern will ensure that---

(aa) in the case of a contract for services (except construction), not
less than 50 percent of the cost of contract performance incurred for
personnel will be expended for its employees or for employees of other
HUBZone small business concerns;

(bb) in the case of a contract for procurement of supplies (other than
procurement from a regular dealer in such supplies), not less than 50
percent of the cost of manufacturing the supplies (not including the
cost of materials) will be incurred in connection with the performance
of the contract in a HUBZone by 1 or more HUBZone small business
concerns;

\(cc\) in the case of a contract for the procurement by the Secretary of
Agriculture of agricultural commodities, none of the commodity being
procured will be obtained by the prime contractor through a
subcontractor for the purchase of the commodity in substantially the
final form in which it is to be supplied to the Government; and

\(ii\) no certification made or information provided by the small
business concern under clause (i) has been, in accordance with the
procedures established under section 31(c)(1)---

\(I\) successfully challenged by an interested party; or

\(II\) otherwise determined by the Administrator to be materially false.

\(B\) CHANGE IN PERCENTAGES.---The Administrator may utilize a
percentage other than the percentage specified in under \[sic\] item
(aa) or (bb) of subparagraph (A)(i)(III), if the Administrator
determines that such action is necessary to reflect conventional
industry practices among small business concerns that are below the
numerical size standard for businesses in that industry category.

\(C\) CONSTRUCTION AND OTHER CONTRACTS.---The Administrator shall
promulgate final regulations imposing requirements that are similar to
those specified in items (aa) and (bb) of subparagraph (A)(i)(III) on
contracts for general and specialty construction, and on contracts for
any other industry category that would not otherwise be subject to those
requirements. The percentage applicable to any such requirement shall be
determined in accordance with subparagraph (B).

\(D\) LIST OF QUALIFIED SMALL BUSINESS CONCERNS.---The Administrator
shall establish and maintain a list of qualified HUBZone small business
concerns, which list shall, to the extent practicable---

\(i\) once the Administrator has made the certification required by
subparagraph (A)(i) regarding a qualified HUBZone small business concern
and has determined that subparagraph (A)(ii) does not apply to that
concern, include the name, address, and type of business with respect to
each such small business concern;

\(ii\) be updated by the Administrator not less than annually; and

\(iii\) be provided upon request to any Federal agency or other entity.

\(6\) NATIVE AMERICAN SMALL BUSINESS CONCERNS.---

\(A\) ALASKA NATIVE CORPORATION.---The term "Alaska Native Corporation"
has the same meaning as the term "Native Corporation" in section 3 of
the Alaska Native Claims Settlement Act (43 U.S.C. 1602).

\(B\) ALASKA NATIVE VILLAGE.---The term "Alaska Native Village" has the
same meaning as the term "Native village" in section 3 of the Alaska
Native Claims Settlement Act (43 U.S.C. 1602).

\(C\) INDIAN RESERVATION.---The term "Indian reservation"---

\(i\) has the same meaning as the term "Indian country" in section 1151
of title 18, United States Code, except that such term does not
include---

\(I\) any lands that are located within a State in which a tribe did not
exercise governmental jurisdiction on the date of enactment of this
paragraph, unless that tribe is recognized after that date of enactment
by either an Act of Congress or pursuant to regulations of the Secretary
of the Interior for the administrative recognition that an Indian group
exists as an Indian tribe (part 83 of title 25, Code of Federal
Regulations); and

\(II\) lands taken into trust or acquired by an Indian tribe after the
date of enactment of this paragraph if such lands are not located within
the external boundaries of an Indian reservation or former reservation
or are not contiguous to the lands held in trust or restricted status on
that date of enactment; and

\(ii\) in the State of Oklahoma, means lands that---

\(I\) are within the jurisdictional areas of an Oklahoma Indian tribe
(as determined by the Secretary of the Interior); and

\(II\) are recognized by the Secretary of the Interior as eligible for
trust land status under part 151 of title 25, Code of Federal
Regulations (as in effect on the date of enactment of this paragraph).

\(7\) AGRICULTURAL COMMODITY.---The term "agricultural commodity" has
the same meaning as in section 102 of the Agricultural Trade Act of 1978
(7 U.S.C. 5602).

\(q\) DEFINITIONS RELATING TO VETERANS.---In this Act, the following
definitions apply:

\(1\) SERVICE-DISABLED VETERAN.---The term "service-disabled veteran"
means a veteran with a disability that is service-connected (as defined
in section 101(16) of title 38, United States Code).

\(2\) SMALL BUSINESS CONCERN OWNED AND CONTROLLED BY SERVICE-DISABLED
VETERANS.---The term "small business concern owned and controlled by
service-disabled veterans" means a small business concern---

\(A\) not less than 51 percent of which is owned by one or more
service-disabled veterans or, in the case of any publicly owned
business, not less than 51 percent of the stock of which is owned by one
or more service-disabled veterans; and

\(B\) the management and daily business operations of which are
controlled by one or more service-disabled veterans or, in the case of a
veteran with permanent and severe disability, the spouse or permanent
caregiver of such veteran.

\(3\) SMALL BUSINESS CONCERN OWNED AND CONTROLLED BY VETERANS.---The
term "small business concern owned and controlled by veterans" means a
small business concern---

\(A\) not less than 51 percent of which is owned by one or more veterans
or, in the case of any publicly owned business, not less than 51 percent
of the stock of which is owned by one or more veterans; and

\(B\) the management and daily business operations of which are
controlled by one or more veterans.

\(4\) VETERAN.---The term "veteran" has the meaning given the term in
section 101(2) of title 38, United States Code.

\(r\) DEFINITIONS RELATING TO SMALL BUSINESS LENDING COMPANIES.---As
used in section 23 of this Act:

\(1\) SMALL BUSINESS LENDING COMPANY.---The term "small business lending
company" means a business concern that is authorized by the
Administrator to make loans pursuant to section 7(a) and whose lending
activities are not subject to regulation by any Federal or State
regulatory agency.

\(2\) NON-FEDERALLY REGULATED SBA LENDER.---The term "non-Federally
regulated SBA lender" means a business concern if---

\(A\) such concern is authorized by the Administrator to make loans
under section 7;

[]{.mark}

\(B\) such concern is subject to regulation by a State; and

\(C\) the lending activities of such concern are not regulated by any
Federal banking authority.

§ 4. (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. 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, the Trust Territory of the Pacific Islands,
and the District of Columbia.

\(b\) (1) 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. In carrying out the programs
administered by the Small Business Administration including its lending
and guaranteeing functions, the Administrator shall not discriminate on
the basis of sex or marital status against any person or small business
concern applying for or receiving assistance from the Small Business
Administration, and the Small Business Administration shall give special
consideration to veterans of the Armed Forces of the United States and
their survivors or dependents. The President also may appoint a Deputy
Administrator, by and with the advice and consent of the Senate. The
Administrator is authorized to appoint five Associate Administrators
(including the Associate Administrator specified in section 201 of the
Small Business Investment Act of 1958) to assist in the execution of the
functions vested in the Administration. One of the Associate
Administrators shall be designated at the time of his appointment as the
Associate Administrator for Minority Small Business and Capital
Ownership Development who shall be an employee in the competitive
service or in the Senior Executive Service and a career appointee and
shall be responsible to the Administrator for the formulation and
execution of the policies and programs under sections 7(j) and 8(a) of
this Act which provide assistance to minority small business concerns.
The Deputy Administrator shall be Acting Administrator of the
Administration during the absence or disability of the Administrator or
in the event of a vacancy in the office of the Administrator.

\(2\) The Administrator also shall be responsible for---

\(A\) establishing and maintaining an external small business economic
data base for the purpose of providing the Congress and the
Administration information on the economic condition and the expansion
or contraction of the small business sector. To that end, the
Administrator shall publish on a regular basis national small business
economic indices and, to the extent feasible, regional small business
economic indices, which shall include, but need not be limited to, data
on---

\(i\) employment, layoffs, and new hires;

\(ii\) number of business establishments and the types of such
establishments such as sole proprietorships, corporations, and
partnerships;

\(iii\) number of business formations and failures;

\(iv\) sales and new orders;

\(v\) back orders;

\(vi\) investment in plant and equipment;

\(vii\) changes in inventory and rate of inventory turnover;

\(viii\) sources and amounts of capital investment, including debt,
equity, and internally generated funds;

\(ix\) debt to equity ratios;

\(x\) exports;

\(xi\) number and dollar amount of mergers and acquisitions by size of
acquiring and acquired firm; and

\(xii\) concentration ratios; and

\(B\) publishing annually a report giving a comparative analysis and
interpretation of the historical trends of the small business sector as
reflected by the data acquired pursuant to subparagraph (A) of this
subsection.

\(3\) RISK MANAGEMENT DATABASE.---

\(A\) ESTABLISHMENT.---The Administration shall establish, within the
management system for the loan programs authorized by subsections (a)
and (b) of section 7 of this Act and title V of the Small Business
Investment Act of 1958, a management information system that will
generate a database capable of providing timely and accurate information
in order to identify loan underwriting, collections, recovery, and
liquidation problems.

\(B\) INFORMATION TO BE MAINTAINED.---In addition to such other
information as the Administration considers appropriate, the database
established under subparagraph (A) shall, with respect to each loan
program described in subparagraph (A), include information relating
to---

\(i\) the identity of the institution making the guaranteed loan or
issuing the debenture;

\(ii\) the identity of the borrower;

\(iii\) the total dollar amount of the loan or debenture;

\(iv\) the total dollar amount of government exposure in each loan;

\(v\) the district of the Administration in which the borrower has its
principal office;

\(vi\) the principal line of business of the borrower, as identified by
Standard Industrial Classification Code (or any successor to that
system);

\(vii\) the delinquency rate for each program (including number of
instances and days overdue);

\(viii\) the number and amount of repurchases, losses, and recoveries in
each program;

\(ix\) the number of deferrals or forbearances in each program
(including days and number of instances);

\(x\) comparisons on the basis of loan program, lender, Administration
district and region, for all the data elements maintained; and

\(xi\) underwriting characteristics of each loan that has entered into
default, including term, amount and type of collateral, loan-to-value
and other actual and projected ratios, line of business, credit history,
and type of loan.

\(C\) DEADLINE FOR OPERATIONAL CAPABILITY.---The database established
under subparagraph (A) shall---

\(i\) be operational not later than June 30, 1997; and

\(ii\) capture data beginning on the first day of the second quarter of
fiscal year 1997 beginning after such date and thereafter.

\(c\) (1) There are hereby established in the Treasury the following
revolving funds: (A) a disaster loan fund which shall be available for
financing functions performed under sections 5(e), 7(b)(1), 7(b)(2),
7(b)(3), 7(b)(4), and 7(c)(2) of this Act; and (B) a business loan and
investment fund which shall be available for financing functions
performed under sections 5(g), 7(a), and 8(a) of this Act, and titles
III, IV and V of the Small Business Investment Act of 1958.

\(2\) All repayments of loans and debentures, payments of interest and
other receipts arising out of transactions heretofore or hereafter
entered into by the Administration (A) pursuant to sections 5(e),
7(b)(1), 7(b)(2), 7(b)(3), 7(b)(4), 7(b)(5), 7(b)(6), 7(b)(7), 7(b)(8),
7(c)(2), and 7(g) of this Act shall be paid into a disaster loan fund;
and (B) pursuant to sections 5(g), 7(a), 7(e), 7(h), 7(i), 7(l), 7(m),
and 8(a) of this Act, and titles III, IV and V of the Small Business
Investment Act of 1958, shall be paid into the business loan and
investment fund.

\(3\) Unexpended balances of appropriations made to the fund pursuant to
this subsection, as in effect immediately prior to the effective date of
this paragraph, shall be allocated, together with related assets and
liabilities, to the funds established by paragraph (1) in such amounts
as the Administrator shall determine.

\(4\) The Administration shall submit to the Committees on
Appropriations, Senate Select Committee on Small Business, and the
Committee on Small Business of the House of Representatives, as soon as
possible after the beginning of each calendar quarter, a full and
complete report on the status of each of the funds established by
paragraph (1). Business‑type budgets for each of the funds established
by paragraph (1) shall be prepared, transmitted to the Committees on
Appropriations, the Senate Select Committee on Small Business and the
Committee on Small Business of the House of Representatives and
considered, and enacted in the manner prescribed by law (Sections 102,
103 and 104 of the Government Corporation Control Act (31 USC 847‑849))
for wholly owned Government corporations.

\(5\) (A) The Administration is authorized to make and issue notes to
the Secretary of the Treasury for the purpose of obtaining funds
necessary for discharging obligations under the revolving funds created
by section 4(c)(1) of this Act and for authorized expenditures out of
the funds. Such notes shall be in such form and denominations and have
such maturities and be subject to such terms and conditions as may be
prescribed by the Administration with the approval of the Secretary of
the Treasury. Such notes shall bear interest at a rate fixed by the
Secretary of the Treasury, taking into consideration the current average
market yield of outstanding marketable obligations of the United States
having maturities comparable to the notes issued by the Administration
under this paragraph. The Secretary of the Treasury is authorized and
directed to purchase any notes of the Administration issued hereunder,
and, for that purpose, the Secretary of the Treasury is authorized to
use as a public debt transaction the proceeds from the sale of any
securities issued under the Second Liberty Bond Act, as amended, and the
purposes for which such securities may be issued under such Act, as
amended, are extended to include the purchase of notes issued by the
Administration. All redemptions, purchases, and sales by the Secretary
of the Treasury of such notes shall be treated as public debt
transactions of the United States. All borrowing authority contained
herein shall be effective only to such extent or in such amounts as are
provided in advance in appropriation Acts.

\(B\) (i) Moneys in the funds established in subsection (c)(1) not
needed for current operations may be paid into miscellaneous receipts of
the Treasury.

\(ii\) Following the close of each fiscal year, the Administration shall
pay into the miscellaneous receipts of the United States Treasury the
actual interest that the Administration collects during that fiscal year
on all financings made under this Act.

\(C\) Except on those loan disbursements on which interest is paid under
subsection (B)(ii), the Administration shall pay into miscellaneous
receipts of the Treasury, following the close of each fiscal year,
interest received by the Administration on financing functions performed
under this Act and titles III and V of the Small Business Investment Act
of l958 providing the capital used to perform such functions originated
from appropriated funds. Such payments shall be treated by the
Department of the Treasury as interest income, not as retirement of
indebtedness.

\(D\) There are authorized to be appropriated, in any fiscal year, such
sums as may be necessary for losses and interest subsidies incurred by
the funds established by subsection (c)(l), but not previously
reimbursed.

\(d\) There is hereby created the Loan Policy Board of the Small
Business Administration, which shall consist of the following members,
all ex officio. The Administrator, as Chairman, the Secretary of the
Treasury, and the Secretary of Commerce. Either of the said Secretaries
may designate an officer of his Department, who has been appointed by
the President by and with the advice and consent of the Senate, to act
in his stead as a member of the Loan Policy Board with respect to any
matter or matters. The Loan Policy Board shall establish general
policies (particularly with reference to the public interest involved in
the granting and denial of applications for financial assistance by the
Administration and with reference to the coordination of the functions
of the Administration with other activities and policies of the
Government), which shall govern the granting and denial of applications
for financial assistance by the Administration.

\(e\) PROHIBITION ON THE PROVISION OF ASSISTANCE.---Notwithstanding any
other provision of law, the Administration is prohibited from providing
any financial or other assistance to any business concern or other
person engaged in the production or distribution of any product or
service that has been determined to be obscene by a court of competent
jurisdiction.

\(f\) CERTIFICATION OF COMPLIANCE WITH CHILD SUPPORT OBLIGATIONS.---

\(1\) IN GENERAL.---For financial assistance approved after the
promulgation of final regulations to implement this section, each
recipient of financial assistance under this Act, including a recipient
of a direct loan or a loan guarantee, shall certify that the recipient
is not more than 60 days delinquent under the terms of any---

\(A\) administrative order;

\(B\) court order; or

\(C\) repayment agreement entered into between the recipient and the
custodial parent or State agency providing child support enforcement
services,

that requires the recipient to pay child support, as such term is
defined in section 462(b) of the Social Security Act.

\(2\) ENFORCEMENT.---Not later than 6 months after the date of enactment
of this subsection, the Administration shall promulgate such regulations
as may be necessary to enforce compliance with the requirements of this
subsection.

\(g\) GIFTS.---

\(1\) IN GENERAL.---The Administrator may, for purposes of this Act, the
Small Business Investment Act of 1954 \[sic; should be 1958\], and title
IV of the Women's Business Ownership Act of 1988, solicit, accept, hold,
administer, utilize, and dispose of gifts, devises, and bequests of
cash, property (including tangible, intangible, real, and personal),
subsistence, and services. Notwithstanding any other provision of law,
the Administrator may utilize gifts, devises, or bequests for marketing
and outreach activities, including the cost of promotional materials and
wearing apparel.

\(2\) AUDITS.---Any gift, devise, or bequest of cash accepted by the
Administrator shall be held in a separate account and shall be subject
to semi-annual audits by the Inspector General of the Administration who
shall report his findings to the Congress.

\(3\) CONFLICTS OF INTEREST.---No gift, devise, or bequest shall be
solicited or accepted under the authority of this subsection if such
solicitation or acceptance would, in the determination of the General
Counsel, create a conflict of interest.

\(4\) ACCEPTANCE OF SERVICES AND FACILITIES FOR DISASTER LOAN
PROGRAM.---The Administrator may 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 section 7(b).

\(h\) CO-SPONSORSHIP OF EVENTS.---

\(1\) AUTHORIZATION.---The Administrator, after consultation with the
General Counsel, may provide assistance for the benefit of small
business through Administration-sponsored activities, through
cosponsored activities with any eligible entity, or through such other
activities that the Administrator determines to be appropriate,
including recognition events.

\(2\) ELIGIBLE ENTITY.---For purposes of this subsection, the term
"eligible entity" means any for-profit or not-for-profit entity, any
Federal, State, or local government official, or any Federal, State, or
local government entity.

\(3\) PROHIBITION ON ENDORSEMENTS.---The Administrator shall ensure that
the Administration and any eligible entities that cosponsor activities
receive appropriate recognition for such cosponsorship, and that such
recognition does not constitute or imply an endorsement by the
Administration of any product or service of such entity.

\(4\) AUTHORITY TO CHARGE FEES.---Notwithstanding any other provision of
law, the Administrator may charge a participant in any activity
sponsored or cosponsored by the Administration a minimal fee, and retain
and use such fee to cover the costs of such activity.

\(5\) LIMITED DELEGATION.---The Administrator may not delegate the
authority described in this subsection except to the Deputy
Administrator, an Associate Administrator, or an Assistant
Administrator.

\(6\) REPORT TO CONGRESS.---The Inspector General of the Administration
shall report semi-annually to Congress on the Administrator's use of
authority under this subsection.

\(7\) RULEMAKING.---Not later than 180 days after the date of enactment
of this subsection, the Administrator shall promulgate regulations to
carry out the provisions of this subsection.

§ 5 (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; 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 non‑reimbursable 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.

\(b\) 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; but 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
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., sec. 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 7(a) and 7(b);

\(6\) 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 in any office where
an attorney or attorneys are not or cannot be economically employed full
time to render such services) when he determines such actions are
necessary or desirable in making, servicing, compromising, modifying,
liquidating, or otherwise dealing with or realizing on loans made under
the provisions of this Act: [Provided,]{.underline} That with respect to
deferred participation loans, the Administrator may, in the discretion
of and pursuant to regulations promulgated by the Administrator,
authorize participating lending institutions to take actions relating to
loan servicing on behalf of the Administrator, including determining
eligibility and creditworthiness and loan monitoring, collection, and
liquidation;

\(8\) 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 7(b) 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: [Provided]{.underline} That
the Administrator may extend the six-month limitation for an additional
six months if the Administrator determines the extension is necessary to
continue efficient disaster loan making activities;

\(9\) 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 section 7(b);

\(10\) upon purchase by the Administration of any deferred participation
entered into under section 7 of this Act, continue to charge a rate of
interest not to exceed that initially charged by the participating
institution on the amount so purchased for the remaining term of the
indebtedness;

\(11\) make such investigations as he deems necessary to determine
whether a recipient of or participant in any assistance under this Act
or any other person has engaged or is about to engage in any acts or
practices which constitute or will constitute a violation of any
provision of this Act, or of any rule or regulation under this Act, or
of any order issued under this Act. The Administration shall permit any
person to file with it a statement in writing, under oath or otherwise
as the Administration shall determine, as to all the facts and
circumstances concerning the matter to be investigated. For the purpose
of any investigation, the Administration is empowered to administer
oaths and affirmations, subpena \[sic\] witnesses, compel their
attendance, take evidence, and require the production of any books,
papers, and documents which are relevant to the inquiry. Such attendance
of witnesses and the production of any such records may be required from
any place in the United States. In case of contumacy by, or refusal to
obey a subpena \[sic\] issued to, any person, including a recipient or
participant, the Administration may invoke the aid of any court of the
United States within the jurisdiction of which such investigation or
proceeding is carried on, or where such person resides or carries on
business, in requiring the attendance and testimony of witnesses and the
production of books, papers, and documents; and such court may issue an
order requiring such person to appear before the Administration, there
to produce records, if so ordered, or to give testimony touching the
matter under investigation. Any failure to obey such order of the court
may be punished by such court as a contempt thereof. All process in any
such case may be served in the judicial district whereof such person is
an inhabitant or wherever he may be found; and

\(12\) impose, retain, and use only those fees which are specifically
authorized by law or which are in effect on September 30, 1994, and in
the amounts and at the rates in effect on such date, except that the
Administrator may, subject to approval in appropriations Acts, impose,
retain, and utilize, additional fees---

\(A\) not to exceed \$100 for each loan servicing action (other than a
loan assumption) requested after disbursement of the loan, including any
substitution of collateral, release or substitution of a guarantor,
reamortization, or similar action;

\(B\) not to exceed \$300 for loan assumptions;

\(C\) not to exceed 1 percent of the amount of requested financings
under title III of the Small Business Investment Act of 1958 for which
the applicant requests a commitment from the Administration for funding
during the following year; and

\(D\) to recover the direct, incremental cost involved in the production
and dissemination of compilations of information produced by the
Administration under the authority of this Act and the Small Business
Investment Act of 1958;

\(13\) collect, retain and utilize, subject to approval in
appropriations Acts, any amounts collected by fiscal transfer agents and
not used by such agent as payment of the cost of loan pooling or
debenture servicing operations, except that amounts collected under this
paragraph and paragraph (12) shall be utilized solely to facilitate the
administration of the program that generated the excess amounts; and

\(14\) require any lender authorized to make loans under section 7 of
this Act to pay examination and review fees, which shall be deposited in
the account for salaries and expenses of the Administration, and shall
be available for the costs of examinations, reviews, and other lender
oversight activities.

\(c\) To such extent as he finds necessary to carry out the provisions
of this Act, the Administrator is authorized to procure the temporary
(not in excess of one year) or intermittent services of experts or
consultants or organizations thereof, including stenographic reporting
services, by contract or appointment, and in such cases such services
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 of the Revised Statutes,
as amended (41 U.S.C., § 5). Any individual so employed may be
compensated at a rate not in excess of the daily equivalent of the
highest rate payable under section 5332 of title 5, United States Code,
including traveltime, and, while such individual is away from his or her
home or regular place of business, he or she may be allowed travel
expenses (including per diem in lieu of subsistence) as authorized by
section 5703 of title 5, United States Code.

\(d\) Section 3648 of the Revised Statutes (31 U.S.C. 529) shall not
apply to prepayments of rentals made by the Administration on safety
deposit boxes used by the Administration for the safeguarding of
instruments held as security for loans or for the safeguarding of other
documents.

\(e\) (1) Subject to the requirements and conditions contained in this
subsection, upon application by a small business concern which is the
recipient of a loan made under this Act, the Administration may
undertake the small business concern\'s obligation to make the required
payments under such loan or may suspend such obligation if the loan was
a direct loan made by the Administration. While such payments are being
made by the Administration pursuant to the undertaking of such
obligation or while such obligation is suspended, no such payment with
respect to the loan may be required from the small business concern.

\(2\) The Administration may undertake or suspend for a period of not to
exceed 5 years any small business concern\'s obligation under this
subsection only if---

\(A\) without such undertaking or suspension of the obligation, the
small business concern would, in the sole discretion of the
Administration, become insolvent or remain insolvent;

\(B\) with the undertaking or suspension of the obligation, the small
business concern would, in the sole discretion of the Administration,
become or remain a viable small business entity; and

\(C\) the small business concern executes an agreement in writing
satisfactory to the Administration as provided by paragraph (4).

\(3\) Notwithstanding the provisions of sections 7(a)(4)(C) and 7(i)(l)
of this Act, the Administration may extend the maturity of any loan on
which the Administration undertakes or suspends the obligation pursuant
to this subsection for a corresponding period of time.

\(4\) (A) Prior to the undertaking or suspension by the Administration
of any small business concern\'s obligation under this subsection, the
Administration, consistent with the purposes sought to be achieved
herein, shall require the small business concern to agree in writing to
repay to it the aggregate amount of the payments which were required
under the loan during the period for which such obligation was
undertaken or suspended, either---

\(i\) by periodic payments not less in amount or less frequently falling
due than those which were due under the loan during such period, or

\(ii\) pursuant to a repayment schedule agreed upon by the
Administration and the small business concern, or

\(iii\) by a combination of the payments described in clause (i) and
clause (ii).

\(B\) In addition to requiring the small business concern to execute the
agreement described in subparagraph (A), the Administration shall, prior
to the undertaking or suspension of the obligation, take such action,
and require the small business concern to take such action as the
Administration deems appropriate in the circumstances, including the
provision of such security as the Administration deems necessary or
appropriate to insure that the rights and interests of the lender (Small
Business Administration or participant) will be safeguarded adequately
during or after the period in which such obligation is so undertaken or
suspended.

\(5\) The term \"required payments\" with respect to any loan means
payments of principal and interest under the loan.

\(f\) (1) The guaranteed portion of any loan made pursuant this Act may
be sold by the lender, and by any subsequent holder, consistent with
regulations on such sales as the Administration shall establish, subject
to the following limitations:

\(A\) prior to the Administration\'s approval of the sale, or upon any
subsequent resale, of any loan guaranteed by the Administration, if the
lender certifies that such loan has been properly closed and that the
lender has substantially complied with the provisions of the guarantee
agreement and the regulations of the Administration, the Administration
shall review and approve only materials not previously approved;

\(B\) all fees due the Administration on a guaranteed loan shall have
been paid in full prior to any sale; and

\(C\) each loan, except each loan made under section 7(a)(14), shall
have been fully disbursed to the borrower prior to any sale.

\(2\) After a loan is sold in the secondary market, the lender shall
remain obligated under its guarantee agreement with the Administration,
and shall continue to service the loan in a manner consistent with the
terms and conditions of such agreement.

\(3\) The Administration shall develop such procedures as are necessary
for the facilitation, administration, and promotion of secondary market
operations, and for assessing the increase of small business access to
capital at reasonable rates and terms as a result of secondary market
operations. Beginning on March 31, 1997, the sale of the unguaranteed
portion of any loan made under section 7(a) shall not be permitted until
a final regulation that applies uniformly to both depository
institutions and other lenders is promulgated by the Administration
setting forth the terms and conditions under which such sales can be
permitted, including maintenance of appropriate reserve requirements and
other safeguards to protect the safety and soundness of the program.

\(4\) Nothing in this subsection or subsection (g) of this section shall
be interpreted to impede or extinguish the right of the borrower or the
successor in interest to such borrower to prepay (in whole or in part)
any loan made pursuant to section 7(a) of this Act, the guaranteed
portion of which may be included in such trust or pool, or to impede or
extinguish the rights of any party pursuant to section 7(a)(6)(C) or
subsection (e) of this section.

\(g\) (1) The Administration is authorized to issue trust certificates
representing ownership of all or a fractional part of the guaranteed
portion of one or more loans which have been guaranteed by the
Administration under this Act, or under section 502 of the Small
Business Investment Act of 1958 (15 U.S.C. 660): [Provided]{.underline},
That such trust certificates shall be based on and backed by a trust or
pool approved by the Administration and composed solely of the entire
guaranteed portion of such loans.

\(2\) The Administration is authorized, upon such terms and conditions
as are deemed appropriate, to guarantee the timely payment of the
principal of and interest on trust certificates issued by the
Administration or its agent for purposes of this subsection. Such
guarantee shall be limited to the extent of principal and interest on
the guaranteed portions of loans which compose the trust or pool. In the
event that a loan in such trust or pool is prepaid, either voluntarily
or in the event of default, the guarantee of timely payment of principal
and interest on the trust certificates shall be reduced in proportion to
the amount of principal and interest such prepaid loan represents in the
trust or pool. Interest on prepaid or defaulted loans shall accrue and
be guaranteed by the Administration only through the date of payment on
the guarantee. During the term of the trust certificate, it may be
called for redemption due to prepayment or default of all loans
constituting the pool.

\(3\) The full faith and credit of the United States is pledged to the
payment of all amounts which may be required to be paid under any
guarantee of such trust certificates issued by the Administration or its
agent pursuant to this subsection.

\(4\) (A) The Administration may collect a fee for any loan guarantee
sold into the secondary market under subsection (f) in an amount equal
to not more than 50 percent of the portion of the sale price that
exceeds 110 percent of the outstanding principal amount of the portion
of the loan guaranteed by the Administration. Any such fee imposed by
the Administration shall be collected by the Administration or by the
agent which carries out on behalf of the Administration the central
registration functions required by subsection (h) of this section and
shall be paid to the Administration and used solely to reduce the
subsidy on loans guaranteed under section 7(a) of this Act:
[Provided]{.underline}, That such fee shall not be charged to the
borrower whose loan is guaranteed: and [Provided further]{.underline},
That nothing herein shall preclude any agent of the Administration from
collecting a fee approved by the Administration for the functions
described in subsection (h)(2).

\(B\) The Administration is authorized to impose and collect, either
directly or through a fiscal and transfer agent, a reasonable penalty on
late payments of the fee authorized under subparagraph (A) in an amount
not to exceed 5 percent of such fee per month plus interest.

\(C\) The Administration may contract with an agent to carry out, on
behalf of the Administration, the assessment and collection of the
annual fee established under section 7(a)(23). The agent may receive, as
compensation for services, any interest earned on the fee while in the
control of the agent before the time at which the agent is contractually
required to remit the fee to the Administration.

\(5\) (A) In the event the Administration pays a claim under a guarantee
issued under this subsection, it shall be subrogated fully to the rights
satisfied by such payment.

\(B\) No State or local law, and no Federal law, shall preclude or limit
the exercise by the Administration of its ownership rights in the
portions of loans constituting the trust or pool against which the trust
certificates are issued.

\(h\) (1) Upon the adoption of final rules and regulations, the
Administration shall---

\(A\) provide for a central registration of all loans and trust
certificates sold pursuant to subsections (f) and (g) of this section;

\(B\) contract with an agent to carry out on behalf of the
Administration the central registration functions of this section and
the issuance of trust certificates to facilitate pooling. Such agent
shall provide a fidelity bond or insurance in such amounts as the
Administration determines to be necessary to fully protect the interest
of the Government;

\(C\) prior to any sale, require the seller to disclose to a purchaser
of the guaranteed portion of a loan guaranteed under this Act and to the
purchaser of a trust certificate issued pursuant to subsection (g),
information on terms, conditions, and yield of such instrument. As used
in this paragraph, if the instrument being sold is a loan, the term
\"seller\" does not include (A) an entity which made the loan or (B) any
individual or entity which sells three or fewer guaranteed loans per
year; and

\(D\) have the authority to regulate brokers and dealers in guaranteed
loans and trust certificates sold pursuant to subsections (f) and (g) of
this section.

\(2\) The agent described in paragraph (1)(B) may be compensated through
any of the fees assessed under this section and any interest earned on
any funds collected by the agent while such funds are in the control of
the agent and before the time at which the agent is contractually
required to transfer such funds to the Administration or to the holders
of the trust certificates, as appropriate.

\(3\) Nothing in this subsection shall prohibit the utilization of a
book-entry or other electronic form of registration for trust
certificates. The Administration may, with the consent of the Secretary
of the Treasury, use the book-entry system of the Federal Reserve
System.

§ 6. (a) All moneys of the Administration not otherwise employed may be
deposited with the Treasury 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 employees\' compensation
fund, on the basis of annual billings as determined by the Secretary of
Labor, for the benefit payments made from such fund on account of
employees engaged in carrying out functions financed by the revolving
fund established by section 4(c) of this Act. The annual billings shall
also include a statement of the fair portion of the cost of the
administration of such fund, which shall be paid by the Administrator
into the Treasury as miscellaneous receipts.

§ 7. (a) LOANS TO SMALL BUSINESS CONCERNS; ALLOWABLE PURPOSES; QUALIFIED
BUSINESS; RESTRICTIONS AND LIMITATIONS.---The Administration is
empowered to the extent and in such amounts as provided in advance in
appropriation Acts to make loans for plant acquisition, construction,
conversion, or expansion, including the acquisition of land, material,
supplies, equipment, and working capital, and to make loans to any
qualified small business concern, including those owned by qualified
Indian tribes, for purposes of this Act. Such financings may be made
either directly or in cooperation with banks or other financial
institutions through agreements to participate on an immediate or
deferred (guaranteed) basis. These powers shall be subject, however, to
the following restrictions, limitations, and provisions:

\(1\) IN GENERAL.---

\(A\) CREDIT ELSEWHERE.---No financial assistance shall be extended
pursuant to this subsection if the applicant can obtain credit
elsewhere. No immediate participation may be purchased unless it is
shown that a deferred participation is not available; and no direct
financing may be made unless it is shown that a participation is not
available.

\(B\) BACKGROUND CHECKS.---Prior to the approval of any loan made
pursuant to this subsection, or section 503 of the Small Business
Investment Act of 1958, the Administrator may verify the applicant's
criminal background, or lack thereof, through the best available means,
including, if possible, use of the National Crime Information Center
computer system at the Federal Bureau of Investigation.

\(2\) LEVEL OF PARTICIPATION IN GUARANTEED LOANS.---

\(A\) IN GENERAL.---Except as provided in subparagraph (B), in an
agreement to participate in a loan on a deferred basis under this
subsection (including a loan made under the Preferred Lenders Program),
such participation by the Administration shall be equal to---

\(i\) 75 percent of the balance of the financing outstanding at the time
of disbursement of the loan, if such balance exceeds \$150,000; or

\(ii\) 85 percent of the balance of the financing outstanding at the
time of disbursement of the loan, if such balance is less than or equal
to \$150,000.

\(B\) REDUCED PARTICIPATION UPON REQUEST.---

\(i\) IN GENERAL.---The guarantee percentage specified by subparagraph
(A) for any loan under this subsection may be reduced upon the request
of the participating lender.

\(ii\) PROHIBITION.---The Administration shall not use the guarantee
percentage requested by a participating lender under clause (i) as a
criterion for establishing priorities in approving loan guarantee
requests under this subsection.

\(C\) INTEREST RATE UNDER PREFERRED LENDERS PROGRAM.---

\(i\) IN GENERAL.---The maximum interest rate for a loan guaranteed
under the Preferred Lenders Program shall not exceed the maximum
interest rate, as determined by the Administration, applicable to other
loans guaranteed under this subsection.

\(ii\) PREFERRED LENDERS PROGRAM DEFINED.---For purposes of this
subparagraph, the term \"Preferred Lenders Program\" means any program
established by the Administrator, as authorized under the proviso in
section 5(b)(7), under which a written agreement between the lender and
the Administration delegates to the lender---

\(I\) complete authority to make and close loans with a guarantee from
the Administration without obtaining the prior specific approval of the
Administration; and

\(II\) complete authority to service and liquidate such loans without
obtaining the prior specific approval of the Administration for routine
servicing and liquidation activities, but shall not take any actions
creating an actual or apparent conflict of interest.

\(D\) PARTICIPATION UNDER EXPORT WORKING CAPITAL
PROGRAM.---Notwithstanding subparagraph (A), in an agreement to
participate in a loan on a deferred basis under the Export Working
Capital Program established pursuant to paragraph (14)(A), such
participation by the Administration shall not exceed 90 percent.

\(3\) No loan shall be made under this subsection---

\(A\) if the total amount outstanding and committed (by participation or
otherwise) to the borrower from the business loan and investment fund
established by this Act would exceed \$1,500,000 (or if the gross loan
amount would exceed \$2,000,000), except as provided in subparagraph
(B);

\(B\) if the total amount outstanding and committed (on a deferred
basis) solely for the purposes provided in paragraph (16) to the
borrower from the business loan and investment fund established by this
Act would exceed \$1,750,000, of which not more than \$1,250,000 may be
used for working capital, supplies or financings under section 7(a)(14)
for export purposes; and

\(C\) if effected either directly or in cooperation with banks or other
lending institutions through agreements to participate on an immediate
basis if the amount would exceed \$350,000.

\(4\) INTEREST RATES AND PREPAYMENT CHARGES.---

\(A\) INTEREST RATES.---Notwithstanding the provisions of the
constitution of any State or the laws of any State limiting the rate or
amount of interest which may be charged, taken, received, or reserved,
the maximum legal rate of interest on any financing made on a deferred
basis pursuant to this subsection shall not exceed a rate prescribed by
the Administration, and the rate of interest for the Administration\'s
share of any direct or immediate participation loan shall not exceed the
current average market yield on outstanding marketable obligations of
the United States with remaining periods to maturity comparable to the
average maturities of such loans and adjusted to the nearest one‑eighth
of 1 per centum, and an additional amount as determined by the
Administration, but not to exceed 1 per centum per annum:
[Provided]{.underline}, That for those loans to assist any public or
private organization for the handicapped or to assist any handicapped
individual as provided in paragraph (10) of this subsection, the
interest rate shall be 3 per centum per annum.

\(B\) PAYMENT OF ACCRUED INTEREST.---

\(i\) IN GENERAL.---Any bank or other lending institution making a claim
for payment on the guaranteed portion of a loan made under this
subsection shall be paid the accrued interest due on the loan from the
earliest date of default to the date of payment of the claim at a rate
not to exceed the rate of interest on the loan on the date of default,
minus one percent.

\(ii\) LOANS SOLD ON SECONDARY MARKET.---If a loan described in clause
(i) is sold on the secondary market, the amount of interest paid to a
bank or other lending institution described in that clause from the
earliest date of default to the date of payment of the claim shall be no
more than the agreed upon rate, minus one percent.

\(iii\) APPLICABILITY.---Clauses (i) and (ii) shall not apply to loans
made on or after October 1, 2000.

\(C\) PREPAYMENT CHARGES.---

\(i\) IN GENERAL.---A borrower who prepays any loan guaranteed under
this subsection shall remit to the Administration a subsidy recoupment
fee calculated in accordance with clause (ii) if---

\(I\) the loan is for a term of not less than 15 years;

\(II\) the prepayment is voluntary;

\(III\) the amount of prepayment in any calendar year is more than 25
percent of the outstanding balance of the loan; and

\(IV\) the prepayment is made within the first 3 years after
disbursement of the loan proceeds.

\(ii\) SUBSIDY RECOUPMENT FEE.---The subsidy recoupment fee charged
under clause (i) shall be---

\(I\) 5 percent of the amount of prepayment, if the borrower repays
during the first year after disbursement;

\(II\) 3 percent of the amount of prepayment, if the borrower prepays
during the second year after disbursement; and

\(III\) 1 percent of the amount of prepayment, if the borrower prepays
during the third year after disbursement.

\(5\) No such loans including renewals and extensions thereof may be
made for a period or periods exceeding twenty-five years, except that
such portion of a loan made for the purpose of acquiring real property
or constructing, converting, or expanding facilities may have a maturity
of twenty‑five years plus such additional period as is estimated may be
required to complete such construction, conversion, or expansion.

\(6\) All loans made under this subsection shall be of such sound value
or so secured as reasonably to assure repayment: [Provided,
however]{.underline}, That---

\(A\) for loans to assist any public or private organization or to
assist any handicapped individual as provided in paragraph (10) of this
subsection any reasonable doubt shall be resolved in favor of the
applicant;

\(B\) recognizing that greater risk may be associated with loans for
energy measures as provided in paragraph (12) of this subsection,
factors in determining \"sound value\" shall include, but not be limited
to, quality of the product or service; technical qualifications of the
applicant or his employees; sales projections; and the financial status
of the business concern: [Provided further]{.underline}, That such
status need not be as sound as that required for general loans under
this subsection; and

\(C\) \[Repealed\]

On that portion of the loan used to refinance existing indebtedness held
by a bank or other lending institution, the Administration shall limit
the amount of deferred participation to 80 per centum of the amount of
the loan at the time of disbursement: [Provided further]{.underline},
That any authority conferred by this subparagraph on the Administration
shall be exercised solely by the Administration and shall not be
delegated to other than Administration personnel.

\(7\) The Administration may defer payments on the principal of such
loans for a grace period and use such other methods as it deems
necessary and appropriate to assure the successful establishment and
operation of such concern.

\(8\) The Administration may make loans under this subsection to small
business concerns owned and controlled by disabled veterans (as defined
in section 4211(3) of title 38, United States Code).

\(9\) The Administration may provide loans under this subsection to
finance residential or commercial construction or rehabilitation for
sale: [Provided, however]{.underline}, That such loans shall not be used
primarily for the acquisition of land.

\(10\) The Administration may provide guaranteed loans under this
subsection to assist any public or private organization for the
handicapped or to assist any handicapped individual, including
service-disabled veterans, in establishing, acquiring, or operating a
small business concern.

\(11\) The Administration may provide loans under this subsection to any
small business concern, or to any qualified person seeking to establish
such a concern when it determines that such loan will further the
policies established in section 2(c) of this Act, with particular
emphasis on the preservation or establishment of small business concerns
located in urban or rural areas with high proportions of unemployed or
low‑income individuals or owned by low‑income individuals.

\(12\) (A) The Administration may provide loans under this subsection to
assist any small business concern, including start up, to enable such
concern to design architecturally or engineer, manufacture, distribute,
market, install, or service energy measures: [Provided,
however]{.underline}, That such loan proceeds shall not be used
primarily for research and development.

\(B\) The Administration may provide deferred participation loans under
this subsection to finance the planning, design, or installation of
pollution control facilities for the purposes set forth in section 404
of the Small Business Investment Act of 1958. Notwithstanding the
limitation expressed in paragraph (3) of this subsection, a loan made
under this paragraph may not result in a total amount outstanding and
committed to a borrower from the business loan and investment fund of
more than \$1,000,000.

\(13\) The Administration may provide financings under this subsection
to State and local development companies for the purposes of, and
subject to the restrictions in, title V of the Small Business Investment
Act of 1958.

\(14\) (A) The Administration may provide extensions of credit, standby
letters of credit, revolving lines of credit for export purposes and
other financing to enable small business concerns, including small
business export trading companies and small business export management
companies, to develop foreign markets. A bank or participating lending
institution may establish the rate of interest on extensions and
revolving lines of credit as may be legal and reasonable.

\(B\) When considering loan or guarantee applications, the
Administration shall give weight to export‑related benefits, including
opening new markets for United States goods and services abroad and
encouraging the involvement of small businesses, including agricultural
concerns, in the export market.

\(C\) The Administration shall aggressively market its export financing
program to small businesses.

\(15\) (A) The Administration may guarantee loans under this subsection
to qualified employee trusts with respect to a small business concern
for the purpose of purchasing stock of the concern under a plan approved
by the Administrator which, when carried out, results in the qualified
employee trust owning at least 51 per centum of the stock of the
concern.

\(B\) The plan requiring the Administrator\'s approval under
subparagraph (A) shall be submitted to the Administration by the trustee
of such trust with its application for the guarantee. Such plan shall
include an agreement with the Administrator which is binding on such
trust and on the small business concern and which provides that---

\(i\) not later than the date the loan guaranteed under subparagraph (A)
is repaid (or as soon thereafter as is consistent with the requirements
of section 401(a) of the Internal Revenue Code of 1954), at least 51 per
centum of the total stock of such concern shall be allocated to the
accounts of at least 51 per centum of the employees of such concern who
are entitled to share in such allocation,

\(ii\) there will be periodic reviews of the role in the management of
such concern of employees to whose accounts stock is allocated, and

\(iii\) there will be adequate management to assure management expertise
and continuity.

\(C\) In determining whether to guarantee any loan under this paragraph,
the individual business experience or personal assets of employee‑owners
shall not be used as criteria, except inasmuch as certain
employee‑owners may assume managerial responsibilities, in which case
business experience may be considered.

\(D\) For purposes of this paragraph, a corporation which is controlled
by any other person shall be treated as a small business concern if such
corporation would, after the plan described in subparagraph (B) is
carried out, be treated as a small business concern.

\(E\) The Administration shall compile a separate list of applications
for assistance under this paragraph, indicating which applications were
accepted and which were denied, and shall report periodically to the
Congress on the status of employee‑owned firms assisted by the
Administration.

\(16\) INTERNATIONAL TRADE.---

\(A\) IN GENERAL.---If the Administrator determines that a loan
guaranteed under this subsection will allow an eligible small business
concern that is engaged in or adversely affected by international trade
to improve its competitive position, the Administrator may make such
loan to assist such concern in---

\(i\) the financing of the acquisition, construction, renovation,
modernization, improvement, or expansion of productive facilities or
equipment to be used in the United States in the production of goods and
services involved in international trade; or

\(ii\) the refinancing of existing indebtedness that is not structured
with reasonable terms and conditions.

\(B\) SECURITY.---Each loan made under this paragraph shall be secured
by a first lien position or first mortgage on the property or equipment
financed by the loan or on other assets of the small business concern.

\(C\) ENGAGED IN INTERNATIONAL TRADE.---For purposes of this paragraph,
a small business concern is engaged in international trade if, as
determined by the Administrator, the small business concern is in a
position to expand existing export markets or develop new export
markets.

\(D\) ADVERSELY AFFECTED BY INTERNATIONAL TRADE.---For purposes of this
paragraph, a small business concern is adversely affected by
international trade if, as determined by the Administrator, the small
business concern---

\(i\) is confronting increased competition with foreign firms in the
relevant market; and

\(ii\) is injured by such competition.

\(E\) FINDINGS BY CERTAIN FEDERAL AGENCIES.---For purposes of
subparagraph (D)(ii) the Administrator shall accept any finding of
injury by the International Trade Commission or any finding of injury by
the Secretary of Commerce pursuant to chapter 3 of title II of the Trade
Act of 1974.

\(17\) The Administration shall authorize lending institutions and other
entities in addition to banks to make loans authorized under this
subsection.

\(18\) GUARANTEE FEES.---

\(A\) IN GENERAL.---With respect to each loan guaranteed under this
subsection (other than a loan that is repayable in 1 year or less), the
Administration shall collect a guarantee fee, which shall be payable by
the participating lender, and may be charged to the borrower, as
follows:

\(i\) A guarantee fee not to exceed 2 percent of the deferred
participation share of a total loan amount that is not more than
\$150,000.

\(ii\) A guarantee fee not to exceed 3 percent of the deferred
participation share of a total loan amount that is more than \$150,000,
but not more than \$700,000.

\(iii\) A guarantee fee not to exceed 3.5 percent of the deferred
participation share of a total loan amount that is more than \$700,000.

\(iv\) In addition to the fee under clause (iii), a guarantee fee equal
to 0.25 percent of any portion of the deferred participation share that
is more than \$1,000,000.

\(B\) RETENTION OF CERTAIN FEES.---Lenders participating in the programs
established under this subsection may retain not more than 25 percent of
a fee collected under subparagraph (A)(i).

\(C\) \[Deleted.\]

\(19\) (A) In addition to the Preferred Lenders Program authorized by
the proviso in section 5(b)(7), the Administration is authorized to
establish a Certified Lenders Program for lenders who establish their
knowledge of Administration laws and regulations concerning the
guaranteed loan program and their proficiency in program requirements.
The designation of a lender as a certified lender shall be suspended or
revoked at any time that the Administration determines that the lender
is not adhering to its rules and regulations or that the loss experience
of the lender is excessive as compared to other lenders, but such
suspension or revocation shall not affect any outstanding guarantee.

\(B\) In order to encourage all lending institutions and other entities
making loans authorized under this subsection to provide loans of
\$50,000 or less in guarantees to eligible small business loan
applicants, the Administration shall develop and allow participating
lenders to solely utilize a uniform and simplified loan form for such
loans.

\(C\) Authority to liquidate loans.---

\(i\) IN GENERAL.---The Administrator may permit lenders participating
in the Certified Lenders Program to liquidate loans made with a
guarantee from the Administration pursuant to a liquidation plan
approved by the Administrator.

\(ii\) Automatic approval.---If the Administrator does not approve or
deny a request for approval of a liquidation plan within 10 business
days of the date on which the request is made (or with respect to any
routine liquidation activity under such a plan, within 5 business days)
such request shall be deemed to be approved.

\(20\) (A) The Administration is empowered to make loans either directly
or in cooperation with banks or other financial institutions through
agreements to participate on an immediate or deferred (guaranteed) basis
to small business concerns eligible for assistance under subsection
(j)(10) and section 8(a). Such assistance may be provided only if the
Administration determines that---

\(i\) the type and amount of such assistance requested by such concern
is not otherwise available on reasonable terms from other sources;

\(ii\) with such assistance such concern has a reasonable prospect for
operating soundly and profitably within a reasonable period of time;

\(iii\) the proceeds of such assistance will be used within a reasonable
time for plant construction, conversion, or expansion, including the
acquisition of equipment, facilities, machinery, supplies, or material
or to supply such concern with working capital to be used in the
manufacture of articles, equipment, supplies, or material for defense or
civilian production or as may be necessary to insure a well‑balanced
national economy; and

\(iv\) such assistance is of such sound value as reasonably to assure
that the terms under which it is provided will not be breached by the
small business concern.

\(B\) (i) No loan shall be made under this paragraph if the total amount
outstanding and committed (by participation or otherwise) to the
borrower would exceed \$750,000.

\(ii\) Subject to the provisions of clause (i), in agreements to
participate in loans on a deferred (guaranteed) basis, participation by
the Administration shall be not less than 85 per centum of the balance
of the financing outstanding at the time of disbursement.

\(iii\) The rate of interest on financings made on a deferred
(guaranteed) basis shall be legal and reasonable.

\(iv\) Financings made pursuant to this paragraph shall be subject to
the following limitations:

\(I\) No immediate participation may be purchased unless it is shown
that a deferred participation is not available.

\(II\) No direct financing may be made unless it is shown that a
participation is unavailable.

\(C\) A direct loan or the Administration\'s share of an immediate
participation loan made pursuant to this paragraph shall be any secured
debt instrument---

\(i\) that is subordinated by its terms to all other borrowings of the
issuer;

\(ii\) the rate of interest on which shall not exceed the current
average market yield on outstanding marketable obligations of the United
States with remaining periods to maturity comparable to the average
maturities of such loan and adjusted to the nearest one‑eighth of 1 per
centum;

\(iii\) the term of which is not more than twenty‑five years; and

\(iv\) the principal on which amortized at such rate as may be deemed
appropriate by the Administration, and the interest on which is payable
not less often than annually.

\(21\) (A) The Administration may make loans on a guaranteed basis under
the authority of this subsection---

\(i\) to a small business concern that has been (or can reasonably be
expected to be) detrimentally affected by---

\(I\) the closure (or substantial reduction) of a Department of Defense
installation; or

\(II\) the termination (or substantial reduction) of a Department of
Defense program on which such small business was a prime contractor or
subcontractor (or supplier) at any tier; or

\(ii\) to a qualified individual or a veteran seeking to establish (or
acquire) and operate a small business concern.

\(B\) Recognizing that greater risk may be associated with a loan to a
small business concern described in subparagraph (A)(i), any reasonable
doubts concerning the firm\'s proposed business plan for transition to
nondefense-related markets shall be resolved in favor of the loan
applicant when making any determination regarding the sound value of the
proposed loan in accordance with paragraph (6).

\(C\) Loans pursuant to this paragraph shall be authorized in such
amounts as provided in advance in appropriation Acts for the purposes of
loans under this paragraph.

\(D\) For purposes of this paragraph a qualified individual is---

\(i\) a member of the Armed Forces of the United States, honorably
discharged from active duty involuntarily or pursuant to a program
providing bonuses or other inducements to encourage voluntary separation
or early retirement;

\(ii\) an employee of a prime contractor, subcontractor, or supplier at
any tier of a Department of Defense program whose employment is
involuntarily terminated (or voluntarily terminated pursuant to a
program offering inducements to encourage voluntary separation or early
retirement) due to the termination (or substantial reduction) of a
Department of Defense program.

\(E\) JOB CREATION AND COMMUNITY BENEFIT.---In providing assistance
under this paragraph, the Administration shall develop procedures to
ensure, to the maximum extent practicable, that such assistance is used
for projects that---

\(i\) have the greatest potential for---

\(I\) creating new jobs for individuals whose employment is
involuntarily terminated due to reductions in Federal defense
expenditures; or

\(II\) preventing the loss of jobs by employees of small business
concerns described in subparagraph (A)(i); and

\(ii\) have substantial potential for stimulating new economic activity
in communities most affected by reductions in Federal defense
expenditures.

\(22\) The Administration is authorized to permit participating lenders
to impose and collect a reasonable penalty fee on late payments of loans
guaranteed under this subsection in an amount not to exceed 5 percent of
the monthly loan payment per month plus interest.

\(23\) YEARLY FEE.---

\(A\) IN GENERAL.---With respect to each loan approved under this
subsection, the Administration shall assess, collect, and retain a fee,
not to exceed 0.55 percent per year of the outstanding balance of the
deferred participation share of the loan, in an amount established once
annually by the Administration in the Administration's annual budget
request to Congress, as necessary to reduce to zero the cost to the
Administration of making guarantees under this subsection. As used in
this paragraph, the term "cost" has the meaning given that term in
section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a).

\(B\) PAYER.---The yearly fee assessed under subparagraph (A) shall be
payable by the participating lender and shall not be charged to the
borrower.

\(C\) LOWERING OF BORROWER FEES.---If the Administration determines that
fees paid by lenders and by small business borrowers for guarantees
under this subsection may be reduced, consistent with reducing to zero
the cost to the Administration of making such guarantees---

\(i\) the Administration shall first consider reducing fees paid by
small business borrowers under clauses (i) through (iii) of paragraph
(18)(A), to the maximum extent possible; and

\(ii\) fees paid by small business borrowers shall not be increased
above the levels in effect on the date of enactment of this
subparagraph.

\(24\) NOTIFICATION REQUIREMENT.---The Administration shall notify the
Committees on Small Business of the Senate and the House of
Representatives not later than 15 days before making any significant
policy or administrative change affecting the operation of the loan
program under this subsection.

\(25\) LIMITATION ON CONDUCTING PILOT PROJECTS.---

\(A\) IN GENERAL.---Not more than 10 percent of the total number of
loans guaranteed in any fiscal year under this subsection may be awarded
as part of a pilot program which is commenced by the Administrator on or
after October 1, 1996.

\(B\) PILOT PROGRAM DEFINED.---In this paragraph, the term \"pilot
program\" means any lending program initiative, project, innovation, or
other activity not specifically authorized by law.

\(C\) LOW DOCUMENTATION LOAN PROGRAM.---The Administrator may carry out
the low documentation loan program for loans of \$100,000 or less only
through lenders with significant experience in making small business
loans. Not later than 90 days after the date of enactment of this
subsection, the Administrator shall promulgate regulations defining the
experience necessary for participation as a lender in the low
documentation loan program.

\(26\) CALCULATION OF SUBSIDY RATE.---All fees, interest, and profits
received and retained by the Administration under this subsection shall
be included in the calculations made by the Director of the Office of
Management and Budget to offset the cost (as that term is defined in
section 502 of the Federal Credit Reform Act of 1990) to the
Administration of purchasing and guaranteeing loans under this Act.

\(27\) Repealed.

\(28\) LEASING.---In addition to such other lease arrangements as may be
authorized by the Administration, a borrower may permanently lease to
one or more tenants not more than 20 percent of any property constructed
with the proceeds of a loan guaranteed under this subsection, if the
borrower permanently occupies and uses not less than 60 percent of the
total business space in the property.

\(29\) REAL ESTATE APPRAISALS.---With respect to a loan under this
subsection that is secured by commercial real property, an appraisal of
such property by a State licensed or certified appraiser---

\(A\) shall be required by the Administration in connection with any
such loan for more than \$250,000; or

\(B\) may be required by the Administration or the lender in connection
with any such loan for \$250,000 or less, if such appraisal is necessary
for appropriate evaluation of creditworthiness.

\(30\) OWNERSHIP REQUIREMENTS.---Ownership requirements to determine the
eligibility of a small business concern that applies for assistance
under any credit program under this Act shall be determined without
regard to any ownership interest of a spouse arising solely from the
application of the community property laws of a State for purposes of
determining marital interests.

\(31\) EXPRESS LOANS.

\(A\) DEFINITIONS.---As used in this paragraph:

\(i\) The term "express lender" means any lender authorized by the
Administration to participate in the Express Loan Program.

\(ii\) The term "express loan" means any loan made pursuant to this
paragraph in which a lender utilizes to the maximum extent practicable
its own loan analyses, procedures, and documentation.

\(iii\) The term "Express Loan Program" means the program for express
loans established by the Administration under paragraph (25)(B), as in
existence on April 5, 2004, with a guaranty rate of not more than 50
percent.

\(B\) RESTRICTION TO EXPRESS LENDER.---The authority to make an express
loan shall be limited to those lenders deemed qualified to make such
loans by the Administration. Designation as an express lender for
purposes of making an express loan shall not prohibit such lender from
taking any other action authorized by the Administration for that lender
pursuant to this subsection.

\(C\) GRANDFATHERING OF EXISTING LENDERS.---Any express lender shall
retain such designation unless the Administration determines that the
express lender has violated the law or regulations promulgated by the
Administration or modifies the requirements to be an express lender and
the lender no longer satisfies those requirements.

\(D\) MAXIMUM LOAN AMOUNT.---The maximum loan amount under the Express
Loan Program is \$350,000.

\(E\) OPTION TO PARTICIPATE.---Except as otherwise provided in this
paragraph, the Administration shall take no regulatory, policy, or
administrative action, without regard to whether such action requires
notification pursuant to paragraph (24), that has the effect of
requiring a lender to make an express loan pursuant to subparagraph (D).

\(b\) Except as to agricultural enterprises as defined in section
18(b)(1) of this Act, the Administration also is empowered to the extent
and in such amounts as provided in advance in appropriation Acts---

\(1\) (A) to make such loans (either directly or in cooperation with
banks or other lending institutions through agreements to participate on
an immediate or deferred (guaranteed) basis as the Administration may
determine to be necessary or appropriate to repair, rehabilitate or
replace property, real or personal, damaged or destroyed by or as a
result of natural or other disasters,: [Provided]{.underline}, That such
damage or destruction is not compensated for by insurance or otherwise:
[And provided further,]{.underline} That the Administration may increase
the amount of the loan by up to an additional 20 per centum if it
determines such increase to be necessary or appropriate in order to
protect the damaged or destroyed property from possible future disasters
by taking mitigating measures, including, but not limited to,
construction of retaining walls and sea walls, grading and contouring
land, relocating utilities and modifying structures;

\(B\) to refinance any mortgage or other lien against a totally
destroyed or substantially damaged home or business concern:
[Provided]{.underline}, That no loan or guarantee shall be extended
unless the Administration finds that (i) the applicant is not able to
obtain credit elsewhere; (ii) such property is to be repaired,
rehabilitated, or replaced; (iii) the amount refinanced shall not exceed
the amount of physical loss sustained; and (iv) such amount shall be
reduced to the extent such mortgage or lien is satisfied by insurance or
otherwise; and

\(C\) during fiscal years 2000 through 2004, to establish a predisaster
mitigation program to make such loans (either directly or in cooperation
with banks or other lending institutions through agreements to
participate on an immediate or deferred (guaranteed) basis), as the
Administrator may determine to be necessary or appropriate, to enable
small businesses to use mitigation techniques in support of a formal
mitigation program established by the Federal Emergency Management
Agency, except that no loan or guarantee may be extended to a small
business under this subparagraph unless the Administration finds that
the small business is otherwise unable to obtain credit for the purposes
described in this subparagraph;

\(2\) to make such loans (either directly or in cooperation with banks
or other lending institutions through agreements to participate on an
immediate or deferred (guaranteed) basis as the Administration may
determine to be necessary or appropriate to any small business concern
or small agricultural cooperative located in an area affected by a
disaster, if the Administration determines that the concern or the
cooperative has suffered a substantial economic injury as a result of
such disaster and if such disaster constitutes---

\(A\) a major disaster, as determined by the President under the
Disaster Relief and Emergency Assistance Act; or

\(B\) a natural disaster, as determined by the Secretary of Agriculture
pursuant to the Consolidated Farmers Home Administration Act of 1961 (7
U.S.C. 1961); or

\(C\) a disaster, as determined by the Administrator of the Small
Business Administration; or

\(D\) if no disaster declaration has been issued pursuant to
subparagraph (A), (B), or (C), the Governor of a State in which a
disaster has occurred may certify to the Small Business Administration
that small business concerns or small agricultural cooperatives (1) have
suffered economic injury as a result of such disaster, and (2) are in
need of financial assistance which is not available on reasonable terms
in the disaster stricken area. Upon receipt of such certification, the
Administration may then make such loans as would have been available
under this paragraph if a disaster declaration had been issued.

[Provided]{.underline}, That no loan or guarantee shall be extended
pursuant to this paragraph (2) unless the Administration finds that the
applicant is not able to obtain credit elsewhere.

\(3\) (A) In this paragraph---

\(i\) the term "essential employee" means an individual who is employed
by a small business concern and whose managerial or technical expertise
is critical to the successful day-to-day operations of that small
business concern;

\(ii\) the term "period of military conflict" has the meaning given the
term in subsection (n)(1); and

\(iii\) the term "substantial economic injury" means an economic harm to
a business concern that results in the inability of the business
concern---

\(I\) to meet its obligations as they mature;

\(II\) to pay its ordinary and necessary operating expenses; or

\(III\) to market, produce, or provide a product or service ordinarily
marketed, produced, or provided by the business concern.

\(B\) The Administration may make such disaster loans (either directly
or in cooperation with banks or other lending institutions through
agreements to participate on an immediate or deferred basis) to assist a
small business concern that has suffered or that is likely to suffer
substantial economic injury as the result of an essential employee of
such small business concern being ordered to active military duty during
a period of military conflict.

\(C\) A small business concern described in subparagraph (B) shall be
eligible to apply for assistance under this paragraph during the period
beginning on the date on which the essential employee is ordered to
active duty and ending on the date that is 90 days after the date on
which such essential employee is discharged or released from active
duty.

\(D\) Any loan or guarantee extended pursuant to this paragraph shall be
made at the same interest rate as economic injury loans under paragraph
(2).

\(E\) No loan may be made under this paragraph, either directly or in
cooperation with banks or other lending institutions through agreements
to participate on an immediate or deferred basis, if the total amount
outstanding and committed to the borrower under this subsection would
exceed \$1,500,000, unless such applicant constitutes a major source of
employment in its surrounding area, as determined by the Administration,
in which case the Administration, in its discretion, may waive the
\$1,500,000 limitation.

\(F\) For purposes of assistance under this paragraph, no declaration of
a disaster area shall be required.

\[THE FOLLOWING PARAGRAPHS PRECEDING SUBSECTION 7(c)

APPLY TO THE ENTIRE SUBSECTION 7(b).\]

No loan under this subsection, including renewals and extensions
thereof, may be made for a period or periods exceeding thirty years:
[Provided]{.underline}, That the Administrator may consent to a
suspension in the payment of principal and interest charges on, and to
an extension in the maturity of, the Federal share of any loan under
this subsection for a period not to exceed five years, if (A) the
borrower under such loan is a homeowner or a small business concern, (B)
the loan was made to enable (i) such homeowner to repair or replace his
home, or (ii) such concern to repair or replace plant or equipment which
was damaged or destroyed as the result of a disaster meeting the
requirements of clause (A) or (B) of paragraph (2) of this subsection,
and (C) the Administrator determines such action is necessary to avoid
severe financial hardship: [Provided further]{.underline}, That the
provisions of paragraph (1) of subsection (c) of this section shall not
be applicable to any such loan having a maturity in excess of twenty
years. Notwithstanding the provisions of any other law, the interest
rate on the Administration\'s share of any loan made under subsection
(b), except as provided in subsection (c), shall not exceed the average
annual interest rate on all interest‑bearing obligations of the United
States then forming a part of the public debt as computed at the end of
the fiscal year next preceding the date of the loan and adjusted to the
nearest one‑eighth of 1 per centum plus one‑quarter of 1 per centum:
[Provided, however]{.underline}, That the interest rate for loans made
under paragraphs (1) and (2) hereof shall not exceed the rate of
interest which is in effect at the time of the occurrence of the
disaster. In agreements to participate in loans on a deferred basis
under this subsection, 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. Notwithstanding any other provision of law,
the interest rate on the Administration\'s share of any loan made
pursuant to paragraph (1) of this subsection to repair or replace a
primary residence and/or replace or repair damaged or destroyed personal
property, less the amount of compensation by insurance or otherwise,
with respect to a disaster occurring on or after July 1, 1976, and prior
to October 1, 1978, shall be: 1 per centum on the amount of such loan
not exceeding \$10,000, and 3 per centum on the amount of such loan over
\$10,000 but not exceeding \$40,000. The interest rate on the
Administration\'s share of the first \$250,000 of all other loans made
pursuant to paragraph (1) of this subsection, with respect to a disaster
occurring on or after July 1, 1976, and prior to October 1, 1978, shall
be 3 per centum. All repayments of principal on the Administration\'s
share of any loan made under the above provisions shall first be applied
to reduce the principal sum of such loan which bears interest at the
lower rates provided in this paragraph. The principal amount of any loan
made pursuant to paragraph (1) in connection with a disaster which
occurs on or after April 1, l977, but prior to January 1, 1978, may be
increased by such amount, but not more than \$2,000, as the
Administration determines to be reasonable in light of the amount and
nature of loss, damage, or injury sustained in order to finance the
installation of insulation in the property which was lost, damaged, or
injured, if the uninsured, damaged portion of the property is 10 per
centum or more of the market value of the property at the time of the
disaster. Not later than June 1, 1978, the Administration shall prepare
and transmit to the Select Committee on Small Business of the Senate,
the Committee on Small Business of the House of Representatives, and the
Committees of the Senate and House of Representatives having
jurisdiction over measures relating to energy conservation, a report on
its activities under this paragraph, including therein an evaluation of
the effect of such activities on encouraging the installation of
insulation in property which is repaired or replaced after a disaster
which is subject to this paragraph, and its recommendations with respect
to the continuation, modification, or termination of such activities.

In the administration of the disaster loan program under paragraphs (1),
(2), and (4) of this subsection, in the case of property loss or damage
or injury resulting from a major disaster as determined by the President
or a disaster as determined by the Administrator which occurs on or
after January 1, 1971, and prior to July 1, 1973, the Small Business
Administration, to the extent such loss or damage or injury is not
compensated for by insurance or otherwise---

\(A\) may make any loan for repair, rehabilitation, or replacement of
property damaged or destroyed without regard to whether the required
financial assistance is otherwise available from private sources;

\(B\) may, in the case of the total destruction or substantial property
damage of a home or business concern, refinance any mortgage or other
liens outstanding against the destroyed or damaged property if such
property is to be repaired, rehabilitated, or replaced, except that (1)
in the case of a business concern, the amount refinanced shall not
exceed the amount of the physical loss sustained, and (2) in the case of
a home, the amount of each monthly payment of principal and interest on
the loan after refinancing under this clause shall be not less than the
amount of each such payment made prior to such refinancing;

\(C\) may, in the case of a loan made under clause (A) or a mortgage or
other lien refinanced under clause (B) in connection with the
destruction of, or substantial damage to, property owned and used as a
residence by an individual who by reason of retirement, disability, or
other similar circumstances relies for support on survivor, disability,
or retirement benefits under a pension, insurance, or other program,
consent to the suspension of the payments of the principal of that loan,
mortgage, or lien during the lifetime of that individual and his spouse
for so long as the Administration determines that making such payments
would constitute a substantial hardship;

\(D\) shall, notwithstanding the provisions of any other law and upon
presentation by the applicant of proof of loss or damage or injury and a
bona fide estimate of cost of repair, rehabilitation, or replacement,
cancel the principal of any loan made to cover a loss or damage or
injury resulting from such disaster, except that---

\(i\) with respect to a loan made in connection with a disaster
occurring on or after January 1, 1971, but prior to January 1, 1972, the
total amount so canceled shall not exceed \$2,500, and the interest on
the balance of the loan shall be at a rate of 3 per centum per annum;
and

\(ii\) with respect to a loan made in connection with a disaster
occurring on or after January 1, 1972, but prior to July 1, 1973, the
total amount so canceled shall not exceed \$5,000, and the interest on
the balance of the loan shall be at a rate of 1 per centum per annum.

With respect to any loan referred to in clause (D) which is outstanding
on the date of enactment of this paragraph, the Administrator shall---

\(i\) make such change in the interest rate on the balance of such loan
as is required under that clause effective as of such date of enactment;
and

\(ii\) in applying the limitation set forth in that clause with respect
to the total amount of such loan which may be canceled, consider as part
of the amount so canceled any part of such loan which was previously
canceled pursuant to section 231 of the Disaster Relief Act of 1970.

Whoever wrongfully misapplies the proceeds of a loan obtained under this
subsection shall be civilly liable to the Administrator in an amount
equal to one‑and‑one‑half times the original principal amount of the
loan.

\(E\) A State grant made on or prior to July 1, 1979, shall not be
considered compensation for the purpose of applying the provisions of
section 312(a) of the Disaster Relief and Emergency Assistance Act to a
disaster loan under paragraph (1), (2), or (4) of this subsection.

\(c\) (1) The Administration may further extend the maturity of or renew
any loan made pursuant to this section, or any loan transferred to the
Administration pursuant to Reorganization Plan Numbered 2 of 1954, or
Reorganization Plan Numbered 1 of 1957, for additional periods not to
exceed ten years beyond the period stated therein, if such extension or
renewal will aid in the orderly liquidation of such loan.

\(2\) During any period in which principal and interest charges are
suspended on the Federal share of any loan, as provided in subsection
(b), the Administrator shall, upon the request of any person, firm, or
corporation having a participation in such loan, purchase such
participation, or assume the obligation of the borrower, for the balance
of such period, to make principal and interest payments on the
non‑Federal share of such loan: [Provided,]{.underline} That no such
payments shall be made by the Administrator in behalf of any borrower
unless (i) the Administrator determines that such action is necessary in
order to avoid a default, and (ii) the borrower agrees to make payments
to the Administration in an aggregate amount equal to the amount paid in
its behalf by the Administrator, in such manner and at such times
(during or after the term of the loan) as the Administrator shall
determine having due regard to the purposes sought to be achieved by
this paragraph.

\(3\) With respect to a disaster occurring on or after October 1, 1978,
and prior to the effective date of this Act, on the Administration\'s
share of loans made pursuant to paragraph (1) of subsection (b)---

\(C\) if the loan proceeds are to repair or replace property damaged or
destroyed and if the applicant is a business concern which is able to
obtain sufficient credit elsewhere, the interest rate shall not exceed
the current average market yield on outstanding marketable obligations
of the United States with remaining periods to maturity comparable to
the average maturities of such loans and adjusted to the nearest
one‑eighth of 1 percent, and an additional amount as determined by the
Administration, but not to exceed 1 percent: [Provided,]{.underline}
That three years after such loan is fully disbursed and every two years
thereafter for the term of the loan, if the Administration determines
that the borrower is able to obtain a loan from non‑Federal sources at
reasonable rates and terms for loans of similar purposes and periods of
time, the borrower shall, upon request by the Administration, apply for
and accept such a loan in sufficient amount to repay the Administration:
[Provided further,]{.underline} That no loan under subsection (b)(1)
shall be made, either directly or in cooperation with banks or other
lending institutions through agreements to participate on an immediate
or deferred basis, if the total amount outstanding and committed to the
borrower under such subsection would exceed \$500,000 for each disaster,
unless an applicant constitutes a major source of employment in an area
suffering a disaster, in which case the Administration, in its
discretion, may waive the \$500,000 limitation.

\(4\) Notwithstanding the provisions of any other law, the interest rate
on the Federal share of any loan made under subsection (b) shall be---

\(A\) in the case of a homeowner unable to secure credit elsewhere, the
rate prescribed by the Administration but not more than one‑half the
rate determined by the Secretary of the Treasury taking into
consideration the current average market yield on outstanding marketable
obligations of the United States with remaining periods to maturity
comparable to the average maturities of such loans plus an additional
charge of not to exceed 1 per centum per annum as determined by the
Administrator, and adjusted to the nearest one‑eighth of 1 per centum
but not to exceed 8 per centum per annum;

\(B\) in the case of a homeowner able to secure credit elsewhere, the
rate prescribed by the Administration but not more than the rate
determined by the Secretary of the Treasury taking into consideration
the current average market yield on outstanding marketable obligations
of the United States with remaining periods to maturity comparable to
the average maturities of such loans plus an additional charge of not to
exceed 1 per centum per annum as determined by the Administrator, and
adjusted to the nearest one‑eighth of 1 per centum;

\(C\) in the case of a business concern unable to obtain credit
elsewhere, not to exceed 8 per centum per annum;

\(D\) in the case of a business concern able to obtain credit elsewhere,
the rate prescribed by the Administration but not in excess of the rate
prevailing in private market for similar loans and not more than the
rate prescribed by the Administration as the maximum interest rate for
deferred participation (guaranteed) loans under section 7(a) of this
Act. Loans under this subparagraph shall be limited to a maximum term of
three years.

\(5\) Notwithstanding the provisions of any other law, the interest rate
on the Federal share of any loan made under subsection (b)(1) and (b)(2)
on account of a disaster commencing on or after October 1, 1982, shall
be---

\(A\) in the case of a homeowner unable to secure credit elsewhere, the
rate prescribed by the Administration but not more than one‑half the
rate determined by the Secretary of the Treasury taking into
consideration the current average market yield on outstanding marketable
obligations of the United States with remaining periods to maturity
comparable to the average maturities of such loan plus an additional
charge of not to exceed 1 per centum per annum as determined by the
Administrator, and adjusted to the nearest one‑eighth of 1 per centum,
but not to exceed 4 per centum per annum;

\(B\) in the case of a homeowner able to secure credit elsewhere, the
rate prescribed by the Administration but not more than the rate
determined by the Secretary of the Treasury taking into consideration
the current average market yield on outstanding marketable obligations
of the United States with remaining periods to maturity comparable to
the average maturities of such loans plus an additional charge of not to
exceed 1 per centum per annum as determined by the Administrator; and
adjusted to the nearest one‑eighth of 1 per centum, but not to exceed 8
per centum per annum;

\(C\) in the case of a business or other concern, including agricultural
cooperatives, unable to obtain credit elsewhere, not to exceed 4 per
centum per annum;

\(D\) in the case of a business concern able to obtain credit elsewhere,
the rate prescribed by the Administration but not in excess of the
lowest of (i) the rate prevailing in the private market for similar
loans, (ii) the rate prescribed by the Administration as the maximum
interest rate for deferred participation (guaranteed) loans under
section 7(a) of this Act, or (iii) 8 per centum per annum. Loans under
this subparagraph shall be limited to a maximum term of three years.

\(6\) Notwithstanding the provisions of any other law, such loans,
subject to the reductions required by subparagraphs (A) and (B) of
paragraph 7(b)(1), shall be in amounts equal to 100 per centum of loss.
The interest rates for loans made under paragraphs 7(b)(1) and (2), as
determined pursuant to paragraph (5), shall be the rate of interest
which is in effect on the date of the disaster commenced:
[Provided]{.underline}, That no loan under paragraphs 7(b)(1) and (2)
shall be made, either directly or in cooperation with banks or other
lending institutions through agreements to participate on an immediate
or deferred (guaranteed) basis, if the total amount outstanding and
committed to the borrower under subsection 7(b) would exceed \$500,000
for each disaster unless an applicant constitutes a major source of
employment in an area suffering a disaster, in which case the
Administration, in its discretion, may waive the \$500,000 limitation.
Employees of concerns sharing a common business premises shall be
aggregated in determining \"major source of employment\" status for
nonprofit applicants owning such premises. [Provided
further]{.underline}, That the Administration, subject to the reductions
required by subparagraphs (A) and (B) of paragraph 7(b)(1), shall not
reduce the amount of eligibility for any homeowner on account of loss of
real estate to less than \$100,000 for each disaster nor for any
homeowner or lessee on account of loss of personal property to less than
\$20,000 for each disaster, such sums being in addition to any eligible
refinancing: [Provided further,]{.underline} That the Administration
shall not require collateral for loans of \$10,000 or less which are
made under paragraph (1) of subsection (b).

With respect to any loan which is outstanding on the date of enactment
of this paragraph and which was made on account of a disaster commencing
on or after October 1, 1982, the Administrator shall make such change in
the interest rate on the balance of such loan as is required herein
effective as of the date of enactment.

\(7\) The Administration shall not withhold disaster assistance pursuant
to this paragraph to nurseries who are victims of drought disasters. As
used in section 7(b)(2) the term \"an area affected by a disaster\"
includes any county, or county contiguous thereto, determined to be a
disaster by the President, the Secretary of Agriculture or the
Administrator of the Small Business Administration.

\(d\) The Administration shall not fund any Small Business Development
Center or any variation thereof, except as authorized in section 21 of
this Act.

\(e\) \[RESERVED\].

\(f\) \[RESERVED\].

\(g\) \[Repealed\].

\(h\) (1) The Administration also is empowered, where other financial
assistance is not available on reasonable terms, 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---

\(A\) to assist any public or private organization---

\(i\) which is organized under the laws of the United States or of any
State, operated in the interest of handicapped individuals, the net
income of which does not inure in whole or in part to the benefit of any
shareholder or other individual;

\(ii\) which complies with any applicable occupational health and safety
standard prescribed by the Secretary of Labor; and

\(iii\) which, in the production of commodities and in the provision of
services during any fiscal year in which it receives financial
assistance under this subsection, employs handicapped individuals for
not less than 75 per centum of the man‑hours required for the production
or provision of the commodities or services; or

\(B\) to assist any handicapped individual in establishing, acquiring,
or operating a small business concern.

\(2\) The Administration\'s share of any loan made under this subsection
shall not exceed \$350,000, nor may any such loan be made if the total
amount outstanding and committed (by participation or otherwise) to the
borrower from the business loan and investment fund established by
section 4(c)(1)(B) of this Act would exceed \$350,000. In agreements to
participate in loans on a deferred basis under this subsection, the
Administration\'s participation may total 100 per centum of the balance
of the loan at the time of disbursement. The Administration\'s share of
any loan made under this subsection shall bear interest at the rate of 3
per centum per annum. The maximum term of any such loan, including
extensions and renewals thereof, may not exceed fifteen years. All loans
made under this subsection shall be of such sound value or so secured as
reasonably to assure repayment: [Provided, however]{.underline}, That
any reasonable doubt shall be resolved in favor of the applicant.

\(3\) For purposes of this subsection, the term \"handicapped
individual\" means a person who has a physical, mental, or emotional
impairment, defect, ailment, disease, or disability of a permanent
nature which in any way limits the selection of any type of employment
for which the person would otherwise be qualified or qualifiable.

\(i\) (1) The Administration also is empowered to make, participate (on
an immediate basis) in, or guarantee loans, repayable in not more than
fifteen years, to any small business concern, or to any qualified person
seeking to establish such a concern, when it determines that such loans
will further the policies established in section 2(b) of this Act, with
particular emphasis on the preservation or establishment of small
business concerns located in urban or rural areas with high proportions
of unemployed or low‑income individuals, or owned by low‑income
individuals: [Provided, however]{.underline}, That no such loans shall
be made, participated in, or guaranteed if the total of such Federal
assistance to a single borrower outstanding at any one time would exceed
\$100,000. The Administration may defer payments on the principal of
such loans for a grace period and use such other methods as it deems
necessary and appropriate to assure the successful establishment and
operation of such concern. The Administration may, in its discretion, as
a condition of such financial assistance, require that the borrower take
steps to improve his management skills by participating in a management
training program approved by the Administration: [Provided,
however,]{.underline} That any management training program so approved
must be of sufficient scope and duration to provide reasonable
opportunity for the individuals served to develop entrepreneurial and
managerial self‑sufficiency.

\(2\) The Administration shall encourage, as far as possible, the
participation of the private business community in the program of
assistance to such concerns, and shall seek to stimulate new private
lending activities to such concerns through the use of the loan
guarantees, participations in loans, and pooling arrangements authorized
by this subsection.

\(3\) To insure an equitable distribution between urban and rural areas
for loans between \$3,500 and \$100,000 made under this subsection the
Administration is authorized to use the agencies and agreements and
delegations developed under title III of the Economic Opportunity Act of
1964, as amended, as it shall determine necessary.

\(4\) The Administration shall provide for the continuing evaluation of
programs under this subsection, including full information on the
location, income characteristics, and types of businesses and
individuals assisted, and on new private lending activity stimulated,
and the results of such evaluation together with recommendations shall
be included in the report required by section 10(a) of this Act.

\(5\) Loans made pursuant to this subsection (including immediate
participation in and guarantees of such loans) shall have such terms and
conditions as the Administration shall determine, subject to the
following limitations---

\(A\) there is reasonable assurance of repayment of the loan;

\(B\) the financial assistance is not otherwise available on reasonable
terms from private sources or other Federal, State, or local programs;

\(C\) the amount of the loan, together with other funds available, is
adequate to assure completion of the project or achievement of the
purposes for which the loan is made;

\(D\) the loan bears interest at a rate not less than (i) a rate
determined by the Secretary of the Treasury, taking into consideration
the average market yield on outstanding Treasury obligations of
comparable maturity, plus (ii) such additional charge, if any, toward
covering other costs of the program as the Administration may determine
to be consistent with its purposes: [Provided, however]{.underline},
That the rate of interest charged on loans made in redevelopment areas
designated under the Public Works and Economic Development Act of 1965
(42 U.S.C. 3108 et seq.) shall not exceed the rate currently applicable
to new loans made under section 201 of that Act (42 U.S.C. 3141); and

\(E\) fees not in excess of amounts necessary to cover administrative
expenses and probable losses may be required on loan guarantees.

\(6\) The Administration shall take such steps as may be necessary to
insure that, in any fiscal year, at least 50 per centum of the amounts
loaned or guaranteed pursuant to this subsection are allotted to small
business concerns located in urban areas identified by the
Administration as having high concentrations of unemployed or low‑income
individuals or to small business concerns owned by low‑income
individuals. The Administration shall define the meaning of low‑income
as it applies to owners of small business concerns eligible to be
assisted under this subsection.

\(7\) No financial assistance shall be extended pursuant to this
subsection where the Administration determines that the assistance will
be used in relocating establishments from one area to another if such
relocation would result in an increase in unemployment in the area of
original location.

\(j\) (1) The Administration shall provide financial assistance to
public or private organizations to pay all or part of the cost of
projects designed to provide technical or management assistance to
individuals or enterprises eligible for assistance under sections 7(i),
7(j)(10), and 8(a) of this Act, with special attention to small
businesses located in areas of high concentration of unemployed or
low‑income individuals, to small businesses eligible to receive
contracts pursuant to section 8(a) of this Act.

\(2\) Financial assistance under this subsection may be provided for
projects, including, but not limited to---

\(A\) planning and research, including feasibility studies and market
research;

\(B\) the identification and development of new business opportunities;

\(C\) The furnishing of centralized services with regard to public
services and Federal Government programs including programs authorized
under sections 7(i), 7(j)(10), and 8(a) of this Act;

\(D\) the establishment and strengthening of business service agencies,
including trade associations and cooperatives; and

\(E\) the furnishing of business counseling, management training, and
legal and other related services, with special emphasis on the
development of management training programs using the resources of the
business community, including the development of management training
opportunities in existing business, and with emphasis in all cases upon
providing management training of sufficient scope and duration to
develop entrepreneurial and managerial self‑sufficiency on the part of
the individuals served.

\(3\) The Administration shall encourage the placement of subcontracts
by businesses with small business concerns located in areas of high
concentration of unemployed or low‑income individuals, and with small
businesses eligible to receive contracts pursuant to section 8(a) of
this Act. The Administration may provide incentives and assistance to
such businesses that will aid in the training and upgrading of potential
subcontractors or other small business concerns eligible for assistance
under sections 7(i), 7(j), and 8(a) of this Act.

\(A\) \[Repealed\].

\(B\) \[Repealed\].

\(4\) The Administration shall give preference to projects which promote
the ownership, participation in ownership, or management of small
businesses owned by low‑income individuals and small businesses eligible
to receive contracts pursuant to section 8(a) of this Act.

\(5\) The financial assistance authorized for projects under this
subsection includes assistance advanced by grant, agreement, or
contract.

\(6\) The Administration is authorized to make payments under grants and
contracts entered into under this subsection in lump sum or
installments, and in advance or by way of reimbursement, and in the case
of grants, with necessary adjustments on account of overpayments or
underpayments.

\(7\) To the extent feasible, services under this subsection shall be
provided in a location which is easily accessible to the individuals and
small business concerns served.

\(8\) \[Repealed\].

\(9\) The Administration shall take such steps as may be necessary and
appropriate, in coordination and cooperation with the heads of other
Federal departments and agencies, to insure that contracts,
subcontracts, and deposits made by the Federal Government or with
programs aided with Federal funds are placed in such way as to further
the purposes of sections 7(i), 7(j), and 8(a) of this Act.

\(10\) There is established within the Administration a small business
and capital ownership development program (hereinafter referred to as
the \"Program\") which shall provide assistance exclusively for small
business concerns eligible to receive contracts pursuant to section 8(a)
of this Act. The program, and all other services and activities
authorized under section 7(j) and 8(a) of this Act, shall be managed by
the Associate Administrator for Minority Small Business and Capital
Ownership Development under the supervision of, and responsible to, the
Administrator.

\(A\) The program shall---

\(i\) assist small business concerns participating in the Program
(either through public or private organizations) to develop and maintain
comprehensive business plans which set forth the Program Participant\'s
specific business targets, objectives, and goals developed and
maintained in conformity with subparagraph (D).

\(ii\) provide for such other nonfinancial services as deemed necessary
for the establishment, preservation, and growth of small business
concerns participating in the Program, including but not limited to (I)
loan packaging, (II) financial counseling, (III) accounting and
bookkeeping assistance, (IV) marketing assistance, and (V) management
assistance;

\(iii\) assist small business concerns participating in the Program to
obtain equity and debt financing;

\(iv\) establish regular performance monitoring and reporting systems
for small business concerns participating in the Program to assure
compliance with their business plans;

\(v\) analyze and report the causes of success and failure of small
business concerns participating in Program; and

\(vi\) provide assistance necessary to help small business concerns
participating in the Program to procure surety bonds, with such
assistance including, but not limited to (I) the preparation of
application forms required to receive a surety bond, (II) special
management and technical assistance designed to meet the specific needs
of small business concerns participating in the Program and which have
received or are applying to receive a surety bond, and (III) preparation
of all forms necessary to receive a surety bond guarantee from the
Administration pursuant to title IV, part B of the Small Business
Investment Act of l958.

\(B\) Small business concerns eligible to receive contracts pursuant to
section 8(a) of this Act shall participate in the Program.

\(C\) (i) A small business concern participating in any program or
activity conducted under the authority of this paragraph or eligible for
the award of contracts pursuant to section 8(a) on September 1, 1988,
shall be permitted continued participation and eligibility in such
program or activity for a period of time which is the greater of---

\(I\) 9 years less the number of years since the award of its first
contract pursuant to section 8(a); or

\(II\) its original fixed program participation term (plus any extension
thereof) assigned prior to the effective date of this paragraph plus
eighteen months.

\(ii\) Nothing contained in this subparagraph shall be deemed to prevent
the Administration from instituting a termination or graduation pursuant
to subparagraph (F) or (H) for issues unrelated to the expiration of any
time period limitation.

\(D\) (i) Promptly after certification under paragraph (11) a Program
Participant shall submit a business plan (hereinafter referred to as the
\"plan\") as described in clause (ii) of this subparagraph for review by
the Business Opportunity Specialist assigned to assist such Program
Participant. The plan may be a revision of a preliminary business plan
submitted by the Program Participant or required by the Administration
as a part of the application for certification under this section and
shall be designed to result in the Program Participant eliminating the
conditions or circumstances upon which the Administration determined
eligibility pursuant to section 8(a)(6). Such plan, and subsequent
modifications submitted under clause (iii) of this subparagraph, shall
be approved by the business opportunity specialist prior to the Program
Participant being eligible for award of a contract pursuant to section
8(a).

\(ii\) The plans submitted under this subparagraph shall include the
following:

\(I\) An analysis of market potential, competitive environment, and
other business analyses estimating the Program Participant\'s prospects
for profitable operations during the term of program participation and
after graduation.

\(II\) An analysis of the Program Participant\'s strengths and
weaknesses with particular attention to correcting any financial,
managerial, technical, or personnel conditions which are likely to
impede the small business concern from receiving contracts other than
those awarded under section 8(a).

\(III\) Specific targets, objectives, and goals, for the business
development of the Program Participant during the next and succeeding
years utilizing the results of the analyses conducted pursuant to
subclauses (I) and (II).

\(IV\) A transition management plan outlining specific steps to assure
profitable business operations after graduation (to be incorporated into
the Program Participant\'s plan during the first year of the
transitional stage of Program participation.

\(V\) Estimates of contract awards pursuant to section 8(a) and from
other sources, which the Program Participant will require to meet the
specific targets, objectives, and goals for the years covered by its
plan. The estimates established shall be consistent with the provisions
of subparagraph (I) and section 8(a).

\(iii\) Each Program Participant shall annually review its currently
approved plan with its Business Opportunity Specialist and modify such
plan as may be appropriate. Any modified plan shall be submitted to the
Administration for approval. The currently approved plan shall be
considered valid until such time as a modified plan is approved by the
Business Opportunity Specialist. Annual reviews pertaining to years in
the transitional stage of program participation shall require, as
appropriate, a written verification that such Program Participant has
complied with the requirements of subparagraph (I) relating to attaining
business activity from sources other that contracts awarded pursuant to
section 8(a).

\(iv\) Each Program Participant shall annually forecast its needs for
contract awards under section 8(a) for the next program year and the
succeeding program year during the review of its business plan,
conducted pursuant to clause (iii). Such forecast shall be known as the
section 8(a) contract support level and shall be included in the Program
Participant\'s business plan. Such forecast shall include---

\(I\) the aggregate dollar value of contract support to be sought on a
noncompetitive basis under section 8(a), reflecting compliance with the
requirements of subparagraph (I) relating to attaining business activity
from sources other than contracts awarded pursuant to section 8(a),

\(II\) the types of contract opportunities being sought, identified by
Standard Industrial Classification (SIC) Code or otherwise,

\(III\) an estimate of the dollar value of contract support to be sought
on a competitive basis, and

\(IV\) such other information as may be requested by the Business
Opportunity Specialist to provide effective business development
assistance to the Program Participant.

\(E\) A small business concern participating in the program conducted
under the authority of this paragraph and eligible for the award of
contracts pursuant to section 8(a) shall be denied all such assistance
if such concern---

\(i\) voluntarily elects not to continue participation;

\(ii\) completes the period of Program participation as prescribed by
paragraph (15);

\(iii\) is terminated pursuant to a termination proceeding conducted in
accordance with section 8(a)(9); or

\(iv\) is graduated pursuant to a graduation proceeding conducted in
accordance with section 8(a)(9).

\(F\) For purposes of this section and section 8(a), the term
\"terminated\" and the term \"termination\" means the total denial or
suspension of assistance under this paragraph or under section 8(a)
prior to the graduation of the participating small business concern or
prior to the expiration of the maximum program participation term. An
action for termination shall be based upon good cause, including---

\(i\) the failure by such concern to maintain its eligibility for
Program participation;

\(ii\) the failure of the concern to engage in business practices that
will promote its competitiveness within a reasonable period of time as
evidenced by, among other indicators, a pattern of unjustified
delinquent performance or terminations for default with respect to
contracts awarded under the authority of section 8(a);

\(iii\) a demonstrated pattern of failing to make required submissions
or responses to the Administration in a timely manner;

\(iv\) the willful violation of any rule or regulation of the
Administration pertaining to material issues;

\(v\) the debarment of the concern or its disadvantaged owners by any
agency pursuant to subpart 9.4 of title 48, Code of Federal Regulations
(or any successor regulation); or

\(vi\) the conviction of the disadvantaged owner or an officer of the
concern for any offense indicating a lack of business integrity
including any conviction for embezzlement, theft, forgery, bribery,
falsification or violation of section 16. For purposes of this clause,
no termination action shall be taken with respect to a disadvantaged
owner solely because of the conviction of an officer of the concern (who
is other than a disadvantaged owner) unless such owner conspired with,
abetted, or otherwise knowingly acquiesced in the activity or omission
that was the basis of such officer\'s conviction.

\(G\) The Director of the Division may initiate a termination proceeding
by recommending such action to the Associate Administrator for Minority
Small Business and Capital Ownership Development. Whenever the Associate
Administrator, or a designee of such officer, determines such
termination is appropriate, within 15 days after making such a
determination the Program Participant shall be provided a written notice
of intent to terminate, specifying the reasons for such action. No
Program Participant shall be terminated from the Program pursuant to
subparagraph (F) without first being afforded an opportunity for a
hearing in accordance with section 8(a)(9).

\(H\) For the purposes of sections 7(j) and 8(a) the term \"graduated\"
or \"graduation\" means that the Program Participant is recognized as
successfully completing the program by substantially achieving the
targets, objectives, and goals contained in the concern\'s business plan
thereby demonstrating its ability to compete in the marketplace without
assistance under this section or section 8(a).

\(I\) (i) During the developmental stage of its participation in the
Program, a Program Participant shall take all reasonable efforts within
its control to attain the targets contained in its business plan for
contracts awarded other than pursuant to section 8(a) (hereinafter
referred to as \"business activity targets.\"). Such efforts shall be
made a part of the business plan and shall be sufficient in scope and
duration to satisfy the Administration that the Program Participant will
engage \[sic\] a reasonable marketing strategy that will maximize its
potential to achieve its business activity targets.

\(ii\) During the transitional stage of the Program a Program
Participant shall be subject to regulations regarding business activity
targets that are promulgated by the Administration pursuant to clause
(iii).

\(iii\) The regulations referred to in clause (ii) shall:

\(I\) establish business activity targets applicable to Program
Participants during the fifth year and each succeeding year of Program
Participation; such targets, for such period of time, shall reflect a
reasonably consistent increase in contracts awarded other than pursuant
to section 8(a), expressed as a percentage of total sales; when
promulgating business activity targets the Administration may establish
modified targets for Program Participants that have participated in the
Program for a period of longer than four years on the effective date of
this subparagraph;

\(II\) require a Program Participant to attain its business activity
targets;

\(III\) provide that, before the receipt of any contract to be awarded
pursuant to section 8(a), the Program Participant (if it is in the
transitional stage) must certify that it has complied with the
regulations promulgated pursuant to subclause (II), or that it is in
compliance with such remedial measures as may have been ordered pursuant
to regulations issued under subclause (V);

\(IV\) require the Administration to review each Program Participant\'s
performance regarding attainment of business activity targets during
periodic reviews of such Participant\'s business plan; and

\(V\) authorize the Administration to take appropriate remedial measures
with respect to a Program Participant that has failed to attain a
required business activity target for the purpose of reducing such
Participant\'s dependence on contracts awarded pursuant to section 8(a);
such remedial actions may include, but are not limited to assisting the
Program Participant to expand the dollar volume of its competitive
business activity or limiting the dollar volume of contracts awarded to
the Program Participant pursuant to section 8(a); except for actions
that would constitute a termination, remedial measures taken pursuant to
this subclause shall not be reviewable pursuant to section 8(a)(9).

\(J\) (i) The Administration shall conduct an evaluation of a Program
Participant\'s eligibility for continued participation in the Program
whenever it receives specific and credible information alleging that
such Program Participant no longer meets the requirements for Program
eligibility. Upon making a finding that a Program Participant is no
longer eligible, the Administration shall initiate a termination
proceeding in accordance with subparagraph (F). A Program Participant\'s
eligibility for award of any contract under the authority of section
8(a) may be suspended pursuant to subpart 9.4 of title 48, Code of
Federal Regulations (or any successor regulation).

\(ii\) (I) Except as authorized by subclause (II) or (III), no award
shall be made pursuant to section 8(a) to other than a small business
concern.

\(II\) In determining the size of a small business concern owned by a
socially and economically disadvantaged Indian tribe (or a wholly owned
business entity of such tribe), each firm\'s size shall be independently
determined without regard to its affiliation with the tribe, any entity
of the tribal government, or any other business enterprise owned by the
tribe, unless the Administrator determines that one or more such
tribally owned business concerns have obtained, or are likely to obtain,
a substantial unfair competitive advantage within an industry category.

\(III\) Any joint venture established under the authority of section
602(b) of Public Law 100‑656, the \"Business Opportunity Development
Reform Act of 1988\", shall be eligible for award of a contract pursuant
to section 8(a).

\(11\) (A) The Associate Administrator for Minority Small Business and
Capital Ownership Development shall be responsible for coordinating and
formulating policies relating to Federal Assistance to small business
concerns eligible for assistance under section 7(i) of this Act and
small business concerns eligible to receive contracts pursuant to
section 8(a) of this Act.

\(B\) (i) Except as provided in clause (iii), no individual who was
determined pursuant to section 8(a) to be socially and economically
disadvantaged before the effective date of this subparagraph shall be
permitted to assert such disadvantage with respect to any other concern
making application for certification after such effective date.

\(ii\) Except as provided in clause (iii), any individual upon whom
eligibility is based pursuant to section 8(a)(4) shall be permitted to
assert such eligibility for only one small business concern.

\(iii\) A socially and economically disadvantaged Indian tribe may own
more than one small business concern eligible for assistance pursuant to
section 7(j)(10) and section 8(a) if---

\(I\) the Indian tribe does not own another firm in the same industry
which has been determined to be eligible to receive contracts under this
program, and

\(II\) the individuals responsible for the management and daily
operations of the concern do not manage more than two Program
Participants.

\(C\) No concern, previously eligible for the award of contracts
pursuant to section 8(a), shall be subsequently recertified for program
participation if its prior participation in the program was concluded
for any of the reasons described in paragraph (10)(E).

\(D\) A concern eligible for the award of contracts pursuant to this
subsection shall remain eligible for such contracts if there is a
transfer of ownership and control (as defined pursuant to section
8(a)(4)) to individuals who are determined to be socially and
economically disadvantaged pursuant to section 8(a). In the event of
such a transfer, the concern, if not terminated or graduated, shall be
eligible for a period of continued participation in the program not to
exceed the time limitations prescribed in paragraph (15).

\(E\) There is established a Division of Program Certification and
Eligibility (hereinafter referred to in this paragraph as the
\"Division\") that shall be made part of the Office of Minority Small
Business and Capital Ownership Development. The Division shall be headed
by a Director who shall report directly to the Associate Administrator
for Minority Small Business and Capital Ownership Development. The
Division shall establish field offices within such regional offices of
the Administration as may be necessary to perform efficiently its
functions and responsibilities.

\(F\) Subject to the provisions of section 8(a)(9), the functions and
responsibility of the Division are to---

\(i\) receive, review and evaluate applications for certification
pursuant to paragraphs (4), (5), (6) and (7) of section 8(a);

\(ii\) advise each program applicant within 15 days after the receipt of
an application as to whether such application is complete and suitable
for evaluation and, if not, what matters must be rectified;

\(iii\) render recommendations on such applications to the Associate
Administrator for Minority Small Business and Capital Ownership
Development;

\(iv\) review and evaluate financial statements and other submissions
from concerns participating in the program established by paragraph (10)
to ascertain continued eligibility to receive subcontracts pursuant to
section 8(a);

\(v\) make a request for the initiation of termination or graduation
proceedings, as appropriate, to the Associate Administrator for Minority
Small Business and Capital Ownership Development;

\(vi\) make recommendations to the Associate Administrator for Minority
Small Business and Capital Ownership Development concerning protests
from applicants that have been denied program admission;

\(vii\) decide protests regarding the status of a concern as a
disadvantaged concern for purposes of any program or activity conducted
under the authority of subsection (d) of section 8, or any other
provision of Federal law that references such subsection for a
definition of program eligibility; and

\(viii\) implement such policy directives as may be issued by the
Associate Administrator for Minority Small Business and Capital
Ownership Development pursuant to subparagraph (I) regarding, among
other things, the geographic distribution of concerns to be admitted to
the program and the industrial make‑up of such concerns.

\(G\) An applicant shall not be denied admission into the program
established by paragraph (10) due solely to a determination by the
Division that specific contract opportunities are unavailable to assist
in the development of such concern unless---

\(i\) the Government has not previously procured and is unlikely to
procure the types of products or services offered by the concern; or

\(ii\) the purchases of such products or services by the Federal
Government will not be in quantities sufficient to support the
developmental needs of the applicant and other Program Participants
providing the same or similar items or services.

\(H\) Not later than 90 days after receipt of a completed application
for Program certification, the Associate Administrator for Minority
Small Business and Capital Ownership Development shall certify a small
business concern as a Program Participant or shall deny such
application.

\(I\) Thirty days before the conclusion of each fiscal year, the
Director of the Division shall review all concerns that have been
admitted into the Program during the preceding 12‑month period. The
review shall ascertain the number of entrants, their geographic
distribution and industrial classification. The Director shall also
estimate the expected growth of the Program during the next fiscal year
and the number of additional Business Opportunity Specialists, if any,
that will be needed to meet the anticipated demand for the Program. The
findings and conclusions of the Director shall be reported to the
Associate Administrator for Minority Small Business and Capital
Ownership Development by September 30 of each year. Based on such report
and such additional data as may be relevant, the Associate Administrator
shall, by October 31 of each year, issue policy and program directives
applicable to such fiscal year that---

\(i\) establish priorities for the solicitation of program applications
from underrepresented regions and industry categories;

\(ii\) assign staffing levels and allocate other program resources as
necessary to meet program needs; and

\(iii\) establish priorities in the processing and admission of new
Program Participants as may be necessary to achieve an equitable
geographic distribution of concerns and a distribution of concerns
across all industry categories in proportions needed to increase
significantly contract awards to small business concerns owned and
controlled by socially and economically disadvantaged individuals. When
considering such increase the Administration shall give due
consideration to those industrial categories where Federal purchases
have been substantial but where the participation rate of such concerns
has been limited.

\(12\) (A) The Administration shall segment the Capital Ownership
Development Program into two stages: a developmental stage; and a
transitional stage.

\(B\) The developmental stage of program participation shall be designed
to assist the concern in its effort to overcome its economic
disadvantage by providing such assistance as may be necessary and
appropriate to access its markets and to strengthen its financial and
managerial skills.

\(C\) The transitional stage of program participation shall be designed
to overcome, insofar as practicable, the remaining elements of economic
disadvantage and to prepare such concern for graduation from the
program.

\(13\) A Program Participant, if otherwise eligible, shall be qualified
to receive the following assistance during the stages of program
participation specified in paragraph 12:

\(A\) Contract support pursuant to section 8(a).

\(B\) Financial assistance pursuant to section 7(a)(20).

\(C\) A maximum of two exemptions from the requirements of section 1(a)
of the Act entitled \"An Act providing conditions for the purchase of
supplies and the making of contracts by the United States, and for other
purposes\", approved June 30, 1936 (49 Stat. 2036), which exemptions
shall apply only to contracts awarded pursuant to section 8(a) and shall
only be used to allow for contingent agreements by a small business
concern to acquire the machinery, equipment, facilities, or labor needed
to perform such contracts. No exemption shall be made pursuant to this
subparagraph if the contract to which it pertains has an anticipated
value in excess of \$10,000,000. This subparagraph shall cease to be
effective on October 1, 1992.

\(D\) A maximum of five exemptions from the requirements of the Act
entitled \"An Act requiring contracts for the construction, alteration
and repair of any public building or public work of the United States to
be accompanied by a performance bond protecting the United States and by
an additional bond for the protection of persons furnishing material and
labor for the construction, alteration, or repair of said public
buildings or public works\", approved August 24, 1935 (49 Stat. 793),
which exemptions shall apply only to contracts awarded pursuant to
section 8(a), except that, such exemptions may be granted under this
subparagraph only if---

\(i\) the Administration finds that such concern is unable to obtain the
requisite bond or bonds from a surety and that no surety is willing to
issue a bond subject to the guarantee provision of title IV of the Small
Business Investment Act of 1958 (15 U.S.C. 692 et seq.);

\(ii\) the Administration and the agency providing the contracting
opportunity have provided for the protection of persons furnishing
materials or labor to the Program Participant by arranging for the
direct disbursement of funds due to such persons by the procuring agency
or through any bank the deposits of which are insured by the Federal
Deposit Insurance Corporation; and

\(iii\) the contract to which it pertains does not exceed \$3,000,000 in
amount. This subparagraph shall cease to be effective on October 1,
1994.

\(E\) Financial assistance whereby the Administration may purchase in
whole or in part, and on behalf of such concerns, skills training or
upgrading for employees or potential employees of such concerns. Such
assistance may be made without regard to section 18(a). Assistance may
be made by direct payment to the training provider or by reimbursing the
Program Participant or the Participant\'s employee, if such
reimbursement is found to be reasonable and appropriate. For purposes of
this subparagraph the term \"training provider\" shall mean an
institution of higher education, a community or vocational college, or
an institution eligible to provide skills training or upgrading under
the Job Training Partnership Act or title I of the Workforce Investment
Act of 1998. The Administration shall, in consultation with the
Secretary of Labor, promulgate rules and regulations to implement this
subparagraph that establish acceptable training and upgrading
performance standards and provide for such monitoring or audit
requirements as may be necessary to ensure the integrity of the training
effort. No financial assistance shall be granted under the subparagraph
unless the Administrator determines that---

\(i\) such concern has documented that it has first explored the use of
existing cost‑free or cost‑subsidized training programs offered by
public and private sector agencies working with programs of employment
and training and economic development;

\(ii\) no more than five employees or potential employees of such
concern are recipients of any benefits under this subparagraph at any
one time;

\(iii\) no more than \$2,500 shall be made available for any one
employee or potential employee;

\(iv\) the length of training or upgrading financed by this subparagraph
shall be no less than one month nor more than six months;

\(v\) such concern has given adequate assurance it will employ the
trainee or upgraded employee for at least six months after the training
or upgrading financed by this subparagraph has been completed and each
trainee or upgraded employee has provided a similar assurance to remain
within the employ of such concern for such period; if such concern,
trainee, or upgraded employee breaches this agreement, the
Administration shall be entitled to and shall make diligent efforts to
obtain from the violating party the repayment of all funds expended on
behalf of the violating party, such repayment shall be made to the
Administration together with such interest and costs of collection as
may be reasonable; the violating party shall be barred from receiving
any further assistance under this subparagraph;

\(vi\) the training to be financed may take place either at such
concern\'s facilities or at those of the training provider; and

\(vii\) such concern will maintain such records as the Administration
deems appropriate to ensure that the provisions of this paragraph and
any other applicable law have not been violated.

\(F\) The transfer of technology or surplus property owned by the United
States to such a concern. Activities designed to effect such transfer
shall be developed in cooperation with the heads of Federal agencies and
shall include the transfer by grant, license, or sale of such technology
or property to such a concern. Such property may be transferred to
Program Participants on a priority basis. Technology or property
transferred under this subparagraph shall be used by the concern during
the normal conduct of its business operation and shall not be sold or
transferred to any other party (other than the Government) during such
concern\'s term of participation in the Program and for one year
thereafter.

\(G\) Training assistance whereby the Administration shall conduct
training sessions to assist individuals and enterprises eligible to
receive contracts under section 8(a) in the development of business
principles and strategies to enhance their ability to successfully
compete for contracts in the marketplace.

\(H\) Joint ventures, leader‑follow arrangements, and teaming agreements
between the Program Participant and other Program Participants and other
business concerns with respect to contracting opportunities for the
research, development, full‑scale engineering or production of major
systems. Such activities shall be undertaken on the basis of programs
developed by the agency responsible for the procurement of the major
system, with the assistance of the Administration.

\(I\) Transitional management business planning training and technical
assistance.

\(J\) Program Participants in the developmental stage of Program
participation shall be eligible for the assistance provided by
subparagraphs (A), (B), (C), (D), (E), (F), and (G).

\(14\) Program Participants in the transitional stage of Program
participation shall be eligible for the assistance provided by
subparagraphs (A), (B), (F), (G), (H), and (I) of paragraph (13).

\(15\) Subject to the provisions of paragraph (10)(C), a small business
concern may receive developmental assistance under the Program and
contracts under section 8(a) for a total period of not longer than nine
years, measured from the date of its certification under the authority
of such section, of which---

\(A\) no more than four years may be spent in the developmental stage of
Program Participation; and

\(B\) no more than five years may be spent in the transitional stage of
Program Participation.

\(16\) (A) The Administrator shall develop and implement a process for
the systematic collection of data on the operations of the Program
established pursuant to paragraph (10).

\(B\) Not later than April 30 of each year, the Administrator shall
submit a report to the Congress on the Program that shall include the
following:

\(i\) The average personal net worth of individuals who own and control
concerns that were initially certified for participation in the Program
during the immediately preceding fiscal year. The Administrator shall
also indicate the dollar distribution of net worths, at \$50,000
increments, of all such individuals found to be socially and
economically disadvantaged. For the first report required pursuant to
this paragraph the Administrator shall also provide the data specified
in the preceding sentence for all eligible individuals in the Program as
of the effective date of this paragraph.

\(ii\) A description and estimate of the benefits and costs that have
accrued to the economy and the Government in the immediately preceding
fiscal year due to the operations of those business concerns that were
performing contracts awarded pursuant to section 8(a).

\(iii\) A compilation and evaluation of those business concerns that
have exited the Program during the immediately preceding three fiscal
years. Such compilation and evaluation shall detail the number of
concerns actively engaged in business operations, those that have ceased
or substantially curtailed such operations, including the reasons for
such actions, and those concerns that have been acquired by other firms
or organizations owned and controlled by other than socially and
economically disadvantaged individuals. For those businesses that have
continued operations after they exited from the Program, the
Administrator shall also separately detail the benefits and costs that
have accrued to the economy during the immediately preceding fiscal year
due to the operations of such concerns.

\(iv\) A listing of all participants in the Program during the preceding
fiscal year identifying, by State and by Region, for each firm: the name
of the concern, the race or ethnicity, and gender of the disadvantaged
owners, the dollar value of all contracts received in the preceding
year, the dollar amount of advance payments received by each concern
pursuant to contracts awarded under section 8(a), and a description
including (if appropriate) an estimate of the dollar value of all
benefits received pursuant to paragraphs (13) and (14) and section
7(a)(20) during such year.

\(v\) The total dollar value of contracts and options awarded during the
preceding fiscal year pursuant to section 8(a) and such amount expressed
as a percentage of total sales of (I) all firms participating in the
Program during such year; and (II) of firms in each of the nine years of
program participation.

\(vi\) A description of such additional resources or program authorities
as may be required to provide the types of services needed over the next
two‑year period to service the expected portfolio of firms certified
pursuant to section 8(a).

\(vii\) The total dollar value of contracts and options awarded pursuant
to section 8(a), at such dollar increments as the Administrator deems
appropriate, for each four digit standard industrial classification code
under which such contracts and options were classified.

\(C\) The first report required by subparagraph (B) shall pertain to
fiscal year 1990.

\(k\) In carrying out its functions under subsections 7(i), 7(j) and
8(a) of this Act, the Administration is authorized---

\(1\) to utilize, with their consent, the services and facilities of
Federal agencies without reimbursement, and, with the consent of any
State or political subdivision of a State, accept and utilize the
services and facilities of such State or subdivision without
reimbursement;

\(2\) to accept, in the name of the Administration, and employ or
dispose of in furtherance of the purposes of this Act, any money or
property, real, personal, or mixed, tangible, or intangible, received by
gift, devise, bequest, or otherwise;

\(3\) to accept voluntary and uncompensated services, notwithstanding
the provisions of section 3679(b) of the Revised Statutes (31 U.S.C.
665(b)); and

\(4\) to employ experts and consultants or organizations thereof as
authorized by section 15 of the Administrative Expenses Act of 1946 (5
U.S.C. 55a), except that no individual may be employed under the
authority of this subsection for more than one hundred days in any
fiscal year; to compensate individuals so employed at rates not in
excess of the daily equivalent of the highest rate payable under section
5332 of title 5, United States Code, including traveltime; and to allow
them, while away from their homes or regular places of business, travel
expenses (including per diem in lieu of subsistence) as authorized by
section 5 of such Act (5 U.S.C. 73b‑2) for persons in the Government
service employed intermittently, while so employed: [Provided,
however]{.underline}, that contracts for such employment may be renewed
annually.

\(l\) \[RESERVED\].

\(m\) MICROLOAN PROGRAM

\(1\) (A) PURPOSES. The purposes of the Microloan Program are---

\(i\) to assist women, low-income, veteran (within the meaning of such
term under section 3(q)), and minority entrepreneurs and business
owners, and other such individuals possessing the capability to operate
successful business concerns; and

\(ii\) to assist small business concerns in those areas suffering from a
lack of credit due to economic downturns;

\(iii\) to establish a microloan program to be administered by the Small
Business Administration\--

\(I\) to make loans to eligible intermediaries to enable such
intermediaries to provide small-scale loans, particularly loans in
amounts averaging not more than \$10,000, to startup, newly established,
or growing small business concerns for working capital or the
acquisition of materials, supplies, or equipment;

\(II\) to make grants to eligible intermediaries that, together with
non-Federal matching funds, will enable such intermediaries to provide
intensive marketing, management, and technical assistance to microloan
borrowers;

\(III\) to make grants to eligible nonprofit entities that, together
with non-Federal matching funds, will enable such entities to provide
intensive marketing, management, and technical assistance to assist
low-income entrepreneurs and other low-income individuals obtain private
sector financing for their businesses, with or without loan guarantees;
and

\(IV\) to report to the Committees on Small Business of the Senate and
the House of Representatives on the effectiveness of the microloan
program and the advisability and feasibility of implementing such a
program; and

\(iv\) to establish a welfare-to-work microloan initiative, which shall
be administered by the Administration, in order to test the feasibility
of supplementing the technical assistance grants provided under clauses
(ii) and (iii) of subparagraph (B) to individuals who are receiving
assistance under the State program funded under part A of title IV of
the Social Security Act (42 U.S.C. 601 et seq.), or under any comparable
State funded means tested program of assistance for low-income
individuals, in order to adequately assist those individuals in---

\(I\) establishing small businesses; and

\(II\) eliminating their dependence on that assistance.

\(B\) ESTABLISHMENT. There is established a microloan program, under
which the Administration may---

\(i\) make direct loans to eligible intermediaries, as provided under
paragraph (3), for the purpose of making short-term, fixed interest rate
microloans to startup, newly established, and growing small business
concerns under paragraph (6);

\(ii\) in conjunction with such loans and subject to the requirements of
paragraph (4), make grants to such intermediaries for the purpose of
providing intensive marketing, management, and technical assistance to
small business concerns that are borrowers under this subsection; and

\(iii\) subject to the requirements of paragraph (5), make grants to
nonprofit entities for the purpose of providing marketing, management,
and technical assistance to low-income individuals seeking to start or
enlarge their own businesses, if such assistance includes working with
the grant recipient to secure loans in amounts not to exceed \$35,000
from private sector lending institutions, with or without a loan
guarantee from the nonprofit entity.

\(2\) ELIGIBILITY FOR PARTICIPATION.---An intermediary shall be eligible
to receive loans and grants under subparagraphs (B)(i) and (B)(ii) of
paragraph (1) if it---

\(A\) meets the definition in paragraph (10); and

\(B\) has at least 1 year of experience making microloans to startup,
newly established, or growing small business concerns and providing, as
an integral part of its microloan program, intensive marketing,
management, and technical assistance to its borrowers.

\(3\) LOANS TO INTERMEDIARIES.---

\(A\) INTERMEDIARY APPLICATIONS.

\(i\) IN GENERAL.---As part of its application for a loan, each
intermediary shall submit a description to the Administration of---

\(I\) the type of businesses to be assisted;

\(II\) the size and range of loans to be made;

\(III\) the geographic area to be served and its economic and
unemployment characteristics;

\(IV\) the status of small business concerns in the area to be served
and an analysis of their credit and technical assistance needs;

\(V\) any marketing, management, and technical assistance to be provided
in connection with a loan made under this subsection;

\(VI\) the local economic credit markets, including the costs associated
with obtaining credit locally;

\(VII\) the qualifications of the applicant to carry out the purpose of
this subsection; and

\(VIII\) any plan to involve other technical assistance providers (such
as counselors from the Service Corps of Retired Executives or small
business development centers) or private sector lenders in assisting
selected small business concerns.

\(ii\) SELECTION OF INTERMEDIARIES.---In selecting intermediaries to
participate in the program established under this subsection, the
Administration shall give priority to those applicants that provide
loans in amounts averaging not more than \$10,000.

\(B\) INTERMEDIARY CONTRIBUTION.---As a condition of any loan made to an
intermediary under subparagraph (B)(i) of paragraph (1), the
Administration shall require the intermediary to contribute not less
than 15 percent of the loan amount in cash from non-Federal sources.

\(C\) LOAN LIMITS.---Notwithstanding subsection (a)(3), no loan shall be
made under this subsection if the total amount outstanding and committed
to one intermediary (excluding outstanding grants) from the business
loan and investment fund established by this Act would, as a result of
such loan, exceed \$750,000 in the first year of such intermediary\'s
participation in the program, and \$3,500,000 in the remaining years of
the intermediary\'s participation in the program.

\(D\) (i) IN GENERAL.---The Administrator shall, by regulation, require
each intermediary to establish a loan loss reserve fund, and to maintain
such reserve fund until all obligations owed to the Administration under
this subsection are repaid.

\(ii\) LEVEL OF LOAN LOSS RESERVE FUND.---

\(I\) IN GENERAL.---Subject to subclause (III), the Administrator shall
require the loan loss reserve fund of an intermediary to be maintained
at a level equal to 15 percent of the outstanding balance of the notes
receivable owed to the intermediary.

\(II\) REVIEW OF LOAN LOSS RESERVE.---After the initial 5 years of an
intermediary's participation in the program authorized by this
subsection, the Administrator shall, at the request of the intermediary,
conduct a review of the annual loss rate of the intermediary. Any
intermediary in operation under this subsection prior to October 1,
1994, that requests a reduction in its loan loss reserve shall be
reviewed based on the most recent 5-year period preceding the request.

\(III\) REDUCTION OF LOAN LOSS RESERVE.---Subject to the requirements of
clause IV, the Administrator may reduce the annual loan loss reserve
requirement of an intermediary to reflect the actual average loan loss
rate for the intermediary during the preceding 5-year period, except
that in no case shall the loan loss reserve be reduced to less than 10
percent of the outstanding balance of the notes receivable owed to the
intermediary.

\(IV\) REQUIREMENTS.---The Administrator may reduce the annual loan loss
reserve requirement of an intermediary only if the intermediary
demonstrates to the satisfaction of the Administrator that---

(aa) the average annual loss rate for the intermediary during the
preceding 5-year period is less than 15 percent; and

(bb) that no other factors exist that may impair the ability of the
intermediary to repay all obligations owed to the Administration under
this subsection.

\(E\) UNAVAILABILITY OF COMPARABLE CREDIT.---An intermediary may make a
loan under this subsection of more than \$20,000 to a small business
concern only if such small business concern demonstrates that it is
unable to obtain credit elsewhere at comparable interest rates and that
it has good prospects for success. In no case shall an intermediary make
a loan under this subsection of more than \$35,000, or have outstanding
or committed to any 1 borrower more than \$35,000.

\(F\) LOAN DURATION; INTEREST RATES.---

\(i\) LOAN DURATION.---Loans made by the Administration under this
subsection shall be for a term of 10 years.

\(ii\) APPLICABLE INTEREST RATES.---Except as provided in clause (iii),
loans made by the Administration under this subsection to an
intermediary shall bear an interest rate equal to 1.25 percentage points
below the rate determined by the Secretary of the Treasury for
obligations of the United States with a period of maturity of 5 years,
adjusted to the nearest one-eighth of 1 percent.

\(iii\) RATES APPLICABLE TO CERTAIN SMALL LOANS.---Loans made by the
Administration to an intermediary that makes loans to small business
concerns and entrepreneurs averaging not more than \$7,500, shall bear
an interest rate that is 2 percentage points below the rate determined
by the Secretary of the Treasury for obligations of the United States
with a period of maturity of 5 years, adjusted to the nearest one-eighth
of 1 percent.

\(iv\) RATES APPLICABLE TO MULTIPLE SITES OR OFFICES.---The interest
rate prescribed in clause (ii) or (iii) shall apply to each separate
loanmaking site or office of 1 intermediary only if such site or office
meets the requirements of that clause.

\(v\) RATE BASIS.---The applicable rate of interest under this paragraph
shall---

\(I\) be applied retroactively for the first year of an intermediary\'s
participation in the program, based upon the actual lending practices of
the intermediary as determined by the Administration prior to the end of
such year; and

\(II\) be based in the second and subsequent years of an intermediary\'s
participation in the program, based upon the actual lending practices of
the intermediary during the term of the intermediary\'s participation in
the program.

(vii)\[sic\] COVERED INTERMEDIARIES.---The interest rates prescribed in
this subparagraph shall apply to all loans made to intermediaries under
this subsection on or after October 28, 1991.

\(G\) DELAYED PAYMENTS.---The Administration shall not require repayment
of interest or principal of a loan made to an intermediary under this
subsection during the first year of the loan.

\(H\) FEES; COLLATERAL.---Except as provided in subparagraphs (B) and
(D), the Administration shall not charge any fees or require collateral
other than an assignment of the notes receivable of the microloans with
respect to any loan made to an intermediary under this subsection.

\(4\) MARKETING, MANAGEMENT AND TECHNICAL ASSISTANCE GRANTS TO
INTERMEDIARIES.---Grants made in accordance with subparagraph (B)(ii) of
paragraph (1) shall be subject to the following requirements:

\(A\) GRANT AMOUNTS.---Except as otherwise provided in subparagraph (C)
and subject to subparagraph (B), each intermediary that receives a loan
under subparagraph (B)(i) of paragraph (1) shall be eligible to receive
a grant to provide marketing, management, and technical assistance to
small business concerns that are borrowers under this subsection. Except
as provided in subparagraph (C), each intermediary meeting the
requirements of subparagraph (B) may receive a grant of not more than 25
percent of the total outstanding balance of loans made to it under this
subsection.

\(B\) CONTRIBUTION.---As a condition of any grant made under
subparagraph (A), except for a grant made to an intermediary that
provides not less than 50 percent of its loans to small business
concerns located in or owned by one or more residents of an economically
distressed area, the Administration shall require the intermediary to
contribute an amount equal to 25 percent of the amount of the grant,
obtained solely from non-Federal sources. In addition to cash or other
direct funding, the contribution may include indirect costs or in-kind
contributions paid for under non-Federal programs.

\(C\) ADDITIONAL TECHNICAL ASSISTANCE GRANTS FOR MAKING CERTAIN
LOANS.---

\(i\) IN GENERAL.---In addition to grants made under subparagraph (A),
each intermediary shall be eligible to receive a grant equal to 5
percent of the total outstanding balance of loans made to the
intermediary under this subsection if---

\(I\) the intermediary provides not less than 25 percent of its loans to
small business concerns located in or owned by one or more residents of
an economically distressed area; or

\(II\) the intermediary has a portfolio of loans made under this
subsection that averages not more than \$10,000 during the period of the
intermediary\'s participation.

\(ii\) PURPOSES.---A grant awarded under clause (i) may be used to
provide marketing, management, and technical assistance to small
business concerns that are borrowers under this subsection.

\(iii\) CONTRIBUTION EXCEPTION.---The contribution requirements in
subparagraph (B) do not apply to grants made under this subparagraph.

\(D\) ELIGIBILITY FOR MULTIPLE SITES OR OFFICES.---The eligibility for a
grant described in subparagraph (A) or (C) shall be determined
separately for each loan-making site or office of 1 intermediary.

\(E\) ASSISTANCE TO CERTAIN SMALL BUSINESS CONCERNS.---

\(i\) IN GENERAL.---Each intermediary may expend an amount not to exceed
25 percent of the grant funds received under paragraph (1)(B)(ii) to
provide information and technical assistance to small business concerns
that are prospective borrowers under this subsection.

\(ii\) TECHNICAL ASSISTANCE.---An intermediary may expend not more than
25 percent of the funds received under paragraph (1)(B)(ii) to enter
into third party contracts for the provision of technical assistance.

\(F\) SUPPLEMENTAL GRANT---

\(i\) IN GENERAL.---The Administration may accept any funds transferred
to the Administration from other departments or agencies of the Federal
Government to make grants in accordance with this subparagraph and
section 202(b) of the Small Business Reauthorization Act of 1997 to
participating intermediaries and technical assistance providers under
paragraph (5), for use in accordance with clause (iii) to provide
additional technical assistance and related services to recipients of
assistance under a State program described in paragraph (1)(A)(iv) at
the time they initially apply for assistance under this subparagraph.

\(ii\) ELIGIBLE RECIPIENTS; GRANT AMOUNTS.---In making grants under this
subparagraph, the Administration may select, from among participating
intermediaries and technical assistance providers described in clause
(i), not more than 20 grantees in fiscal year 1998, not more than 25
grantees in fiscal year 1999, and not more than 30 grantees in fiscal
year 2000, each of whom may receive a grant under this subparagraph in
an amount not to exceed \$200,000 per year.

\(iii\) USE OF GRANT AMOUNTS.---Grants under this subparagraph---

\(I\) are in addition to other grants provided under this subsection and
shall not require the contribution of matching amounts as a condition of
eligibility; and

\(II\) may be used by a grantee---

(aa) to pay or reimburse a portion of child care and transportation
costs of recipients of assistance described in clause (i), to the extent
such costs are not otherwise paid by State block grants under the Child
Care Development Block Grant Act of 1990 (42 U.S.C. 9958 et seq.); and

(bb) for marketing, management, and technical assistance to recipients
of assistance described in clause (i).

\(iv\) MEMORANDUM OF UNDERSTANDING.---Prior to accepting any transfer of
funds under clause (i) from a department or agency of the Federal
Government, the Administration shall enter into a Memorandum of
Understanding with the department or agency, which shall---

\(I\) specify the terms and conditions of the grants under this
subparagraph; and

\(II\) provide for appropriate monitoring of expenditures by each
grantee under this subparagraph and each recipient of assistance
described in clause (i) who receives assistance from a grantee under
this subparagraph, in order to ensure compliance with this subparagraph
by those grantees and recipients of assistance.

\(5\) PRIVATE SECTOR BORROWING TECHNICAL ASSISTANCE GRANTS. Grants made
in accordance with subparagraph (B)(iii) of paragraph (1) shall be
subject to the following requirements:

\(A\) GRANT AMOUNTS. Subject to the requirements of subparagraph (B),
the Administration may make not more than 55 grants annually, each in
amounts not to exceed \$200,000 for the purposes specified in
subparagraph (B)(iii) of paragraph (1).

\(B\) CONTRIBUTION. As a condition of any grant made under subparagraph
(A), the Administration shall require the grant recipient to contribute
an amount equal to 20 percent of the amount of the grant, obtained
solely from non-Federal sources. In addition to cash or other direct
funding, the contribution may include indirect costs or in-kind
contributions paid for under non-Federal programs.

\(6\) LOANS TO SMALL BUSINESS CONCERNS FROM ELIGIBLE INTERMEDIARIES.---

\(A\) IN GENERAL.---An eligible intermediary shall make short-term,
fixed rate loans to startup, newly established, and growing small
business concerns from the funds made available to it under subparagraph
(B)(i) of paragraph (1) for working capital and the acquisition of
materials, supplies, furniture, fixtures, and equipment.

\(B\) PORTFOLIO REQUIREMENT.---To the extent practicable, each
intermediary that operates a microloan program under this subsection
shall maintain a microloan portfolio with an average loan size of not
more than \$15,000.

\(C\) INTEREST LIMIT.---Notwithstanding any provision of the laws of any
State or the constitution of any State pertaining to the rate or amount
of interest that may be charged, taken, received or reserved on a loan,
the maximum rate of interest to be charged on a microloan funded under
this subsection shall not exceed the rate of interest applicable to a
loan made to an intermediary by the Administration---

\(i\) in the case of a loan of more than \$7,500 made by the
intermediary to a small business concern or entrepreneur by more than
7.75 percentage points; and

\(ii\) in the case of a loan of not more than \$7,500 made by the
intermediary to a small business concern or entrepreneur by more than
8.5 percentage points.

\(D\) REVIEW RESTRICTION.---The Administration shall not review
individual microloans made by intermediaries prior to approval.

\(E\) ESTABLISHMENT OF CHILD CARE OR TRANSPORTATION BUSINESS.---In
addition to other eligible small businesses concerns \[sic\], borrowers
under any program under this subsection may include individuals who will
use the loan proceeds to establish for-profit or nonprofit child care
establishments or business providing for-profit transportation services.

\(7\) PROGRAM FUNDING FOR MICROLOANS.---

\(A\) NUMBER OF PARTICIPANTS.---Under the program authorized by this
subsection, the Administration may fund, on a competitive basis, not
more than 300 intermediaries.

\(B\) ALLOCATION.---

\(i\) MINIMUM ALLOCATION.--- Subject to the availability of
appropriations, of the total amount of new loan funds made available for
award under this subsection in each fiscal year, the Administration
shall make available for award in each State (including the district of
Columbia, the Commonwealth of Puerto Rico, the United States Virgin
Islands, Guam, and American Samoa) an amount equal to the sum of---

\(I\) the lesser of---

(aa) \$800,000; or

(bb) 1/55 of the total amount of new loan funds made available for award
under this subsection for that fiscal year; and

\(II\) any additional amount, as determined by the Administration.

\(ii\) REDISTRIBUTION.---If, at the beginning of the third quarter of a
fiscal year, the Administration determines that any portion of the
amount made available to carry out this subsection is unlikely to be
made available under clause (i) during that fiscal year, the
Administration may make that portion available for award in any one or
more States (including the District of Columbia, the Commonwealth of
Puerto Rico, the United States Virgin Islands, Guam, and American Samoa)
without regard to clause (i).

\(8\) EQUITABLE DISTRIBUTION OF INTERMEDIARIES.---In approving microloan
program applicants and providing funding to intermediaries under this
subsection, the Administration shall select and provide funding to such
intermediaries as will ensure appropriate availability of loans for
small businesses in all industries located throughout each State,
particularly those located in urban and in rural areas.

\(9\) GRANTS FOR MANAGEMENT, MARKETING, TECHNICAL ASSISTANCE, AND
RELATED SERVICES---

\(A\) IN GENERAL.---The Administration may procure technical assistance
for intermediaries participating in the Microloan Program to ensure that
such intermediaries have the knowledge, skills, and understanding of
microlending practice necessary to operate successful microloan
programs.

\(B\) ASSISTANCE AMOUNT.---The Administration shall transfer 7 percent
of its annual appropriation for loans and loan guarantees under this
subsection to the Administration\'s Salaries and Expense Account for the
specific purpose of providing 1 or more technical assistance grants to
experienced microlending organizations and national and regional
nonprofit organizations that have demonstrated experience in providing
training support for microenterprise development and financing to
achieve the purpose set forth in subparagraph (A).

\(C\) WELFARE-TO-WORK.---Of amounts made available to carry out the
welfare-to-work microloan initiative under paragraph (1)(A)(iv) in any
fiscal year, the Administration may use not more than 5 percent to
provide technical assistance, either directly or through contractors, to
welfare-to-work microloan initiative grantees, to ensure that, as
grantees they have the knowledge, skills, and understanding of
microlending and welfare-to-work transition, and other related issues,
to operate a successful welfare-to-work microloan initiative.

\(10\) REPORT TO CONGRESS. On November 1, 1995, the Administration shall
submit to the Committees on Small Business of the Senate and the House
of Representatives a report, including the Administration\'s evaluation
of the effectiveness of the first 3 1/2 years of the microloan program
and the following:

\(A\) the numbers and locations of the intermediaries funded to conduct
microloan programs;

\(B\) the amounts of each loan and each grant to intermediaries;

\(C\) a description of the matching contributions of each intermediary;

\(D\) the numbers and amounts of microloans made by the intermediaries
to small business concern borrowers;

\(E\) the repayment history of each intermediary;

\(F\) a description of the loan portfolio of each intermediary including
the extent to which it provides microloans to small business concerns in
rural areas; and

\(G\) any recommendations for legislative changes that would improve
program operations.

\(11\) DEFINITIONS. For purposes of this subsection---

\(A\) the term \"intermediary\" means

\(i\) a private, nonprofit entity;

\(ii\) a private nonprofit community development corporation;

\(iii\) a consortium of private, nonprofit organizations or nonprofit
community development corporations;

\(iv\) a quasi-governmental economic development entity (such as a
planning and development district), other than a State, county,
municipal government, or any agency thereof, if\--

\(I\) no application is received from an eligible nonprofit
organization; or

\(II\) the Administration determines that the needs of a region or
geographic area are not adequately served by an existing, eligible
nonprofit organization that has submitted an application; or

\(v\) an agency of or nonprofit entity established by a Native American
Tribal Government,

that seeks to borrow or has borrowed funds from the Small Business
Administration to make microloans to small business concerns under this
subsection;

\(B\) the term \"microloan\" means a short-term, fixed rate loan of not
more than \$35,000, made by an intermediary to a startup, newly
established, or growing small business concern;

\(C\) the term \"rural area\" means any political subdivision or
unincorporated area\--

\(i\) in a nonmetropolitan county (as defined by the Secretary of
Agriculture) or its equivalent thereof; or

\(ii\) in a metropolitan county or its equivalent that has a resident
population of less than 20,000 if the Small Business Administration has
determined such political subdivision or area to be rural; and

\(D\) the term \"economically distressed area\", as used in paragraph
(4), means a county or equivalent division of local government of a
State in which the small business concern is located, in which,
according to the most recent data available from the Bureau of the
Census, Department of Commerce, not less than 40 percent of residents
have an annual income that is at or below the poverty level.

\(12\) DEFERRED PARTICIPATION LOAN PILOT.---In lieu of making direct
loans to intermediaries as authorized in paragraph (1)(B), during fiscal
years 1998 through 2000, the Administration may, on a pilot program
basis, participate on a deferred basis of not less than 90 percent and
not more than 100 percent on loans made to intermediaries by a
for-profit or nonprofit entity or by alliances of such entities, subject
to the following conditions:

\(A\) NUMBER OF LOANS.---In carrying out this paragraph, the
Administration shall not participate in providing financing on a
deferred basis to more than 10 intermediaries in urban areas or more
than 10 intermediaries in rural areas.

\(B\) TERM OF LOANS.---The term of each loan shall be 10 years. During
the first year of the loan, the intermediary shall not be required to
repay any interest or principal. During the second through fifth years
of the loan, the intermediary shall be required to pay interest only.
During the sixth through tenth years of the loan, the intermediary shall
be required to make interest payments and fully amortize the principal.

\(C\) INTEREST RATE.---The interest rate on each loan shall be the rate
specified by paragraph (3)(F) for direct loans.

\(13\) EVALUATION OF WELFARE-TO-WORK MICROLOAN INITIATIVE.---On January
31, 1999, and annually thereafter, the Administration shall submit to
the Committees on Small Business of the House of Representatives and the
Senate a report on any monies distributed pursuant to paragraph (4)(F).

\(n\) REPAYMENT DEFERRED FOR ACTIVE DUTY RESERVISTS.---

\(1\) DEFINITIONS.---In this subsection:

\(A\) ELIGIBLE RESERVIST.---The term "eligible reservist" means a member
of a reserve component of the Armed Forces ordered to active duty during
a period of military conflict.

\(B\) ESSENTIAL EMPLOYEE.---The term "essential employee" means an
individual who is employed by a small business concern and whose
managerial or technical expertise is critical to the successful
day-to-day operations of that small business concern.

\(C\) PERIOD OF MILITARY CONFLICT.---The term "period of military
conflict" means---

\(i\) a period of war declared by the Congress;

\(ii\) a period of national emergency declared by the Congress or by the
President; or

\(iii\) a period of a contingency operation, as defined in section
101(a) of title 10, United States Code.

\(D\) QUALIFIED BORROWER.---The term "qualified borrower" means---

\(i\) an individual who is an eligible reservist and who received a
direct loan under subsection (a) or (b) before being ordered to active
duty; or

\(ii\) a small business concern that received a direct loan under
subsection (a) or (b) before an eligible reservist, who is an essential
employee, was ordered to active duty.

\(2\) DEFERRAL OF DIRECT LOANS.---

\(A\) IN GENERAL.---The Administration shall, upon written request,
defer repayment of principal and interest due on a direct loan made
under subsection (a) or (b), if such loan was incurred by a qualified
borrower.

\(B\) PERIOD OF DEFERRAL.---The period of deferral for repayment under
this paragraph shall begin on the date on which the eligible reservist
is ordered to active duty and shall terminate on the date that is 180
days after the date such eligible reservist is discharged or released
from active duty.

\(C\) INTEREST RATE REDUCTION DURING DEFERRAL.---Notwithstanding any
other provision of law, during the period of deferral described in
subparagraph (B), the Administration may, in its discretion, reduce the
interest rate on any loan qualifying for a deferral under this
paragraph.

\(3\) DEFERRAL OF LOAN GUARANTEES AND OTHER FINANCINGS.---The
Administration shall---

\(A\) encourage intermediaries participating in the program under
subsection (m) to defer repayment of a loan made with proceeds made
available under that subsection, if such loan was incurred by a small
business concern that is eligible to apply for assistance under
subsection (b)(3); and

\(B\) not later than 30 days after the date of the enactment of this
subsection, establish guidelines to---

\(i\) encourage lenders and other intermediaries to defer repayment of,
or provide other relief relating to, loan guarantees under subsection
(a) and financings under section 504 of the Small Business Investment
Act of 1958 that were incurred by small business concerns that are
eligible to apply for assistance under subsection (b)(3), and loan
guarantees provided under subsection (m) if the intermediary provides
relief to a small business concern under this paragraph; and

\(ii\) implement a program to provide for the deferral of repayment or
other relief to any intermediary providing relief to a small business
borrower under this paragraph.

§ 8. (a) (1) It shall be the duty of the Administration and it is hereby
empowered, whenever it determines such action is necessary or
appropriate---

\(A\) to enter into contracts with the United States Government and any
department, agency, or officer thereof having procurement powers
obligating the Administration to furnish articles, equipment, supplies,
services, or materials to the Government or to perform construction work
for the Government. In any case in which the Administration certifies to
any officer of the Government having procurement powers that the
Administration is competent and responsible 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 procurement
contract to the Administration upon such terms and conditions as may be
agreed upon between the Administration and the procurement officer.
Whenever the Administration and such procurement officer fail to agree,
the matter shall be submitted for determination to the Secretary or the
head of the appropriate department or agency by the Administrator. Not
later than 5 days from the date the Administration is notified of a
procurement officer\'s adverse decision, the Administration may notify
the contracting officer of the intent to appeal such adverse decision,
and within 15 days of such date the Administrator shall file a written
request for a reconsideration of the adverse decision with the Secretary
of the department or agency head. For the purposes of this subparagraph,
a procurement officer\'s adverse decision includes a decision not to
make available for award pursuant to this subsection a particular
procurement requirement or the failure to agree on the terms and
conditions of a contract to be awarded noncompetitively under the
authority of this subsection. Upon receipt of the notice of intent to
appeal, the Secretary of the department or the agency head shall suspend
further action regarding the procurement until a written decision on the
Administrator\'s request for reconsideration has been issued by such
Secretary or agency head, unless such officer makes a written
determination that urgent and compelling circumstances which
significantly affect interests of the United States will not permit
waiting for a reconsideration of the adverse decision. If the
Administrator\'s request for reconsideration is denied, the Secretary of
the department or agency head shall specify the reasons why the selected
firm was determined to be incapable to perform the procurement
requirement, and the findings supporting such determination, which shall
be made a part of the contract file for the requirement. A contract may
not be awarded under this subsection if the award of the contract would
result in a cost to the awarding agency which exceeds a fair market
price;

\(B\) to arrange for the performance of such procurement contracts by
negotiating or otherwise letting subcontracts to socially and
economically disadvantaged small business concerns for construction
work, services, or the manufacture, supply, assembly of such articles,
equipment, supplies, 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;

\(C\) to make an award to a small business concern owned and controlled
by socially and economically disadvantaged individuals which has
completed its period of Program Participation as prescribed by section
7(j)(15), if---

\(i\) the contract will be awarded as a result of an offer (including
price) submitted in response to a published solicitation relating to a
competition conducted pursuant to subparagraph (D); and

\(ii\) the prospective contract awardee was a Program Participant
eligible for award of the contract on the date specified for receipt of
offers contained in the contract solicitation; and

\(D\) (i) A contract opportunity offered for award pursuant to this
subsection shall be awarded on the basis of competition restricted to
eligible Program Participants if---

\(I\) there is a reasonable expectation that at least two eligible
Program Participants will submit offers and that award can be made at a
fair market price, and

\(II\) the anticipated award price of the contract (including options)
will exceed \$5,000,000 in the case of a contract opportunity assigned a
standard industrial classification code for manufacturing and
\$3,000,000 (including options) in the case of all other contract
opportunities.

\(ii\) The Associate Administrator for Minority Small Business and
Capital Ownership Development, on a nondelegable basis, is authorized to
approve a request from an agency to award a contract opportunity under
this subsection on the basis of a competition restricted to eligible
Program Participants even if the anticipated award price is not expected
to exceed the dollar amounts specified in clause (i)(II). Such approvals
shall be granted only on a limited basis.

\(2\) Notwithstanding subsections (a) and (c) of the first section of
the Act entitled \"An Act requiring contracts for the construction,
alteration, and repair of any public building or public work of the
United States to be accompanied by a performance bond protecting the
United States and by additional bond for the protection of persons
furnishing material and labor for the construction, alteration, or
repair of said public buildings or public works,\" approved August 24,
1935 (49 Stat. 793), no small business concern shall be required to
provide any amount of any bond as a condition of receiving any
subcontract under this subsection if the Administrator determines that
such amount is inappropriate for such concern in performing such
contract: [Provided]{.underline}, That the Administrator shall exercise
the authority granted by the paragraph only if---

\(A\) the Administration takes such measures as it deems appropriate for
the protection of persons furnishing materials and labor to a small
business receiving any benefit pursuant to this paragraph;

\(B\) the Administration assists, insofar as practicable, a small
business receiving the benefits of this paragraph to develop, within a
reasonable period of time, such financial and other capability as may be
needed to obtain such bonds as the Administration may subsequently
require for the successful completion of any program conducted under the
authority of this subsection;

\(C\) the Administration finds that such small business is unable to
obtain the requisite bond or bonds from a surety and that no surety is
willing to issue such bond or bonds subject to the guarantee provisions
of Title IV of the Small Business Investment Act of 1958; and

\(D\) the small business is determined to be a startup concern and such
concern has not been participating in any program conducted under the
authority of this subsection for a period exceeding one year.

The authority to waive bonds provided in this paragraph (2) may not be
exercised after September 30, 1988.

\(3\) (A) Any Program Participant selected by the Administration to
perform a contract to be let noncompetitively pursuant to this
subsection shall, when practicable, participate in any negotiation of
the terms and conditions of such contract.

\(B\) (i) For purposes of paragraph (1) a \"fair market price\" shall be
determined by the agency offering the procurement requirement to the
Administration, in accordance with clauses (ii) and (iii).

\(ii\) The estimate of a current fair market price for a new procurement
requirement, or a requirement that does not have a satisfactory
procurement history, shall be derived from a price or cost analysis.
Such analysis may take into account prevailing market conditions,
commercial prices for similar products or services, or data obtained
from any other agency. Such analysis shall consider such cost or pricing
data as may be timely submitted by the Administration.

\(iii\) The estimate of a current fair market price for a procurement
requirement that has a satisfactory procurement history shall be based
on recent award prices adjusted to insure comparability. Such
adjustments shall take into account differences in quantities,
performance times, plans, specifications, transportation costs,
packaging and packing costs, labor and materials costs, overhead costs,
and any other additional costs which may be deemed appropriate.

\(C\) An agency offering a procurement requirement for potential award
pursuant to this subsection shall, upon the request of the
Administration, promptly submit to the Administration a written
statement detailing the method used by the agency to estimate the
current fair market price for such contract, identifying the
information, studies, analyses, and other data used by such agency. The
agency\'s estimate of the current fair market price (and any supporting
data furnished to the Administration) shall not be disclosed to any
potential offeror (other than the Administration).

\(D\) A small business concern selected by the Administration to perform
or negotiate a contract to be let pursuant to this subsection may
request the Administration to protect the agency\'s estimate of the fair
market price for such contract pursuant to paragraph (1)(A).

\(4\) (A) For purposes of this section, the term \"socially and
economically disadvantaged small business concern\" means any small
business concern which meets the requirements of subparagraph (B) and---

\(i\) which is at least 51 per centum unconditionally owned by---

\(I\) one or more socially and economically disadvantaged individuals,

\(II\) an economically disadvantaged Indian tribe (or a wholly owned
business entity of such tribe), or

\(III\) an economically disadvantaged Native Hawaiian organization, or

\(ii\) in the case of any publicly owned business, at least 51 per
centum of the stock of which is unconditionally owned by---

\(I\) one or more socially and economically disadvantaged individuals,

\(II\) an economically disadvantaged Indian tribe (or a wholly owned
business entity of such tribe), or

\(III\) an economically disadvantaged Native Hawaiian organization.

\(B\) A small business concern meets the requirements of this
subparagraph if the management and daily business operations of such
small concern are controlled by one or more---

\(i\) socially and economically disadvantaged individuals described in
subparagraph (A)(i)(I) or subparagraph (A)(ii)(I), or

\(ii\) members of an economically disadvantaged Indian tribe described
in subparagraph (A)(i)(II) or subparagraph (A)(ii)(II) or

\(iii\) Native Hawaiian organizations described in subparagraph
(A)(i)(III) or subparagraph (A)(ii)(III).

\(C\) Each Program Participant shall certify, on an annual basis, that
it meets the requirements of this paragraph regarding ownership and
control.

\(5\) Socially disadvantaged individuals are those who have been
subjected to racial or ethnic prejudice or cultural bias because of
their identity as a member of a group without regard to their individual
qualities.

\(6\) (A) Economically disadvantaged individuals are those socially
disadvantaged individuals whose ability to compete in the free
enterprise system has been impaired due to diminished capital and credit
opportunities as compared to others in the same business area who are
not socially disadvantaged. In determining the degree of diminished
credit and capital opportunities the Administration shall consider, but
not be limited to, the assets and net worth of such socially
disadvantaged individual. In determining the economic disadvantage of an
Indian tribe, the Administration shall consider, where available,
information such as the following: the per capita income of members of
the tribe excluding judgment awards, the percentage of the local Indian
population below the poverty level, and the tribe\'s access to capital
markets.

\(B\) Each Program Participant shall annually submit to the
Administration---

\(i\) a personal financial statement for each disadvantaged owner;

\(ii\) a record of all payments made by the Program Participant to each
of its disadvantaged owners or to any person or entity affiliated with
such owners; and

\(iii\) such other information as the Administration may deem necessary
to make the determinations required by this paragraph.

\(C\) (i) Whenever, on the basis of information provided by a Program
Participant pursuant to subparagraph (B) or otherwise, the
Administration has reason to believe that the standards to establish
economic disadvantage pursuant to subparagraph (A) have not been met,
the Administration shall conduct a review to determine whether such
Program Participant and its disadvantaged owners continue to be impaired
in their ability to compete in the free enterprise system due to
diminished capital and credit opportunities when compared to other
concerns in the same business area, which are not socially
disadvantaged.

\(ii\) If the Administration determines, pursuant to such review, that a
Program Participant and its disadvantaged owners are no longer
economically disadvantaged for the purpose of receiving assistance under
this subsection, the Program Participant shall be graduated pursuant to
section 7(j)(10)(G) subject to the right to a hearing as provided for
under paragraph (9).

\(D\) (i) Whenever, on the basis of information provided by a Program
Participant pursuant to subparagraph (B) or otherwise, the
Administration has reason to believe that the amount of funds or other
assets withdrawn from a Program Participant for the personal benefit of
its disadvantaged owners or any person or entity affiliated with such
owners may have been unduly excessive, the Administration shall conduct
a review to determine whether such withdrawal of funds or other assets
was detrimental to the achievement of the targets, objectives, and goals
contained in such Program Participant\'s business plan.

\(ii\) If the Administration determines, pursuant to such review, that
funds or other assets have been withdrawn to the detriment of the
Program Participant\'s business, the Administration shall---

\(I\) initiate a proceeding to terminate the Program Participant
pursuant to section 7(j)(10)(F), subject to the right to a hearing under
paragraph (9); or

\(II\) require an appropriate reinvestment of funds or other assets and
such other steps as the Administration may deem necessary to ensure the
protection of the concern.

\(E\) Whenever the Administration computes personal net worth for any
purpose under this paragraph, it shall exclude from such computation---

\(i\) the value of investments that disadvantaged owners have in their
concerns, except that such value shall be taken into account under this
paragraph when comparing such concerns to other concerns in the same
business area that are owned by other than socially disadvantaged
persons;

\(ii\) the equity that disadvantaged owners have in their primary
personal residences, except that any portion of such equity that is
attributable to unduly excessive withdrawals from a Program Participant
or a concern applying for program participation shall be taken into
account.

\(7\) (A) No small business concern shall be deemed eligible for any
assistance pursuant to this subsection unless the Administration
determines that with contract, financial, technical, and management
support the small business concern will be able to perform contracts
which may be awarded to such concern under paragraph (1)(C) and has
reasonable prospects for success in competing in the private sector.

\(B\) Limitations established by the Administration in its regulations
and procedures restricting the award of contracts pursuant to this
subsection to a limited number of standard industrial classification
codes in an approved business plan shall not be applied in a manner that
inhibits the logical business progression by a participating small
business concern into areas of industrial endeavor where such concern
has the potential for success.

\(8\) All determinations made pursuant to paragraph (5) with respect to
whether a group has been subjected to prejudice or bias shall be made by
the Administrator after consultation with the Associate Administrator
for Minority Small Business and Capital Ownership Development. All other
determinations made pursuant to paragraphs (4), (5), (6), and (7) shall
be made by the Associate Administrator for Minority Small Business and
Capital Ownership Development under the supervision of, and responsible
to, the Administrator.

\(9\) (A) Subject to the provisions of subparagraph (E), the
Administration, prior to taking any action described in subparagraph
(B), shall provide the small business concern that is the subject of
such action, an opportunity for a hearing on the record, in accordance
with chapter 5 of title 5, United States Code.

\(B\) The actions referred to in subparagraph (A) are---

\(i\) denial of program admission based upon a negative determination
pursuant to paragraph (4), (5), or (6);

\(ii\) a termination pursuant to section 7(j)(10)(F);

\(iii\) a graduation pursuant to section 7(j)(10)(G); and

\(iv\) the denial of a request to issue a waiver pursuant to paragraph
(21)(B).

\(C\) The Administration\'s proposed action, in any proceeding conducted
under the authority of this paragraph, shall be sustained unless it is
found to be arbitrary, capricious, or contrary to law.

\(D\) A decision rendered pursuant to this paragraph shall be the final
decision of the Administration and shall be binding upon the
Administration and those within its employ.

\(E\) The adjudicator selected to preside over a proceeding conducted
under the authority of this paragraph shall decline to accept
jurisdiction over any matter that---

\(i\) does not, on its face, allege facts that, if proven to be true,
would warrant reversal or modification of the Administration\'s
position;

\(ii\) is untimely filed;

\(iii\) is not filed in accordance with the rules of procedure governing
such proceedings; or

\(iv\) has been decided by or is the subject of an adjudication before a
court of competent jurisdiction over such matters.

\(F\) Proceedings conducted pursuant to the authority of this paragraph
shall be completed and a decision rendered, insofar as practicable,
within ninety days after a petition for a hearing is filed with the
adjudicating office.

\(10\) The Administration shall develop and implement an outreach
program to inform and recruit small business concerns to apply for
eligibility for assistance under this subsection. Such program shall
make a sustained and substantial effort to solicit applications for
certification from small business concerns located in areas of
concentrated unemployment or underemployment or within labor surplus
areas and within States having relatively few Program Participants and
from small disadvantaged business concerns in industry categories that
have not substantially participated in the award of contracts let under
the authority of this subsection.

\(11\) To the maximum extent practicable, construction subcontracts
awarded by the Administration pursuant to this subsection shall be
awarded within the county or State where the work is to be performed.

\(12\) (A) The Administration shall require each concern eligible to
receive subcontracts pursuant to this subsection to annually prepare and
submit to the Administration a capability statement. Such statement
shall briefly describe such concern\'s various contract performance
capabilities and shall contain the name and telephone number of the
Business Opportunity Specialist assigned such concern. The
Administration shall separate such statements by those primarily
dependent upon local contract support and those primarily requiring a
national marketing effort. Statements primarily dependent upon local
contract support shall be disseminated to appropriate buying activities
in the marketing area of the concern. The remaining statements shall be
disseminated to the Directors of Small and Disadvantaged Business
Utilization for the appropriate agencies who shall further distribute
such statements to buying activities with such agencies that may
purchase the types of items or services described on the capability
statements.

\(B\) Contracting activities receiving capability statements shall,
within 60 days after receipt, contact the relevant Business Opportunity
Specialist to indicate the number, type and approximate dollar value of
contract opportunities that such activities may be awarding over the
succeeding 12‑month period and which may be appropriate to consider for
award to those concerns for which it has received capability statements.

\(C\) Each executive agency reporting to the Federal Procurement Data
System contract actions with an aggregate value in excess of
\$50,000,000 in fiscal year 1988, or in any succeeding fiscal year,
shall prepare a forecast of expected contract opportunities or classes
of contract opportunities for the next and succeeding fiscal years that
small business concerns, including those owned and controlled by
socially and economically disadvantaged individuals, are capable of
performing. Such forecast shall be periodically revised during such
year. To the extent such information is available, the agency forecasts
shall specify:

\(i\) The approximate number of individual contract opportunities (and
the number of opportunities within a class)

\(ii\) The approximate dollar value, or range of dollar values, for each
contract opportunity or class of contract opportunities.

\(iii\) The anticipated time (by fiscal year quarter) for the issuance
of a procurement request.

\(iv\) The activity responsible for the award and administration of the
contract.

\(D\) The head of each executive agency subject to the provisions of
subparagraph (C) shall within 10 days of completion furnish such
forecasts to---

\(i\) the Director of the Office of Small and Disadvantaged Business
Utilization established pursuant to section 15(k) for such agency; and

\(ii\) the Administrator.

\(E\) The information reported pursuant to subparagraph (D) may be
limited to classes of items and services for which there are substantial
annual purchases.

\(F\) Such forecasts shall be available to small business concerns.

\(13\) For purposes of this subsection, the term \"Indian tribe\" means
any Indian tribe, band, nation, or other organized group or community of
Indians, including any Alaska Native village or regional or village
corporation (within the meaning of the Alaska Native Claims Settlement
Act) which---

\(A\) is recognized as eligible for the special programs and services
provided by the United States to Indians because of their status as
Indians, or

\(B\) is recognized as such by the State in which such tribe, band,
nation, group, or community resides.

\(14\) (A) A concern may not be awarded a contract under this subsection
as a small business concern unless the concern agrees that---

\(i\) in the case of a contract for services (except construction), at
least 50 percent of the cost of contract performance incurred for
personnel shall be expended for employees of the concern; and

\(ii\) in the case of a contract for procurement of supplies (other than
procurement from a regular dealer in such supplies), the concern will
perform work for at least 50 percent of the cost of manufacturing the
supplies (not including the cost of materials).

\(B\) The Administrator may change the percentage under clause (i) or
(ii) of subparagraph (A) if the Administrator determines that such
change is necessary to reflect conventional industry practices among
business concerns that are below the numerical size standard for
businesses in that industry category. A percentage established under the
preceding sentence may not differ from a percentage established under
section 15(o).

\(C\) The Administration shall establish, through public rulemaking,
requirements similar to those specified in subparagraph (A) to be
applicable to contracts for general and specialty construction and to
contracts for any other industry category not otherwise subject to the
requirements of such subparagraph. The percentage applicable to any such
requirement shall be determined in accordance with subparagraph (B),
except that such a percentage may not differ from a percentage
established under section 15(o) for the same industry category.

\(15\) For purposes of this subsection, the term \"Native Hawaiian
Organization\" means any community service organization serving Native
Hawaiians in the State of Hawaii which---

\(A\) is a nonprofit corporation that has filed articles of
incorporation with the director (or the designee thereof) of the Hawaii
Department of Commerce and Consumer Affairs, or any successor agency,

\(B\) is controlled by Native Hawaiians, and

\(C\) whose business activities will principally benefit such Native
Hawaiians.

\(16\) (A) The Administration shall award sole source contracts under
this section to any small business concern recommended by the procuring
agency offering the contract opportunity if---

\(i\) the Program Participant is determined to be a responsible
contractor with respect to performance of such contract opportunity;

\(ii\) the award of such contract would be consistent with the Program
Participant's business plan; and

\(iii\) the award of the contract would not result in the Program
Participant exceeding the requirements established by section
7(j)(10)(I).

\(B\) To the maximum extent practicable, the Administration shall
promote the equitable geographic distribution of sole source contracts
awarded pursuant to this subsection.

\(17\) (A) An otherwise responsible business concern that is in
compliance with the requirements of subparagraph (B) shall not be denied
the opportunity to submit and have considered its offer for any
procurement contract for the supply of a product to be let pursuant to
this subsection or subsection (a) of section 15 solely because such
concern is other than the actual manufacturer or processor of the
product to be supplied under the contract.

\(B\) To be in compliance with the requirements referred to in
subparagraph (A), such a business concern shall---

\(i\) be primarily engaged in the wholesale or retail trade;

\(ii\) be a small business concern under the numerical size standard for
the Standard Industrial Classification Code assigned to the contract
solicitation on which the offer is being made;

\(iii\) be a regular dealer, as defined pursuant to section 35(a) of
title 41, United States Code (popularly referred to as the Walsh‑Healey
Public Contracts Act), in the product to be offered the Government or be
specifically exempted from such section by section 7(j)(13)(C); and

\(iv\) represent that it will supply the product of a domestic small
business manufacturer or processor, unless a waiver of such requirement
is granted---

\(I\) by the Administrator, after reviewing a determination by the
contracting officer that no small business manufacturer or processor can
reasonably be expected to offer a product meeting the specifications
(including period for performance) required of an offeror by the
solicitation; or

\(II\) by the Administrator for a product (or class of products), after
determining that no small business manufacturer or processor is
available to participate in the Federal procurement market.

\(18\) (A) No person within the employ of the Administration shall,
during the term of such employment and for a period of two years after
such employment has been terminated, engage in any activity or
transaction specified in subparagraph (B) with respect to any Program
Participant during such person\'s term of employment, if such person
participated personally (either directly or indirectly) in
decision‑making responsibilities relating to such Program Participant or
with respect to the administration of any assistance provided to Program
Participants generally under this subsection, section 7(j)(10), or
section 7(a)(20).

\(B\) The activities and transactions prohibited by subparagraph (A)
include---

\(i\) the buying, selling, or receiving (except by inheritance) of any
legal or beneficial ownership of stock or any other ownership interest
or the right to acquire any such interest;

\(ii\) the entering into or execution of any written or oral agreement
(whether or not legally enforceable) to purchase or otherwise obtain any
right or interest described in clause (i); or

\(iii\) the receipt of any other benefit or right that may be an
incident of ownership.

\(C\) (i) The employees designated in clause (ii) shall annually submit
a written certification to the Administration regarding compliance with
the requirements of this paragraph.

\(ii\) The employees referred to in clause (i) are---

\(I\) regional administrators;

\(II\) district directors;

\(III\) the Associate Administrator for Minority Small Business and
Capital Ownership Development;

\(IV\) employees whose principal duties relate to the award of contracts
or the provision of other assistance pursuant to this subsection or
section 7(j)(10); and

\(V\) such other employees as the Administrator may deem appropriate.

\(iii\) Any present or former employee of the Administration who
violates this paragraph shall be subject to a civil penalty, assessed by
the Attorney General, that shall not exceed 300 per centum of the
maximum amount of gain such employee realized or could have realized as
a result of engaging in those activities and transactions prescribed by
subparagraph (B).

\(iv\) In addition to any other remedy or sanction provided for under
law or regulation, any person who falsely certifies pursuant to clause
(i) shall be subject to a civil penalty under the Program Fraud Civil
Remedies Act of 1986 (31 U.S.C. 3801‑3812).

\(19\) (A) Any employee of the Administration who has authority to take,
direct others to take, recommend, or approve any action with respect to
any program or activity conducted pursuant to this subsection or section
7(j), shall not, with respect to any such action, exercise or threaten
to exercise such authority on the basis of the political activity or
affiliation of any party. Employees of the Administration shall
expeditiously report to the Inspector General of the Administration any
such action for which such employee\'s participation has been solicited
or directed.

\(B\) Any employee who willfully and knowingly violates subparagraph (A)
shall be subject to disciplinary action which may consist of separation
from service, reduction in grade, suspension, or reprimand.

\(C\) Subparagraph (A) shall not apply to any action taken as a penalty
or other enforcement of a violation of any law, rule, or regulation
prohibiting or restricting political activity.

\(D\) The prohibitions of subparagraph (A), and remedial measures
provided for under subparagraphs (B) and (C) with regard to such
prohibitions, shall be in addition to, and not in lieu of, any other
prohibitions, measures or liabilities that may arise under any other
provision of law.

\(20\) (A) Small business concerns participating in the Program under
section 7(j)(10) and eligible to receive contracts pursuant to this
section shall semiannually report to their assigned Business Opportunity
Specialist the following:

\(i\) A listing of any agents, representatives, attorneys, accountants,
consultants, and other parties (other than employees) receiving
compensation to assist in obtaining a Federal contract for such Program
Participant.

\(ii\) The amount of compensation received by any person listed under
clause (i) during the relevant reporting period and a description of the
activities performed in return for such compensation.

\(B\) The Business Opportunity Specialist shall promptly review and
forward such report to the Associate Administrator for Minority Small
Business and Capital Ownership Development. Any report that raises a
suspicion of improper activity shall be reported immediately to the
Inspector General of the Administration.

\(C\) The failure to submit a report pursuant to the requirements of
this subsection and applicable regulations shall be considered \"good
cause\" for the initiation of a termination proceeding pursuant to
section 7(j)(10)(F).

\(21\) (A) Subject to the provisions of subparagraph (B), a contract
(including options) awarded pursuant to this subsection shall be
performed by the concern that initially received such contract.
Notwithstanding the provisions of the preceding sentence, if the owner
or owners upon whom eligibility was based relinquish ownership or
control of such concern, or enter into any agreement to relinquish such
ownership or control, such contract or option shall be terminated for
the convenience of the Government, except that no repurchase costs or
other damages may be assessed against such concerns due solely to the
provisions of this subparagraph.

\(B\) The Administrator may, on a nondelegable basis, waive the
requirements of subparagraph (A) only if one of the following conditions
exist:

\(i\) When it is necessary for the owners of the concern to surrender
partial control of such concern on a temporary basis in order to obtain
equity financing.

\(ii\) The head of the contracting agency for which the contract is
being performed certifies that termination of the contract would
severely impair attainment of the agency\'s program objectives or
missions;

\(iii\) Ownership and control of the concern that is performing the
contract will pass to another small business concern that is a program
participant, but only if the acquiring firm would otherwise be eligible
to receive the award directly pursuant to subsection (a);

\(iv\) The individuals upon whom eligibility was based are no longer
able to exercise control of the concern due to incapacity or death; or

\(v\) When, in order to raise equity capital, it is necessary for the
disadvantaged owners of the concern to relinquish ownership of a
majority of the voting stock of such concern, but only if---

\(I\) such concern has exited the Capital Ownership Development Program;

\(II\) the disadvantaged owners will maintain ownership of the largest
single outstanding block of voting stock (including stock held by
affiliated parties); and

\(III\) the disadvantaged owners will maintain control of daily business
operations.

\(C\) The Administrator may waive the requirements of subparagraph (A)
if---

\(i\) in the case of subparagraph (B)(i), (ii) and (iv), he is requested
to do so prior to the actual relinquishment of ownership or control; and

\(ii\) in the case of subparagraph (B)(iii), he is requested to do so as
soon as possible after the incapacity or death occurs.

\(D\) Concerns performing contracts awarded pursuant to this subsection
shall be required to notify the Administration immediately upon entering
an agreement (either oral or in writing) to transfer all or part of its
stock or other ownership interest to any other party.

\(E\) Notwithstanding any other provision of law, for the purposes of
determining ownership and control of a concern under this section, any
potential ownership interests held by investment companies licensed
under the Small Business Investment Act of 1958 shall be treated in the
same manner as interests held by the individuals upon whom eligibility
is based.

\(b\) It shall also be the duty of the Administration and it is hereby
empowered, whenever it determines such action is necessary---

\(1\) (A) to provide technical, managerial, and informational aids to
small business concerns---

\(i\) by advising and counseling on matters in connection with
Government procurement and policies, principles, and practices of good
management;

\(ii\) by cooperating and advising with---

\(I\) voluntary business, professional, educational, and other nonprofit
organizations, associations, and institutions (except that the
Administration shall take such actions as it determines necessary to
ensure that such cooperation does not constitute or imply an endorsement
by the Administration of the organization or its products or services,
and shall ensure that it receives appropriate recognition in all printed
materials); and

\(II\) other Federal and State agencies;

\(iii\) by maintaining a clearinghouse for information on managing,
financing, and operating small business enterprises; and

\(iv\) by disseminating such information, including through recognition
events, and by other activities that the Administration determines to be
appropriate.

\(B\) To establish, conduct, and publicize, and to recruit, select, and
train volunteers for (and to enter into contracts, grants, or
cooperative agreements therefor), volunteer programs, including a
Service Corps of Retired Executives (SCORE) and an Active Corps of
Executive (sic) (ACE) for the purposes of section 8(b)(1)(A) of this
Act. To facilitate the implementation of such volunteer programs the
Administration shall maintain at its headquarters and pay the salaries,
benefits, and expenses of a volunteer and professional staff to manage
and oversee the program. Any such payments made pursuant to this
subparagraph shall be effective only to such extent or in such amounts
as are provided in advance in appropriation Acts. Notwithstanding any
other provision of law, SCORE may solicit cash and in-kind contributions
from the private sector to be used to carry out its functions under this
Act, and may use payments made by the Administration pursuant to this
subparagraph for such solicitation and the management of the
contributions received.

\(C\) To allow any individual or group of persons participating with it
in furtherance of the purposes of subparagraphs (A) and (B) to use the
Administration\'s office facilities and related material and services as
the Administration deems appropriate, including clerical and
stenographic services:

\(i\) such volunteers, while carrying out activities under section
8(b)(1) of this Act shall be deemed Federal employees for the purposes
of the Federal tort claims provisions in title 28, United States Code;
and for the purposes of subchapter I of chapter 81 of title 5, United
States Code (relative to compensation to Federal employees for work
injuries) shall be deemed civil employees of the United States within
the meaning of the term \"employee\" as defined in section 8101 of title
5, United States Code, and the provisions of that subchapter shall apply
except that in computing compensation benefits for disability or death,
the monthly pay of a volunteer shall be deemed that received under the
entrance salary for a grade GS‑11 employee;

\(ii\) the Administrator is authorized to reimburse such volunteers for
all necessary out‑of‑pocket expenses incident to their provision of
services under this Act, or in connection with attendance at meetings
sponsored by the Administration, or for the cost of malpractice
insurance, as the Administrator shall determine, in accordance with
regulations which he or she shall prescribe, and, while they are
carrying out such activities away from their homes or regular places of
business, for travel expenses (including per diem in lieu of
subsistence) as authorized by section 5703 of title 5, United States
Code, for individuals serving without pay; and

\(iii\) such volunteers shall in no way provide services to a client of
such Administration with a delinquent loan outstanding, except upon a
specific request signed by such client for assistance in connection with
such matter.

\(D\) Notwithstanding any other provision of law, no payment for
supportive services or reimbursement of out‑of‑pocket expenses made to
persons serving pursuant to section 8(b)(1) of this Act shall be subject
to any tax or charge or be treated as wages or compensation for the
purposes of unemployment, disability, retirement, public assistance, or
similar benefit payments, or minimum wage laws.

\(E\) In carrying out its functions under subparagraph (A), to make
grants (including contracts and cooperative agreements) to any public or
private institution of higher education for the establishment and
operation of a small business institute, which shall be used to provide
business counseling and assistance to small business concerns through
the activities of students enrolled at the institution, which students
shall be entitled to receive educational credits for their activities.

\(F\) Notwithstanding any other provision of law and pursuant to
regulations which the Administrator shall prescribe, counsel may be
employed and counsel fees, court costs, bail, and other expenses
incidental to the defense of volunteers may be paid in judicial or
administrative proceedings arising directly out of the performance of
activities pursuant to section 8(b)(1) of this Act, as amended (15
U.S.C. 637(b)(1)) to which volunteers have been made parties.

\(G\) In carrying out its functions under this Act and to carry out the
activities authorized by title IV of the Women\'s Business Ownership Act
of 1988 the Administration is authorized to accept, in the name of the
Administration, and employ or dispose of in furtherance of the purposes
of this Act, any money or property, real, personal, or mixed, tangible,
or intangible, received by gift, devise, bequest, or otherwise; and,
further, to accept gratuitous services and facilities.

\(2\) to make a complete inventory of all productive facilities of
small‑business concerns or to arrange for such inventory to be made by
any other governmental agency which has the facilities. In making any
such inventory, the appropriate agencies in the several States may be
requested to furnish an inventory of the productive facilities of
small‑business concerns in each respective State if such an inventory is
available or in prospect;

\(3\) to coordinate and to ascertain the means by which the productive
capacity of small‑business concerns can be more effectively utilized;

\(4\) to consult and cooperate with officers of the Government having
procurement or property disposal powers, in order to utilize the
potential productive capacity of plants operated by small‑business
concerns;

\(5\) to obtain information as to methods and practices which Government
prime contractors utilize in letting subcontracts and to take action to
encourage the letting of subcontracts by prime contractors to
small‑business concerns at prices and on conditions and terms which are
fair and equitable;

\(6\) to determine within any industry the concerns, firms, persons,
corporations, partnerships, cooperatives, or other business enterprises
which are to be designated \"small business concerns\" for the purpose
of effectuating the provisions of this Act. To carry out this purpose
the Administrator, when requested to do so, shall issue in response to
each such request an appropriate certificate certifying an individual
concern as a \"small business concern\" in accordance with criteria
expressed in this Act. Any such certificate shall be subject to
revocation when the concern covered thereby ceases to be a \"small
business concern\". Offices of the Government having procurement or
lending powers, or engaging in the disposal of Federal property or
allocating materials or supplies, or promulgating regulations affecting
the distribution of materials or supplies, shall accept as conclusive
the Administration\'s determination as to which enterprises are to be
designated \"small‑business concerns,\" as authorized and directed under
this paragraph;

\(7\) (A) to certify to Government procurement officers, and officers
engaged in the sale and disposal of Federal property, with respect to
all elements of responsibility, including, but not limited to,
capability, competency, capacity, credit, integrity, perseverance, and
tenacity, of any small business concern or group of such concerns to
receive and perform a specific Government contract. A Government
procurement officer or an officer engaged in the sale and disposal of
Federal property may not, for any reason specified in the preceding
sentence, preclude any small business concern or group of such concerns
from being awarded such contract without referring the matter for a
final disposition to the Administration.

\(B\) If a Government procurement officer finds that an otherwise
qualified small business concern may be ineligible due to the provisions
of section 35(a) of title 41, United States Code (the Walsh‑Healey
Public Contracts Act), he shall notify the Administration in writing of
such finding. The Administration shall review such finding and shall
either dismiss it and certify the small business concern to be an
eligible Government contractor for a specific Government contract or if
it concurs in the finding, forward the matter to the Secretary of Labor
for final disposition, in which case the Administration may certify the
small business concern only if the Secretary of Labor finds the small
business concern not to be in violation.

\(C\) In any case in which a small business concern or group of such
concerns has been certified by the Administration pursuant to (A) or (B)
to be a responsible or eligible Government contractor as to a specific
Government contract, the officers of the Government having procurement
or property disposal powers are directed to accept such certification as
conclusive, and shall let such Government contract to such concern or
group of concerns without requiring it to meet any other requirement of
responsibility or eligibility. Notwithstanding the first sentence of
this subparagraph, the Administration may not establish an exemption
from referral or notification or refuse to accept a referral or
notification from a Government procurement officer made pursuant to
subparagraph (A) or (B) of this paragraph, but nothing in this paragraph
shall require the processing of an application for certification if the
small business concern to which the referral pertains declines to have
the application processed.

\(8\) to obtain from any Federal department, establishment, or agency
engaged in procurement or in the financing of procurement or production
such reports concerning the letting of contracts and subcontracts and
the making of loans to business concerns as it may deem pertinent in
carrying out its functions under this Act;

\(9\) to obtain from any Federal department, establishment, or agency
engaged in the disposal of Federal property such reports concerning the
solicitation of bids, time of sale, or otherwise as it may deem
pertinent in carrying out its functions under this Act;

\(10\) to obtain from suppliers of materials information pertaining to
the method of filling orders and the bases for allocating their supply,
whenever it appears that any small business is unable to obtain
materials from its normal sources;

\(11\) to make studies and recommendations to the appropriate Federal
agencies to insure that a fair proportion of the total purchases and
contracts for property and services for the Government be placed with
small‑business enterprises, to insure that a fair proportion of
Government contracts for research and development be placed with
small‑business concerns, to insure that a fair proportion of the total
sales of Government property be made to small‑business concerns, and to
insure a fair and equitable share of materials, supplies, and equipment
to small‑business concerns;

\(12\) to consult and cooperate with all Government agencies for the
purpose of insuring that small‑business concerns shall receive fair and
reasonable treatment from such agencies;

\(13\) to establish such advisory boards and committees as may be
necessary to achieve the purposes of this Act and of the Small Business
Investment Act of 1958; to call meetings of such boards and committees
from time to time; to pay the transportation expenses and a per diem
allowance in accordance with Section 5703 of title 5, United States
Code, to the members of such boards and committees for travel and
subsistence expenses incurred at the request of the Administration in
connection with travel to points more than fifty miles distant from the
homes of such members in attending the meetings of such boards and
committees; and to rent temporarily, within the District of Columbia or
elsewhere, such hotel or other accommodations as are needed to
facilitate the conduct of such meetings;

\(14\) to provide at the earliest practicable time such information and
assistance as may be appropriate, including information concerning
eligibility for loans under section 7(b)(3), to local public agencies
(as defined in section 110(h) of the Housing Act of 1949) and to
small‑business concerns to be displaced by federally aided urban renewal
projects in order to assist such small‑business concerns in
reestablishing their operations;

\(15\) to disseminate, without regard to the provisions of section 3204
of title 39, United States Code, data and information, in such form as
it shall deem appropriate, to public agencies, private organizations,
and the general public;

\(16\) to make studies of matters materially affecting the competitive
strength of small business, and of the effect on small business of
Federal laws, programs, and regulations, and to make recommendations to
the appropriate Federal agency or agencies for the adjustment of such
programs and regulations to the needs of small business; and

\(17\) to make grants to, and enter into contracts and cooperative
agreements with, educational institutions, private businesses, veterans'
nonprofit community-based organizations, and Federal, State, and local
departments and agencies for the establishment and implementation of
outreach programs for disabled veterans (as defined in section 4211(3)
of title 38, United States Code), veterans, and members of a reserve
component of the Armed Forces.

\(c\) \[Reserved\].

\(d\) (1) It is the policy of the United States that small business
concerns, small business concerns owned and controlled by veterans,
small business concerns owned and controlled by service-disabled
veterans, qualified HUBZone small business concerns, small business
concerns owned and controlled by socially and economically disadvantaged
individuals and small business concerns owned and controlled by women,
shall have the maximum practicable opportunity to participate in the
performance of contracts let by any Federal agency, including contracts
and subcontracts for subsystems, assemblies, components, and related
services for major systems. It is further the policy of the United
States that its prime contractors establish procedures to ensure the
timely payment of amounts due pursuant to the terms of their
subcontracts with small business concerns, small business concerns owned
and controlled by veterans, small business concerns owned and controlled
by service-disabled veterans, qualified HUBZone small business concerns,
small business concerns owned and controlled by socially and
economically disadvantaged individuals, and small business concerns
owned and controlled by women.

\(2\) The clause stated in paragraph (3) shall be included in all
contracts let by any Federal agency except any contract which---

\(A\) does not exceed the simplified acquisition threshold;

\(B\) including all subcontracts under such contracts will be performed
entirely outside of any State, territory, or possession of the United
States, the District of Columbia, or the Commonwealth of Puerto Rico; or

\(C\) is for services which are personal in nature.

\(3\) The clause required by paragraph (2) shall be as follows:

\"(A) It is the policy of the United States that small business
concerns, small business concerns owned and controlled by veterans,
small business concerns owned and controlled by service-disabled
veterans, qualified HUBZone small business concerns, small business
concerns owned and controlled by socially and economically disadvantaged
individuals, and small business concerns owned and controlled by women
shall have the maximum practicable opportunity to participate in the
performance of contracts let by any Federal agency, including contracts
and subcontracts for subsystems, assemblies, components, and related
services for major systems. It is further the policy of the United
States that its prime contractors establish procedures to ensure the
timely payment of amounts due pursuant to the terms of their
subcontracts with small business concerns, small business concerns owned
and controlled by veterans, small business concerns owned and controlled
by service-disabled veterans, qualified HUBZone small business concerns,
small business concerns owned and controlled by socially and
economically disadvantaged individuals, and small business concerns
owned and controlled by women.

\"(B) The contractor hereby agrees to carry out this policy in the
awarding of subcontracts to the fullest extent consistent with the
efficient performance of this contract. The contractor further agrees to
cooperate in any studies or surveys as may be conducted by the United
States Small Business Administration or the awarding agency of the
United States as may be necessary to determine the extent of the
contractor\'s compliance with this clause.

\"(C) As used in this contract, the term \'small business concern\'
shall mean a small business as defined pursuant to section 3 of the
Small Business Act and relevant regulations promulgated pursuant
thereto. The term \'small business concern owned and controlled by
socially and economically disadvantaged individuals\' shall mean a small
business concern---

\"(i) which is at least 51 per centum owned by one or more socially and
economically disadvantaged individuals; or, in the case of any publicly
owned business, at least 51 per centum of the stock of which is owned by
one or more socially and economically disadvantaged individuals; and

\"(ii) whose management and daily business operations are controlled by
one or more of such individuals.

\"The contractor shall presume that socially and economically
disadvantaged individuals include Black Americans, Hispanic Americans,
Native Americans, Asian Pacific Americans, and other minorities, or any
other individual found to be disadvantaged by the Administration
pursuant to section 8(a) of the Small Business Act.

"(D) The term \"small business concern owned and controlled by women\"
shall mean a small business concern---

\(i\) which is at least 51 per centum owned by one or more women; or, in
the case of any publicly owned business, at least 51 per centum of the
stock of which is owned by one or more women; and

\(ii\) whose management and daily business operations are controlled by
one or more women.

"(E) The term "small business concern owned and controlled by veterans"
shall mean a small business concern----

\(i\) which is at least 51 per centum owned by one or more eligible
veterans; or, in the case of any publicly owned business, at least 51
per centum of the stock of which is owned by one or more veterans; and

\(ii\) whose management and daily business operations are controlled by
such veterans. The contractor shall treat as veterans all individuals
who are veterans within the meaning of the term under section 3(q) of
the Small Business Act.

\"(F) Contractors acting in good faith may rely on written
representations by their subcontractors regarding their status as either
a small business concern, small business concerns owned and controlled
by veterans, small business concerns owned and controlled by
service-disabled veterans, a small business concern owned and controlled
by socially and economically disadvantaged individuals, or a small
business concern owned and controlled by women.\"

"(G) In this contract, the term 'qualified HUBZone small business
concern' has the meaning given that term in section 3(p) of the Small
Business Act."

\(4\) (A) Each solicitation of an offer for a contract to be let by a
Federal agency which is to be awarded pursuant to the negotiated method
of procurement and which may exceed \$1,000,000, in the case of a
contract for the construction of any public facility, or \$500,000, in
the case of all other contracts, shall contain a clause notifying
potential offering companies of the provisions of this subsection
relating to contracts awarded pursuant to the negotiated method of
procurement.

\(B\) Before the award of any contract to be let, or any amendment or
modification to any contract let, by any Federal agency which---

\(i\) is to be awarded, or was let, pursuant to the negotiated method of
procurement;

\(ii\) is required to include the clause stated in paragraph (3),

\(iii\) may exceed \$1,000,000 in the case of a contract for the
construction of any public facility, or \$500,000 in the case of all
other contracts, and

\(iv\) which offers subcontracting possibilities,

the apparent successful offeror shall negotiate with the procurement
authority a subcontracting plan which incorporates the information
prescribed in paragraph (6). The subcontracting plan shall be included
in and made a material part of the contract.

\(C\) If, within the time limit prescribed in regulations of the Federal
agency concerned, the apparent successful offeror fails to negotiate the
subcontracting plan required by this paragraph, such offeror shall
become ineligible to be awarded the contract. Prior compliance of the
offeror with other such subcontracting plans shall be considered by the
Federal agency in determining the responsibility of that offeror for the
award of the contract.

\(D\) No contract shall be awarded to any offeror unless the procurement
authority determines that the plan to be negotiated by the offeror
pursuant to this paragraph provides the maximum practicable opportunity
for small business concerns, qualified HUBZone small business concerns,
small business concerns owned and controlled by veterans, small business
concerns owned and controlled by service-disabled veterans, small
business concerns owned and controlled by socially and economically
disadvantaged individuals, and small business concerns owned and
controlled by women to participate in the performance of the contract.

\(E\) Notwithstanding any other provision of law, every Federal agency,
in order to encourage subcontracting opportunities for small business
concerns, small business concerns owned and controlled by veterans,
small business concerns owned and controlled by service-disabled
veterans, qualified HUBZone small business concerns, and small business
concerns owned and controlled by the socially and economically
disadvantaged individuals as defined in paragraph (3) of this subsection
and for small business concerns owned and controlled by women, is hereby
authorized to provide such incentives as such Federal agency may deem
appropriate in order to encourage such subcontracting opportunities as
may be commensurate with the efficient and economical performance of the
contract: [Provided]{.underline}, That, this subparagraph shall apply
only to contracts let pursuant to the negotiated method of procurement.

\(F\) (i) Each contract subject to the requirements of this paragraph or
paragraph (5) shall contain a clause for the payment of liquidated
damages upon a finding that a prime contractor has failed to make a good
faith effort to comply with the requirements imposed on such contractor
by this subsection.

\(ii\) The contractor shall be afforded an opportunity to demonstrate a
good faith effort regarding compliance prior to the contracting
officer\'s final decision regarding the imposition of damages and the
amount thereof. The final decision of a contracting officer regarding
the contractor\'s obligation to pay such damages, or the amounts
thereof, shall be subject to the Contract Disputes Act of 1978 (41
U.S.C. 601‑613).

\(iii\) Each agency shall ensure that the goals offered by the apparent
successful bidder or offeror are attainable in relation to---

\(I\) the subcontracting opportunities available to the contractor,
commensurate with the efficient and economical performance of the
contract;

\(II\) the pool of eligible subcontractors available to fulfill the
subcontracting opportunities; and

\(III\) the actual performance of such contractor in fulfilling the
subcontracting goals specified in prior plans.

\(G\) The following factors shall be designated by the Federal agency as
significant factors for purposes of evaluating offers for a bundled
contract where the head of the agency determines that the contract
offers a significant opportunity for subcontracting:

\(i\) A factor that is based on the rate provided under the
subcontracting plan for small business participation in the performance
of the contract.

\(ii\) For the evaluation of past performance of an offeror, a factor
that is based on the extent to which the offeror attained applicable
goals for small business participation in the performance of contracts.

\(5\) (A) Each solicitation of a bid for any contract to be let, or any
amendment or modification to any contract let, by any Federal agency
which---

\(i\) is to be awarded pursuant to the formal advertising method of
procurement,

\(ii\) is required to contain the clause stated in paragraph (3) of this
subsection,

\(iii\) may exceed \$1,000,000 in the case of a contract for the
construction of any public facility, or \$500,000, in the case of all
other contracts, and

\(iv\) offers subcontracting possibilities,

shall contain a clause requiring any bidder who is selected to be
awarded a contract to submit to the Federal agency concerned a
subcontracting plan which incorporates the information prescribed in
paragraph (6).

\(B\) If, within the time limit prescribed in regulations of the Federal
agency concerned, the bidder selected to be awarded the contract fails
to submit the subcontracting plan required by this paragraph, such
bidder shall become ineligible to be awarded the contract. Prior
compliance of the bidder with other such subcontracting plans shall be
considered by the Federal agency in determining the responsibility of
such bidder for the award of the contract. The subcontracting plan of
the bidder awarded the contract shall be included in and made a material
part of the contract.

\(6\) Each subcontracting plan required under paragraph (4) or (5) shall
include---

\(A\) percentage goals for the utilization as subcontractors of small
business concerns, small business concerns owned and controlled by
veterans, small business concerns owned and controlled by
service-disabled veterans, qualified HUBZone small business concerns,
small business concerns owned and controlled by socially and
economically disadvantaged individuals, and small business concerns
owned and controlled by women;

\(B\) the name of an individual within the employ of the offeror or
bidder who will administer the subcontracting program of the offeror or
bidder and a description of the duties of such individual;

\(C\) a description of the efforts the offeror or bidder will take to
assure that small business concerns, small business concerns owned and
controlled by veterans, small business concerns owned and controlled by
service-disabled veterans, qualified HUBZone small business concerns,
small business concerns owned and controlled by the socially and
economically disadvantaged individuals, and small business concerns
owned and controlled by women will have an equitable opportunity to
compete for subcontracts;

\(D\) assurances that the offeror or bidder will include the clause
required by paragraph (2) of this subsection in all subcontracts which
offer further subcontracting opportunities, and that the offeror or
bidder will require all subcontractors (except small business concerns)
who receive subcontracts in excess of \$1,000,000 in the case of a
contract for the construction of any public facility, or in excess of
\$500,000 in the case of all other contracts, to adopt a plan similar to
the plan required under paragraph (4) or (5);

\(E\) assurances that the offeror or bidder will submit such periodic
reports and cooperate in any studies or surveys as may be required by
the Federal agency or the Administration in order to determine the
extent of compliance by the offeror or bidder with the subcontracting
plan; and

\(F\) a recitation of the types of records the successful offeror or
bidder will maintain to demonstrate procedures which have been adopted
to comply with the requirements and goals set forth in this plan,
including the establishment of source lists of small business concerns,
small business concerns owned and controlled by veterans, small business
concerns owned and controlled by service-disabled veterans, qualified
HUBZone small business concerns, small business concerns owned and
controlled by socially and economically disadvantaged individuals, and
small business concerns owned and controlled by women; and efforts to
identify and award subcontracts to such small business concerns.

\(7\) The provisions of paragraph (4), (5), and (6) shall not apply to
offerors or bidders who are small business concerns.

\(8\) The failure of any contractor or subcontractor to comply in good
faith with---

\(A\) the clause contained in paragraph (3) of this subsection, or

\(B\) any plan required of such contractor pursuant to the authority of
this subsection to be included in its contract or subcontract,

shall be a material breach of such contract or subcontract.

\(9\) Nothing contained in this subsection shall be construed to
supersede the requirements of Defense Manpower Policy Number 4A (32A CFR
Chap. 1) or any successor policy.

\(10\) In the case of contracts within the provisions of paragraphs (4),
(5), and (6), the Administration is authorized to---

\(A\) assist Federal agencies and businesses in complying with their
responsibilities under the provisions of this subsection, including the
formulation of subcontracting plans pursuant to paragraph (4);

\(B\) review any solicitation for any contract to be let pursuant to
paragraphs (4) and (5) to determine the maximum practicable opportunity
for small business concerns, small business concerns owned and
controlled by veterans, small business concerns owned and controlled by
service-disabled veterans, qualified HUBZone small business concerns,
small business concerns owned and controlled by socially and
economically disadvantaged individuals, and small business concerns
owned and controlled by women to participate as subcontractors in the
performance of any contract resulting from any solicitation, and to
submit its findings, which shall be advisory in nature, to the
appropriate Federal agency; and

\(C\) evaluate compliance with subcontracting plans, either on a
contract‑by‑contract basis, or in the case contractors \[sic\] having
multiple contracts, on an aggregate basis.

\(11\) For purposes of determining the attainment of a subcontract
utilization goal under any subcontracting plan entered into with any
executive agency pursuant to this subsection, a mentor firm providing
development assistance to a protégé firm under the pilot Mentor-Protégé
Program established pursuant to section 831 of the National Defense
Authorization Act for Fiscal Year 1991 (Public Law 101-510; 10 USC 2301
note) shall be granted credit for such assistance in accordance with
subsection (g) of such section.

\(e\) (1) Except as provided in subsection (g)---

\(A\) an executive agency intending to---

\(i\) solicit bids or proposals for a contract for property or services
for a price expected to exceed \$25,000;

\(ii\) place an order, expected to exceed \$25,000, under a basic
agreement, basic ordering agreement, or similar arrangement,

shall furnish for publication by the Secretary of Commerce a notice
described in subsection (b) of this section;

\(B\) an executive agency intending to solicit bids or proposals for a
contract for property or services shall post, for a period of not less
than ten days, in a public place at the contracting office issuing the
solicitation a notice of solicitation described in subsection (f)---

\(i\) in the case of an executive agency other than the Department of
Defense, if the contract is for a price expected to exceed \$10,000, but
not to exceed \$25,000; and

\(ii\) in the case of the Department of Defense, if the contract is for
a price expected to exceed \$5,000, but not to exceed \$25,000; and

\(C\) an executive agency awarding a contract for property or services
for a price exceeding \$100,000, or placing an order referred to in
clause (A)(ii) exceeding \$100,000, shall furnish for publication by the
Secretary of Commerce a notice announcing the award or order if there is
likely to be any subcontract under such contract or order.

\(2\) The Secretary of Commerce shall publish promptly in the Commerce
Business Daily each notice required by paragraph (1).

\(3\) Whenever an executive agency is required by paragraph (1)(A) to
furnish a notice to the Secretary of Commerce, such executive agency may
not---

\(A\) issue the solicitation earlier than 15 days after the date on
which the notice is published by the Secretary of Commerce; or

\(B\) in the case of a contract or order estimated to be greater than
the simplified acquisition threshold, establish a deadline for the
submission of all bids or proposals in response to the notice required
by paragraph (1)(A) that---

\(i\) in the case of an order under a basic agreement, basic ordering
agreement, or similar arrangement, is earlier than the date 30 days
after the date the notice required by paragraph (1)(A)(ii) is published;

\(ii\) in the case of a solicitation for research and development, is
earlier than the date 45 days after the date the notice required by
paragraph (1)(A)(i) is published; or

\(iii\) in any other case, is earlier than the date 30 days after the
date the solicitation is issued.

\(f\) Each notice of solicitation required by subparagraph (A) or (B) of
subsection (e)(1) shall include---

\(1\) an accurate description of the property or services to be
contracted for, which description (A) shall not be unnecessarily
restrictive of competition, and (B) shall include, as appropriate, the
agency nomenclature, National Stock Number or other part number, and a
brief description of the item\'s form, fit, or function, physical
dimensions, predominant material of manufacture, or similar information
that will assist a prospective contractor to make an informed business
judgment as to whether a copy of the solicitation should be requested;

\(2\) provisions that---

\(A\) state whether the technical data required to respond to the
solicitation will not be furnished as part of such solicitation, and
identify the source in the Government, if any, from which the technical
data may be obtained; and

\(B\) state whether an offeror, its product, or service must meet a
qualification requirement in order to be eligible for award, and, if so,
identify the office from which a qualification requirement may be
obtained;

\(3\) the name, business address, and telephone number of the
contracting officer;

\(4\) a statement that all responsible sources may submit a bid,
proposal, or quotation (as appropriate) which shall be considered by the
agency;

\(5\) in the case of a procurement using procedures other than
competitive procedures, a statement of the reason justifying the use of
such procedures and the identity of the intended source; and

\(6\) in the case of a contract in an amount estimated to be greater
than \$25,000 but not greater than the simplified acquisition
threshold---

\(A\) a description of the procedures to be used in awarding the
contract; and

\(B\) a statement specifying the periods for prospective offerors and
the contracting officer to take the necessary preaward and award
actions.

\(g\) (1) A notice is not required under subsection (e)(1)

if---

\(A\) the proposed procurement is for an amount not greater than the
simplified acquisition threshold and is to be conducted by---

\(i\) using widespread electronic public notice of the solicitation in a
form that allows convenient and universal user access through a single,
Government-wide point of entry; and

\(ii\) permitting the public to respond to the solicitation
electronically.

\(B\) the notice would disclose the executive agency\'s needs and the
disclosure of such needs would compromise the national security;

\(C\) the proposed procurement would result from acceptance of---

\(i\) any unsolicited proposal that demonstrates a unique and innovative
research concept and the publication of any notice of such unsolicited
research proposal would disclose the originality of thought or
innovativeness of the proposal or would disclose proprietary information
associated with the proposal; or

\(ii\) a proposal submitted under section 9 of this Act;

\(D\) the procurement is made against an order placed under a
requirements contract;

\(E\) the procurement is made for perishable subsistence supplies;

\(F\) the procurement is for utility services, other than
telecommunication services, and only one source is available; or

\(G\) the procurement is for the services of an expert for use in any
litigation or dispute (including preparation for any foreseeable
litigation or dispute) that involves or could involve the Federal
Government in any trial, hearing, or proceeding before any court,
administrative tribunal, or agency, or in any part of an alternative
dispute resolution process, whether or not the expert is expected to
testify.

\(2\) The requirements of subsection (a)(1)(A) do not apply to any
procurement under conditions described in paragraph (2), (3), (4), (5),
or (7) of section 303(c) of the Federal Property and Administrative
Services Act of 1949 (41 U.S.C. 253(c)) or paragraph (2), (3), (4), (5),
or (7) of section 2304(c) of title 10, United States Code.

\(3\) The requirements of subsection (a)(1)(A) shall not apply in the
case of any procurement for which the head of the executive agency makes
a determination in writing, after consultation with the Administrator
for Federal Procurement Policy and the Administrator of the Small
Business Administration, that it is not appropriate or reasonable to
publish a notice before issuing a solicitation.

\(h\) (1) An executive agency may not award a contract using procedures
other than competitive procedures unless---

\(A\) except as provided in paragraph (2), a written justification for
the use of such procedures has been approved---

\(i\) in the case of a contract for an amount exceeding \$100,000 (but
equal to or less than \$1,000,000), by the advocate for competition for
the procuring activity (without further delegation);

\(ii\) in the case of a contract for an amount exceeding \$1,000,000
(but equal to or less than \$10,000,000), by the head of the procuring
activity or a delegate who, if a member of the Armed Forces, is a
general or flag officer, or, if a civilian, is serving in a position in
grade GS‑16 or above under the General Schedule (or in a comparable or
higher position under another schedule); or

\(iii\) in the case of a contract for an amount exceeding \$10,000,000,
by the senior procurement executive of the agency designated pursuant to
section 16(3) of the Office of Federal Procurement Policy Act (41 U.S.C.
414(3)) (without further delegation); and

\(B\) all other requirements applicable to the use of such procedures
under title III of the Federal Property and Administrative Services Act
of 1949 (41 U.S.C. 251 et seq.) or chapter 137 of title 10, United
States Code, as appropriate, have been satisfied.

\(2\) The same exceptions as are provided in section 303(f)(2) of the
Federal Property and Administrative Services Act of 1949 (41 U.S.C.
253(f)(2)) or section 2304(f)(2) of title 10, United States Code, shall
apply with respect to the requirements of paragraph (1)(A) of this
subsection in the same manner as such exceptions apply to the
requirements of section 303(f)(1) of such Act or section 2304(f)(1) of
such title, as appropriate.

\(i\) An executive agency shall make available to any business concern,
or the authorized representative of such concern, the complete
solicitation package for any on‑going procurement announced pursuant to
a notice under subsection (e). An executive agency may require the
payment of a fee, not exceeding the actual cost of duplication, for a
copy of such package.

\(j\) For purposes of this section, the term \"executive agency\" has
the meaning provided such term in section 4(1) of the Office of Federal
Procurement Policy Act (41 U.S.C. 403(1)).

\(k\) NOTICES OF SUBCONTRACTING OPPORTUNITIES---

\(1\) IN GENERAL.---Notices of subcontracting opportunities may be
submitted for publication in the Commerce Business Daily by---

\(A\) a business concern awarded a contract by an executive agency
subject to subsection (e)(1)(C); and

\(B\) a business concern that is a subcontractor or supplier (at any
tier) to such contractor having a subcontracting opportunity in excess
of \$10,000.

\(2\) CONTENT OF NOTICE.---The notice of a subcontracting opportunity
shall include---

\(A\) a description of the business opportunity that is comparable to
the description specified in paragraphs (1), (2), (3), and (4) of
subsection (f); and

\(B\) the due date for receipt of offers.

\(l\) MANAGEMENT ASSISTANCE FOR SMALL BUSINESSES AFFECTED BY MILITARY
OPERATIONS.---The Administration shall utilize, as appropriate, its
entrepreneurial development and management assistance programs,
including programs involving State or private sector partners, to
provide business counseling and training to any small business concern
adversely affected by the deployment of units of the Armed Forces of the
United States in support of a period of military conflict (as defined in
section 7(n)(1)).

\(m\) PROCUREMENT PROGRAM FOR WOMEN-OWNED SMALL BUSINESS CONCERNS.---

\(1\) DEFINITIONS.---In this subsection, the following definitions
apply:

\(A\) CONTRACTING OFFICER.---The term "contracting officer" has the
meaning given such term in section 27(f)(5) of the Office of Federal
Procurement Policy Act (41 U.S.C. 423(f)(5)).

\(B\) SMALL BUSINESS CONCERN OWNED AND CONTROLLED BY WOMEN.---The term
"small business concern owned and controlled by women" has the meaning
given such term in section 3(n), except that ownership shall be
determined without regard to any community property law.

\(2\) AUTHORITY TO RESTRICT COMPETITION.---In accordance with this
subsection, a contracting officer may restrict competition for any
contract for the procurement of goods or services by the Federal
Government to small business concerns owned and controlled by women,
if---

\(A\) each of the concerns is not less than 51 percent owned by 1 or
more women who are economically disadvantaged (and such ownership is
determined without regard to any community property law);

\(B\) the contracting officer has a reasonable expectation that 2 or
more small business concerns owned and controlled by women will submit
offers for the contract;

\(C\) the contract is for the procurement of goods or services with
respect to an industry identified by the Administrator pursuant to
paragraph (3);

\(D\) the anticipated award price of the contract (including options)
does not exceed---

\(i\) \$5,000,000, in the case of a contract assigned an industrial
classification code for manufacturing; or

\(ii\) \$3,000,000, in the case of all other contracts;

\(E\) in the estimation of the contracting officer, the contract award
can be made at a fair and reasonable price; and

\(F\) each of the concerns---

\(i\) is certified by a Federal agency, a State government, or a
national certifying entity approved by the Administrator, as a small
business concern owned and controlled by women; or

\(ii\) certifies to the contracting officer that it is a small business
concern owned and controlled by women and provides adequate
documentation, in accordance with standards established by the
Administration, to support such certification.

\(3\) WAIVER.---With respect to a small business concern owned and
controlled by women, the Administrator may waive subparagraph (2)(A) if
the Administrator determines that the concern is in an industry in which
small business concerns owned and controlled by women are substantially
underrepresented.

\(4\) IDENTIFICATION OF INDUSTRIES.---The Administrator shall conduct a
study to identify industries in which small business concerns owned and
controlled by women are underrepresented with respect to Federal
procurement contracting.

\(5\) ENFORCEMENT; PENALTIES.---

\(A\) VERIFICATION OF ELIGIBILITY.---In carrying out this subsection,
the Administrator shall establish procedures relating to---

\(i\) the filing, investigation, and disposition by the Administration
of any challenge to the eligibility of a small business concern to
receive assistance under this subsection (including a challenge, filed
by an interested party, relating to the veracity of a certification made
or information provided to the Administration by a small business
concern under paragraph (2)(F)); and

\(ii\) verification by the Administrator of the accuracy of any
certification made or information provided to the Administration by a
small business concern under paragraph (2)(F).

\(B\) EXAMINATIONS.---The procedures established under subparagraph (A)
may provide for program examinations (including random program
examinations) by the Administrator of any small business concern making
a certification or providing information to the Administrator under
paragraph (2)(F).

\(C\) PENALTIES.---In addition to the penalties described in section
16(d), any small business concern that is determined by the
Administrator to have misrepresented the status of that concern as a
small business concern owned and controlled by women for purposes of
this subsection, shall be subject to---

\(i\) section 1001 of title 18, United States Code; and

\(ii\) sections 3729 through 3733 of title 31, United States Code;

\(6\) PROVISION OF DATA.---Upon the request of the Administrator, the
head of any Federal department or agency shall promptly provide to the
Administrator such information as the Administrator determines to be
necessary to carry out this subsection.

\(n\) BUSINESSLINC GRANTS AND COOPERATIVE AGREEMENTS.---

\(1\) IN GENERAL.---In accordance with this subsection, the
Administrator may make grants to enter into cooperative agreements with
any coalition of private entities, public entities, or any combination
of private and public entities---

\(A\) to expand business-to-business relationships between large and
small businesses; and

\(B\) to provide businesses, directly or indirectly, with online
information and a database of companies that are interested in
mentor-protégé programs or community-based, statewide, or local business
development programs.

\(2\) MATCHING REQUIREMENT.---Subject to subparagraph (B), the
Administrator may make a grant to a coalition under paragraph (1) only
if the coalition provides for activities described in paragraph (1)(A)
or (1)(B) an amount, either in kind or in cash, equal to the grant
amount.

\(3\) AUTHORIZATION OF APPROPRIATIONS.---There is authorized to be
appropriated to carry out this subsection \$6,600,000, to remain
available until expended, for each of fiscal years 2001 through 2006.

§ 9. (a) Research and development are major factors in the growth and
progress of industry and the national economy. The expense of carrying
on research and development programs is beyond the means of many
small‑business concerns, and such concerns are handicapped in obtaining
the benefits of research and development programs conducted at
Government expense. These small‑business concerns are thereby placed at
a competitive disadvantage. This weakens the competitive free enterprise
system and prevents the orderly development of the national economy. It
is the policy of the Congress that assistance be given to small‑business
concerns to enable them to undertake and to obtain the benefits of
research and development in order to maintain and strengthen the
competitive free enterprise system and the national economy.

\(b\) It shall be the duty of the Administration, and it is hereby
empowered---

\(l\) to assist small‑business concerns to obtain Government contracts
for research and development;

\(2\) to assist small‑business concerns to obtain the benefits of
research and development performed under Government contracts or at
Government expense;

\(3\) to provide technical assistance to small‑business concerns to
accomplish the purposes of this section; and

\(4\) to develop and maintain a source file and an information program
to assure each qualified and interested small business concern the
opportunity to participate in Federal agency small business innovation
research programs and small business technology transfer programs;

\(5\) to coordinate with participating agencies a schedule for release
of SBIR and STTR solicitations, and to prepare a master release schedule
so as to maximize small businesses\' opportunities to respond to
solicitations;

\(6\) to independently survey and monitor the operation of SBIR and STTR
programs within participating Federal agencies; and

\(7\) to report not less than annually to the Committee on Small
Business of the Senate and the Committee on Science and the Committee on
Small Business of the House of Representatives, on the SBIR and STTR
programs of the Federal agencies and the Administration\'s information
and monitoring efforts related to the SBIR programs, including the data
on output and outcomes collected pursuant to subsections (g)(10) and
(o)(9) , and (o)(15), the number of proposals received from, and the
number and total amount of awards to, HUBZone small business concerns
under each of the SBIR and STTR programs, and a description of the
extent to which Federal agencies are providing in a timely manner
information needed to maintain the database described in subsection (k).

\(c\) The Administration is authorized to consult and cooperate with all
Government agencies and to make studies and recommendations to such
agencies, and such agencies are authorized and directed to cooperate
with the Administration in order to carry out and to accomplish the
purposes of this section.

\(d\) (l) The Administrator is authorized to consult with
representatives of small‑business concerns with a view to assisting and
encouraging such firms to undertake joint programs for research and
development carried out through such corporate or other mechanism as may
be most appropriate for the purpose. Such joint programs may, among
other things, include the following purposes:

\(A\) to construct, acquire, or establish laboratories and other
facilities for the conduct of research;

\(B\) to undertake and utilize applied research;

\(C\) to collect research information related to a particular industry
and disseminate it to participating members;

\(D\) to conduct applied research on a protected, proprietary, and
contractual basis with member or nonmember firms, Government agencies,
and others;

\(E\) to prosecute applications for patents and render patent services
for participating members; and

\(F\) to negotiate and grant licenses under patents held under the joint
program, and to establish corporations designed to exploit particular
patents obtained by it.

\(2\) The Administrator may, after consultation with the Attorney
General and the Chairman of the Federal Trade Commission, and with the
prior written approval of the Attorney General, approve any agreement
between small‑business firms providing for a joint program of research
and development, if the Administrator finds that the joint program
proposed will maintain and strengthen the free enterprise system and the
economy of the Nation. The Administrator or the Attorney General may at
any time withdraw his approval of the agreement and the joint program of
research and development covered thereby, if he finds that the agreement
or the joint program carried on under it is no longer in the best
interests of the competitive free enterprise system and the economy of
the Nation. A copy of the statement of any such finding and approval
intended to be within the coverage of this subsection, and a copy of any
modification or withdrawal of approval, shall be published in the
Federal Register. The authority conferred by this subsection on the
Administrator shall not be delegated by him.

\(3\) No act or omission to act pursuant to and within the scope of any
joint program for research and development, under an agreement approved
by the Administrator under this subsection, shall be construed to be
within the prohibitions of the antitrust laws or the Federal Trade
Commission Act. Upon publication in the Federal Register of the notice
of withdrawal of his approval of the agreement granted under this
subsection, either by the Administrator or by the Attorney General, the
provisions of this subsection shall not apply to any subsequent act or
omission to act by reason of such agreement or approval.

\(e\) For the purpose of this section---

\(1\) the term \"extramural budget\" means the sum of the total
obligations minus amounts obligated for such activities by employees of
the agency in or through Government‑owned, Government‑ operated
facilities, except that for the Department of Energy it shall not
include amounts obligated for atomic energy defense programs solely for
weapons activities or for naval reactor programs, and except that for
the Agency for International Development it shall not include amounts
obligated solely for general institutional support of international
research centers or for grants to foreign countries;

\(2\) the term \"Federal agency\" means an executive agency as defined
in section 105 of title 5, United States Code, or a military department
as defined in section 102 of such title, except that it does not include
any agency within the Intelligence Community (as the term is defined in
section 3.4(f) of Executive Order 12333 or its successor orders);

\(3\) the term \"funding agreement\" means any contract, grant, or
cooperative agreement entered into between any Federal agency and any
small business for the performance of experimental, developmental, or
research work funded in whole or in part by the Federal Government;

\(4\) the term \"Small Business Innovation Research Program\" or
\"SBIR\" means a program under which a portion of a Federal agency\'s
research or research and development effort is reserved for award to
small business concerns through a uniform process having ‑‑

\(A\) a first phase for determining, insofar as possible, the scientific
and technical merit and feasibility of ideas that appear to have
commercial potential, as described in subparagraph (B), submitted
pursuant to SBIR program solicitations;

\(B\) a second phase, to further develop proposals which meet particular
program needs, in which awards shall be made based on the scientific and
technical merit and feasibility of the proposals, as evidenced by the
first phase, considering, among other things, the proposal\'s commercial
potential, as evidenced by---

\(i\) the small business concern\'s record of successfully
commercializing SBIR or other research;

\(ii\) the existence of second phase funding commitments from private
sector or non-SBIR funding sources;

\(iii\) the existence of third phase, follow-on commitments for the
subject of the research; and

\(iv\) the presence of other indicators of the commercial potential of
the idea; and

\(C\) where appropriate, a third phase---

\(i\) in which commercial applications of SBIR-funded research or
research and development are funded by non-Federal sources of capital
or, for products or services intended for use by the Federal Government,
by follow-on non-SBIR Federal funding awards; or

\(ii\) for which awards from non-SBIR Federal funding sources are used
for the continuation of research or research and development that has
been competitively selected using peer review or scientific review
criteria;

\(5\) the term \"research\" or \"research and development\" means any
activity which is (A) a systematic, intensive study directed toward
greater knowledge or understanding of the subject studied; (B) a
systematic study directed specifically toward applying new knowledge to
meet a recognized need; or (C) a systematic application of knowledge
toward the production of useful materials, devices, and systems or
methods, including design, development, and improvement of prototypes
and new processes to meet specific requirements;

\(6\) the term \"Small Business Technology Transfer Program\" or
\"STTR\" means a program under which a portion of a Federal agency\'s
extramural research or research and development effort is reserved for
award to small business concerns for cooperative research and
development through a uniform process having---

\(A\) a first phase, to determine, to the extent possible, the
scientific, technical, and commercial merit and feasibility of ideas
submitted pursuant to STTR program solicitations;

\(B\) a second phase, to further develop proposed ideas to meet
particular program needs, in which awards shall be made based on the
scientific, technical, and commercial merit and feasibility of the idea,
as evidenced by the first phase and by other relevant information; and

\(C\) where appropriate, a third phase---

\(i\) in which commercial applications of STTR-funded research or
research and development are funded by non-Federal sources of capital
or, for products or services intended for use by the Federal Government,
by follow-on non-STTR Federal funding awards; and

\(ii\) for which awards from non-STTR Federal funding sources are used
for the continuation of research or research and development that has
been competitively selected using peer review or scientific review
criteria;

\(7\) the term \"cooperative research and development\" means research
or research and development conducted jointly by a small business
concern and a research institution in which not less than 40 percent of
the work is performed by the small business concern, and not less than
30 percent of the work is performed by the research institution; and

\(8\) the term \"research institution\" means a nonprofit institution,
as defined in section 4(5) of the Stevenson-Wydler Technology Innovation
Act of 1980, and includes federally funded research and development
centers, as identified by the National Scientific Foundation in
accordance with the governmentwide Federal Acquisition Regulation issued
in accordance with section 35(c)(1) of the Office of Federal Procurement
Policy Act (or any successor regulation thereto).

\(f\) FEDERAL AGENCY EXPENDITURES FOR THE SBIR PROGRAM.---

\(1\) REQUIRED EXPENDITURE AMOUNTS.---Each Federal agency which has an
extramural budget for research or research and development in excess of
\$100,000,000 for fiscal year 1992, or any fiscal year thereafter, shall
expend with small business concerns---

\(A\) not less than 1.5 percent of such budget in each of fiscal years
1993 and 1994;

\(B\) not less than 2.0 percent of such budget in each of fiscal years
1995 and 1996; and

\(C\) not less than 2.5 percent of such budget in each fiscal year
thereafter,

specifically in connection with SBIR programs which meet the
requirements of this section, policy directives, and regulations issued
under this section.

\(2\) LIMITATIONS.---A Federal agency shall not---

\(A\) use any of its SBIR budget established pursuant to paragraph (1)
for the purpose of funding administrative costs of the program,
including costs associated with salaries and expenses; or

\(B\) make available for the purpose of meeting the requirements of
paragraph (1) an amount of its extramural budget for basic research
which exceeds the percentages specified in paragraph (1).

\(3\) EXCLUSION OF CERTAIN FUNDING AGREEMENTS.---Funding agreements with
small business concerns for research or research and development which
result from competitive or single source selections other than an SBIR
program shall not be considered to meet any portion of the percentage
requirements of paragraph (1).

\(g\) Each Federal agency required by subsection (f) to establish a
small business innovation research program shall, in accordance with
this Act and regulations issued hereunder---

\(1\) unilaterally determine categories of projects to be in its SBIR
program;

\(2\) issue small business innovation research solicitations in
accordance with a schedule determined cooperatively with the Small
Business Administration;

\(3\) unilaterally determine research topics within the agency\'s SBIR
solicitations, giving special consideration to broad research topics and
to topics that further 1 or more critical technologies, as identified
by---

\(A\) the National Critical Technologies Panel (or its successor) in the
1991 report required under section 603 of the National Science and
Technology Policy, Organization, and Priorities Act of 1976, and in
subsequent reports issued under that authority; or

\(B\) the Secretary of Defense, in the 1992 report issued in accordance
with section 2522 of title 10, United States Code, and in subsequent
reports issued under that authority;

\(4\) unilaterally receive and evaluate proposals resulting from SBIR
proposals;

\(5\) subject to subsection (l), unilaterally select awardees for its
SBIR funding agreements and inform each awardee under such an agreement,
to the extent possible, of the expenses of the awardee that will be
allowable under the funding agreement;

\(6\) administer its own SBIR funding agreements (or delegate such
administration to another agency);

\(7\) make payments to recipients of SBIR funding agreements on the
basis of progress toward or completion of the funding agreement
requirements and, in all cases, make payment to recipients under such
agreements in full, subject to audit, on or before the last day of the
12-month period beginning on the date of completion of such
requirements;

\(8\) make an annual report on the SBIR program to the Small Business
Administration and the Office of Science and Technology Policy;

\(9\) include, as part of its annual performance plan as required by
subsections (a) and (b) of section 1115 of title 31, United States Code,
a section on its SBIR program, and shall submit such section to the
Committee on Small Business of the Senate, and the Committee on Science
and the Committee on Small Business of the House of Representatives; and

\(10\) collect, and maintain in a common format in accordance with
subsection (v), such information from awardees as is necessary to assess
the SBIR program, including information necessary to maintain the
database described in subsection (k).

\(h\) In addition to the requirements of subsection (f), each Federal
agency which has a budget for research or research and development in
excess of \$20,000,000 for any fiscal year beginning with fiscal year
1983 or subsequent fiscal year shall establish goals specifically for
funding agreements for research or research and development to small
business concerns, and no goal established under this subsection shall
be less than the percentage of the agency\'s research or research and
development budget expended under funding agreements with small business
concerns in the immediately preceding fiscal year.

\(i\) ANNUAL REPORTING.---

\(1\) IN GENERAL.---Each Federal agency required by this section to have
an SBIR program or to establish goals shall report annually to the Small
Business Administration the number of awards pursuant to grants,
contracts, or cooperative agreements over \$10,000 in amount and the
dollar value of all such awards, identifying SBIR awards and comparing
the number and amount of such awards with awards to other than small
business concerns.

\(2\) CALCULATION OF EXTRAMURAL BUDGET.---

\(A\) METHODOLOGY.---Not later than 4 months after the date of enactment
of each appropriations Act for a Federal agency required by this section
to have an SBIR program, the Federal agency shall submit to the
Administrator a report, which shall include a description of the
methodology used for calculating the amount of the extramural budget of
that Federal agency.

\(B\) ADMINISTRATOR'S ANALYSIS.---The Administrator shall include an
analysis of the methodology received from each Federal agency referred
to in subparagraph (A) in the report required by subsection (b)(7).

\(j\) (1) POLICY DIRECTIVES.---The Small Business Administration, after
consultation with the Administrator of the Office of Federal Procurement
Policy, the Director of the Office of Science and Technology Policy, and
the Intergovernmental Affairs Division of the Office of Management and
Budget, shall, within one hundred and twenty days of the enactment of
the Small Business Innovation Development Act of 1982, issue policy
directives for the general conduct of the SBIR programs within the
Federal Government, including providing for---

\(A\) simplified, standardized, and timely SBIR solicitations;

\(B\) a simplified, standardized funding process which provides for

\(i\) the timely receipt and review of proposals;

\(ii\) outside peer review for at least phase two proposals, if
appropriate;

\(iii\) protection of proprietary information provided in proposals;

\(iv\) selection of awardees;

\(v\) retention of rights in data generated in the performance of the
contract by the small business concern;

\(vi\) transfer of title to property provided by the agency to the small
business concern if such a transfer would be more cost effective than
recovery of the property by the agency;

\(vii\) cost sharing; and

\(viii\) cost principles and payment schedules;

\(C\) exemptions from the regulations under paragraph (2) if national
security or intelligence functions clearly would be jeopardized;

\(D\) minimizing regulatory burden associated with participation in the
SBIR program for the small business concern which will stimulate the
cost‑effective conduct of Federal research and development and the
likelihood of commercialization of the results of research and
development conducted under the SBIR program;

\(E\) simplified, standardized, and timely annual report on the SBIR
program to the Small Business Administration and the Office of Science
and Technology Policy;

\(F\) standardized and orderly withdrawal from program participation by
an agency having a SBIR program; at the discretion of the
Administration, such directives may require a phased withdrawal over a
period of time sufficient in duration to minimize any adverse impact on
small business concerns; and

\(G\) the voluntary participation in a SBIR program by a Federal agency
not required to establish such a program pursuant to subsection (f).

\(2\) MODIFICATIONS.\--Not later than 90 days after the enactment of the
Small Business Research and Development Enhancement Act of 1992, the
Administrator shall modify the policy directives issued pursuant to this
subsection to provide for---

\(A\) retention by a small business concern of the rights to data
generated by the concern in the performance of an SBIR award for a
period of not less than 4 years;

\(B\) continued use by a small business concern participating in the
third phase of the SBIR program, as a directed bailment, of any property
transferred by a Federal agency to the small business concern in the
second phase of an SBIR program for a period of not less than 2 years,
beginning on the initial date of the concern\'s participation in the
third phase of such program;

\(C\) procedures to ensure, to the extent practicable, that an agency
which intends to pursue research, development, or production of a
technology developed by a small business concern under an SBIR program
enters into follow-on non-SBIR funding agreements with the small
business concern for such research, development, or production;

\(D\) an increase to \$100,000 in the first phase of an SBIR program,
and to \$750,000 in the second phase of an SBIR program, and an
adjustment of such amounts once every 5 years to reflect economic
adjustments and programmatic considerations;

\(E\) a process for notifying the participating SBIR agencies and
potential SBIR participants of the 1991, 1992, and the current critical
technologies, as identified---

\(i\) by the National Critical Technologies Panel (or its successor), in
accordance with section 603 of the National Science and Technology
Policy, Organization, and Priorities Act of 1976; or

\(ii\) by the Secretary of Defense, in accordance with section 2522 of
title 10, United States Code;

\(F\) enhanced outreach efforts to increase the participation of
socially and economically disadvantaged small business concerns, as
defined in section 8(a)(4), and the participation of small businesses
that are 51 percent owned and controlled by women in technological
innovation and in SBIR programs, including the third phase of such
programs, and the collection of data to document such participation;

\(G\) technical and programmatic guidance to encourage agencies to
develop gap-funding programs to address the delay between an award for
the first phase of an SBIR program and the application for and extension
of an award for the second phase of such program;

\(H\) procedures to ensure that a small business concern that submits a
proposal for a funding agreement for the first phase of an SBIR program
and that has received more than 15 second phase SBIR awards during the
preceding 5 fiscal years is able to demonstrate the extent to which it
was able to secure third phase funding to develop concepts resulting
from previous second phase SBIR awards; and

\(I\) procedures to ensure that agencies participating in the SBIR
program retain the information submitted under subparagraph (H) at least
until the General Accounting Office submits the report required under
section 105 of the Small Business Research and Development Enhancement
Act of 1992.

\(3\) ADDITIONAL MODIFICATIONS.---Not later than 120 days after the date
of enactment of the Small Business Innovation Research Program
Reauthorization Act of 2000, the Administrator shall modify the policy
directives issued pursuant to this subsection---

\(A\) to clarify that the rights provided for under paragraph (2)(A)
apply to all Federal funding awards under this section, including the
first phase (as described in subsection (e)(4)(A)), the second phase (as
described in subsection (e)(4)(B)), and the third phase (as described in
subsection (e)(4)(C));

\(B\) to provide for the requirement of a succinct commercialization
plan with each application for a second phase award that is moving
toward commercialization;

\(C\) to require agencies to report to the Administration, not less
frequently than annually, all instances in which an agency pursued
research, development, or production of a technology developed by a
small business concern using an award made under the SBIR program of
that agency, and determined that it was not practicable to enter into a
follow-on non-SBIR program funding agreement with the small business
concern, which report shall include, at a minimum---

\(i\) the reasons why the follow-on funding agreement with the small
business concern was not practicable;

\(ii\) the identity of the entity with which the agency contracted to
perform the research, development, or production; and

\(iii\) a description of the type of funding agreement under which the
research, development, or production was obtained; and

\(D\) to implement subsection (v), including establishing standardized
procedures for the provision of information pursuant to subsection
(k)(3).

\(k\) DATABASE.---

\(1\) PUBLIC DATABASE.---Not later than 180 days after the date of
enactment of the Small Business Innovation Research Program
Reauthorization Act of 2000, the Administrator shall develop, maintain,
and make available to the public a searchable, up-to-date, electronic
database that includes---

\(A\) the name, size, location, and an identifying number assigned by
the Administrator, of each small business concern that has received a
first phase or second phase SBIR or STTR award from a Federal agency;

\(B\) a description of each first phase or second phase SBIR or STTR
award received by that small business concern, including---

\(i\) an abstract of the project funded by the award, excluding any
proprietary information so identified by the small business concern;

\(ii\) the Federal agency making the award; and

\(iii\) the date and amount of the award;

\(C\) an identification of any business concern or subsidiary
established for the commercial application of a product or service for
which an SBIR or STTR award is made; and

\(D\) information regarding mentors and Mentoring Networks, as required
by section 35(d).

\(E\) with respect to assistance under the STTR program only---

\(i\) whether the small business concern or the research institution
initiated their collaboration on each assisted STTR project;

\(ii\) whether the small business concern or the research institution
originated any technology relating to the assisted STTR project;

\(iii\) the length of time it took to negotiate any licensing agreement
between the small business concern and the research institution under
each assisted STTR project; and

\(iv\) how the proceeds from commercialization, marketing, or sale of
technology resulting from each assisted STTR project were allocated (by
percentage) between the small business concern and the research
institution.

\(2\) GOVERNMENT DATABASE.---Not later than 180 days after the date of
enactment of the Small Business Innovation Research Program
Reauthorization Act of 2000, the Administrator, in consultation with
Federal agencies required to have an SBIR program pursuant to subsection
(f)(1), shall develop and maintain a database to be used solely for SBIR
program evaluation that---

\(A\) contains for each second phase award made by a Federal agency---

\(i\) information collected in accordance with paragraph (3) on revenue
from the sale of new products or services resulting from the research
conducted under the award;

\(ii\) information collected in accordance with paragraph (3) on
additional investment from any source, other than first phase or second
phase SBIR or STTR awards, to further the research and development
conducted under the award; and

\(iii\) any other information received in connection with the award that
the Administrator, in conjunction with the SBIR program managers of
Federal agencies, considers relevant and appropriate;

\(B\) includes any narrative information that a small business concern
receiving a second phase award voluntarily submits to further describe
the outputs and outcomes of its awards;

\(C\) includes for each applicant for a first phase or second phase
award that does not receive such an award---

\(i\) the name, size, and location, and an identifying number assigned
by the Administration;

\(ii\) an abstract of the project; and

\(iii\) the Federal agency to which the application was made;

\(D\) includes any other data collected by or available to any Federal
agency that such agency considers may be useful for SBIR program
evaluation; and

\(E\) is available for use solely for program evaluation purposes by the
Federal Government or, in accordance with policy directives issued by
the Administration, by other authorized persons who are subject to a use
and nondisclosure agreement with the Federal Government covering the use
of the database.

\(3\) UPDATING INFORMATION FOR DATABASE.---

\(A\) IN GENERAL.---A small business concern applying for a second phase
award under this section shall be required to update information in the
database established under this subsection for any prior second phase
award received by that small business concern. In complying with this
paragraph, a small business concern may apportion sales or additional
investment information relating to more than one second phase award
among those awards, if it notes the apportionment for each award.

\(B\) ANNUAL UPDATES UPON TERMINATION.---A small business concern
receiving a second phase award under this section shall---

\(i\) update information in the database concerning that award at the
termination of the award period; and

\(ii\) be requested to voluntarily update such information annually
thereafter for a period of 5 years.

\(4\) PROTECTION OF INFORMATION.---Information provided under paragraph
(2) shall be considered privileged and confidential and not subject to
disclosure pursuant to section 552 of title 5, Untied States Code.

\(5\) RULE OF CONSTRUCTION.---Inclusion of information in the database
under this subsection shall not be considered to be publication for
purposes of subsection (a) or (b) of section 102 of title 35, United
States Code.

\(l\) REPORTING OF AWARDS MADE FROM SINGLE PROPOSAL, TO MULTIPLE AWARD
WINNERS, OR TO CRITICAL TECHNOLOGY TOPICS\--

\(1\) SINGLE PROPOSAL.---If a Federal agency required to establish an
SBIR program under subsection (f) makes an award with respect to an SBIR
solicitation topic or subtopic for which the agency received only 1
proposal, the agency shall provide written justification for making the
award in its next quarterly report to the Administration and in the
agency\'s next annual report required under subsection (g)(8).

\(2\) MULTIPLE AWARDS.---An agency referred to in paragraph (1) shall
include in its next annual report required under subsection (g)(8) an
accounting of the awards the agency has made for the first phase of an
SBIR program during the reporting period to entities that have received
more than 15 awards for the second phase of an SBIR program during the
preceding 5 fiscal years.

\(3\) CRITICAL TECHNOLOGY AWARDS.---An agency referred to in paragraph
(1) shall include in its next annual report required under subsection
(g)(8) an accounting of the number of awards it has made to critical
technology topics, as defined in subsection (g)(3), including an
identification of the specific critical technologies topics, and the
percentage by number and dollar amount of the agency\'s total SBIR
awards to such critical technology topics.

\(m\) TERMINATION.---The authorization to carry out the Small Business
Innovation Research Program under this section shall terminate on
September 30, 2008.

\(n\) REQUIRED EXPENDITURES FOR STTR BY FEDERAL AGENCIES.---

\(1\) REQUIRED EXPENDITURE AMOUNTS.---

\(A\) IN GENERAL.---With respect to each fiscal year through fiscal year
2009, each Federal agency that has an extramural budget for research, or
research and development, in excess of \$1,000,000,000 for that fiscal
year, shall expend with small business concerns not less than the
percentage of that extramural budget specified in subparagraph (B),
specifically in connection with STTR programs that meet the requirements
of this section and any policy directives and regulations issued under
this section.

\(B\) EXPENDITURE AMOUNTS.---The percentage of the extramural budget
required to be expended by an agency in accordance with subparagraph (A)
shall be---

\(i\) 0.15 percent for each fiscal year through fiscal year 2003; and

\(ii\) 0.3 percent for fiscal year 2004 and each fiscal year thereafter.

\(2\) LIMITATIONS.---A Federal agency shall not---

\(A\) use any of its STTR budget established pursuant to paragraph (1)
for the purpose of funding administrative costs of the program,
including costs associated with salaries and expenses, or, in the case
of a small business concern or a research institution, costs associated
with salaries, expenses, and administrative overhead (other than those
direct or indirect costs allowable under guidelines of the Office of
Management and Budget and the governmentwide Federal Acquisition
Regulation issued in accordance with section 25(c)(1) of the Office of
Federal Procurement Policy Act); or

\(B\) make available for the purpose of meeting the requirements of
paragraph (1) an amount of its extramural budget for basic research
which exceeds the percentage specified in paragraph (1).

\(3\) EXCLUSION OF CERTAIN FUNDING AGREEMENTS.---Funding agreements with
small business concerns for research or research and development which
result from competitive or single source selections other than an STTR
program shall not be considered to meet any portion of the percentage
requirements of paragraph (1).

\(o\) FEDERAL AGENCY STTR AUTHORITY.---Each Federal agency required to
establish an STTR program in accordance with subsection (n) and
regulations issued under this Act, shall---

\(1\) unilaterally determine categories of projects to be included in
its STTR program;

\(2\) issue STTR solicitations in accordance with a schedule determined
cooperatively with the Administration;

\(3\) unilaterally determine research topics within the agency\'s STTR
solicitations, giving special consideration to broad research topics and
to topics that further 1 or more critical technologies, as identified---

\(A\) by the National Critical Technologies Panel (or its successor) in
reports required under section 603 of the National Science and
Technology Policy, Organization, and Priorities Act of 1976; or

\(B\) by the Secretary of Defense, in accordance with section 2522 of
title 10, United States Code;

\(4\) unilaterally receive and evaluate proposals resulting from STTR
solicitations;

\(5\) unilaterally select awardees for its STTR funding agreements and
inform each awardee under such an agreement, to the extent possible, of
the expenses of the awardee that will be allowable under the funding
agreement;

\(6\) administer its own STTR funding agreements (or delegate such
administration to another agency);

\(7\) make payments to recipients of STTR funding agreements on the
basis of progress toward or completion of the funding agreement
requirements and, in all cases, make payment to recipients under such
agreements in full, subject to audit, on or before the last day of the
12-month period beginning on the date of the completion of such
requirements;

\(8\) include, as part of its annual performance plan as required by
subsections (a) and (b) of section 1115 of title 31, United States Code,
a section on its STTR program, and shall submit such section to the
Committee on Small Business of the Senate, and the Committee on Science
and the Committee on Small Business of the House of Representatives;

\(9\) collect such data from awardees as is necessary to assess STTR
program outputs and outcomes;

\(10\) submit an annual report on the STTR program to the Administration
and the Office of Science and Technology Policy;

\(11\) adopt the agreement developed by the Administrator under
subsection (w) as the agency's model agreement for allocating between
small business concerns and research institutions intellectual property
rights and rights, if any, to carry out follow-on research, development,
or commercialization;

\(12\) develop, in consultation with the Office of Federal Procurement
Policy and the Office of Government Ethics, procedures to ensure that
federally funded research and development centers (as defined in
subsection (e)(8)) that participate in STTR agreements---

\(A\) are free from organizational conflicts of interests relative to
the STTR program;

\(B\) do not use privileged information gained through work performed
for an STTR agency or private access to STTR agency personnel in the
development of an STTR proposal; and

\(C\) use outside peer review, as appropriate; and

\(13\) not later than July 31, 1993, develop procedures for assessing
the commercial merit and feasibility of STTR proposals, as evidenced
by---

\(A\) the small business concern\'s record of successfully
commercializing STTR or other research;

\(B\) the existence of second phase funding commitments from private
sector or non-STTR funding sources;

\(C\) the existence of third phase follow-on commitments for the subject
of the research; and

\(D\) the presence of other indicators of the commercial potential of
the idea.

\(14\) implement an outreach program to research institutions and small
business concerns for the purpose of enhancing its STTR program, in
conjunction with any such outreach done for purposes of the SBIR
program; and

\(15\) collect, and maintain in a common format in accordance with
subsection (v), such information from awardees as is necessary to assess
the STTR program, including information necessary to maintain the
database described in subsection (k).

\(p\) STTR POLICY DIRECTIVE.---

\(1\) ISSUANCE.---The Administrator shall issue a policy directive for
the general conduct of the STTR programs within the Federal Government.
Such policy directive shall be issued after consultation with---

\(A\) the heads of each of the Federal agencies required by subsection
(n) to establish an STTR program;

\(B\) the Under Secretary of Commerce for Intellectual Property and
Director of the United States Patent and Trademark Office; and

\(C\) the Director of the Office of Federal Procurement Policy.

\(2\) CONTENTS.---The policy directive required by paragraph (1) shall
provide for---

\(A\) simplified, standardized, and timely STTR solicitations;

\(B\) a simplified, standardized funding process that provides for---

\(i\) the timely receipt and review of proposals;

\(ii\) outside peer review, if appropriate;

\(iii\) protection of proprietary information provided in proposals;

\(iv\) selection of awardees;

\(v\) retention by a small business concern of the rights to data
generated by the concern in the performance of an STTR award for a
period of not less than 4 years;

\(vi\) continued use by a small business concern, as a directed
bailment, of any property transferred by a Federal agency to the small
business concern in the second phase of the STTR program for a period of
not less than 2 years, beginning on the initial date of the concern\'s
participation in the third phase of such program;

\(vii\) cost sharing;

\(viii\) cost principles and payment schedules; and

\(ix\) 1-year awards for the first phase of an STTR program, generally
not to exceed \$100,000 and 2-year awards for the second phase of an
STTR program, generally not to exceed \$750,000, greater or lesser
amounts to be awarded at the discretion of the awarding agency, and
shorter or longer periods of time to be approved at the discretion of
the awarding agency where appropriate for a particular project;

\(C\) minimizing regulatory burdens associated with participation in
STTR programs;

\(D\) guidelines for a model agreement, to be used by all agencies, for
allocating between small business concerns and research institutions
intellectual property rights and rights, if any, to carry out follow-on
research, development, or commercialization;

\(E\) procedures to ensure that---

\(i\) a recipient of an STTR award is a small business concern, as
defined in section 3 and the regulations promulgated thereunder; and

\(ii\) such small business concern exercises management and control of
the performance of the STTR funding agreement pursuant to a business
plan providing for the commercialization of the technology that is the
subject matter of the award; and

\(F\) procedures to ensure, to the extent practicable, that an agency
which intends to pursue research, development, or production of a
technology developed by a small business concern under an STTR program
enters into follow-on, non-STTR funding agreements with the small
business concern for such research, development, or production.

\(3\) MODIFICATIONS.---Not later than 120 days after the date of
enactment of this paragraph, the Administrator shall modify the policy
directive issued pursuant to this subsection to clarify that the rights
provided for under paragraph (2)(B)(v) apply to all Federal funding
awards under this section, including the first phase (as described in
subsection (e)(6)(A)), the second phase (as described in subsection
(e)(6)(B)), and the third phase (as described in subsection (e)(6)(C)).

\(q\) DISCRETIONARY TECHNICAL ASSISTANCE.---

\(1\) IN GENERAL.---Each Federal agency required by this section to
conduct an SBIR program may enter into an agreement with a vendor
selected under paragraph (2) to provide small business concerns engaged
in SBIR projects with technical assistance services, such as access to a
network of scientists and engineers engaged in a wide range of
technologies, or access to technical and business literature available
through on-line data bases, for the purpose of assisting such concerns
in---

\(A\) making better technical decisions concerning such projects;

\(B\) solving technical problems which arise during the conduct of such
projects;

\(C\) minimizing technical risks associated with such projects; and

\(D\) developing and commercializing new commercial products and
processes resulting from such projects.

\(2\) VENDOR SELECTION.---Each agency may select a vendor to assist
small business concerns to meet the goals listed in paragraph (1) for a
term not to exceed 3 years. Such selection shall be competitive and
shall utilize merit-based criteria.

\(3\) ADDITIONAL TECHNICAL ASSISTANCE.---

\(A\) FIRST PHASE.---Each agency referred to in paragraph (1) may
provide services described in paragraph (1) to first phase SBIR award
recipients in an amount equal to not more than \$4,000, which shall be
in addition to the amount of the recipient\'s award.

\(B\) SECOND PHASE.---Each agency referred to in paragraph (1) may
authorize any second phase SBIR award recipient to purchase, with funds
available from their SBIR awards, services described in paragraph (1),
in an amount equal to not more than \$4,000 per year.

\(r\) THIRD PHASE AGREEMENTS.---

\(1\) IN GENERAL.---In the case of a small business concern that is
awarded a funding agreement for the second phase of an SBIR or STTR
program, a Federal agency may enter into a third phase agreement with
that business concern for additional work to be performed during or
after the second phase period. The second phase funding agreement with
the small business concern may, at the discretion of the agency awarding
the agreement, set out the procedures applicable to third phase
agreements with that agency or any other agency.

\(2\) DEFINITION.---In this subsection, the term \"third phase
agreement\" means a follow-on, non-SBIR or non-STTR funded contract as
described in paragraph (4)(C) or paragraph (6)(C) of subsection (e).

\(3\) INTELLECTUAL PROPERTY RIGHTS.---Each funding agreement under an
SBIR or STTR program shall include provisions setting forth the
respective rights of the United States and the small business concern
with respect to intellectual property rights and with respect to any
right to carry out follow-on research.

\(s\) OUTREACH.

\(1\) DEFINITION OF ELIGIBLE STATE.---In this subsection, the term
"eligible State" means a State---

\(A\) if the total value of contracts awarded to the State during fiscal
year 1995 under this section was less than \$5,000,000; and

\(B\) that certifies to the Administration described in paragraph (2)
that the State will, upon receipt of assistance under this subsection,
provide matching funds from non-Federal sources in an amount that is not
less than 50 percent of the amount provided under this subsection.

\(2\) PROGRAM AUTHORITY.---Of amounts made available to carry out this
section for each of the fiscal years 2000 through 2005 the Administrator
may expend with eligible States not more than \$2,000,000 in each such
fiscal year in order to increase the participation of small business
concerns located in those States in the programs under this section.

\(3\) AMOUNT OF ASSISTANCE.---The amount of assistance provided to an
eligible State under this subsection in any fiscal year---

\(A\) shall be equal to twice the total amount of matching funds from
non-Federal sources provided by the State; and

\(B\) shall not exceed \$100,000.

\(4\) USE OF ASSISTANCE.---Assistance provided to an eligible State
under this subsection shall be used by the State, in consultation with
State and local departments and agencies, for programs and activities to
increase the participation of small business concerns located in the
State in the programs under this section, including---

\(A\) the establishment of quantifiable performance goals, including
goals relating to---

\(i\) the number of program awards under this section made to small
business concerns in the State; and

\(ii\) the total amount of Federal research and development contracts
awarded to small business concerns in the State;

\(B\) the provision of competition outreach support to small business
concerns in the State that are involved in research and development; and

\(C\) the development and dissemination of educational and promotional
information relating to the programs under this section to small
business concerns in the State.

\(t\) INCLUSION IN STRATEGIC PLANS.---Program information relating to
the SBIR and STTR programs shall be included by each Federal agency in
any update or revision required of the Federal agency under section
306(b) of title 5, United States.

\(u\) COORDINATION OF TECHNOLOGY DEVELOPMENT PROGRAMS.---

\(1\) DEFINITION OF TECHNOLOGY DEVELOPMENT PROGRAM.---In this
subsection, the term "technology development program" means---

\(A\) the Experimental Program to Stimulate Competitive Research of the
National Science Foundation, as established under section 113 of the
National Science Foundation Authorization Act of 1988 (42 U.S.C. 1862g);

\(B\) the Defense Experimental Program to Stimulate Competitive Research
of the Department of Defense;

\(C\) the Experimental Program to Stimulate Competitive Research of the
Department of Energy;

\(D\) the Experimental Program to Stimulate Competitive Research of the
Environmental Protection Agency;

\(E\) the Experimental Program to Stimulate Competitive Research of the
National Aeronautics and Space Administration;

\(F\) the Institutional Development Award Program of the National
Institutes of Health; and

\(G\) the National Research Initiative Competitive Grants Program of the
Department of Agriculture.

\(2\) COORDINATION REQUIREMENTS.---Each Federal agency that is subject
to subsection (f) and that has established a technology development
program may, in each fiscal year, review for funding under that
technology development program---

\(A\) any proposal to provide outreach and assistance to 1 or more small
business concerns interested in participating in the SBIR program,
including any proposal to make a grant or loan to a company to pay a
portion or all of the cost of developing an SBIR proposal, from an
entity, organization, or individual located in---

\(i\) a State that is eligible to participate in that program; or

\(ii\) a State described in paragraph (3); or

\(B\) any proposal for the first phase of the SBIR program, if the
proposal, though meritorious, is not funded through the SBIR program for
that fiscal year due to funding restraints, from a small business
concern located in---

\(i\) a State that is eligible to participate in a technology
development program; or

\(ii\) a State described in paragraph (3).

\(3\) ADDITIONALLY ELIGIBLE STATE.---A State referred to in subparagraph
(A)(ii) or (B)(ii) of paragraph (2) is a State in which the total value
of contracts awarded to small business concerns under all SBIR programs
is less than the total value of contracts awarded to small business
concerns in a majority of other States, as determined by the
Administrator in biennial fiscal years, beginning with fiscal year 2000,
based on the most recent statistics compiled by the Administrator.

\(v\) SIMPLIFIED REPORTING REQUIREMENTS.---The Administrator shall work
with the Federal agencies required by this section to have an SBIR or
STTR program to standardize reporting requirements for the collection of
data from SBIR or STTR applicants and awardees, including data for
inclusion in the database under subsection (k), taking into
consideration the unique needs of each agency, and to the extent
possible, permitting the updating of previously reported information by
electronic means. Such requirements shall be designed to minimize the
burden on small businesses.

\(w\) STTR MODEL AGREEMENT FOR INTELLECTUAL PROPERTY RIGHTS.---

\(1\) IN GENERAL.---The Administrator shall promulgate regulations
establishing a single model agreement for use in the STTR program that
allocates between small business concerns and research institutions
intellectual property rights and rights, if any, to carry out follow-on
research, development, or commercialization.

\(2\) OPPORTUNITY FOR COMMENT.---In promulgating regulations under
paragraph (1), the Administrator shall provide to affected agencies,
small business concerns, research institutions, and other interested
parties the opportunity to submit written comments.

§ l0. (a) The Administration shall, as soon as practicable each fiscal
year make a comprehensive annual report to the President, the President
of the Senate, the Senate Select Committee on Small Business, and the
Speaker of the House of Representatives. Such report shall include a
description of the state of small business in the Nation and the several
States, and a description of the operations of the Administration under
this chapter, including, but not limited to, the general lending,
disaster relief, Government regulation relief, procurement and property
disposal, research and development, technical assistance, dissemination
of data and information, and other functions under the jurisdiction of
the Administration during the previous fiscal year. Such report shall
contain recommendations for strengthening or improving such programs,
or, when necessary or desirable to implement more effectively
congressional policies and proposals, for establishing new or
alternative programs. In addition, such report shall include the names
of the business concerns to whom contracts are let and for whom
financing is arranged by the Administration, together with the amounts
involved. With respect to minority small business concerns, the report
shall include the proportion of loans and other assistance under this
Act provided to such concerns, the goals of the Administration for the
next fiscal year with respect to such concerns, and recommendations for
improving assistance to minority small business concerns under this Act.

\(b\) The Administration shall make a report to the President, the
President of the Senate, and the Speaker of the House of
Representatives, to the Senate Select Committee on Small Business, and
to the Committee on Small Business of the House of Representatives, as
soon as practicable each fiscal year, showing as accurately as possible
for each such period the amount of funds appropriated to it that it has
expended in the conduct of each of its principal activities such as
lending, procurement, contracting, and providing technical and
managerial aids. Such report shall contain the number and amount of
loans, the number of applications, the total amount applied for, and the
number and amount of defaults for each type of equipment or service for
which loans are authorized by this Act. Such report shall provide such
information separately on each type of loan made under paragraphs (10)
through (15) of section 7(a) and separately for all other loan programs.
In addition, the information on loans shall be supplied on a monthly
basis to the Committee on Small Business of the Senate and the Committee
on Small Business of the House of Representatives.

\(c\) \[Repealed\].

\(d\) For the purpose of aiding in carrying out the national policy to
insure that a fair proportion of the total purchases and contracts for
property and services for the Government be placed with small‑business
enterprises, and to maintain and strengthen the overall economy of the
Nation, the Department of Defense shall make an annual report to the
Committees on Small Business of the Senate and the House of
Representatives showing the amount of funds appropriated to the
Department of Defense which have been expended, obligated, or contracted
to be spent with small business concerns and the amount of such funds
expended, obligated, or contracted to be spent with firms other than
small business in the same fields of operation; and such reports shall
show separately the funds expended, obligated, or contracted to be spent
for basic and applied scientific research and development.

\(e\) The Administration and the Inspector General of the Administration
shall retain all correspondence, records of inquiries, memoranda,
reports, books, and records, including memoranda as to all
investigations conducted by or for the Administration, for a period of
at least one year from the date of each thereof, and shall at all times
keep the same available for inspection and examination by the Senate
Select Committee on Small Business and the Committee on Small Business
of the House of Representatives, or their duly authorized
representatives.

\(2\) The Committee on Small Business of either the Senate or the House
of Representatives may request that the Office of the Inspector General
of the Administration conduct an investigation of any program or
activity conducted under the authority of section 7(j) or 8(a). Not
later than thirty days after the receipt of such a request, the
Inspector General shall inform the committee, in writing, of the
disposition of the request by such office.

\(f\) To the extent deemed necessary by the Administrator to protect and
preserve small‑business interests, the Administration shall consult and
cooperate with other departments and agencies of the Federal Government
in the formulation by the Administration of policies affecting
small‑business concerns. When requested by the Administrator, each
department and agency of the Federal Government shall consult and
cooperate with the Administration in the formulation by the
Administration of policies affecting small‑business concerns. When
requested by the Administrator, each department and agency of the
Federal Government shall consult and cooperate with the Administration
in the formulation by such department or agency of policies affecting
small‑ business concerns, in order to insure that small‑business
interests will be recognized, protected, and preserved. This subsection
shall not require any department or agency to consult or cooperate with
the Administration in any case where the head of such department or
agency determines that such consultation or cooperation would unduly
delay action which must be taken by such department or agency to protect
the national interest in an emergency.

\(g\) The Administration shall transmit, not later than December 3l of
each year, to the Senate Select Committee on Small Business and
Committee on Small Business of the House of Representatives a sealed
report with respect to---

\(l\) complaints alleging illegal conduct by employees of the
Administration which were received or acted upon by the Administration
during the preceding fiscal year; and

\(2\) investigations undertaken by the Administration, including
external and internal audits and security and investigation reports.

\(h\) The Administration shall transmit, not later than March 31 of each
year, to the Committees on Small Business of the Senate and House of
Representatives a report on the secondary market operations during the
preceding calendar year. This report shall include, but not be limited
to, (1) the number and the total dollar amount of loans sold into the
secondary market and the distribution of such loans by size of loan,
size of lender, geographic location of lender, interest rate, maturity,
lender servicing fees, whether the rate is fixed or variable, and
premium paid; (2) the number and dollar amount of loans resold in the
secondary market with a distribution by size of loan, interest rate, and
premiums; (3) the number and total dollar amount of pools formed; (4)
the number and total dollar amount of loans in each pool; (5) the dollar
amount, interest rate, and terms on each loan in each pool and whether
the rate is fixed or variable; (6) the number, face value, interest
rate, and terms of the trust certificates issued for each pool; (7) to
the maximum extent possible, the use by the lender of the proceeds of
sales of loans in the secondary market for additional lending to small
business concerns; and (8) an analysis of the information reported in
(1) through (7) to assess small businesses\' access to capital at
reasonable rates and terms as a result of secondary market operations.

§ 11. (a) The President is authorized to consult with representatives of
small‑business concerns with a view to encouraging the making by such
persons with the approval of the President of voluntary agreements and
programs to further the objectives of this Act.

\(b\) No act or omission to act pursuant to this Act which occurs while
this Act is in effect, if requested by the President pursuant to a
voluntary agreement or program approved under subsection (a) of this
section and found by the President to be in the public interest as
contributing to the national defense, shall be construed to be within
the prohibitions of the antitrust laws or the Federal Trade Commission
Act of the United States. A copy of each such request 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 unless publication thereof would, in the opinion of the
President, endanger the national security.

\(c\) The authority granted in subsection (b) of this section shall be
delegated only (1) to an official who shall for the purpose of such
delegation be required to be appointed by the President by and with the
advice and consent of the Senate, (2) upon the condition that such
official consult with the Attorney General and the Chairman of the
Federal Trade Commission not less than ten days before making any
request or finding thereunder, and (3) upon the condition that such
official obtain the approval of the Attorney General to any request
thereunder before making the request.

\(d\) Upon withdrawal of any request or finding hereunder, or upon
withdrawal by the Attorney General of his approval of the voluntary
agreement or program on which the request or finding is based, the
provisions of this section shall not apply to any subsequent act, or
omission to act, by reason of such finding or request.

§ 12. The President may transfer to the Administration any functions,
powers, and duties of any department or agency which relate primarily to
small‑business problems. In connection with any such transfer, the
President may provide for appropriate transfers of records, property,
necessary personnel, and unexpended balances of appropriations and other
funds available to the department or agency from which the transfer is
made.

§ 13. No loan shall be made or equipment, facilities, or services
furnished by the Administration under this Act to any business
enterprise unless the owners, partners, or officers of such business
enterprise (1) certify to the Administration the names of any attorneys,
agents, or other persons engaged by or on behalf of such business
enterprise for the purpose of expediting applications made to the
Administration for assistance of any sort, and the fees paid or to be
paid to any such persons; (2) execute an agreement binding any such
business enterprise for a period of two years after any assistance is
rendered by the Administration to such business enterprise, to refrain
from employing, tendering any office or employment to, or retaining for
professional service, any person, who, on the date such assistance or
any part thereof was rendered, or within one year prior thereto, shall
have served as an officer, attorney, agent, or employee of the
Administration occupying a position or engaging in activities which the
Administration shall have determined involve discretion with respect to
the granting of assistance under this Act; and (3) furnish the names of
lending institutions to which such business enterprise has applied for
loans together with dates, amounts, terms, and proof of refusal.

§ 14. To the fullest extent the Administration deems practicable, it
shall make a fair charge for the use of Government‑owned property and
make and let contracts on a basis that will result in a recovery of the
direct cost incurred by the Administration.

§ 15. (a) To effectuate the purposes of this Act, small business
concerns within the meaning of this Act shall receive any award or
contract or any part thereof, and be awarded any contract for the sale
of Government property, as to which it is determined by the
Administration and the contracting procurement or disposal agency (1) to
be in the interest of maintaining or mobilizing the Nation\'s full
productive capacity, (2) to be in the interest of war or national
defense programs, (3) to be in the interest of assuring that a fair
proportion of the total purchases and contracts for property and
services for the Government in each industry category are placed with
small‑business concerns, or (4) to be in the interest of assuring that a
fair proportion of the total sales of Government property be made to
small‑business concerns; but nothing contained in this Act shall be
construed to change any preferences or priorities established by law
with respect to the sale of electrical power or other property by the
Government or any agency thereof. These determinations may be made for
individual awards or contracts or for classes of awards or contracts. If
a proposed procurement includes in its statement of work goods or
services currently being performed by a small business, and if the
proposed procurement is in a quantity or estimated dollar value the
magnitude of which renders small business prime contract participation
unlikely, or if a proposed procurement for construction seeks to package
or consolidate discrete construction projects, or the solicitation
involves an unnecessary or unjustified bundling of contract
requirements, as determined by the Administration, the Procurement
Activity shall provide a copy of the proposed procurement to the
Procurement Activity\'s Small Business Procurement Center Representative
at least 30 days prior to the solicitation\'s issuance along with a
statement explaining (1) why the proposed acquisition cannot be divided
into reasonably small lots (not less than economic production runs) to
permit offers on quantities less than the total requirement, (2) why
delivery schedules cannot be established on a realistic basis that will
encourage small business participation to the extent consistent with the
actual requirements of the Government, (3) why the proposed acquisition
cannot be offered so as to make small business participation likely, (4)
why construction cannot be procured as separate discrete projects, or
(5) why the agency has determined that the bundled contract (as defined
in section 3(o)) is necessary and justified. The thirty‑day notification
process shall occur concurrently with other processing steps required
prior to issuance of the solicitation. Within 15 days after receipt of
the proposed procurement and accompanying statement, if the Procurement
Center Representative believes that the procurement as proposed will
render small business prime contract participation unlikely, the
Representative shall recommend to the Procurement Activity alternative
procurement methods which would increase small business prime
contracting opportunities. Whenever the Administration and the
contracting procurement agency fail to agree, the matter shall be
submitted for determination to the Secretary or the head of the
appropriate department or agency by the Administrator. For purposes of
clause (3) of the first sentence of this subsection, an industry
category is a discrete group of similar goods and services. Such groups
shall be determined by the Administration in accordance with the
definition of a "United States industry" under the North American
Industry Classification System, as established by the Office of
Management and Budget, except that the Administration shall limit such
an industry category to a greater extent than provided under such
classification codes if the Administration receives evidence indicating
that further segmentation for purposes of this paragraph is warranted
due to special capital equipment needs or special labor or geographic
requirements or to recognize a new industry. A market for goods or
services may not be segmented under the preceding sentence due to
geographic requirements unless the Government typically designates the
area where work for contracts for such goods or services is to be
performed and Government purchases comprise the major portion of the
entire domestic market for such goods or services and, due to the fixed
location of facilities, high mobilization costs, or similar economic
factors, it is unreasonable to expect competition from business concerns
located outside of the general areas where such concerns are located. A
contract may not be awarded under this subsection if the award of the
contract would result in a cost to the awarding agency which exceeds a
fair market price.

\(b\) With respect to any work to be performed the amount of which would
exceed the maximum amount of any contract for which a surety may be
guaranteed against loss under section 411 of the Small Business
Investment Act of 1958 (15 U.S.C. 694 (b)), the contracting procurement
agency shall, to the extent practicable, place contracts so as to allow
more than one small business concern to perform such work.

\(c\) (1) As used in this subsection:

\(A\) The term \"Committee\" means the Committee for Purchase from the
Blind and Other Severely Handicapped established under the first section
of the Act entitled \"An Act to create a Committee on Purchases of
Blind‑made Products, and for other purposes\", approved June 25, 1938
(41 U.S.C. 46).

\(B\) The term \"public or private organization for the handicapped\"
has the same meaning given such term in section 3(e).

\(C\) The term \"handicapped individual\" has the same meaning given
such term in section 3(f).

\(2\) (A) During fiscal year 1995, public or private organizations for
the handicapped shall be eligible to participate in programs authorized
under this section in an aggregate amount not to exceed \$40,000,000.

\(B\) None of the amounts authorized for participation by subparagraph
(A) may be placed on the procurement list maintained by the Committee
pursuant to section 2 of the Act entitled \"An Act to create a Committee
on Purchases of Blind-made Products, and for other purposes\", approved
June 25, 1938 (41 U.S.C. 47).

\(3\) The Administrator shall monitor and evaluate such participation.

\(4\) (A) Not later than ten days after the announcement of a proposed
award of a contract by an agency or department to a public or private
organization for the handicapped, a for‑profit small business concern
that has experienced or is likely to experience severe economic injury
as the result of the proposed award may file an appeal of the proposed
award with the Administrator.

\(B\) If such a concern files an appeal of a proposed award under
subparagraph (A) and the Administrator, after consultation with the
Executive Director of the Committee, finds that the concern has
experienced or is likely to experience severe economic injury as the
result of the proposed award, not later than thirty days after the
filing of the appeal, the Administration shall require each agency and
department having procurement powers to take such action as may be
appropriate to alleviate economic injury sustained or likely to be
sustained by the concern.

\(5\) Each agency and department having procurement powers shall report
to the Office of Federal Procurement Policy each time a contract subject
to paragraph (2)(A) is entered into, and shall include in its report the
amount of the next higher bid submitted by a for‑profit small business
concern. The Office of Federal Procurement Policy shall collect data
reported under the preceding sentence through the Federal procurement
data system and shall report to the Administration which shall notify
all such agencies and departments when the maximum amount of awards
authorized under paragraph (2)(A) has been made during any fiscal year.

\(6\) For the purpose of this subsection, a contract may be awarded only
if at least 75 per centum of the direct labor performed on each item
being produced under the contract in the sheltered workshop or performed
in providing each type of service under the contract by the sheltered
workshop is performed by handicapped individuals.

\(7\) Agencies awarding one or more contracts to such an organization
pursuant to the provisions of this subsection may use multiyear
contracts, if appropriate.

\(d\) For purposes of this section priority shall be given to the
awarding of contracts and the placement of subcontracts to small
business concerns which shall perform a substantial proportion of the
production on those contracts and subcontracts within areas of
concentrated unemployment or underemployment or within labor surplus
areas. Notwithstanding any other provision of law, total labor surplus
area set‑asides pursuant to Defense Manpower Policy Number 4 (32A C.F.R.
Chapter 1) or any successor policy shall be authorized if the Secretary
or his designee specifically determines that there is a reasonable
expectation that offers will be obtained from a sufficient number of
eligible concerns so that awards will be made at reasonable prices. As
soon as practicable and to the extent possible, in determining labor
surplus areas, consideration shall be given to those persons who would
be available for employment were suitable employment available. Until
such definition reflects such number, the present criteria of such
policy shall govern.

\(e\) PROCUREMENT STRATEGIES; CONTRACT BUNDLING---

\(1\) IN GENERAL.---To the maximum extent practicable, procurement
strategies used by the various agencies having contracting authority
shall facilitate the maximum participation of small business concerns as
prime contractors, subcontractors, and suppliers.

\(2\) MARKET RESEARCH---

\(A\) IN GENERAL.---Before proceeding with an acquisition strategy that
could lead to a contract containing consolidated procurement
requirements, the head of an agency shall conduct market research to
determine whether consolidation of the requirements is necessary and
justified.

\(B\) FACTORS.---For purposes of subparagraph (A), consolidation of the
requirements may be determined as being necessary and justified if, as
compared to the benefits that would be derived from contracting to meet
those requirements if not consolidated, the Federal Government would
derive from the consolidation measurably substantial benefits, including
any combination of benefits that, in combination, are measurably
substantial. Benefits described in the preceding sentence may include
the following:

\(i\) Cost savings.

\(ii\) Quality improvements.

\(iii\) Reduction in acquisition cycle times.

\(iv\) Better terms and conditions.

\(v\) Any other benefits.

\(C\) REDUCTION OF COSTS NOT DETERMINATIVE.---The reduction of
administrative or personnel costs alone shall not be a justification for
bundling of contract requirements unless the cost savings are expected
to be substantial in relation to the dollar value of the procurement
requirements to be consolidated.

\(3\) STRATEGY SPECIFICATIONS.---If the head of a contracting agency
determines that a proposed procurement strategy for a procurement
involves a substantial bundling of contract requirements, the proposed
procurement strategy shall---

\(A\) identify specifically the benefits anticipated to be derived from
the bundling of contract requirements;

\(B\) set forth an assessment of the specific impediments to
participation by small business concerns as prime contractors that
result from the bundling of contract requirements and specify actions
designed to maximize small business participation as subcontractors
(including suppliers) at various tiers under the contract or contracts
that are awarded to meet the requirements; and

\(C\) include a specific determination that the anticipated benefits of
the proposed bundled contract justify its use.

\(4\) CONTRACT TEAMING.---In the case of a solicitation of offers for a
bundled contract that is issued by the head of an agency, a small
business concern may submit an offer that provides for use of a
particular team of subcontractors for the performance of the contract.
The head of the agency shall evaluate the offer in the same manner as
other offers, with due consideration t the capabilities of all of the
proposed subcontractors. If a small business concern teams under this
paragraph, it shall not affect its status as a small business concern
for any other purpose.

\(f\) \[deleted\].

\(g\) (1) The President shall annually establish Government‑wide goals
for procurement contracts awarded to small business concerns, small
business concerns owned and controlled by service disabled veterans,
qualified HUBZone small business concerns, small business concerns owned
and controlled by socially and economically disadvantaged individuals,
and small business concerns owned and controlled by women. The
Government‑wide goal for participation by small business concerns shall
be established at not less than 23 percent of the total value of all
prime contract awards for each fiscal year. The Government-wide goal for
participation by small business concerns owned and controlled by
service-disabled veterans shall be established at not less than 3
percent of the total value of all prime contract and subcontract awards
for each fiscal year. The Government-wide goal for participation by
qualified HUBZone small business concerns shall be established at not
less than 1 percent of the total value of all prime contract awards for
fiscal year 1999, not less than 1.5 percent of the total value of all
prime contract awards for fiscal year 2000, not less than 2 percent of
the total value of all prime contract awards for fiscal year 2001, not
less than 2.5 percent of the total value of all prime contract awards
for fiscal year 2002, and not less than 3 percent of the total value of
all prime contract awards for fiscal year 2003 and each fiscal year
thereafter. The Government‑wide goal for participation by small business
concerns owned and controlled by socially and economically disadvantaged
individuals shall be established at not less than 5 percent of the total
value of all prime contract and subcontract awards for each fiscal year.
The Government-wide goal for participation by small business concerns
owned and controlled by women shall be established at not less than 5
percent of the total value of all prime contract and subcontract awards
for each fiscal year. Notwithstanding the Government‑wide goal, each
agency shall have an annual goal that presents, for that agency, the
maximum practicable opportunity for small business concerns, small
business concerns owned and controlled by service-disabled veterans,
qualified HUBZone small business concerns, small business concerns owned
and controlled by socially and economically disadvantaged individuals,
and small business concerns owned and controlled by women to participate
in the performance of contracts let by such agency. The Administration
and the Administrator of the Office of Federal Procurement Policy shall,
when exercising their authority pursuant to paragraph (2), insure that
the cumulative annual prime contract goals for all agencies meet or
exceed the annual Government‑wide prime contract goal established by the
President pursuant to this paragraph.

\(2\) The head of each Federal agency shall, after consultation with the
Administration, establish goals for the participation by small business
concerns, by small business concerns owned and controlled by
service-disabled veterans, by qualified HUBZone small business concerns,
by small business concerns owned and controlled by socially and
economically disadvantaged individuals, and by small business concerns
owned and controlled by women in procurement contracts of such agency
having a value of \$25,000 or more. Goals established under this
subsection shall be jointly established by the Administration and the
head of each Federal agency and shall realistically reflect the
potential of small business concerns, small business concerns owned and
controlled by service-disabled veterans, qualified HUBZone small
business concerns, and small business concerns owned and controlled by
socially and economically disadvantaged individuals to perform such
contracts and to perform subcontracts under such contracts. Whenever the
Administration and the head of any Federal agency fail to agree on
established goals, the disagreement shall be submitted to the
Administrator of the Office of Federal Procurement Policy for final
determination. For the purpose of establishing goals under this
subsection, the head of each Federal agency shall make consistent
efforts to annually expand participation by small business concerns from
each industry category in procurement contracts of the agency, including
participation by small business concerns owned and controlled by
service-disabled veterans, by qualified HUBZone small business concerns,
by small business concerns owned and controlled by socially and
economically disadvantaged individuals and by small business concerns
owned and controlled by women. The head of each Federal agency, in
attempting to attain such participation, shall consider---

\(A\) contracts awarded as the result of unrestricted competition; and

\(B\) contracts awarded after competition restricted to eligible small
business concerns under this section and under the program established
under section 8(a).

\(h\) (1) At the conclusion of each fiscal year, the head of each
Federal agency shall report to the Administration on the extent of
participation by small business concerns, small business concerns owned
and controlled by veterans (including service-disabled veterans),
qualified HUBZone small business concerns, small business concerns owned
and controlled by socially and economically disadvantaged individuals,
and small business concerns owned and controlled by women in procurement
contracts of such agency. Such reports shall contain appropriate
justifications for failure to meet the goals established under
subsection (g) of this section.

\(2\) The Administration shall annually compile and analyze the reports
submitted by the individual agencies pursuant to paragraph (1) and shall
submit them to the President and the Congress. The Administration\'s
submission to the President shall include the following:

\(A\) The Government‑wide goals for participation by small business
concerns, small business concerns owned and controlled by
service-disabled veterans, qualified HUBZone small business concerns,
small business concerns owned and controlled by socially and
economically disadvantaged individuals, and small business concerns
owned and controlled by women and the performance in attaining such
goals.

\(B\) The goals in effect for each agency and the agency\'s performance
in attaining such goals.

\(C\) An analysis of any failure to achieve the Government‑wide goals or
any individual agency goals and the actions planned by such agency (and
approved by the Administration) to achieve the goals in the succeeding
fiscal year.

\(D\) The number and dollar value of contracts awarded to small business
concerns, small business concerns owned and controlled by
service-disabled veterans, qualified HUBZone small business concerns,
small business concerns owned and controlled by socially and
economically disadvantaged individuals and small business concerns owned
and controlled by women through---

\(i\) noncompetitive negotiation,

\(ii\) competition restricted to small business concerns owned and
controlled by socially and economically disadvantaged individuals,

\(iii\) competition restricted to small business concerns, and

\(iv\) unrestricted competitions,

for each agency and on a Government‑wide basis.

\(E\) The number and dollar value of subcontracts awarded to small
business concerns, small business concerns owned and controlled by
service-disabled veterans, qualified HUBZone small business concerns,
small business concerns owned and controlled by socially and
economically disadvantaged individuals and small business concerns owned
and controlled by women.

\(F\) The number and dollar value of prime contracts and subcontracts
awarded to small business concerns owned and controlled by women.

\(3\) The President shall include the information required by paragraph
(2) in each annual report to the Congress on the state of small business
prepared pursuant to section 303(a) of the Small Business Economic
Policy Act of 1980 (15 U.S.C. 631b(a)).

\(i\) Nothing in this Act or any other provision of law precludes
exclusive small business set‑asides for procurements of architectural
and engineering services, research, development, test and evaluation,
and each Federal agency is authorized to develop such set‑asides to
further the interests of small business in those areas.

\(j\) (1) Each contract for the purchase of goods and services that has
an anticipated value greater than \$2,500 but not greater than \$100,000
shall be reserved exclusively for small business concerns unless the
contracting officer is unable to obtain offers from two or more small
business concerns that are competitive with market prices and are
competitive with regard to the quality and delivery of the goods or
services being purchased.

\(2\) in carrying out paragraph (1), a contracting officer shall
consider a responsive offer timely received from an eligible small
business offeror.

\(3\) Nothing in paragraph (1) shall be construed as precluding an award
of a contract with a value not greater than \$100,000 under the
authority of subsection (a) of section 8 of this Act, section 2323 of
title 10, United States Code, section 712 of the Business Opportunity
Development Reform Act of 1988 (Public Law 100-656; 15 U.S.C. 644 note),
or section 7102 of the Federal Acquisition Streamlining Act of 1994.

\(k\) There is hereby established in each Federal agency having
procurement powers an office to be known as the \"Office of Small and
Disadvantaged Business Utilization\". The management of each such office
shall be vested in an officer or employee of such agency who shall---

\(1\) be known as the \"Director of Small and Disadvantaged Business
Utilization\" for such agency,

\(2\) be appointed by the head of such agency,

\(3\) be responsible only to, and report directly to, the head of such
agency or to the deputy of such head, except that the director for the
Office of the Secretary of Defense shall be responsible only to, and
report to, such Secretary or the Secretary\'s designee,

\(4\) be responsible for the implementation and execution of the
functions and duties under sections 8 and 15 of this Act which relate to
such agency,

\(5\) identify proposed solicitations that involve significant bundling
of contract requirements, and work with the agency acquisition officials
and the Administration to revise the procurement strategies for such
proposed solicitations where appropriate to increase the probability of
participation by small businesses as prime contractors, or to facilitate
small business participation as subcontractors and suppliers, if a
solicitation for a bundled contract is to be issued;

\(6\) assist small business concerns to obtain payments, late payment
interest penalties, or information due to such concerns from an
executive agency or a contractor, in conformity with chapter 39 of title
31, United States Code, or any other protection for contractors or
subcontractors (including suppliers) that is included in the Federal
Acquisition Regulation or any individual agency supplement to such
Government-wide regulation;

\(7\) have supervisory authority over personnel of such agency to the
extent that the functions and duties of such personnel relate to
functions and duties under sections 8 and 15 of this Act,

\(8\) assign a small business technical adviser to each office to which
the Administration has assigned a procurement center representative ‑‑

\(A\) who shall be a full‑time employee of the procuring activity and
shall be well qualified, technically trained and familiar with the
supplies or services purchased at the activity, and

\(B\) whose principal duty shall be to assist the Administration
procurement center representative in his duties and functions relating
to sections 8 and 15 of this Act,

\(9\) cooperate, and consult on a regular basis, with the Administration
with respect to carrying out the functions and duties described in
paragraph (4) of this subsection, and

\(10\) make recommendations to contracting officers as to whether a
particular contract requirement should be awarded pursuant to subsection
(a), or section 8(a) of this Act or section 2323 of title 10, United
States Code. Such recommendations shall be made with due regard to the
requirements of subsection (m), and the failure of the contracting
officer to accept any such recommendations shall be documented and
included within the appropriate contract file.

This subsection shall not apply to the Administration.

\(l\) (1) The Administration shall assign to each major procurement
center a breakout procurement center representative with such assistance
as may be appropriate. The breakout procurement center representative
shall carry out the activities described in paragraph (2), and shall be
an advocate for the breakout of items for procurement through full and
open competition, whenever appropriate, while maintaining the integrity
of the system in which such items are used, and an advocate for the use
of full and open competition, whenever appropriate, for the procurement
of supplies and services by such center. Any breakout procurement center
representative assigned under this subsection shall be in addition to
the representative referred to in subsection (k)(6).

\(2\) In addition to carrying out the responsibilities assigned by the
Administration, a breakout procurement center representative is
authorized to ‑‑

\(A\) attend any provisioning conference or similar evaluation session
during which determinations are made as to whether requirements are to
be procured through other than full and open competition and make
recommendations with respect to such requirements to the members of such
conference or session;

\(B\) review, at any time, restrictions on competition previously
imposed on items through acquisition method coding or similar
procedures, and recommend to personnel of the appropriate activity the
prompt reevaluation of such limitations;

\(C\) review restrictions on competition arising out of restrictions on
the rights of the United States in technical data, and, when
appropriate, recommend that personnel of the appropriate activity
initiate a review of the validity of such an asserted restriction;

\(D\) obtain from any governmental source, and make available to
personnel of the appropriate activity, technical data necessary for the
preparation of a competitive solicitation package for any item of supply
or service previously procured noncompetitively due to the
unavailability of such technical data;

\(E\) have access to procurement records and other data of the
procurement center commensurate with the level of such representative\'s
approved security clearance classification;

\(F\) receive unsolicited engineering proposals and, when appropriate
(i) conduct a value analysis of such proposal to determine whether such
proposal, if adopted, will result in lower costs to the United States
without substantially impeding legitimate acquisition objectives and
forward to personnel of the appropriate activity recommendations with
respect to such proposal, or (ii) forward such proposals without
analysis to personnel of the activity responsible for reviewing such
proposals and who shall furnish the breakout procurement center
representative with information regarding the disposition of any such
proposal; and

\(G\) review the systems that account for the acquisition and management
of technical data within the procurement center to assure that such
systems provide the maximum availability and access to data needed for
the preparation of offers to sell to the United States those supplies to
which such data pertain which potential offerors are entitled to
receive.

\(3\) A breakout procurement center representative is authorized to
appeal the failure to act favorably on any recommendation made pursuant
to paragraph (2). Such appeal shall be filed and processed in the same
manner and subject to the same conditions and limitations as an appeal
filed by the Administrator pursuant to subsection (a).

\(4\) The Administration shall assign and co‑locate at least two small
business technical advisers to each major procurement center in addition
to such other advisers as may be authorized from time to time. The sole
duties of such advisers shall be to assist the breakout procurement
center representative for the center to which such advisers are assigned
in carrying out the functions described in paragraph (2) and the
representatives referred to in subsection (k)(6).

\(5\) (A) The breakout procurement center representatives and technical
advisers assigned pursuant to this subsection shall be---

\(i\) full‑time employees of the Administration; and

\(ii\) fully qualified, technically trained, and familiar with the
supplies and services procured by the major procurement center to which
they are assigned.

\(B\) In addition to the requirements of subparagraph (A), each breakout
procurement center representative, and at least one technical adviser
assigned to such representative, shall be an accredited engineer.

\(C\) The Administration shall establish personnel positions for
breakout procurement representatives and advisers assigned pursuant to
this subsection which are classified at a grade level of the General
Schedule sufficient to attract and retain highly qualified personnel.

\(6\) For purposes of this subsection, the term \"major procurement
center\" means a procurement center that, in the opinion of the
Administrator, purchases substantial dollar amounts of other than
commercial items and which has the potential to incur significant
savings as the result of the placement of a breakout procurement center
representative.

\(7\) (A) At such times as the Administrator deems appropriate, the
breakout procurement center representative shall conduct familiarization
sessions for contracting officers and other appropriate personnel of the
procurement center to which such representative is assigned. Such
sessions shall acquaint the participants with the provisions of this
subsection and shall instruct them in methods designed to further the
purposes of such subsection.

\(B\) The breakout procurement center representative shall prepare and
personally deliver an annual briefing and report to the head of the
procurement center to which such representative is assigned. Such
briefing and report shall detail the past and planned activities of the
representative and shall contain such recommendations for improvement in
the operation of the center as may be appropriate. The head of such
center shall personally receive such briefing and report and shall,
within sixty calendar days after receipt, respond, in writing, to each
recommendation made by such representative.

\(m\) (1) Each agency subject to the requirements of section 2323 of
title 10, United States Code, shall, when implementing such
requirements---

\(A\) establish policies and procedures that insure that there will be
no reduction in the number of dollar value of contracts awarded pursuant
to this section and section 8(a) in order to achieve any goal or other
program objective; and

\(B\) assure that such requirements will not alter or change the
procurement process used to implement this section or section 8(a).

\(2\) All procurement center representatives (including those referred
to in subsection (k)(6)), in addition to such other duties as may be
assigned by the Administrator, shall---

\(A\) monitor the performance of the procurement activities to which
they are assigned to ascertain the degree of compliance with the
requirements of paragraph (l);

\(B\) report to their immediate supervisors all instances of
noncompliance with such requirements; and

\(C\) increase, insofar as possible, the number and dollar value of
procurements that may be used for the programs established under this
section, section 8(a), and section 2323 of title 10, United States Code.

\(n\) For purposes of this section, the determination of labor surplus
areas shall be made on the basis of the criteria in effect at the time
of the determination, except that any minimum population criteria shall
not exceed twenty‑five thousand. Such determination, as modified by the
preceding sentence, shall be made by the Secretary of Labor.

\(o\) (1) A concern may not be awarded a contract under subsection (a)
as a small business concern unless the concern agrees that---

\(A\) in the case of a contract for services (except construction), at
least 50 percent of the cost of contract performance incurred for
personnel shall be expended for employees of the concern; and

\(B\) in the case of a contract for procurement of supplies (other than
procurement from a regular dealer in such supplies), the concern will
perform work for at least 50 percent of the cost of manufacturing the
supplies (not including the cost of materials).

\(2\) The Administrator may change the percentage under subparagraph (A)
or (B) of paragraph (1) if the Administrator determines that such change
is necessary to reflect conventional industry practices among business
concerns that are below the numerical size standard for businesses in
that industry category.

\(3\) The Administration shall establish, through public rulemaking,
requirements similar to those specified in paragraph (1) to be
applicable to contracts for general and specialty construction and to
contracts for any other industry category not otherwise subject to the
requirements of such paragraph. The percentage applicable to any such
requirement shall be determined in accordance with paragraph (2).

\(p\) DATABASE, ANALYSIS, AND ANNUAL REPORT WITH RESPECT TO BUNDLED
CONTRACTS.---

\(1\) BUNDLED CONTRACT DEFINED.---In this subsection, the term "bundled
contract" has the meaning given such term in section 3(o)(1).

\(2\) DATABASE.---

\(A\) IN GENERAL.---Not later than 180 days after the date of the
enactment of this subsection, the Administrator of the Small Business
Administration shall develop and shall thereafter maintain a database
containing data and information regarding---

\(i\) each bundled contract awarded by a Federal agency; and

\(ii\) each small business concern that has been displaced as a prime
contractor as a result of the award of such a contract.

\(3\) ANALYSIS.---For each bundled contract that is to be recompeted as
a bundled contract, the Administrator shall determine---

\(A\) the amount of savings and benefits (in accordance with subsection
(e)) achieved under the bundling of contract requirements; and

\(B\) whether such savings and benefits will continue to be realized if
the contract remains bundled, and whether such savings and benefits
would be greater if the procurement requirements were divided into
separate solicitations suitable for award to small business concerns.

\(4\) ANNUAL REPORT ON CONTRACT BUNDLING.---

\(A\) IN GENERAL.---Not later than 1 year after the date of the
enactment of this paragraph, and annually in March thereafter, the
Administration shall transmit a report on contract bundling to the
Committees on Small Business of the House of Representatives and the
Senate.

\(B\) CONTENTS.---Each report transmitted under subparagraph (A) shall
include---

\(i\) data on the number, arranged by industrial classification, of
small business concerns displaced as prime contractors as a result of
the award of bundled contracts by Federal agencies; and

\(ii\) a description of the activities with respect to previously
bundled contracts of each Federal agency during the preceding year,
including---

\(I\) data on the number and total dollar amount of all contract
requirements that were bundled; and

\(II\) with respect to each bundled contract, data or information on---

(aa) the justification for the bundling of contract requirements;

(bb) the cost savings realized by bundling the contract requirements
over the life of the contract;

\(cc\) the extent to which maintaining the bundled status of contract
requirements is projected to result in continued cost savings;

(dd) the extent to which the bundling of contract requirements complied
with the contracting agency's small business subcontracting plan,
including the total dollar value awarded to small business concerns as
subcontractors and the total dollar value previously awarded to small
business concerns as prime contractors; and

(ee) the impact of the bundling of contract requirements on small
business concerns unable to compete as prime contractors for the
consolidated requirements and on the industries of such small business
concerns, including a description of any changes to the proportion of
any such industry that is composed of small business concerns.

\(5\) ACCESS TO DATA.---

\(A\) FEDERAL PROCUREMENT DATA SYSTEM.---To assist in the implementation
of this section, the Administration shall have access to information
collected through the Federal Procurement Data System.

\(B\) AGENCY PROCUREMENT DATA SOURCES.---To assist in the implementation
of this section, the head of each contracting agency shall provide, upon
request of the Administration, procurement information collected through
existing agency data collection sources.

§ 16. (a) Whoever makes any statement knowing it to be false, or whoever
willfully overvalues any security, for the purpose of obtaining for
himself or for any applicant any loan, or extension thereof by renewal,
deferment of action, or otherwise, or the acceptance, release, or
substitution of security therefor, or for the purpose of influencing in
any way the action of the Administration, or for the purpose of
obtaining money, property, or anything of value, under this Act, shall
be punished by a fine of not more than \$5,000 or by imprisonment for
not more than two years, or both.

\(b\) Whoever, being connected in any capacity with the Administration,
(1) embezzles, abstracts, purloins, or willfully misapplies any moneys,
funds, securities, or other things of value, whether belonging to it or
Pledged or otherwise entrusted to it, or (2) with intent to defraud the
Administration or any other body politic or corporate, or any
individual, or to deceive any officer, auditor, or examiner of the
Administration makes any false entry in any book, report, or statement
of or to the Administration, or without being duly authorized, draws any
order or issues, puts forth, or assigns any note, debenture, bond, or
other obligation, or draft, bill of exchange, mortgage, judgment, or
decree thereof, or (3) with intent to defraud participates or shares in
or receives directly or indirectly any money, profit, property, or
benefit through any transaction, loan, commission, contract, or any
other act of the Administration, or (4) gives any unauthorized
information concerning any future action or Plan of the Administration
which might affect the value of securities, or, having such knowledge,
invests or speculates, directly or indirectly, in the securities or
property of any company or corporation receiving loans or other
assistance from the Administration, shall be punished by a fine of not
more than \$10,000 or by imprisonment for not more than five years, or
both.

\(c\) Whoever, with intent to defraud, knowingly conceals, removes,
disposes of, or converts to his own use or to that of another, any
property mortgaged or Pledged to, or held by, the Administration, shall
be fined not more than \$5,000 or imprisoned not more than five years,
or both; but if the value of such property does not exceed \$100, he
shall be fined not more than \$1,000 or imprisoned not more than one
year, or both.

\(d\) (1) Whoever misrepresents the status of any concern or person as a
"small business concern", a "qualified HUBZone small business concern",
a \"small business concern owned and controlled by socially and
economically disadvantaged individuals\" or a "small business
concern\[s\] owned and controlled by women", in order to obtain for
oneself or another any---

\(A\) prime contract to be awarded pursuant to section 9, 15, or 31;

\(B\) subcontract to be awarded pursuant to section 8(a);

\(C\) subcontract that is to be included as part or all of a goal
contained in a subcontracting Plan required pursuant to section 8(d); or

\(D\) prime or subcontract to be awarded as a result, or in furtherance,
of any other provision of Federal law that specifically references
section 8(d) for a definition of program eligibility, shall be subject
to the penalties and remedies described in paragraph (2).

\(2\) Any person who violates paragraph (1) shall---

\(A\) be punished by a fine of not more than \$500,000 or by
imprisonment for not more than 10 years, or both;

\(B\) be subject to the administrative remedies prescribed by the
Program Fraud Civil Remedies Act of 1986 (31 U.S.C. 3801‑3812);

\(C\) be subject to suspension and debarment as specified in subpart 9.4
of title 48, Code of Federal Regulations (or any successor regulation)
on the basis that such misrepresentation indicates a lack of business
integrity that seriously and directly affects the present responsibility
to perform any contract awarded by the Federal Government or a
subcontract under such a contract; and

\(D\) be ineligible for participation in any program or activity
conducted under the authority of this Act or the Small Business
Investment Act of 1958 (15 U.S.C. 661 et seq.) for a period not to
exceed 3 years.

\(e\) Any representation of the status of any concern or person as a
\"small business concern\", a "HUBZone small business concern", a
\"small business concern owned and controlled by socially and
economically disadvantaged individuals\", or a \"small business
concern\[s\] owned and controlled by women\" in order to obtain any
prime contract or subcontract enumerated in subsection (d) of this
section shall be in writing.

\(f\) Whoever falsely certifies past compliance with the requirements of
section 7(j)(10)(I) of this Act shall be subject to the penalties
prescribed in subsection (d).

§ 17. Any interest held by the Administration in property, as security
for a loan, shall be subordinate to any lien on such property for taxes
due on the property to a State, or political subdivision thereof, in any
case where such lien would, under applicable State law, be superior to
such interest if such interest were held by any party other than the
United States.

§ 18. (a) The Administration shall not duplicate the work or activity of
any other department or agency of the Federal Government and nothing
contained in this Act shall be construed to authorize any such
duplication unless such work or activity is expressly provided for in
this Act. If loan applications are being refused or loans denied by such
other department or agency responsible for such work or activity due to
administrative withholding from obligation or withholding from
apportionment, or due to administratively declared moratorium, then, for
purposes of this section, no duplication shall be deemed to have
occurred.

\(b\) As used in this Act---

\(1\) \"agricultural enterprises\" means those businesses engaged in the
production of food and fiber, ranching, and raising of livestock,
aquaculture, and all other farming and agricultural related industries;
and

\(2\) \"credit elsewhere\" means the availability of sufficient credit
from non‑Federal sources at reasonable rates and terms, taking into
consideration prevailing private rates and terms in the community in or
near where the concern transacts business for similar purposes and
periods of time.

§ 19. If any provision of this Act, or the application thereof to any
person or circumstances, is held invalid, the remainder of this Act, and
the application of such provision to other persons or circumstances,
shall not be affected thereby.

§ 20. (a) (1) For fiscal year 2000 and each fiscal year thereafter,
there are authorized to be appropriated such sums as may be necessary
and appropriate, to remain available until expended, and to be available
solely---

\(A\) to carry out the Small Business Development Center Program under
section 21, but not to exceed the annual funding level, as specified in
section 21(a);

\(B\) to pay the expenses of the National Small Business Development
Center Advisory Board, as provided in section 21(i);

\(C\) to pay the expenses of the information sharing system, as provided
in section 21(c)(8);

\(D\) to pay the expenses of the association referred to in section
21(a)(3)(A) for conducting the accreditation program, as provided in
section 21(k)(2); and

\(E\) to pay the expenses of the Administration, including salaries of
examiners, for conducting examinations as part of the accreditation
program conducted by the association referred to in section 21(a)(3)(A).

\(F\) to pay for small business development center grants as mandated or
directed by Congress.

\(2\) Notwithstanding any other provision of law, the Administration
shall enter into commitments for direct loans and to guarantee loans,
debentures, payment of rentals, or other amounts due under qualified
contracts and other types of financial assistance and enter into
commitments to purchase debentures and preferred securities and to
guarantee sureties against loss pursuant to programs under this Act and
the Small Business Investment Act of 1958, in the full amounts provided
by law subject only to (A) the availability of qualified applications,
and (B) limitations contained in appropriations Acts. Nothing in this
paragraph authorizes the Administration to reduce or limit its authority
to enter into such commitments. Subject to approval in appropriations
Acts, amounts authorized for preferred securities, debentures or
participating securities under title III of the Small Business
Investment Act of 1958 may be obligated in one fiscal year and disbursed
or guaranteed in any 1 or more of the 4 subsequent fiscal years.

\(3\) There are authorized to be transferred from the disaster loan
revolving fund such sums as may be necessary and appropriate for
administrative expenses of the Administration.

\(4\) Except as may be otherwise specifically provided by law, the
amount of deferred participation loans authorized in this section---

\(A\) shall mean the net amount of the loan principal guaranteed by the
Small Business Administration (and does not include any amount which is
not guaranteed); and

\(B\) shall be available for a national program, except that the
Administration may use not more than an amount equal to 10 percent of
the amount authorized each year for any special or pilot program
directed to identified sectors of the small business community or to
specific geographic regions of the United States.

\(b\) There are authorized to be appropriated to the Administration for
fiscal year 1991 such sums as may be necessary to carry out the
provisions of this Act and the Small Business Investment Act of 1958.
There also are hereby authorized to be appropriated such sums as may be
necessary and appropriate for the carrying out of the provisions and
purposes, including administrative, of sections 7(b)(1) and 7(b)(2) of
this Act; and there are authorized to be transferred from the disaster
loan revolving fund such sums as may be necessary and appropriate for
such administrative expenses.

\(c\) DISASTER MITIGATION PILOT PROGRAM.---The following program levels
are authorized for loans under section 7(b)(1)(C):

\(1\) \$15,000,000 for fiscal year 2005.

\(2\) \$15,000,000 for fiscal year 2006.

\(d\) FISCAL YEAR 2005.---

\(1\) PROGRAM LEVELS.---The following program levels are authorized for
fiscal year 2005:

\(A\) For the programs authorized by this Act, the Administration is
authorized to make---

\(i\) \$75,000,000 in technical assistance grants, as provided in
section 7(m); and

\(ii\) \$105,000,000 in direct loans, as provided in 7(m).

\(B\) For the programs authorized by this Act, the Administration is
authorized to make \$23,050,000,000 in deferred participation loans and
other financings. Of such sum, the Administration is authorized to
make---

\(i\) \$16,500,000,000 in general business loans, as provided in section
7(a);

\(ii\) \$6,000,000,000 in certified development company financings, as
provided in section 7(a)(13) and as provided in section 504 of the Small
Business Investment Act of 1958;

\(iii\) \$500,000,000 in loans, as provided in section 7(a)(21); and

\(iv\) \$50,000,000 in loans, as provided in section 7(m).

\(C\) For the programs authorized by title III of the Small Business
Investment Act of 1958, the Administration is authorized to make---

\(i\) \$4,250,000,000 in purchases of participating securities; and

\(ii\) \$3,250,000,000 in guarantees of debentures.

\(D\) For the programs authorized by part B of title IV of the Small
Business Investment Act of 1958, the Administration is authorized to
enter into guarantees not to exceed \$6,000,000,000, of which not more
than 50 percent may be in bonds approved pursuant to section 411(a)(3)
of that Act.

\(E\) The Administration is authorized to make grants or enter into
cooperative agreements for a total amount of \$7,000,000 for the Service
Corps of Retired Executives program authorized by section 8(b)(1).

\(2\) ADDITIONAL AUTHORIZATIONS.---

\(A\) There are authorized to be appropriated to the Administration for
fiscal year 2005 such sums as may be necessary to carry out the
provisions of this Act not elsewhere provided for, including
administrative expenses and necessary loan capital for disaster loans
pursuant to section 7(b), and to carry out the Small Business Investment
Act of 1958, including salaries and expenses of the Administration.

\(B\) Notwithstanding any other provision of this paragraph, for fiscal
year 2005---

\(i\) no funds are authorized to be used as loan capital for the loan
program authorized by section 7(a)(21) except by transfer from another
Federal department or agency to the Administration, unless the program
level authorized for general business loans under paragraph (1)(B)(i) is
fully funded; and

\(ii\) the Administration may not approve loans on its own behalf or on
behalf of any other Federal department or agency, by contract or
otherwise, under terms and conditions other than those specifically
authorized under this Act or the Small Business Investment Act of 1958,
except that it may approve loans under section 7(a)(21) of this Act in
gross amounts of not more than \$2,000,000.

\(e\) FISCAL YEAR 2006.---

\(1\) PROGRAM LEVELS.---The following program levels are authorized for
fiscal year 2006:

\(A\) For the programs authorized by this Act, the Administration is
authorized to make---

\(i\) \$80,000,000 in technical assistance grants, as provided in
section 7(m); and

\(ii\) \$110,000,000 in direct loans, as provided in 7(m).

\(B\) For the programs authorized by this Act, the Administration is
authorized to make \$25,050,000,000 in deferred participation loans and
other financings. Of such sum, the Administration is authorized to
make---

\(i\) \$17,000,000,000 in general business loans, as provided in section
7(a);

\(ii\) \$7,500,000,000 in certified development company financings, as
provided in section 7(a)(13) and as provided in section 504 of the Small
Business Investment Act of 1958;

\(iii\) \$500,000,000 in loans, as provided in section 7(a)(21); and

\(iv\) \$50,000,000 in loans, as provided in section 7(m).

\(C\) For the programs authorized by title III of the Small Business
Investment Act of 1958, the Administration is authorized to make---

\(i\) \$4,500,000,000 in purchases of participating securities; and

[]{.mark}

\(ii\) \$3,500,000,000 in guarantees of debentures.

\(D\) For the programs authorized by part B of title IV of the Small
Business Investment Act of 1958, the Administration is authorized to
enter into guarantees not to exceed \$6,000,000,000, of which not more
than 50 percent may be in bonds approved pursuant to section 411(a)(3)
of that Act.

\(E\) The Administration is authorized to make grants or enter into
cooperative agreements for a total amount of \$7,000,000 for the Service
Corps of Retired Executives program authorized by section 8(b)(1).

\(2\) ADDITIONAL AUTHORIZATIONS.---

\(A\) There are authorized to be appropriated to the Administration for
fiscal year 2006 such sums as may be necessary to carry out the
provisions of this Act not elsewhere provided for, including
administrative expenses and necessary loan capital for disaster loans
pursuant to section 7(b), and to carry out the Small Business Investment
Act of 1958, including salaries and expenses of the Administration.

\(B\) Notwithstanding any other provision of this paragraph, for fiscal
year 2006---

[]{.mark}

\(i\) no funds are authorized to be used as loan capital for the loan
program authorized by section 7(a)(21) except by transfer from another
Federal department or agency to the Administration, unless the program
level authorized for general business loans under paragraph (1)(B)(i) is
fully funded; and

\(ii\) the Administration may not approve loans on its own behalf or on
behalf of any other Federal department or agency, by contract or
otherwise, under terms and conditions other than those specifically
authorized under this Act or the Small Business Investment Act of 1958,
except that it may approve loans under section 7(a)(21) of this Act in
gross amounts of not more than \$2,000,000.

\[(f)---(i) deleted\].

\(j\) FISCAL YEAR 2004 PURCHASE AND GUARANTEE AUTHORITY UNDER TITLE III
OF SMALL BUSINESS INVESTMENT ACT OF 1958.---For fiscal year 2004, for
the programs authorized by title III of the Small Business Investment
Act of 1958 (15 U.S.C. 681 et seq.), the Administration is authorized to
make---

\(1\) \$4,000,000,000 in purchases of participating securities; and

\(2\) \$3,000,000,000 in guarantees of debentures.

§ 21. (a) (1) The Administration is authorized to make grants (including
contracts and cooperative agreements) to any State government or any
agency thereof, any regional entity, any State‑chartered development,
credit or finance corporation, any women's business center operating
pursuant to section 29, any public or private institution of higher
education, including but not limited to any land‑grant college or
university, any college or school of business, engineering, commerce, or
agriculture, community college or junior college, or to any entity
formed by two or more of the above entities (herein referred to as
\"applicants\") to assist in establishing small business development
centers and to any such body for: small business oriented employment or
natural resources development programs; studies, research, and
counseling concerning the managing, financing, and operation of small
business enterprises; management and technical assistance regarding
small business participation in international markets, export promotion
and technology transfer, delivery or distribution of such services and
information; and providing access to business analysts who can refer
small business concerns to available experts: [Provided]{.underline},
That after December 31, 1990, the Administration shall not make a grant
to any applicant other than an institution of higher education or a
women's business center operating pursuant to section 29 as a Small
Business Development Center unless the applicant was receiving a grant
(including a contract or cooperative agreement) on such date. The
Administration shall require any applicant for a small business
development center grant with performance commencing on or after January
1, 1992 to have its own budget and to primarily utilize institutions of
higher education and women's business centers operating pursuant to
section 29 to provide services to the small business community. The term
of such grants shall be made on a calendar year basis or to coincide
with the Federal fiscal year.

\(2\) The Small Business Development Centers shall work in close
cooperation with the Administration\'s regional and local offices, the
Department of Commerce, appropriate Federal, State and local agencies
and the small business community to serve as an active information
dissemination and service delivery mechanism for existing trade
promotion, trade finance, trade adjustment, trade remedy and trade data
collection programs of particular utility for small businesses.

\(3\) The Small Business Development Center Program shall be under the
general management and oversight of the Administration, for the delivery
of programs and services to the small business community. Such programs
and services shall be jointly developed, negotiated, and agreed upon,
with full participation of both parties, pursuant to an executed
cooperative agreement between the Small Business Development Center
applicant and the Administration.

\(A\) Small business development centers are authorized to form an
association to pursue matters of common concern. If more than a majority
of the small business development centers which are operating pursuant
to agreements with the

Administration are members of such an association, the Administration is
authorized and directed to recognize the existence and activities of
such an association and to consult with it and develop documents (i)
announcing the annual scope of activities pursuant to this section, (ii)
requesting proposals to deliver assistance as provided in this section
and (iii) governing the general operations and administration of the
Small Business Development Center Program, specifically including the
development of regulations and a uniform negotiated cooperative
agreement for use on an annual basis when entering into individual
negotiated agreements with small business development centers.

\(B\) Provisions governing audits, cost principles and administrative
requirements for Federal grants, contracts and cooperative agreements
which are included in uniform requirements of Office of Management and
Budget (OMB) Circulars shall be incorporated by reference and shall not
be set forth in summary or other form in regulations.

\(C\) On an annual basis, the Small Business Development Center shall
review and coordinate public and private partnerships and cosponsorships
with the Administration for the purpose of more efficiently leveraging
available resources on a National and a State basis.

\(4\) SMALL BUSINESS DEVELOPMENT CENTER PROGRAM LEVEL.---

\(A\) IN GENERAL.---The Administration shall require as a condition of
any grant (or amendment or modification thereof) made to an applicant
under this section, that a matching amount (excluding any fees collected
from recipients of such assistance) equal to the amount of such grant be
provided from sources other than the Federal Government, to be comprised
of not less than 50 percent cash and not more than 50 percent of
indirect costs and in-kind contributions.

\(B\) RESTRICTION.---The matching amount described in subparagraph (A)
shall not include any indirect costs or in-kind contributions derived
from any Federal program.

\(C\) FUNDING FORMULA.---

\(i\) IN GENERAL.---Subject to clause (iii), the amount of a formula
grant received by a State under this subparagraph shall be equal to an
amount determined in accordance with the following formula:

\(I\) The annual amount made available under section 20(a) for the Small
Business Development Center Program, less any reductions made for
expenses authorized by clause (v) of this subparagraph, shall be divided
on a pro rata basis, based on the percentage of the population of each
State, as compared to the population of the United States.

\(II\) If the pro rata amount calculated under subclause (I) for any
State is less than the minimum funding level under clause (iii), the
Administration shall determine the aggregate amount necessary to achieve
that minimum funding level for each such State.

\(III\) The aggregate amount calculated under subclause (II) shall be
deducted from the amount calculated under subclause (I) for States
eligible to receive more than the minimum funding level. The deductions
shall be made on a pro rata basis, based on the population of each such
State, as compared to the total population of all such States.

\(IV\) The aggregate amount deducted under subclause (III) shall be
added to the grants of those States that are not eligible to receive
more than the minimum funding level in order to achieve the minimum
funding level for each such State, except that the eligible amount of a
grant to any State shall not be reduced to an amount below the minimum
funding level.

\(ii\) GRANT DETERMINATION.---The amount of a grant that a State is
eligible to apply for under this subparagraph shall be the amount
determined under clause (i), subject to any modifications required under
clause (iii), and shall be based on the amount available for the fiscal
year in which performance of the grant commences, but not including
amounts distributed in accordance with clause (iv). The amount of a
grant received by a State under any provision of this subparagraph shall
not exceed the amount of matching funds from sources other than the
Federal Government, as required under subparagraph (A).

\(iii\) MINIMUM FUNDING LEVEL.---The amount of the minimum funding level
for each State shall be determined for each fiscal year based on the
amount made available for that fiscal year to carry out this section, as
follows:

\(I\) If the amount made available is not less than \$81,500,000 and not
more than \$90,000,000, the minimum funding level shall be \$500,000.

\(II\) If the amount made available is less than \$81,500,000, the
minimum funding level shall be the remainder of \$500,000 minus a
percentage of \$500,000 equal to the percentage amount by which the
amount made available is less than \$81,500,000.

\(III\) If the amount available is more than \$90,000,000, the minimum
funding level shall be the sum of \$500,000 Plus a percentage of
\$500,000 equal to the percentage amount by which the amount made
available exceeds \$90,000,000.

\(iv\) DISTRIBUTIONS.---Subject to clause (iii), if any State does not
apply for, or use, its full funding eligibility for a fiscal year, the
Administration shall distribute the remaining funds as follows:

\(I\) If the grant to any State is less than the amount received by that
State in Fiscal year 2000, the Administration shall distribute such
remaining funds, on a pro rata bases, based on the percentage of
shortage of each such State, as compared to the total amount of such
remaining funds available, to the extent necessary in order to increase
the amount of the grant to the amount received by that State in fiscal
year 2000, or until such funds are exhausted, whichever first occurs.

\(II\) If any funds remain after the application of subclause (I), the
remaining amount may be distributed as supplemental grants to any State,
as the Administration determines, in its discretion, to be appropriate,
after consultation with the association referred to in subsection
(a)(3)(A).

\(v\) USE OF AMOUNTS.

\(I\) IN GENERAL.---Of the amounts made available in any fiscal year to
carry out this section---

(aa) not more than \$500,000 may be used by the Administration to pay
expenses enumerated in subparagraphs (B) through (D) of section
20(a)(1); and

(bb) not more than \$500,000 may be used by the Administration to pay
the examination expenses enumerated in section 20(a)(1)(E).

\(II\) LIMITATION.---No funds described in subclause (I) may be used for
examination expenses under section 20(a)(1)(E) if the usage would reduce
the amount of grants made available under clause (i)(I) of this
subparagraph to less than \$85,000,000 (after excluding any amounts
provided in appropriations Acts, or accompanying report language, for
specific institutions or for purposes other than the general small
business development center program) or would further reduce the amount
of such grants below such amount.

\(vi\) EXCLUSIONS.---Grants provided to a State by the Administration or
another Federal agency to carry out subsection (a)(6) or (c)(3)(G), or
for supplemental grants set forth in clause (iv)(II) of this
subparagraph, shall not be included in the calculation of maximum
funding for a State under clause (ii) of this subparagraph.

\(vii\) AUTHORIZATION OF APPROPRIATIONS.---There are authorized to be
appropriated to carry out this subparagraph---

\(I\) \$130,000,000 for fiscal year 2005; and

\(II\) \$135,000,000 for fiscal year 2006.

\(viii\) LIMITATION.---From the funds appropriated pursuant to clause
(vii), the Administration shall reserve not less than \$1,000,000 in
each fiscal year to develop portable assistance for startup and
sustainability non-matching grant programs to be conducted by eligible
small business development centers in communities that are economically
challenged as a result of a business or government facility down sizing
or closing, which has resulted in the loss of jobs or small business
instability. A non-matching grant under this clause shall not exceed
\$100,000, and shall be used for small business development center
personnel expenses and related small business programs and services.

\(ix\) STATE DEFINED.---In this subparagraph, the term "State" means
each of the several States, the District of Columbia, the Commonwealth
of Puerto Rico, the Virgin Islands, Guam, and American Samoa.

\(5\) FEDERAL CONTRACTS WITH SMALL BUSINESS DEVELOPMENT CENTERS.---

\(A\) IN GENERAL.---Subject to the conditions set forth in subparagraph
(B), a small business development center may enter into a contract with
a Federal department or agency to provide specific assistance to small
business concerns.

\(B\) CONTRACT PREREQUISITES.---Before bidding on a contract described
in subparagraph (A), a small business development center shall receive
approval from the Associate Administrator of the small business
development center program of the subject and general scope of the
contract. Each approval under subparagraph (A) shall be based upon a
determination that the contract will provide assistance to small
business concerns and that performance of the contract will not hinder
the small business development center in carrying out the terms of the
grant received by the small business development center from the
Administration.

\(C\) EXEMPTION FROM MATCHING REQUIREMENT.---A contract under this
paragraph shall not be subject to the matching funds or eligibility
requirements of paragraph (4).

\(D\) ADDITIONAL PROVISION.---Notwithstanding any other provision of
law, a contract for assistance under this paragraph shall not be applied
to any Federal department or agency\'s small business, woman-owned
business, or socially and economically disadvantaged business
contracting goal under section 15(g).

\(6\) Any applicant which is funded by the Administration as a Small
Business Development Center may apply for an additional grant to be used
solely to assist---

\(A\) with the development and enhancement of exports by small business
concerns;

\(B\) in technology transfer; and

\(C\) with outreach, development, and enhancement of minority-owned
small business startups or expansions, HUBZone small business concerns,
veteran-owned small business startups or expansions, and women-owned
small business startups or expansions, in communities impacted by base
closings or military or corporate downsizing, or in rural or underserved
communities;

as provided under subparagraphs (B) through (G) of subsection (c)(3).
Applicants for such additional grants shall comply with all of the
provisions of this section, including providing matching funds, except
that funding under this paragraph shall be effective for any fiscal year
to the extent provided in advance in appropriations Acts and shall be in
addition to the dollar program limitations specified in paragraphs (4)
and (5). No recipient of funds under this paragraph shall receive a
grant which would exceed its pro rata share of a \$15,000,000 program
based upon the populations to be served by the Small Business
Development Center as compared to the total population of the United
States. The minimum amount of eligibility for any State shall be
\$100,000.

\(7\) PRIVACY REQUIREMENTS.---

\(A\) IN GENERAL.---A small business development center, consortium of
small business development centers, or contractor or agent of a small
business development center may not disclose the name, address, or
telephone number of any individual or small business concern receiving
assistance under this section without the consent of such individual or
small business concern, unless---

\(i\) the Administrator is ordered to make such a disclosure by a court
in any civil or criminal enforcement action initiated by a Federal or
State agency; or

\(ii\) the Administrator considers such a disclosure to be necessary for
the purpose of conducting a financial audit of a small business
development center, but a disclosure under this clause shall be limited
to the information necessary for such audit.

\(B\) ADMINISTRATOR USE OF INFORMATION.---This section shall not---

\(i\) restrict Administrator access to program activity data; or

\(ii\) prevent the Administrator from using client information to
conduct client surveys.

\(C\) REGULATIONS.---

\(i\) IN GENERAL.---The Administrator shall issue regulations to
establish standards---

\(I\) for disclosures with respect to financial audits under
subparagraph (A)(ii); and

\(II\) for client surveys under subparagraph (B)(ii), including
standards for oversight of such surveys and for dissemination and use of
client information.

\(ii\) MAXIMUM PRIVACY PROTECTION.---Regulations under this
subparagraph, \[sic\] shall, to the extent practicable, provide for the
maximum amount of privacy protection.

\(iii\) INSPECTOR GENERAL.---Until the effective date of regulations
under this subparagraph, any client survey and the use of such
information shall be approved by the Inspector General who shall include
such approval in his semi-annual report.

\(b\) (1) Financial assistance shall not be made available to any
applicant if approving such assistance would be inconsistent with a Plan
for the area involved which has been adopted by an agency recognized by
the State government as authorized to do so and approved by the
Administration in accordance with the standards and requirements
established pursuant to this section.

\(2\) An applicant may apply to participate in the program by submitting
to the Administration for approval a Plan naming those authorized in
subsection (a) to participate in the program, the geographic area to be
served, the services that it would provide, the method for delivering
services, a budget, and any other information and assurances the
Administration may require to insure that the applicant will carry out
the activities eligible for assistance. The Administration is authorized
to approve, conditionally approve or reject a Plan or combination of
Plans submitted. In all cases, the Administration shall review Plans for
conformity with the Plan submitted pursuant to paragraph (1) of this
subsection, and with a view toward providing small business with the
most comprehensive and coordinated assistance in the State or part
thereof to be served.

\(3\) At the discretion of the Administration, the Administration is
authorized to permit a small business development center to provide
advice, information and assistance, as described in subsection (c), to
small businesses located outside the State, but only to the extent such
businesses are located within close geographical proximity to the small
business development center, as determined by the Administration.

\(c\) (1) Applicants receiving grants under this section shall assist
small businesses in solving problems concerning operations,
manufacturing, engineering, technology exchange and development,
personnel administration, marketing, sales, merchandising, finance,
accounting, business strategy development, and other disciplines
required for small business growth and expansion, innovation, increased
productivity, and management improvement, and for decreasing industry
economic concentrations.

\(2\) A small business development center shall provide services as
close as possible to small businesses by providing extension services
and utilizing satellite locations when necessary. The facilities and
staff of each Small Business Development Center shall be located in such
places as to provide maximum accessibility and benefits to the small
business which the center is intended to serve. To the extent possible,
it also shall make full use of other Federal and State government
programs that are concerned with aiding small business. A small business
development center shall have---

\(A\) a full‑time staff, including a full‑time director who shall have
the authority to make expenditures under the center\'s budget and who
shall manage the program activities;

\(B\) access to business analysts to counsel, assist, and inform small
business clients;

\(C\) access to technology transfer agents to provide state of art
technology to small businesses through coupling with national and
regional technology data sources;

\(D\) access to information specialists to assist in providing
information searches and referrals to small business;

\(E\) access to part‑time professional specialists to conduct research
or to provide counseling assistance whenever the need arises; and

\(F\) access to laboratory and adaptive engineering facilities.

\(3\) Services provided by a small business development center shall
include, but shall not be limited to ‑‑

\(A\) furnishing one‑to‑one individual counseling to small businesses,
including---

\(i\) working with individuals to increase awareness of basic credit
practices and credit requirements;

\(ii\) working with individuals to develop business Plans, financial
packages, credit applications, and contract proposals;

\(iii\) working with the Administration to develop and provide
informational tools for use in working with individuals on pre-business
startup Planning, existing business expansion, and export Planning; and

\(iv\) working with individuals referred by the local offices of the
Administration and Administration participating lenders;

\(B\) assisting in technology transfer, research and development,
including applied research, and coupling from existing sources to small
businesses, including---

\(i\) working to increase the access of small businesses to the
capabilities of automated flexible manufacturing systems;

\(ii\) working through existing networks and developing new networks for
technology transfer that encourage partnership between the small
business and academic communities to help commercialize university‑based
research and development and introduce university‑based engineers and
scientists to their counterparts in small technology‑based firms; and

\(iii\) exploring the viability of developing shared production
facilities, under appropriate circumstances;

\(C\) in cooperation with the Department of Commerce and other relevant
Federal agencies, actively assisting small businesses in exporting by
identifying and developing potential export markets, facilitating export
transactions, developing linkages between United States small business
firms and prescreened foreign buyers, assisting small businesses to
participate in international trade shows, assisting small businesses in
obtaining export financing, and facilitating the development or
reorientation of marketing and production strategies; where appropriate,
the Small Business Development Center and the Administration may work in
cooperation with the State to establish a State international trade
center for these purposes;

\(D\) developing a program in conjunction with the Export‑Import Bank
and local and regional Administration offices that will enable Small
Business Development Centers to serve as an information network and to
assist small business applicants for Export‑Import Bank financing
programs, and otherwise identify and help to make available export
financing programs to small businesses;

\(E\) working closely with the small business community, small business
consultants, State agencies, universities and other appropriate groups
to make translation services more readily available to small business
firms doing business, or attempting to develop business, in foreign
markets;

\(F\) in providing assistance under this subsection, applicants shall
cooperate with the Department of Commerce and other relevant Federal
agencies to increase access to available export market information
systems, including the CIMS system;

\(G\) assisting small businesses to develop and implement strategic
business Plans to timely and effectively respond to the Planned closure
(or reduction) of a Department of Defense facility within the community,
or actual or projected reductions in such firms\' business base due to
the actual or projected termination (or reduction) of a Department of
Defense program or a contract in support of such program---

\(i\) by developing broad economic assessments of the adverse impacts
of---

\(I\) the closure (or reduction) of the Department of Defense facility
on the small business concerns providing goods or services to such
facility or to the military and civilian personnel currently stationed
or working at such facility; and

\(II\) the termination (or reduction) of a Department of Defense program
(or contracts under such program) on the small business concerns
participating in such program as a prime contractor, subcontractor or
supplier at any tier;

\(ii\) by developing, in conjunction with appropriate Federal, State,
and local governmental entities and other private sector organizations,
the parameters of a transition adjustment program adaptable to the needs
of individual small business concerns;

\(iii\) by conducting appropriate programs to inform the affected small
business community regarding the anticipated adverse impacts identified
under clause (i) and the economic adjustment assistance available to
such firms; and

\(iv\) by assisting small business concerns to develop and implement an
individualized transition business Plan.

\(H\) maintaining current information concerning Federal, State, and
local regulations that affect small businesses and counsel small
businesses on methods of compliance. Counseling and technology
development shall be provided when necessary to help small businesses
find solutions for complying with environmental, energy, health, safety,
and other Federal, State, and local regulations;

\(I\) coordinating and conducting research into technical and general
small business problems for which there are no ready solutions;

\(J\) providing and maintaining a comprehensive library that contains
current information and statistical data needed by small businesses;

\(K\) maintaining a working relationship and open communications with
the financial and investment communities, legal associations, local and
regional private consultants, and local and regional small business
groups and associations in order to help address the various needs of
the small business community;

\(L\) conducting in‑depth surveys for local small business groups in
order to develop general information regarding the local economy and
general small business strengths and weaknesses in the locality;

\(M\) in cooperation with the Department of Commerce, the Administration
and other relevant Federal agencies, actively assisting rural small
businesses in exporting by identifying and developing potential export
markets for rural small businesses, facilitating export transactions for
rural small businesses, developing linkages between United States\'
rural small businesses and prescreened foreign buyers, assisting rural
small businesses to participate in international trade shows, assisting
rural small businesses in obtaining export financing and developing
marketing and production strategies;

\(N\) assisting rural small businesses---

\(i\) in developing marketing and production strategies that will enable
them to better compete in the domestic market---

\(ii\) by providing technical assistance needed by rural small
businesses;

\(iii\) by making available managerial assistance to rural small
business concerns; and

\(iv\) by providing information and assistance in obtaining financing
for business startups and expansion;

\(O\) in conjunction with the United States Travel and Tourism
Administration, assist rural small business in developing the tourism
potential of rural communities by---

\(i\) identifying the cultural, historic, recreational, and scenic
resources of such communities;

\(ii\) providing assistance to small businesses in developing tourism
marketing and promotion Plans relating to tourism in rural areas; and

\(iii\) assisting small business concerns to obtain capital for starting
or expanding businesses primarily serving tourists;

\(P\) maintaining lists of local and regional private consultants to
whom small businesses can be referred;

\(Q\) providing information to small business concerns regarding
compliance with regulatory requirements;

\(R\) developing informational publications, establishing resource
centers of reference materials, and distributing compliance guides
published under section 312(a) of the Small Business Regulatory
Enforcement Fairness Act of 1996;

\(S\) providing small business owners with access to a wide variety of
export-related information by establishing on-line computer linkages
between small business development centers and an international trade
data information network with ties to the Export Assistance Center
program; and

\(T\) providing information and assistance to small business concerns
with respect to establishing drug-free workplace programs on or before
October 1, 2006.

\(4\) A small business development center shall continue to upgrade and
modify its services, as needed, in order to meet the changing and
evolving needs of the small business community.

\(5\) In addition to the methods prescribed in section 21(c)(2), a small
business development center shall utilize and compensate as one of its
resources qualified small business vendors, including but not limited
to, private management consultants, private consulting engineers and
private testing laboratories, to provide services as described in this
subsection to small businesses on behalf of such small business
development center.

\(6\) In any State (A) in which the Administration has not made a grant
pursuant to paragraph (1) of subsection (a), or (B) in which no
application for a grant has been made by a Small Business Development
Center pursuant to paragraph (6) of such subsection within 60 days after
the effective date of any grant under subsection (a)(1) to such center
or the date the Administration notifies the grantee funded under
subsection (a)(1) that funds are available for grant applications
pursuant to subsection (a)(6), whichever date occurs last, the
Administration may make grants to a non‑profit entity in that State to
carry out the activities specified in paragraph (6) of subsection (a).
Any such applicants shall comply with the matching funds requirement of
paragraph (4) of subsection (a). Such grants shall be effective for any
fiscal year only to the extent provided in advance in appropriations
Acts, and each State shall be limited to the pro rata share provisions
of paragraph (6) of subsection (a).

\(7\) In performing the services identified in paragraph (3), the Small
Business Development Centers shall work in close cooperation with the
Administration\'s regional and local offices, the local small business
community, and appropriate State and local agencies.

\(8\) The Associate Administrator for Small Business Development
Centers, in consultation with the Small Business Development Centers,
shall develop and implement an information sharing system. Subject to
amounts approved in advance in appropriations Acts, the Administration
may make grants or enter cooperative agreements with one or more centers
to carry out the provisions of this paragraph. Said grants or
cooperative agreements shall be awarded for periods of no more than five
years duration. The matching funds provisions of subsection (a) shall
not be applicable to grants or cooperative agreements under this
paragraph. The system shall

\(A\) allow Small Business Development Centers participating in the
program to exchange information about their programs; and

\(B\) provide information central to technology transfer.

\(d\) Where appropriate, the Small Business Development Centers shall
work in conjunction with the relevant State agency and the Department of
Commerce to develop a comprehensive Plan for enhancing the export
potential of small businesses located within the State. This Plan may
involve the cofunding and staffing of a State Office of International
Trade within the State Small Business Development Center, using joint
State and Federal funding, and any other appropriate measures directed
at improving the export performances of small businesses within the
State.

\(e\) Laboratories operated and funded by the Federal Government are
authorized and directed to cooperate with the Administration in
developing and establishing programs to support small business
development centers by making facilities and equipment available;
providing experiment station capabilities in adaptive engineering;
providing library and technical information processing capabilities; and
providing professional staff for consulting. The Administration is
authorized to reimburse the laboratories for such services.

\(f\) The National Science Foundation is authorized and directed to
cooperate with the Administration and with the Small Business
Development Centers in developing and establishing programs to support
the centers.

\(g\) The National Aeronautics and Space Administration and industrial
application centers supported by the National Aeronautics and Space
Administration are authorized and directed to cooperate with small
business development centers participating in this program. The National
Aeronautics and Space Administration shall report annually on the
performance of such industrial application centers with recommendations
to the Administration and the Congress on how such industrial
application centers can be strengthened and expanded. The National
Aeronautics and Space Administration shall include in its report to
Congress information on the ability of industrial application centers to
interact with the Nation\'s small business community and recommendations
to the Administration on continued funding.

\(h\) ASSOCIATE ADMINISTRATOR FOR SMALL BUSINESS DEVELOPMENT CENTERS.---

\(1\) APPOINTMENT AND COMPENSATION.---The Administrator shall appoint an
Associate Administrator for Small Business Development Centers who shall
report to an official who is not more than one level below the Office of
the Administrator and who shall serve without regard to the provisions
of title 5 governing appointments in the competitive service, and
without regard to chapter 51, and subchapter III of chapter 53 of such
title relating to classification and General Schedule pay rates, but at
a rate not less than the rate of GS-17 of the General Schedule.

\(2\) DUTIES.---

\(A\) IN GENERAL.---The sole responsibility of the Associate
Administrator for Small Business Development Centers shall be to
administer the small business development center program. Duties of the
position shall include recommending the annual program budget, reviewing
the annual budgets submitted by each applicant, establishing appropriate
funding levels therefore, selecting applicants to participate in this
program, implementing the provisions of this section, maintaining a
clearinghouse to provide for the dissemination and exchange of
information between small business development centers and conducting
audits of recipients of grants under this section.

\(B\) CONSULTATION REQUIREMENTS.---In carrying out the duties described
in this subsection, the Associate Administrator shall confer with and
seek the advice of the Board established by subsection (i) and
Administration officials in areas served by the small business
development centers; however, the Associate Administrator shall be
responsible for the management and administration of the program and
shall not be subject to the approval or concurrence of such
Administration officials.

\(i\) (1) There is established a National Small Business Development
Center Advisory Board (herein referred to as \"Board\") which shall
consist of nine members appointed from civilian life by the
Administrator and who shall be persons of outstanding qualifications
known to be familiar and sympathetic with small business needs and
problems. No more than three members shall be from universities or their
affiliates and six shall be from small businesses or associations
representing small businesses. At the time of the appointment of the
Board, the Administrator shall designate one‑third of the members and at
least one from each category whose term shall end in two years from the
date of appointment, a second third whose terms shall end in three years
from the date of appointment, and the final third whose term shall end
in four years from the date of appointment. Succeeding Boards shall have
three‑year terms, with one‑third of the Board changing each year.

\(2\) The Board shall elect a Chairman and advise, counsel, and confer
with the Associate Administrator for Small Business Development Centers
in carrying out the duties described in this section. The Board shall
meet at least semiannually and at the call of the Chairman of the Board.
Each member of the Board shall be entitled to be compensated at the rate
not in excess of their per diem equivalent of the highest rate of pay
for individuals occupying the position under GS‑18 of the General
Schedule for each day engaged in activities of the Board and shall be
entitled to be reimbursed for expenses as a member of the Board.

\(j\) (1) Each small business development center shall establish an
advisory board.

\(2\) Each small business development center advisory board shall elect
a chairman and advise, counsel, and confer with the director of the
small business development center on all policy matters pertaining to
the operation of the small business development center, including who
may be eligible to receive assistance from, and how local and regional
private consultants may participate with the small business development
center.

\(k\) PROGRAM EXAMINATION AND ACCREDITATION.---

\(1\) EXAMINATION.---Not later than 180 days after the date of enactment
of this subsection, the Administration shall develop and implement a
biennial programmatic and financial examination of each small business
development center established pursuant to this section.

\(2\) ACCREDITATION.---The Administration may provide financial support,
by contract or otherwise, to the association authorized by subsection
(a)(3)(A) for the purpose of developing a small business development
center accreditation program.

\(3\) EXTENSION OR RENEWAL OF COOPERATIVE AGREEMENTS.---

\(A\) IN GENERAL.---In extending or renewing a cooperative agreement of
a small business development center, the Administration shall consider
the results of the examination and accreditation program conducted
pursuant to paragraphs (1) and (2).

\(B\) ACCREDITATION REQUIREMENT.---After September 30, 2000, the
Administration may not renew or extend any cooperative agreement with a
small business development center unless the center has been approved
under the accreditation program conducted pursuant to this subsection,
except that the Associate Administrator for Small Business Development
Centers may waive such accreditation requirement, in the discretion of
the Associate Administrator, upon a showing that the center is making a
good faith effort to obtain certification.

\(l\) CONTRACT AUTHORITY.---The authority to enter into contracts shall
be in effect for each fiscal year only to the extent and in the amounts
as are provided in advance in appropriations Acts. After the
administration \[sic\] has entered a contract, either as a grant or a
cooperative agreement, with any applicant under this section, it shall
not suspend, terminate, or fail to renew or extend any such contract
unless the Administration provides the applicant with written
notification setting forth the reasons therefore and affording the
applicant an opportunity for a hearing, appeal, or other administrative
proceeding under the provisions of chapter 5 of title 5, United States
Code. If any contract or cooperative agreement under this section with
an entity that is covered by this section is not renewed or extended,
any award of a successor contract or cooperative agreement under this
section to another entity shall be made on a competitive basis.

\(m\) PROHIBITION ON CERTAIN FEES.---A small business development center
shall not impose or otherwise collect a fee or other compensation in
connection with the provision of counseling services under this section.

§ 21A. \[Repealed\].

§ 22. (a) There is established within the Administration an Office of
International Trade which shall implement the programs pursuant to this
section.

\(b\) The Office, working in close cooperation with the Department of
Commerce and other relevant Federal agencies, Small Business Development
Centers engaged in export promotion efforts, regional and local
Administration offices, the small business community, and relevant State
and local export promotion programs, shall---

\(1\) assist in developing a distribution network for existing trade
promotion, trade finance, trade adjustment, trade remedy assistance and
trade data collection programs through use of the Administration\'s
regional and local offices and the Small Business Development Center
network;

\(2\) assist in the aggressive marketing of these programs and the
dissemination of marketing information, including computerized marketing
data, to the small business community; and

\(3\) give preference in hiring or approving the transfer of any
employee into the Office or to a position described in paragraph (8)
below to otherwise qualified applicants who are fluent in a language in
addition to English. Such employees shall accompany foreign trade
missions if designated by the director of the Office and shall be
available as needed to translate documents, interpret conversations and
facilitate multilingual transactions including providing referral lists
for translation services if required.

\(c\) The Office shall promote sales opportunities for small business
goods and services abroad. To accomplish this objective the office
shall---

\(1\) in cooperation with the Department of Commerce, other relevant
agencies, regional and local Administration offices, the Small Business
Development Center network, and State programs, develop a mechanism for
(A) identifying sub‑sectors of the small business community with strong
export potential; (B) identifying areas of demand in foreign markets;
(C) prescreening foreign buyers for commercial and credit purposes; and
(D) assisting in increasing international marketing by disseminating
relevant information regarding market leads, linking potential sellers
and buyers, and catalyzing the formation of joint ventures, where
appropriate;

\(2\) in cooperation with the Department of Commerce, actively assist
small businesses in the formation and utilization of export trading
companies, export management companies and research and development
pools authorized under section 9 of this Act;

\(3\) work in conjunction with other Federal agencies, regional and
local offices of the Administration, the Small Business Development
Center network, and the private sector to identify and publicize
existing translation services, including those available through
colleges and universities participating in the Small Business
Development Center Program;

\(4\) work closely with the Department of Commerce and other relevant
Federal agencies to---

\(A\) collect, analyze and periodically update relevant data regarding
the small business share of United States exports and the nature of
State exports (including the production of Gross State Produce figures)
and disseminate that data to the public and to Congress;

\(B\) make recommendations to the Secretary of Commerce and to Congress
regarding revision of the SIC codes to encompass industries currently
overlooked and to create SIC codes for export trading companies and
export management companies;

\(C\) improve the utility and accessibility of existing export promotion
programs for small businesses; and

\(D\) increase the accessibility of the Export Trading Company contact
facilitation service;

\(5\) make available to the small business community information
regarding conferences on exporting and international trade sponsored by
the public and private sector;

\(6\) provide small businesses with access to current and complete
export information by---

\(A\) making available, at the Administration\'s regional offices
through cooperation with the Department of Commerce, export information,
including, but not limited to, the worldwide information and trade
system and world trade data reports;

\(B\) maintaining a current list of financial institutions that finance
export operations;

\(C\) maintaining a current directory of all Federal, regional, State
and private sector programs that provide export information and
assistance to small businesses; and

\(D\) preparing and publishing such reports as it determines to be
necessary concerning market conditions, sources of financing, export
promotion programs, and other information pertaining to the needs of
small business exporting firms so as to insure that the maximum
information is made available to small businesses in a readily usable
form;

\(7\) encourage through cooperation with the Department of Commerce,
greater small business participation in trade fairs, shows, missions,
and other domestic and overseas export development activities of the
Department of Commerce; and

\(8\) facilitate decentralized delivery of export information and
assistance to small businesses by assigning full‑time export development
specialists to each Administration regional office and assigning primary
responsibility for export development to one person in each district
office. Such specialists shall ‑‑

\(A\) assist small businesses in obtaining export information and
assistance from other Federal departments and agencies;

\(B\) maintain a current directory of all programs which provide export
information and assistance to small businesses within the region;

\(C\) encourage financial institutions to develop and expand programs
for export financing;

\(D\) provide advice to Administration personnel involved in granting
loans, loan guarantees, and extensions and revolving lines of credit,
and providing other forms of assistance to small businesses engaged in
exports; and

\(E\) within one hundred and eighty days of their appointment,
participate in training programs designed by the Administrator, in
conjunction with the Department of Commerce and other Federal
departments and agencies, to study export programs and to examine small
businesses\' needs for export information and assistance.

\(d\) The Office shall work in cooperation with the Export‑Import Bank
of the United States, the Department of Commerce, other relevant Federal
agencies, and the States to develop a program through which export
specialists in the regional offices of the Administration, regional and
local loan officers, and Small Business Development Center personnel can
facilitate the access of small businesses to relevant export financing
programs of the Export‑Import Bank of the United States and to export
and pre‑export financing programs available from the Administration and
the private sector. To accomplish this goal, the Office shall work in
cooperation with the Export‑Import Bank and the small business
community, including small business trade associations, to---

\(1\) aggressively market existing Administration export financing and
pre‑export financing programs;

\(2\) identify financing available under various Export‑Import Bank
programs, and aggressively market those programs to small businesses;

\(3\) assist in the development of financial intermediaries and
facilitate the access of those intermediaries to existing financing
programs;

\(4\) promote greater participation by private financial institutions,
particularly those institutions already participating in loan programs
under this Act, in export finance; and

\(5\) provide for the participation of appropriate Administration
personnel in training programs conducted by the Export‑Import Bank.

\(e\) The Office shall---

\(1\) work in cooperation with other Federal agencies and the private
sector to counsel small businesses with respect to initiating and
participating in any proceedings relating to the administration of the
United States trade laws; and

\(2\) work with the Department of Commerce, the Office of the United
States Trade Representative, and the International Trade Commission to
increase access to trade remedy proceedings for small businesses.

\(f\) The Office shall report to the Committees on Small Business of the
House of Representatives and the Senate on an annual basis as to its
progress in implementing the requirements under this section.

\(g\) The Office, in cooperation, where appropriate, with the Division
of Economic Research of the Office of Advocacy, and with other Federal
agencies, shall undertake studies regarding the following issues and
shall report to the Committees on Small Business of the House of
Representatives and the Senate, and to other relevant Committees of the
House and Senate within 6 months after the date of enactment of the
Small Business International Trade and Competitiveness Act with specific
recommendations on---

\(1\) the viability and cost of establishing an annual, competitive
small business export incentive program similar to the Small Business
Innovation Research program and alternative methods of structuring such
a program;

\(2\) methods of streamlining trade remedy proceedings to increase
access for, and reduce expenses incurred by, smaller firms;

\(3\) methods of improving the current small business foreign sales
corporation tax incentives and providing small businesses with greater
benefits from this initiative;

\(4\) methods of identifying potential export markets for United States
small businesses; maintaining and disseminating current foreign market
data; and devising a comprehensive export marketing strategy for United
States small business goods and services, and shall include data on the
volume and dollar amount of goods and services, identified by type,
imported by United States trading partners over the past 10 years; and

\(5\) the results of a survey of major United States trading partners to
identify the domestic policies, programs and incentives, and the private
sector initiatives, which exist to encourage the formation and growth of
small business.

§ 23. SUPERVISORY AND ENFORCEMENT AUTHORITY FOR SMALL BUSINESS LENDING
COMPANIES.

\(a\) IN GENERAL.---The Administrator is authorized---

\(1\) to supervise the safety and soundness of small business lending
companies and non-Federally regulated lenders;

\(2\) with respect to small business lending companies to set capital
standards to regulate, to examine, and to enforce laws governing such
companies, in accordance with the purposes of this Act; and

\(3\) with respect to non-Federally regulated lenders to regulate, to
examine, and to enforce laws governing the lending activities of such
lenders under section 7(a) in accordance with the purposes of this Act.

\(b\) CAPITAL DIRECTIVE.---

\(1\) IN GENERAL.---If the Administrator determines that a small
business lending company is being operated in an imprudent manner, the
Administrator may, in addition to any other action authorized by law,
issue a directive to such company to increase capital to such level as
the Administrator determines will result in the safe and sound operation
of such company.

\(2\) DELEGATION.---The Administrator may not delegate the authority
granted under paragraph (1) except to an Associate Deputy Administrator.

\(3\) REGULATIONS.---The Administrator shall issue regulations outlining
the conditions under which the Administrator may determine the level of
capital pursuant to paragraph (1).

\(c\) CIVIL ACTION.---If a small business lending company violates this
Act, the Administrator may institute a civil action in an appropriate
district court to terminate the rights, privileges, and franchises of
the company under this Act.

\(d\) REVOCATION OR SUSPENSION OF LOAN AUTHORITY.---

\(1\) The Administrator may revoke or suspend the authority of a small
business lending company or a non-Federally regulated lender to make,
service or liquidate business loans authorized by section 7(a) of this
Act---

\(A\) for false statements knowingly made in any written submission
required under this Act;

\(B\) for omission of a material fact from any written submission
required under this Act;

\(C\) for willful or repeated violation of this Act;

\(D\) for willful or repeated violation of any condition imposed by the
Administrator with respect to any application, request, or agreement
under this Act; or

\(E\) for violation of any cease and desist order of the Administrator
under this section.

\(2\) The Administrator may revoke or suspend authority under paragraph
(1) only after a hearing under subsection (f). The Administrator may
delegate power to revoke or suspend authority under paragraph (1) only
to the Deputy Administrator and only if the Administrator is unavailable
to take such action.

\(A\) The Administrator, after finding extraordinary circumstances and
in order to protect the financial or legal position of the United
States, may issue a suspension order without conducting a hearing
pursuant to subsection (f). If the Administrator issues a suspension
under the preceding sentence, the Administrator shall within two
business days follow the procedures set forth in subsection (f).

\(B\) Any suspension under paragraph (1) shall remain in effect until
the Administrator makes a decision pursuant to subparagraph (4) to
permanently revoke the authority of the small business lending company
or non-Federally regulated lender, suspend the authority for a time
certain, or terminate the suspension.

\(3\) The small business lending company or non-Federally regulated
lender must notify borrowers of a revocation and that a new entity has
been appointed to service their loans. The Administrator or an employee
of the Administration designated by the Administrator may provide such
notice to the borrower.

\(4\) Any revocation or suspension under paragraph (1) shall be made by
the Administrator except that the Administrator shall delegate to an
administrative law judge as that term is used in section 3105 of title
5, United States Code, the authority to conduct any hearing required
under subsection (f). The Administrator shall base the decision to
revoke on the record of the hearing.

\(e\) CEASE AND DESIST ORDER.---

\(1\) Where a small business lending company, a non-Federally regulated
lender, or other person violates this Act or is engaging or is about to
engage in any acts or practices which constitute or will constitute a
violation of this Act, the Administrator may order, after the
opportunity for hearing pursuant to subsection (f), the company, lender,
or other person to cease and desist from such action or failure to act.
The Administrator may []{.mark}delegate the authority under the
preceding sentence only to the Deputy Administrator and only if the
Administrator is unavailable to take such action.

\(2\) The Administrator, after finding extraordinary circumstances and
in order to protect the financial or legal position of the United
States, may issue a cease and desist order without conducting a hearing
pursuant to subsection (f). If the Administrator issues a cease and
desist order under the preceding sentence, the Administrator shall
within two business days follow the procedures set forth in subsection
(f).

\(3\) The Administrator may further order such small business lending
company or non-Federally regulated lender or other person to take such
action or to refrain from such action as the Administrator deems
necessary to insure compliance with this Act.

\(4\) A cease and desist order under this subsection may also provide
for the suspension of authority to lend in subsection (d).

\(f\) PROCEDURE FOR REVOCATION OR SUSPENSION OF LOAN AUTHORITY AND FOR
CEASE AND DESIST ORDER.---

\(1\) Before revoking or suspending authority under subsection (d) or
issuing a cease and desist order under subsection (e), the Administrator
shall serve an order to show cause upon the small business lending
company, non-Federally regulated lender, or other person why an order
revoking or suspending the authority or a cease and desist order should
not be issued. The order to show cause shall contain a statement of the
matters of fact and law asserted by the Administrator and the legal
authority and jurisdiction under which a hearing is to be held, and
shall set forth that a hearing will be held before an administrative law
judge at a time and place stated in the order. Such hearing shall be
conducted pursuant to the provisions of sections 554, 556, and 557 of
title 5, United States Code. If after hearing, or a waiver thereof, the
Administrator determines that an order revoking or suspending the
authority or a cease and desist order should be issued, the
Administrator shall promptly issue such order, which shall include a
statement of the findings of the Administrator and the grounds and
reasons therefore and specify the effective date of the order, and shall
cause the order to be served on the small business lending company,
non-Federally regulated lender, or other person involved.

\(2\) Witnesses summoned before the Administrator shall be paid by the
party at whose instance they were called the same fees and mileage that
are paid witnesses in the courts of the United States.

\(3\) A cease and desist order, suspension or revocation issued by the
Administrator, after the hearing under this subsection is final agency
action for purposes of chapter 7 of title 5, United States Code. An
adversely aggrieved party shall have 20 days from the date of issuance
of the cease and desist order, suspension or revocation, to seek
judicial review in an appropriate district court.

\(g\) REMOVAL OR SUSPENSION OF MANAGEMENT OFFICIAL.---

[]{.mark}

\(1\) DEFINITION.---In this section, the term "management official"
means, with respect to a small business lending company or a
non-Federally regulated lender, an officer, director, general partner,
manager, employee, agent, or other participant in the management of the
affairs of the company's or lender's activities under section 7(a) of
this Act.

\(2\) REMOVAL OF MANAGEMENT OFFICIAL.---

\(A\) NOTICE.---The Administrator may serve upon any management official
a written notice of its intention to remove that management official if,
in the opinion of the Administrator, the management official---

\(i\) willfully and knowingly commits a substantial violation of---

\(I\) this Act;

\(II\) any regulation issued under this Act;

\(III\) a final cease-and-desist order under this Act; or

\(IV\) any agreement by the management official, the small business
lending company or non-Federally regulated lender under this Act; or

\(ii\) willfully and knowingly commits a substantial breach of a
fiduciary duty of that person as a management official and the violation
or breach of fiduciary duty is one involving personal dishonesty on the
part of such management official.

\(B\) CONTENTS OF NOTICE.---A notice under subparagraph (A) shall
contain a statement of the facts constituting grounds therefore and
shall fix a time and place at which a hearing, conducted pursuant to
sections 554, 556, and 557 of title 5, United States Code, will be held
thereon.

\(C\) HEARING.---

\(i\) TIMING.---A hearing under subparagraph (B) shall be held not
earlier than 30 days and later than 60 days after the date of service of
notice of the hearing, unless an earlier or a later date is set by the
Administrator at the request of---

\(I\) the management official, and for good cause shown; or

\(II\) the Attorney General.

[]{.mark}

\(ii\) CONSENT.---Unless the management official appears at a hearing
under this paragraph in person or by a duly authorized representative,
the management official shall be deemed to have consented to the
issuance of an order of removal under subparagraph (A).

\(D\) ORDER OF REMOVAL.---

\(i\) IN GENERAL.---In the event of consent under subparagraph (C)(ii),
or if upon the record made at a hearing under this subsection, the
Administrator finds that any of the grounds specified in the notice of
removal has been established, the Administrator may issue such orders of
removal from office as the Administrator deems appropriate.

\(ii\) EFFECTIVENESS.---An order under clause (i) shall---

\(I\) take effect 30 days after the date of service upon the subject
small business lending company or non-Federally regulated lender and the
management official concerned (except in the case of an order issued
upon consent as described in subparagraph (C)(ii), which shall become
effective at the time specified in such order); and

\(II\) remain effective and enforceable, except to such extent as it is
stayed, modified, terminated, or set aside by action of the
Administrator or a reviewing court in accordance with this section.

\(3\) AUTHORITY TO SUSPEND OR PROHIBIT PARTICIPATION.---

\(A\) IN GENERAL.---In order to protect a small business lending
company, a non-Federally regulated lender or the interests of the
Administration or the United States, the Administrator may suspend from
office or prohibit from further participation in any manner in the
management or conduct of the affairs of a small business lending company
or a non-Federally regulated lender a management official by written
notice to such effect served upon the management official. Such
suspension or prohibition may prohibit the management official from
making, servicing, reviewing, approving, or liquidating any loan under
section 7(a) of this Act.

\(B\) EFFECTIVENESS.---A suspension or prohibition under subparagraph
(A)---

\(i\) shall take effect upon service of notice under paragraph (2); and

\(ii\) unless stayed by a court in proceedings authorized by
subparagraph (C), shall remain in effect---

[]{.mark}

\(I\) pending the completion of the administrative proceedings pursuant
to a notice of intention to remove served under paragraph (2); and

\(II\) until such time as the Administrator dismisses the charges
specified in the notice, or, if an order of removal or prohibition is
issued against the management official, until the effective date of any
such order.

\(C\) JUDICIAL REVIEW OF SUSPENSION PRIOR TO HEARING.---Not later than
10 days after a management official is suspended or prohibited from
participation under subparagraph (A), the management official may apply
to an appropriate district court for a stay of the suspension or
prohibition pending the completion of the administrative proceedings
pursuant to a notice of intent to remove served upon the management
official under paragraph (2).

\(4\) AUTHORITY TO SUSPEND ON CRIMINAL CHARGES.---

\(A\) IN GENERAL.---If a management official is charged in any
information, indictment, or complaint authorized by a United States
attorney, with a felony involving dishonesty or breach of trust, the
Administrator may, by written notice served upon the management
official, suspend the management official from office or prohibit the
management official from further participation in any manner in the
management or conduct of the affairs of the small business lending
company or non-Federally regulated lender.

\(B\) EFFECTIVENESS.---A suspension or prohibition under subparagraph
(A) shall remain in effect until the information, indictment, or
complaint is finally disposed of, or until terminated by the
Administrator or upon an order of a district court.

\(C\) AUTHORITY UPON CONVICTION.---If a judgment of conviction with
respect to an offense described in subparagraph (A) is entered against a
management official, then at such time as the judgment is not subject to
further judicial review (and for purposes of this subparagraph shall not
include any petition for a writ of habeas corpus), the Administrator may
issue and serve upon the management official an order removing the
management official, effective upon service of a copy of the order upon
the small business lending company or non-Federally regulated lender.

\(D\) AUTHORITY UPON DISMISSAL OR OTHER DISPOSITION.---A finding of not
guilty or other disposition of charges described in subparagraph (A)
shall not preclude the Administrator from instituting proceedings under
subsection (e) or (f).

\(5\) NOTIFICATION TO SMALL BUSINESS LENDING COMPANY OR A NON-FEDERALLY
REGULATED LENDER.---Copies of each notice required to be served on a
management official under this section shall also be served upon the
small business lending company or non-Federally regulated lender
involved.

[]{.mark}

\(6\) FINAL AGENCY ACTION AND JUDICIAL REVIEW.---

\(A\) ISSUANCE OF ORDERS.---After a hearing under this subsection, and
not later than 30 days after the Administrator notifies the parties that
the case has been submitted for final decision, the Administrator shall
render a decision in the matter (which shall include findings of fact
upon which its decision is predicated), and shall issue and cause to be
served upon each party to the proceeding an order or orders consistent
with this section. The decision of the Administrator shall constitute
final agency action for purposes of chapter 7 of title 5, United States
Code.

\(B\) JUDICIAL REVIEW.---An adversely aggrieved party shall have 20 days
from the date of issuance of the order to seek judicial review in an
appropriate district court.

\(h\) APPOINTMENT OF RECEIVER.---

\(1\) In any proceeding under subsection (f)(4) or subsection (g)(6)(C)
\[sic\], the court may take exclusive jurisdiction of a small business
lending company or a non-Federally regulated lender and appoint a
receiver to hold and administer the assets of the company or lender.

\(2\) Upon request of the Administrator, the court may appoint the
Administrator as a receiver under paragraph (1).

\(i\) POSSESSION OF ASSETS.---

\(1\) If a small business lending company or a non-Federally regulated
lender is not in compliance with capital requirements or is insolvent,
the Administrator may take possession of the portfolio of loans
guaranteed by the Administrator and sell such loans to a third party by
means of a receiver appointed under subsection (h).

\(2\) If a small business lending company or a non-Federally regulated
lender is not in compliance with capital requirements or is insolvent or
otherwise operating in an unsafe and unsound condition, the
Administrator may take possession of servicing activities of loans that
are guaranteed by the Administrator and sell such servicing rights to a
third party by means of a receiver appointed under subsection (h).

\(j\) PENALTIES AND FORFEITURES.---

\(1\) Except as provided in paragraph (2), a small business lending
company or a non-Federally regulated lender which violates any
regulation or written directive issued by the Administrator regarding
the filing of any regular or special report shall pay to the United
States a civil penalty of not more than \$5,000 for each day of the
continuance of the failure to file such report, unless it is shown that
such failure is due to reasonable cause and not due to willful neglect.
The civil penalties under this subsection may be enforced in a civil
action brought by the Administrator. The penalties under this
[]{.mark}subsection shall not apply to any affiliate of a small business
lending company that procures at least 10 percent of its annual
purchasing requirements from small manufacturers.

\(2\) The Administrator may by rules and regulations that shall be
codified in the Code of Federal Regulations, after an opportunity for
notice and comment, or upon application of an interested party, at any
time previous to such failure, by order, after notice and opportunity
for hearing which shall be conducted pursuant to sections 554, 556, and
557 of title 5, United States Code, exempt in whole or in part, any
small business lending company or non-Federally regulated lender from
paragraph (1), upon such terms and conditions and for such period of
time as it deems necessary and appropriate, if the Administrator finds
that such action is not inconsistent with the public interest or the
protection of the Administration. The Administrator may for the purposes
of this section make any alternative requirements appropriate to the
situation.

§ 24. (a) The Administrator is authorized to make grants to or to enter
into contracts with any State for the purpose of contracting with small
businesses to plant trees on land owned or controlled by such State or
local government. The Administrator shall require as a condition of any
grant (or amendment or modification thereof) under this section that the
applicant also contribute to the project a sum equal to at least 25 per
centum of a particular project cost from sources other than the Federal
Government. Such non‑Federal money may include inkind contributions,
including the cost or value of providing care and maintenance for a
period of three years after the planting of the trees, but shall not
include any value attributable to the land on which the trees are to be
planted, nor may any part of any grant be used to pay for land or land
charges: [Provided,]{.underline} That not less than one‑half of the
amounts appropriated under this section shall be allocated to each
State, the District of Columbia, and the Commonwealth of Puerto Rico on
the basis of the population in each area as compared to the total
population in all areas as provided by the Census Bureau of the
Department of Commerce in the annual population estimate or the
decennial census, whichever is most current. The Administrator may give
a priority in awarding the remaining one‑half of appropriated amounts to
applicants who agree to contribute more than the requisite 25 per
centum, and shall give priority to a proposal to restore an area
determined to be a major disaster by the President on a date not more
than three years prior to the fiscal year for which the application is
made.

\(b\) In order to accomplish the objectives of this section, the
Administrator, in consultation with appropriate Federal agencies, shall
be responsible for formulating a national small business tree planting
program. Based on this program, a State may submit a detailed proposal
for tree planting by contract.

\(c\) To encourage and develop the capacity of small business concerns,
to utilize this important segment of our economy, and to permit rapid
increases in employment opportunities in local communities, grantees are
directed to utilize small business contractors or concerns in connection
with the program established by this section, and shall, to the extent
practicable, divide the project to allow more than one small business
concern to perform the work under the project.

\(d\) For purposes of this section, agencies of the Federal Government
are hereby authorized to cooperate with all grantees and with State
foresters or other appropriate officials by providing without charge, in
furtherance of this program, technical services with respect to the
planting and growing of such trees.

\(e\) There are authorized to be appropriated to carry out the
objectives of this section, \$15,000,000 for fiscal year 1991 and
\$30,000,000 for each of the fiscal years 1992 through 1994, and all of
such sums may remain available until expended.

\(f\) Notwithstanding any other law, rule, or regulation, the
administration shall publish in the Federal Register proposed rules and
regulations implementing this section within sixty days after the date
of enactment of this section and shall publish final rules and
regulations within one hundred and twenty days of the date of enactment
of this section.

\(g\) As used in this section:

\(1\) the term \"local government\" includes political subdivisions of a
State such as counties, parishes, cities, towns and municipalities;

\(2\) the term \"planting\" includes watering, application of fertilizer
and herbicides, pruning and shaping, and other subsequent care and
maintenance for a period of three years after the trees are planted; and

\(3\) the term \"State\" includes any agency thereof.

\(h\) The Administrator shall submit annually to the President and the
Congress a report on activities within the scope of this section.

§ 25. (a) There is hereby established a Central European Small Business
Enterprise Development Commission (hereinafter in this section referred
to as the \"Commission\"). The Commission shall be comprised of a
representative of each of the following: the Small Business
Administration, the Association of American Universities, and the
Association of Small Business Development Centers.

\(b\) The Commission shall develop in Czechoslovakia, Poland and Hungary
(hereinafter referred to as \"designated Central European countries\") a
self‑sustaining system to provide management and technical assistance to
small business owners.

\(1\) Not later than 90 days after the effective date of this section,
the Commission, in consultation with the Agency for International
Development, shall enter a contract with one or more entities to---

\(A\) determine the needs of small businesses in the designated Central
European countries for management and technical assistance;

\(B\) evaluate appropriate Small Business Development Center‑programs
\[sic\] which might be replicated in order to meet the needs of each of
such countries; and

\(C\) identify and assess the capability of educational institutions in
each such country to develop a Small Business Development Center type
program.

\(2\) Not later than 18 months after the effective date of this section,
the Commission shall review the recommendations submitted to it and
shall formulate and contract for the establishment of a three‑year
management and technical assistance demonstration program.

\(c\) In order to be eligible to participate, the educational
institution in each designated Central European country shall---

\(1\) obtain the prior approval of the government to conduct the
program;

\(2\) agree to provide partial financial support for the program, either
directly or indirectly, during the second and third years of the
demonstration program; and

\(3\) agree to obtain private sector involvement in the delivery of
assistance under the program.

\(d\) The Commission shall meet and organize not later than 30 days
after the date of enactment of this section.

\(e\) Members of the Commission shall serve without pay, except they
shall be entitled to reimbursement for travel, subsistence, and other
necessary expenses incurred by them in carrying out their functions in
the same manner as persons employed intermittently in the Federal
Government are allowed expenses under section 5703 of title 5, United
States Code.

\(f\) Two Commissioners shall constitute a quorum for the transaction of
business. Meetings shall be at the call of the Chairperson who shall be
elected by the Members of the Commission.

\(g\) The Commission shall not have any authority to appoint staff, but
upon request of the Chairperson, the head of any Federal department or
agency may detail, on a reimbursable basis, any of the personnel of such
department or agency to the Commission to assist in carrying out the
Commission\'s functions under this section without regard to section
3341 of title 5 of the United States Code. The Administrator of the
General Services Administration shall provide, on a reimbursable basis,
such administrative support services as the Commission may request.

\(h\) The Commission shall report to Congress not later than December 1,
1991, and annually thereafter, on the progress in carrying out the
provisions of this section.

\(i\) There are hereby authorized to be appropriated to the Small
Business Administration the sum of \$3,000,000 for fiscal year 1991,
\$5,000,000 for fiscal year 1992, \$2,000,000 for each of fiscal years
1993 and 1994, and \$1,000,000 for fiscal year 1995 to carry out the
provisions of this section. Such sums shall be disbursed by the Small
Business Administration as requested by the Commission and may remain
available until expended. Any authority to enter contracts or other
spending authority provided for in this section is subject to amounts
provided for in advance in appropriations Acts.

§ 26. (a) There is hereby established in the Small Business
Administration an Office of Rural Affairs (hereafter in this section
referred to as the \"Office\").

\(b\) The Office shall be headed by a director who shall be appointed by
the Administrator not later than 90 days after the date of the enactment
of this section.

\(c\) The Office shall---

\(1\) strive to achieve an equitable distribution of the financial
assistance available from the Administration for small business concerns
located in rural areas;

\(2\) to the extent practicable, compile annual statistics on rural
areas, including statistics concerning the population, poverty, job
creation and retention, unemployment, business failures, and business
startups;

\(3\) provide information to industries, organizations, and State and
local governments concerning the assistance available to rural small
business concerns through the Administration and through other Federal
departments and agencies;

\(4\) provide information to industries, organizations, educational
institutions, and State and local governments concerning programs
administered by private organizations, educational institutions, and
Federal, State, and local governments which improve the economic
opportunities of rural citizens; and

\(5\) work with the United States Tourism and Travel Administration to
assist small businesses in rural areas with tourism promotion and
development.

§ 27. PAUL D. COVERDELL DRUG-FREE WORKPLACE PROGRAM.

\(a\) DEFINITIONS.---In this section:

\(1\) DRUG-FREE WORKPLACE PROGRAM.---The term "drug-free workplace
program" means a program that includes---

\(A\) a written policy, including a clear statement of expectations for
workplace behavior, prohibitions against reporting to work or working
under the influence of illegal drugs or alcohol, prohibitions against
the use or possession of illegal drugs in the workplace, and the
consequences of violating those expectations and prohibitions;

\(B\) drug and alcohol abuse prevention training for a total of not less
than 2 hours for each employee, and additional voluntary drug and
alcohol abuse prevention training for employees who are parents;

\(C\) employee illegal drug testing, with analysis conducted by a drug
testing laboratory certified by the Substance Abuse and Mental Health
Services Administration, or approved by the College of American
Pathologists for forensic drug testing, and a review of each positive
test result by a medical review officer;

\(D\) employee access to an employee assistance program, including
confidential assessment, referral, and short-term problem resolution;
and

\(E\) continuing alcohol and drug abuse prevention education.

\(2\) ELIGIBLE INTERMEDIARY.---The term "eligible intermediary" means an
organization---

\(A\) that has not less than 2 years of experience in carrying out
drug-free workplace programs;

\(B\) that has a drug-free workplace policy in effect;

\(C\) that is located in a State, the District of Columbia, or a
territory of the United States; and

\(D\) (i) the purpose of which is---

\(I\) to develop comprehensive drug-free workplace programs or to supply
drug-free workplace services; or

\(II\) to provide other forms of assistance and services to small
business concerns; or

\(ii\) that is eligible to receive a grant under chapter 2 of the
National Narcotics Leadership Act of 1988 (21 U.S.C. 1521 et seq.).

\(3\) EMPLOYEE.---The term "employee" includes any---

\(A\) applicant for employment;

\(B\) employee;

\(C\) supervisor;

\(D\) manager;

\(E\) officer of a small business concern who is active in management of
the concern; and

\(F\) owner of a small business concern who is active in management of
the concern.

\(4\) MEDICAL REVIEW OFFICER.---The term "medical review officer"---

\(A\) means a licensed physician with knowledge of substance abuse
disorders; and

\(B\) does not include any---

\(i\) employee of the small business concern; or

\(ii\) employee or agent of, or any person having a financial interest
in, the laboratory for which the illegal drug test results are being
reviewed.

\(b\) ESTABLISHMENT.---

\(1\) IN GENERAL.---There is established a drug-free workplace
demonstration program, under which the Administrator may make grants to,
or enter into cooperative agreements or contracts with, eligible
intermediaries for the purpose of providing financial and technical
assistance to small business concerns seeking to establish a drug-free
workplace program.

\(2\) ADDITIONAL GRANTS FOR TECHNICAL ASSISTANCE.---In addition to
grants under paragraph (1), the Administrator may make grants to, or
enter into cooperative agreements or contracts with, any grantee for the
purpose of providing, in cooperation with one or more small business
development centers, technical assistance to small business concerns
seeking to establish a drug-free workplace program.

\(3\) 2-YEAR GRANTS.---Each grant made under this subsection shall be
for a period of 2 years, subject to an annual performance review by the
Administrator.

\(c\) PROMOTION OF EFFECTIVE PRACTICES OF ELIGIBLE INTERMEDIARIES.---

\(1\) TECHNICAL ASSISTANCE AND INFORMATION.---The Administrator, after
consultation with the Director of the Center for Substance Abuse and
Prevention, shall provide technical assistance and information to each
eligible intermediary under subsection (b) regarding the most effective
practices in establishing and carrying out drug-free workplace programs.

\(2\) EVALUATION OF PROGRAM.---

\(A\) DATA COLLECTION AND ANALYSIS.---Each eligible intermediary
receiving a grant under this section shall establish a system to collect
and analyze information regarding the effectiveness of drug-free
workplace programs established with assistance provided under this
section through the intermediary, including information regarding any
increase or decrease among employees in drug use, awareness of the
adverse consequences of drug use, and absenteeism, injury, and
disciplinary problems related to drug use. Such system shall conform to
such requirements as the Administrator, after consultation with the
Director of the Center for Substance Abuse and Prevention, may
prescribe. Not more than 5 percent of the amount of each grant made
under subsection (b) shall be used by the eligible intermediary to carry
out this paragraph.

\(B\) METHOD OF EVALUATION.---The Administrator, after consultation with
the Director of the Center for Substance Abuse and Prevention, shall
provide technical assistance and guidance to each eligible intermediary
receiving a grant under subsection (b) regarding the collection and
analysis of information to evaluate the effectiveness of drug-free
workplace programs established with assistance provided under this
section, including the information referred to in paragraph (1). Such
assistance shall include the identification of additional information
suitable for measuring the benefits of drug-free workplace programs to
the small business concern and to the concern's employees and the
identification of methods suitable for analyzing such information.

\(d\) EVALUATION AND COORDINATION. Not later than 18 months after the
date of enactment of the Drug-Free Workplace Act of 1998, the
Administrator, in coordination with the Secretary of Labor, the
Secretary of Health and Human Services, and the Director of National
Drug Control Policy, shall---

\(1\) evaluate the drug-free workplace programs established with
assistance made available under this section; and

\(2\) submit to Congress a report describing the results of the
evaluation under paragraph (1).

\(e\) CONTRACT AUTHORITY.---In carrying out this section, the
Administrator may---

\(1\) contract with public and private entities to provide assistance
related to carrying out the program under this section; and

\(2\) compensate those entities for provision of that assistance.

\(f\) CONSTRUCTION.---Nothing in this section may be construed to
require an employer who attends a program offered by an intermediary to
contract for any service offered by the intermediary.

\(g\) AUTHORIZATION.---

\(1\) IN GENERAL.---There is authorized to be appropriated to carry out
this section, (other than subsection (b)(2)), \$5,000,000 for each of
fiscal years 2005 and 2006. Amounts made available under this paragraph
shall remain available until expended.

\(2\) SMALL BUSINESS DEVELOPMENT CENTERS.---Of the total amount made
available under paragraph (1) for each of fiscal years 2005 and 2006,
not more than the greater of 10 percent or \$500,000 may be used to
carry out section 21(c)(3)(T).

\(3\) ADDITIONAL AUTHORIZATION FOR TECHNICAL ASSISTANCE GRANTS.---There
are authorized to be appropriated to carry out subsection (b)(2),
\$1,500,000 for each of fiscal years 2005 and 2006. Amounts made
available under this paragraph shall remain available until expended.

\(4\) LIMITATION ON ADMINISTRATIVE COSTS.---Not more than 5 percent of
the total amount made available under this subsection for any fiscal
year shall be used for administrative costs (determined without regard
to the administrative costs of eligible intermediaries).

§ 28. PILOT TECHNOLOGY ACCESS PROGRAM.

\(a\) The Administration, in consultation with the National Institute of
Standards and Technology and the National Technical Information Service,
shall establish a Pilot Technology Access Program, for making awards
under this section to Small Business Development Centers (hereinafter in
this section referred to as \"Centers\").

\(b\) The Administrator of the Small Business Administration shall
establish competitive, merit-based criteria for the selection of Centers
to receive awards on the basis of---

\(1\) the ability of the applicant to carry out the purposes described
in subsection (d) in a manner relevant to the needs of industries in the
area served by the Center;

\(2\) the ability of the applicant to integrate the implementation of
this program with existing Federal and State technical and business
assistance resources; and

\(3\) the ability of the applicant to continue providing technology
access after the termination of this pilot program.

\(c\) To be eligible to receive an award under this section, an
applicant shall provide a matching contribution at least equal to that
received under such award, not more than 50 percent of which may be
waived overhead or in-kind contributions.

\(d\) Awards made under this section shall be for the purpose of
increasing access by small businesses to on-line data base services that
provide technical and business information, and access to technical
experts, in a wide range of technologies, through such activities as---

\(1\) defraying the cost of access by small businesses to the data base
services;

\(2\) training small businesses in the use of the data base services;
and

\(3\) establishing a public point of access to the data base services.

Activities described in paragraphs (1) through (3) may be carried out
through contract with a private entity.

\(e\) Awards previously made under section 21A of this Act may be
renewed under this section.

\(f\) Two years after the date on which the first award was issued under
section 21A of this Act, the General Accounting Office shall submit to
the Committee on Small Business and the Committee on Science, Space, and
Technology of the House of Representatives and to the Committee on Small
Business and the Committee on Commerce, Science, and Transportation of
the Senate, an interim report on the implementation of the program under
such section and this section, including the judgments of the
participating Centers as to its effect on small business productivity
and innovation.

\(g\) Three years after such date, the General Accounting Office shall
submit to the Committee on Small Business and the Committee on Science,
Space, and Technology of the House of Representatives and to the
Committee on Small Business and the Committee on Commerce, Science and
Transportation of the Senate, a final report evaluating the
effectiveness of the Program under section 21A and this section in
improving small business productivity and innovation.

\(h\) There are authorized to be appropriated to the Small Business
Administration \$5 million for each of fiscal years 1992 through 1995 to
carry out this section, and such amounts may remain available until
expended.

\(i\) Centers are encouraged to seek funding from Federal and
non-Federal sources other than those provided for in this section to
assist small businesses in the identification of appropriate
technologies to fill their needs, the transfer of technologies from
Federal laboratories, public and private universities, and other public
and private institutions, the analysis of commercial opportunities
represented by such technologies, and such other functions as the
development business Planning, market research, and financial packaging
required for commercialization. Insofar as such Centers pursue these
activities, Federal agencies are encouraged to employ these Centers to
interface with small businesses for such purposes as facilitating small
business participation in Federal procurement and fostering
commercialization of Federally-funded research and development.

§ 29. WOMEN'S BUSINESS CENTER PROGRAM.

\(a\) DEFINITIONS - In this section---

\(1\) the term "Assistant Administrator" means the Assistant
Administrator of the Office of Women's Business Ownership established
under subsection (g);

\(2\) the term "private nonprofit organization" means an entity that is
described in section 501(c) of the Internal Revenue Code of 1986 and
exempt from taxation under section 501(a) of such Code;

\(3\) the term "small business concern owned and controlled by women",
either startup or existing, includes any small business concern---

\(A\) that is not less than 51 percent owned by 1 or more women; and

\(B\) the management and daily business operations of which are
controlled by 1 or more women; and

\(4\) the term "women's business center site" means the location of---

\(A\) a women's business center; or

\(B\) 1 or more women's business centers, established in conjunction
with another women's business center in another location within a State
or region---

\(i\) that reach a distinct population that would otherwise not be
served;

\(ii\) whose services are targeted to women; and

\(iii\) whose scope, function, and activities are similar to those of
the primary women's business center or centers in conjunction with which
it was established.

\(b\) AUTHORITY.---The Administration may provide financial assistance
to private nonprofit organizations to conduct 5-year projects for the
benefit of small business concerns owned and controlled by women. The
projects shall provide---

\(1\) financial assistance, including training and counseling in how to
apply for and secure business credit and investment capital, preparing
and presenting financial statements, and managing cash flow and other
financial operations of a business concern;

\(2\) management assistance, including training and counseling in how to
Plan, organize, staff, direct, and control each major activity and
function of a small business concern; and

\(3\) marketing assistance, including training and counseling in
identifying and segmenting domestic and international market
opportunities, preparing and executing marketing Plans, developing
pricing strategies, locating contract opportunities, negotiating
contracts, and utilizing varying public relations and advertising
techniques.

\(c\) CONDITIONS OF PARTICIPATION---

\(1\) NON-FEDERAL CONTRIBUTIONS.---As a condition of receiving financial
assistance authorized by this section, the recipient organization shall
agree to obtain, after its application has been approved and notice of
award has been issue, cash contributions from non-Federal sources as
follows:

\(A\) in the first and second years, 1 non-Federal dollar for each 2
Federal dollars; and

\(B\) in the third, fourth, and fifth years, 1 non-Federal dollar for
each Federal dollar.

\(2\) FORM OF NON-FEDERAL CONTRIBUTIONS.---Not more than one-half of the
non-Federal sector matching assistance may be in the form of in-kind
contributions that are budget line items only, including office
equipment and office space.

\(3\) FORM OF FEDERAL CONTRIBUTIONS.---The financial assistance
authorized pursuant to this section may be made by grant, contract, or
cooperative agreement and may contain such provision, as necessary, to
provide for payments in lump sum or installments, and in advance or by
way of reimbursement. The Administration may disburse up to 25 percent
of each year's Federal share awarded to a recipient organization after
notice of the award has been issued and before the non-Federal sector
matching funds are obtained.

\(4\) FAILURE TO OBTAIN NON-FEDERAL FUNDING.---If any recipient of
assistance fails to obtain the required non-Federal contribution during
any project, it shall not be eligible thereafter for advance
disbursements pursuant to paragraph (3) during the remainder of that
project, or for any other project for which it is or may be funded by
the Administration, and prior to approving assistance to such
organization for any other projects, the Administration shall
specifically determine whether the Administration believes that the
recipient will be able to obtain the requisite non-Federal funding and
enter a written finding setting forth the reasons for making such
determination.

\(d\) CONTRACT AUTHORITY.---A women's business center may enter into a
contract with a Federal department or agency to provide specific
assistance to women and other underserved small business concerns.
Performance of such contract should not hinder the women\'s business
centers in carrying out the terms of the grant received by the women\'s
business centers from the Administration.

\(e\) SUBMISSION OF 5-YEAR PLAN.---Each applicant organization initially
shall submit a 5-year Plan to the Administration on proposed fundraising
and training activities, and a recipient organization may receive
financial assistance under this program for a maximum of 5 years per
women\'s business center site.

\(f\) CRITERIA.---The Administration shall evaluate and rank applicants
in accordance with predetermined selection criteria that shall be stated
in terms of relative importance. Such criteria and their relative
importance shall be made publicly available and stated in each
solicitation for applications made by the Administration. The criteria
shall include---

\(1\) the experience of the applicant in conducting programs or ongoing
efforts designed to impart or upgrade the business skills of women
business owners or potential owners;

\(2\) the present ability of the applicant to commence a project within
a minimum amount of time;

\(3\) the ability of the applicant to provide training and services to a
representative number of women who are both socially and economically
disadvantaged; and

\(4\) the location for the women\'s business center site proposed by the
applicant.

\(g\) OFFICE OF WOMEN'S BUSINESS OWNERSHIP---

\(1\) ESTABLISHMENT.---There is established within the Administration an
Office of Women's Business Ownership, which shall be responsible for the
administration of the Administration's programs for the development of
women\'s business enterprises (as defined in section 408 of the Women's
Business Ownership Act of 1988 (15 U.S.C. 631 note)). The Office of
Women's Business Ownership shall be administered by an Assistant
Administrator, who shall be appointed by the Administrator.

\(2\) ASSISTANT ADMINISTRATOR OF THE OFFICE OF WOMEN'S BUSINESS
OWNERSHIP---

\(A\) QUALIFICATIONS.---The position of Assistant Administrator shall be
a Senior Executive Service position under section 3132(a)(2) of title 5,
United States Code. The Assistant Administrator shall serve as a
noncareer appointee (as defined in section 3132(a)(7) of that title).

\(B\) RESPONSIBILITIES AND DUTIES---

\(i\) RESPONSIBILITIES.---The responsibilities of the Assistant
Administrator shall be to administer the programs and services of the
Office of Women's Business Ownership established to assist women
entrepreneurs in the areas of---

\(I\) starting and operating a small business;

\(II\) development of management and technical skills;

\(III\) seeking Federal procurement opportunities; and

\(IV\) increasing the opportunity for access to capital.

\(ii\) DUTIES.---The Assistant Administrator shall---

\(I\) administer and manage the Women\'s Business Center program;

\(II\) recommend the annual administrative and program budgets for the
Office of Women's Business Ownership (including the budget for the
Women\'s Business Center program);

\(III\) establish appropriate funding levels therefore;

\(IV\) review the annual budgets submitted by each applicant for the
Women\'s Business Center program;

\(V\) select applicants to participate in the program under this section

\(VI\) implement this section;

\(VII\) maintain a clearinghouse to provide for the dissemination and
exchange of information between women\'s business centers;

\(VIII\) serve as the vice chairperson of the Interagency Committee on
Women's Business Enterprise;

\(IX\) serve as liaison for the National Women's Business Council; and

\(X\) advise the Administrator on appointments to the Women's Business
Council.

\(C\) CONSULTATION REQUIREMENTS - In carrying out the responsibilities
and duties described in this paragraph, the Assistant Administrator
shall confer with and seek the advice of the Administration officials in
areas served by the women\'s business centers.

\(h\) PROGRAM EXAMINATION.---

\(1\) IN GENERAL.---The Administration shall---

\(A\) develop and implement an annual programmatic and financial
examination of each women's business center established pursuant to this
section, pursuant to which each such center shall provide to the
Administration---

\(i\) an itemized cost breakdown of actual expenditures for costs
incurred during the preceding year; and

\(ii\) documentation regarding the amount of matching assistance from
non-Federal sources obtained and expended by the center during the
preceding year in order to meet the requirements of subsection (c) and,
with respect to any in-kind contributions described in subsection (c)(2)
that were used to satisfy the requirements of subsection (c),
verification of the existence and valuation of those contributions; and

\(B\) analyze the results of each such examination and, based on that
analysis, make a determination regarding the programmatic and financial
viability of each women's business center.

\(2\) CONDITIONS FOR CONTINUED FUNDING.---In determining whether to
award a contract (as a sustainability grant) under subsection (l) or to
renew a contract (either as a grant or cooperative agreement) under this
section with a women's business center, the Administration---

\(A\) shall consider the results of the most recent examination of the
center under paragraph (1); and

\(B\) may withhold such award or renewal, if the Administration
determines that---

\(i\) the center has failed to provide any information required to be
provided under clause (i) or (ii) of paragraph (1)(A), or the
information provided by the center is inadequate; or

\(ii\) the center has failed to provide any information required to be
provided by the center for purposes of the report of the Administration
under subsection (j), or the information provided by the center is
inadequate.

\(i\) CONTRACT AUTHORITY.---The authority of the Administrator to enter
into contracts shall be in effect for each fiscal year only to the
extent and in the amounts as are provided in advance in appropriations
Acts. After the Administrator has entered into a contract, either as a
grant or a cooperative agreement, with any applicant under this section,
it shall not suspend, terminate, or fail to renew or extend any such
contract unless the Administrator provides the applicant with written
notification setting forth the reasons therefore and affords the
applicant an opportunity for a hearing, appeal, or other administrative
proceeding under chapter 5 of title 5, United States Code.

\(j\) MANAGEMENT REPORT.---

\(1\) IN GENERAL.---The Administration shall prepare and submit to the
Committees on Small Business of the House of Representatives and the
Senate a report on the effectiveness of all projects conducted under
this section.

\(2\) CONTENTS.---Each report submitted under paragraph (1) shall
include information concerning, with respect to each women's business
center established pursuant to this section---

\(A\) the number of individuals receiving assistance;

\(B\) the number of startup business concerns formed;

\(C\) the gross receipts of assisted concerns;

\(D\) the employment increases or decreases of assisted concerns;

\(E\) to the maximum extent practicable, increases or decreases in
profits of assisted concerns; and

\(F\) the most recent analysis, as required under subsection (h)(1)(B),
and the subsequent determination made by the Administration under that
subsection.

\(k\) AUTHORIZATION OF APPROPRIATIONS---

\(1\) IN GENERAL.---There is authorized to be appropriated, to remain
available until the expiration of the pilot program under subsection
(l)---

\(A\) \$12,000,000 for fiscal year 2000;

\(B\) \$12,800,000 for fiscal year 2001;

\(C\) \$13,700,000 for fiscal year 2002; and

\(D\) \$14,500,000 for fiscal year 2003.

\(2\) USE OF AMOUNTS.---

\(A\) IN GENERAL.---Except as provided in subparagraph (B), amounts made
available under this subsection for fiscal year 1999, and each fiscal
year thereafter, may only be used for grant awards and may not be used
for costs incurred by the Administration in connection with the
management and administration of the program under this section.

\(B\) EXCEPTIONS.---Of the amount made available under this subsection
for a fiscal year, the following amounts shall be available for
selection panel costs, post-award conference costs, and costs related to
monitoring and oversight:

\(i\) For fiscal year 2000, 2 percent.

\(ii\) For fiscal year 2001, 1.9 percent.

\(iii\) For fiscal year 2002, 1.9 percent.

\(iv\) For fiscal year 2003, 1.6 percent.

\(3\) EXPEDITED ACQUISITION.---Notwithstanding any other provision of
law, the Administrator, acting through the Assistant Administrator, may
use such expedited acquisition methods as the Administrator determines
to be appropriate to carry out this section, except that the
Administrator shall ensure that all small business sources are provided
a reasonable opportunity to submit proposals.

\(4\) RESERVATION OF FUNDS FOR SUSTAINABILITY PILOT PROGRAM.---

\(A\) IN GENERAL.---Subject to subparagraph (B), of the total amount
made available under this subsection for a fiscal year, the following
amounts shall be reserved for sustainability grants under subsection
(l):

\(i\) For fiscal year 2000, 17 percent.

\(ii\) For fiscal year 2001, 18.8 percent.

\(iii\) For fiscal year 2002, 30.2 percent.

\(iv\) For fiscal year 2003, 30.2 percent.

\(B\) USE OF UNAWARDED FUNDS FOR SUSTAINABILITY PILOT PROGRAM
GRANTS.---If the amount reserved under subparagraph (A) for any fiscal
year is not fully awarded to private nonprofit organizations described
in subsection (l)(1)(B), the Administration is authorized to use the
unawarded amount to fund additional women's business center sites or to
increase funding of existing women's business center sites under
subsection (b).

\(l\) SUSTAINABILITY PILOT PROGRAM.---

\(1\) IN GENERAL.---There is established a 4-year pilot program under
which the Administration is authorized to award grants (referred to in
this section as "sustainability grants") on a competitive basis for an
additional 5-year project under this section to any private nonprofit
organization (or a division thereof)---

\(A\) that has received financial assistance under this section pursuant
to a grant, contract, or cooperative agreement; and

\(B\) that---

\(i\) is in the final year of a 5-year project; or

\(ii\) has completed a project financed under this section (or any
predecessor to this section) and continues to provide assistance to
women entrepreneurs.

\(2\) CONDITIONS FOR PARTICIPATION.---In order to receive a
sustainability grant, an organization described in paragraph (1) shall
submit to the Administration an application, which shall include---

\(A\) a certification that the applicant---

\(i\) is a private nonprofit organization;

\(ii\) employs a full-time executive director or program manager to
manage the center; and

\(iii\) as a condition of receiving a sustainability grant, agrees---

\(I\) to a site visit as part of the final selection process and to an
annual programmatic and financial examination; and

\(II\) to the maximum extent practicable, to remedy any problems
identified pursuant to that site visit or examination;

\(B\) information demonstrating that the applicant has the ability and
resources to meet the needs of the market to be served by the women's
business center site for which a sustainability grant is sought,
including the ability to fundraise;

\(C\) information relating to assistance provided by the women's
business center site for which a sustainability grant is sought in the
area in which the site is located, including---

\(i\) the number of individuals assisted;

\(ii\) the number of hours of counseling, training, and workshops
provided; and

\(iii\) the number of startup business concerns formed;

\(D\) information demonstrating the effective experience of the
applicant in---

\(i\) conducting financial, management, and marketing assistance
programs, as described in paragraphs (1), (2), and (3) of subsection
(b), designed to impart or upgrade the business skills of women business
owners or potential owners;

\(ii\) providing training and services to a representative number of
women who are both socially and economically disadvantaged;

\(iii\) using resource partners of the Administration and other
entities, such as universities;

\(iv\) complying with the cooperative agreement of the applicant; and

\(v\) the prudent management of finances and staffing, including the
manner in which the performance of the applicant compared to the
business Plan of the applicant and the manner in which grant funds
awarded under subsection (b) were used by the applicant; and

\(E\) a 5-year Plan that projects the ability of the women's business
center site for which a sustainability grant is sought---

\(i\) to serve women business owners or potential owners in the future
by improving fundraising and training activities; and

\(ii\) to provide training and services to a representative number of
women who are both socially and economically disadvantaged.

\(3\) REVIEW OF APPLICATIONS.---

\(A\) IN GENERAL.---The Administration shall---

\(i\) review each application submitted under paragraph (2) based on the
information provided in subparagraphs (D) and (E) of that paragraph, and
the criteria set forth in subsection (f);

\(ii\) as part of the final selection process, conduct a site visit at
each women's business center for which a sustainability grant is sought;
and

\(iii\) approve or disapprove applications for sustainability grants
simultaneously with applications for grants under subsection (b).

\(B\) DATA COLLECTION.---Consistent with the annual report to Congress
under subsection (j), each women's business center site that is awarded
a sustainability grant shall, to the maximum extent practicable, collect
information relating to---

\(i\) the number of individuals assisted;

\(ii\) the number of hours of counseling and training provided and
workshops conducted;

\(iii\) the number of startup business concerns formed;

\(iv\) any available gross receipts of assisted concerns; and

\(v\) the number of jobs created, maintained, or lost at assisted
concerns.

\(C\) RECORD RETENTION.---The Administration shall maintain a copy of
each application submitted under this subsection for not less than 10
years.

\(4\) NON-FEDERAL CONTRIBUTION.---

\(A\) IN GENERAL.---Notwithstanding any other provision of this section,
as a condition of receiving a sustainability grant, an organization
described in paragraph (1) shall agree to obtain, after its application
has been approved under paragraph (3) and notice of award has been
issued, cash and in-kind contributions from non-Federal sources for each
year of additional program participation in an amount equal to 1
non-Federal dollar for each Federal dollar.

\(B\) FORM OF NON-FEDERAL CONTRIBUTIONS.---Not more than 50 percent of
the non-Federal assistance obtained for purposes of subparagraph (A) may
be in the form of in-kind contributions that are budget line items only,
including office equipment and office space.

\(5\) TIMING OF REQUESTS FOR PROPOSALS..---In carrying out this
subsection, the Administration shall issue requests for proposals for
women's business centers applying for the pilot program under this
subsection simultaneously with requests for proposals for grants under
subsection (b).

§ 30. OVERSIGHT OF REGULATORY ENFORCEMENT.

\(a\) DEFINITIONS.---For purposes of this section, the term---

\(1\) \"Board\" means a Regional Small Business Regulatory Fairness
Board established under subsection (c); and

\(2\) \"Ombudsman\" means the Small Business and Agriculture Regulatory
Enforcement Ombudsman designated under subsection (b).

\(b\) SBA ENFORCEMENT OMBUDSMAN.---

\(1\) Not later than 180 days after the date of enactment of this
section, the Administrator shall designate a Small Business and
Agriculture Regulatory Enforcement Ombudsman, who shall report directly
to the Administrator, utilizing personnel of the Small Business
Administration to the extent practicable. Other agencies shall assist
the Ombudsman and take actions as necessary to ensure compliance with
the requirements of this section. Nothing in this section is intended to
replace or diminish the activities of any Ombudsman or similar office in
any other agency.

\(2\) The Ombudsman shall---

\(A\) work with each agency with regulatory authority over small
businesses to ensure that small business concerns that receive or are
subject to an audit, on-site inspection, compliance assistance effort,
or other enforcement related communication or contact by agency
personnel are provided with a means to comment on the enforcement
activity conducted by such personnel;

\(B\) establish means to receive comments from small business concerns
regarding actions by agency employees conducting compliance or
enforcement activities with respect to the small business concern, means
to refer comments to the Inspector General of the affected agency in the
appropriate circumstances, and otherwise seek to maintain the identity
of the person and small business concern making such comments on a
confidential basis to the same extent as employee identities are
protected under section 7 of the Inspector General Act of 1978 (5 U.S.C.
App.);

\(C\) based on substantiated comments received from small business
concerns and the Boards, annually report to Congress and affected
agencies evaluating the enforcement activities of agency personnel
including a rating of the responsiveness to small business of the
various regional and program offices of each agency;

\(D\) coordinate and report annually on the activities, findings and
recommendations of the Boards to the Administrator and to the heads of
affected agencies; and

\(E\) provide the affected agency with an opportunity to comment on
draft reports prepared under subparagraph (C), and include a section of
the final report in which the affected agency may make such comments as
are not addressed by the Ombudsman in revisions to the draft.

\(c\) REGIONAL SMALL BUSINESS REGULATORY FAIRNESS BOARDS.---

\(1\) Not later than 180 days after the date of enactment of this
section, the Administrator shall establish a Small Business Regulatory
Fairness Board in each regional office of the Small Business
Administration.

\(2\) Each Board established under paragraph (1) shall---

\(A\) meet at least annually to advise the Ombudsman on matters of
concern to small businesses relating to the enforcement activities of
agencies;

\(B\) report to the Ombudsman on substantiated instances of excessive
enforcement actions of agencies against small business concerns
including any findings or recommendations of the Board as to agency
enforcement policy or practice; and

\(C\) prior to publication, provide comment on the annual report of the
Ombudsman prepared under subsection (b).

\(3\) Each Board shall consist of five members, who are owners,
operators, or officers of small business concerns, appointed by the
Administrator, after receiving the recommendations of the chair and
ranking minority member of the Committees on Small Business of the House
of Representatives and the Senate. Not more than three of the Board
members shall be of the same political party. No member shall be an
officer or employee of the Federal Government, in either the executive
branch or the Congress.

\(4\) Members of the Board shall serve at the Pleasure of the
Administrator for terms of three years or less.

\(5\) The Administrator shall select a chair from among the members of
the Board who shall serve at the Pleasure of the Administrator for not
more than 1 year as chair.

\(6\) A majority of the members of the Board shall constitute a quorum
for the conduct of business, but a lesser number may hold hearings.

\(d\) POWERS OF THE BOARDS.

\(1\) The Board may hold such hearings and collect such information as
appropriate for carrying out this section.

\(2\) The Board may use the United States mails in the same manner and
under the same conditions as other departments and agencies of the
Federal Government.

\(3\) The Board may accept donations of services necessary to conduct
its business, provided that the donations and their sources are
disclosed by the Board.

\(4\) Members of the Board shall serve without compensation, provided
that, members of the Board shall be allowed travel expenses, including
per diem in lieu of subsistence, at rates authorized for employees of
agencies under subchapter I of chapter 57 of title 5, United States
Code, while away from their homes or regular Places of business in the
performance of services for the Board.

§ 31. HUBZONE PROGRAM

\(a\) IN GENERAL.---There is established within the Administration a
program to be carried out by the Administrator to provide for Federal
contracting assistance to qualified HUBZone small business concerns in
accordance with this section.

\(b\) ELIGIBLE CONTRACTS---

\(1\) DEFINITIONS .---In this subsection---

\(A\) the term "contracting officer" has the meaning given that term in
section 27(f)(5) of the Office of Federal Procurement Policy Act (41
U.S.C. 423(f)(5); and

\(B\) the term "full and open competition" has the meaning given that
term in section 4 of the Office of Federal Procurement Policy Act (41
U.S.C. 403).

\(2\) AUTHORITY OF CONTRACTING OFFICER.---Notwithstanding any other
provision of law---

\(A\) a contracting officer may award sole source contracts under this
section to any qualified HUBZone small business concern, if---

\(i\) the qualified HUBZone small business concern is determined to be a
responsible contractor with respect to performance of such contract
opportunity, and the contracting officer does not have a reasonable
expectation that 2 or more qualified HUBZone small business concerns
will submit offers for the contracting opportunity;

\(ii\) the anticipated award price of he contract (including options)
will not exceed---

\(I\) \$5,000,000, in the case of a contract opportunity assigned a
standard industrial classification code for manufacturing; or

\(II\) \$3,000,000, in the case of all other contract opportunities; and

\(iii\) in the estimation of the contracting officer, the contract award
can be made at a fair and reasonable price;

\(B\) a contract opportunity shall be awarded pursuant to this section
on the basis of competition restricted to qualified HUBZone small
business concerns if the contracting officer has a reasonable
expectation that not less than 2 qualified HUBZone small business
concerns will submit offers and that the award can be made at a fair
market price; and

\(C\) not later than 5 days from the date the Administration is notified
of a procurement officer's decision not to award a contract opportunity
under this section to a qualified HUBZone small business concern, the
Administrator may notify the contracting officer of the intent to appeal
the contracting officer's decision, and within 15 days of such date the
Administrator may file a written request for reconsideration of the
contracting officer's decision with the Secretary of the department or
agency head.

\(3\) PRICE EVALUATION PREFERENCE IN FULL AND OPEN COMPETITIONS.---

\(A\) IN GENERAL.---Subject to subparagraph (B), in any case in which a
contract is to be awarded on the basis of full and open competition, the
price offered by a qualified HUBZone small business concern shall be
deemed as being lower than the price offered by another offeror (other
than another small business concern), if the price offered by the
qualified HUBZone small business concern is not more than 10 percent
higher than the price offered by the otherwise lowest, responsive, and
responsible offeror.

\(B\) PROCUREMENT OF COMMODITIES.---For purchases by the Secretary of
Agriculture of agricultural commodities, the price evaluation
preferences shall be---

\(i\) 10 percent, for the portion of a contract to be awarded that is
not greater than 25 percent of the total volume being procured for each
commodity in a single invitation;

\(ii\) 5 percent, for the portion of a contract to be awarded that is
greater than 25 percent, but not greater than 40 percent, of the total
volume being procured for each commodity in a single invitation; and

\(iii\) zero, for the portion of a contract to be awarded that is
greater than 40 percent of the total volume being procured for each
commodity in a single invitation.

\(C\) PROCUREMENT OF COMMODITIES FOR INTERNATIONAL FOOD AID EXPORT
OPERATIONS.---The price evaluation preference for purchases of
agricultural commodities by the Secretary of Agriculture for export
operations through international food aid programs administered by the
Farm Service Agency shall be 5 percent on the first portion of a
contract to be awarded that is not greater than 20 percent of the total
volume of each commodity being procured in a single invitation.

\(D\) TREATMENT OF PREFERENCE.---A contract awarded to a HUBZone small
business concern under a preference described in subparagraph (B) shall
not be counted toward the fulfillment of any requirement partially set
aside for competition restricted to small business concerns.

\(4\) RELATIONSHIP TO OTHER CONTRACTING PREFERENCES.---A procurement may
not be made from a source on the basis of a preference provided in
paragraph (2) or (3), if the procurement would otherwise be made from a
different source under section 4124 or 4125 of title 18, United States
Code, or the Javits-Wagner-O'Day Act (41 U.S.C. 46 et seq.).

\(c\) ENFORCEMENT; PENALTIES---

\(1\) VERIFICATION OF ELIGIBILITY.---In carrying out this section, the
Administrator shall establish procedures relating to---

\(A\) the filing, investigation, and disposition by the Administration
of any challenge to the eligibility of a small business concern to
receive assistance under this section (including a challenge, filed by
an interested party, relating to the veracity of a certification made or
information provided to the Administration by a small business concern
under section 3(p)(5); and

\(B\) verification by the Administrator of the accuracy of any
certification made or information provided to the Administration by a
small business concern under section 3(p)(5).

\(2\) EXAMINATIONS.---The procedures established under paragraph (1) may
provide for program examinations (including random program examinations)
by the Administrator of any small business concern making a
certification or providing information to the Administrator under
section 3(p)(5).

\(3\) PROVISION OF DATA.---Upon the request of the Administrator, the
Secretary of Labor, the Secretary of Housing and Urban Development, and
the Secretary of the Interior (or the Assistant Secretary for Indian
Affairs), shall promptly provide to the Administrator such information
as the Administrator determines to be necessary to carry out this
subsection.

\(4\) PENALTIES.---In addition to the penalties described in section
16(d), any small business concern that is determined by the
Administrator to have misrepresented the status of that concern as a
"HUBZone small business concern" for purposes of this section, shall be
subject to---

\(A\) section 1001 of title 18, United States Code; and

\(B\) sections 3729 through 3733 of title 31, United States Code.

\(d\) AUTHORIZATION OF APPROPRIATIONS.---There is authorized to be
appropriated to carry out the program established by this section
\$10,000,000 for each of fiscal years 2004 through 2006.

§ 32. VETERANS PROGRAMS.

\(a\) OFFICE OF VETERANS BUSINESS DEVELOPMENT.---There is established in
the Administration an Office of Veterans Business Development, which
shall be administered by the Associate Administrator for Veterans
Business Development (in this section referred to as the "Associate
Administrator") appointed under section 4(b)(1).

\(b\) ASSOCIATE ADMINISTRATOR FOR VETERANS BUSINESS DEVELOPMENT.---The
Associate Administrator---

\(1\) shall be an appointee in the Senior Executive Service;

\(2\) shall be responsible for the formulation, execution, and promotion
of policies and programs of the Administration that provide assistance
to small business concerns owned and controlled by veterans and small
business concerns owned and controlled by service-disabled veterans. The
Associate Administrator shall act as an ombudsman for full consideration
of veterans in all programs of the Administration; and

\(3\) shall report to and be responsible directly to the Administrator.

\(c\) AUTHORIZATION OF APPROPRIATIONS.---There are authorized to be
appropriated to carry out this section---

\(1\) \$1,500,000 for fiscal year 2005; and

\(2\) \$2,000,000 for fiscal year 2006.

§ 33. NATIONAL VETERANS BUSINESS DEVELOPMENT CORPORATION.

\(a\) ESTABLISHMENT.---There is established a federally chartered
corporation to be known as the National Veterans Business Development
Corporation (in this section referred to as the "Corporation") which
shall be incorporated under the laws of the District of Columbia and
which shall have the powers granted in this section. Notwithstanding any
other provision of law, the Corporation is a private entity and is not
an agency, instrumentality, authority, entity, or establishment of the
United States Government.

\(b\) PURPOSES OF THE CORPORATION.---The purposes of the Corporation
shall be---

\(1\) to expand the provision of and improve access to technical
assistance regarding entrepreneurship for the Nation's veterans; and

\(2\) to assist veterans, including service-disabled veterans, with the
formation and expansion of small business concerns by working with and
organizing public and private resources, including those of the Small
Business Administration, the Department of Veterans Affairs, the
Department of Labor, the Department of Commerce, the Department of
Defense, the Service Corps of Retired Executives (described in section
8(b)(1)(B) of this Act), the Small Business Development Centers
(described in section 21 of this Act), and the business development
staffs of each department and agency of the United States.

\(c\) BOARD OF DIRECTORS.---

\(1\) IN GENERAL.---The management of the Corporation shall be vested in
a Board of Directors composed of nine voting members and three nonvoting
ex officio members.

\(2\) APPOINTMENT OF VOTING MEMBERS.---The President shall, after
considering recommendations which shall be proposed by the Chairmen and
Ranking Members of the Committees on Small Business and the Committees
on Veterans Affairs of the House of Representatives and the Senate,
appoint United States citizens to be voting members of the Board, not
more than five of whom shall be members of the same political party.

\(3\) EX OFFICIO MEMBERS.---The Administrator of the Small Business
Administration, the Secretary of Defense, and the Secretary of Veterans
Affairs shall serve as the nonvoting ex officio members of the Board of
Directors.

\(4\) INITIAL APPOINTMENTS.---The initial members of the Board of
Directors shall be appointed non later than 60 days after the date of
enactment of this Act.

\(5\) CHAIRPERSON.---The members of the Board of Directors appointed
under paragraph (2) shall elect one such member to serve as chairperson
of the Board of Directors for a term of 2 years.

\(6\) TERMS OF APPOINTED MEMBERS.---

\(A\) IN GENERAL.---Each member of the Board of Directors appointed
under paragraph (2) shall serve a term of 6 years, except as provided in
subparagraph (B).

\(B\) TERMS OF INITIAL APPOINTEES.---As designated by the President at
the time of appointment, of the members first appointed---

\(i\) three shall be for a term of 2 years; and

\(ii\) three shall be for a term of 4 years.

\(C\) UNEXPIRED TERMS.---Any member of the board of Directors appointed
to fill a vacancy occurring before the expiration of the term for which
the member's predecessor was appointed shall be appointed only for the
remainder of the term. A member may serve after the expiration of that
member's term until a successor has taken office.

\(7\) VACANCIES.---Any vacancy on the Board of Directors shall be filled
in the manner in which the original appointment was made. In the case of
a vacancy in the office of the Administrator of the Small Business
Administration or the Secretary of Veterans Affairs, and pending the
appointment of a successor, an acting appointee for such vacancy may
serve as an ex officio member.

\(8\) INELIGIBILITY FOR OTHER OFFICES.---No voting member of the Board
of directors may be an officer or employee of the United States while
serving as a member of the Board of Directors or during the 2-year
period preceding such service.

\(9\) IMPARTIALITY AND NONDISCRIMINATION.---The Board of Directors shall
administer the affairs of the Corporation fairly and impartially and
without discrimination.

\(10\) OBLIGATIONS AND EXPENSES.---The Board of Directors shall
prescribe the manner in which the obligations of the Corporation may be
incurred and in which its expenses shall be allowed and paid.

\(11\) QUORUM.---Five voting members of the Board of Directors shall
constitute a quorum, but a lesser number may hold hearings.

\(d\) CORPORATE POWERS.---On October 1, 1999, the Corporation shall
become a body corporate and as such shall have the authority to do the
following:

\(1\) To adopt and use a corporate seal.

\(2\) To have succession until dissolved by an Act of Congress.

\(3\) To make contracts or grants.

\(4\) To sue and be sued, and to file and defend against lawsuits in
State or Federal court.

\(5\) To appoint, through the actions of its Board of Directors,
officers and employees of the Corporation, to define their duties and
responsibilities, fix their compensations, and to dismiss at will such
officers or employees.

\(6\) To prescribe, through the actions of its Board of Directors,
bylaws not inconsistent with Federal law and the law of the State of
incorporation, regulating the manner in which its general business may
be conducted and the manner in which the privileges granted to it by law
may be exercised.

\(7\) To exercise, through the actions of its Board of Directors or duly
authorized officers, all powers specifically granted by the provisions
of this section, and such incidental powers as shall be necessary.

\(8\) To solicit, receive, and disburse funds from private, Federal,
State and local organizations.

\(9\) To accept and employ or dispose of in furtherance of the purposes
of this section any money or property, real, personal, or mixed,
tangible or intangible, received by gift, devise, bequest, or otherwise.

\(10\) To accept voluntary and uncompensated services.

\(e\) CORPORATE FUNDS.---

\(1\) DEPOSIT OF FUNDS.---The board of Directors shall deposit all funds
of the Corporation in federally chartered and insured depository
institutions until such funds are disbursed under paragraph (2).

\(2\) DISBURSEMENT OF FUNDS.---Funds of the Corporation may be disbursed
only for purposes that are---

\(A\) approved by the Board of Directors by a recorded vote with a
quorum present; and

\(B\) in accordance with the purposes of the Corporation as specified in
subsection (b).

\(f\) NETWORK OF INFORMATION AND ASSISTANCE CENTERS.---In carrying out
the purpose described in subsection (b), the Corporation shall establish
and maintain a network of information and assistance centers for use by
veterans and the public.

\(g\) ANNUAL REPORT.---On or before October 1 of each year, the Board of
Directors shall transmit a report to the President and the Congress
describing the activities and accomplishments of the Corporation for the
preceding year and the Corporation's findings regarding the efforts of
Federal, State and private organizations to assist veterans in the
formation and expansion of small business concerns.

\(h\) ASSUMPTION OF DUTIES OF ADVISORY COMMITTEE.---On October 1, 2006,
the Corporation established under this section shall assume the duties,
responsibilities, and authority of the Advisory Committee on Veterans
Affairs established under section 203 of this Act.

\(i\) USE OF MAILS.---The Corporation may use the United States mails in
the same manner and under the same conditions as the departments and
agencies of the United States.

\(j\) PROFESSIONAL CERTIFICATION ADVISORY BOARD.---

\(1\) IN GENERAL.---Acting through the Board of Directors, the
Corporation shall establish a Professional Certification Advisory Board
to create uniform guidelines and standards for the professional
certification of members of the Armed Services to aid in their efficient
and orderly transition to civilian occupations and professions and to
remove potential barriers in the areas of licensure and certification.

\(2\) MEMBERSHIP.---The members of the Advisory Board shall serve
without compensation, shall meet in the District of Columbia no less
than quarterly, and shall be appointed by the Board of Directors as
follows:

\(A\) PRIVATE SECTOR MEMBERS.---The Corporation shall appoint not less
than seven members for terms of 2 years to represent private sector
organizations and associations, including the American Association of
Community Colleges, the Society for Human Resource Managers, the
Coalition for Professional Certification, the Council on Licensure and
Enforcement, and the American Legion.

\(B\) PUBLIC SECTOR MEMBERS.---The Corporation shall invite public
sector members to serve at the discretion of their departments or
agencies and shall---

\(i\) encourage the participation of the Under Secretary of Defense for
Personnel and Readiness;

\(ii\) encourage the participation of two officers from each branch of
the Armed Forces to represent the Training Commands of their branch; and

\(iii\) seek the participation and guidance of the Assistant Secretary
of Labor for Veterans' Employment.

\(k\) AUTHORIZATION OF APPROPRIATIONS.---

\(1\) IN GENERAL.---Subject to paragraph (2), there are authorized to be
appropriated to the Corporation to carry out this section---

\(A\) \$4,000,000 for fiscal year 2001;

\(B\) \$4,000,000 for fiscal year 2002;

\(C\) \$2,000,000 for fiscal year 2003; and

\(D\) \$2,000,000 for fiscal year 2004.

\(2\) MATCHING REQUIREMENT.---

\(A\) FISCAL YEAR 2002.---The amount made available to the Corporation
for fiscal year 2002 may not exceed twice the amount that the
Corporation certifies that it will provide for that fiscal year from
sources other than the Federal Government.

\(B\) SUBSEQUENT FISCAL YEARS.---The amount made available to the
Corporation for fiscal year 2003 or 2004 may not exceed the amount that
the Corporation certifies that it will provide for that fiscal year from
sources other than the Federal Government.

\(3\) PRIVATIZATION.---The Corporation shall institute and implement a
Plan to raise private funds and become a self-sustaining corporation.

§ 34. FEDERAL AND STATE TECHNOLOGY PARTNERSHIP PROGRAM.

\(a\) DEFINITIONS.---In this section and section 35, the following
definitions apply:

\(1\) APPLICANT.---The term "applicant" means an entity, organization,
or individual that submits a proposal for an award or a cooperative
agreement under this section.

\(2\) BUSINESS ADVICE AND COUNSELING.---The term "business advice and
counseling" means provide advice and assistance on matters described in
section 35(c)(2)(B) to small business concerns to guide them through the
SBIR and STTR program process, from application to award and successful
completion of each phase of the program.

\(3\) FAST PROGRAM.---The term "FAST program" means the Federal and
State Technology Partnership Program established under this section.

\(4\) MENTOR.---The term "mentor" means an individual described in
section 35(c)(2).

\(5\) MENTORING NETWORK.---The term "Mentoring Network" means an
association, organization, coalition, or other entity (including an
individual) that meets the requirements of section 35(c).

\(6\) RECIPIENT.---The term "recipient" means a person that receives an
award or becomes party to a cooperative agreement under this section.

\(7\) SBIR PROGRAM.---The term "SBIR program" has the same meaning as in
section 9(e)(4).

\(8\) STATE.---The term "State" means each of the several States, the
District of Columbia, the Commonwealth of Puerto Rico, the Virgin
Islands, Guam, and American Samoa.

\(9\) STTR PROGRAM.---The term STTR program" has the same meaning as in
section 9(e)(6).

\(b\) ESTABLISHMENT OF PROGRAM.---The Administrator shall establish a
program to be known as the Federal and State Technology Partnership
Program, the purpose of which shall be to strengthen the technological
competitiveness of small business concerns in the States.

\(c\) GRANTS AND COOPERATIVE AGREEMENTS.---

\(1\) JOINT REVIEW.---In carrying out the FAST program under this
section, the Administrator and the SBIR program managers at the National
Science Foundation and the Department of Defense shall jointly review
proposals submitted by applicants and may make awards or enter into
cooperative agreements under this section based on the factors for
consideration set forth in paragraph (2), in order to enhance or develop
in a State---

\(A\) technology research and development by small business concerns;

\(B\) technology transfer from university research to technology-based
small business concerns;

\(C\) technology deployment and diffusion benefiting small business
concerns;

\(D\) the technological capabilities of small business concerns through
the establishment or operation of consortia comprised of entities,
organizations, or individuals, including---

\(i\) State and local development agencies and entities;

\(ii\) representatives of technology-based small business concerns;

\(iii\) industries and emerging companies;

\(iv\) universities; and

\(v\) small business development centers; and

\(E\) outreach, financial support, and technical assistance to
technology-based small business concerns participating in or interested
in participating in an SBIR program, including initiatives---

\(i\) to make grants or loans to companies to pay a portion or all of
the cost of developing SBIR proposals;

\(ii\) to establish or operate a Mentoring Network within the FAST
program to provide business advice and counseling that will assist small
business concerns that have been identified by FAST program
participants, program managers of participating SBIR agencies, the
Administration, or other entities that are knowledgeable about the SBIR
and STTR programs as good candidates for the SBIR and STTR programs, and
that would benefit from mentoring, in accordance with section 35;

\(iii\) to create or participate in a training program for individuals
providing SBIR outreach and assistance at the State and local levels;
and

\(iv\) to encourage the commercialization of technology developed
through SBIR program funding.

\(2\) SELECTION CONSIDERATIONS.---In making awards or entering into
cooperative agreements under this section, the Administrator and the
SBIR program managers referred to in paragraph (1)---

\(A\) may only consider proposals by applicants that intend to use a
portion of the Federal assistance provided under this section to provide
outreach, financial support, or technical assistance to technology-based
small business concerns participating in or interested in participating
in the SBIR program; and

\(B\) shall consider, at a minimum---

\(i\) whether the applicant has demonstrated that the assistance to be
provided would address unmet needs of small business concerns in the
community, and whether it is important to use Federal funding for the
proposed activities;

\(ii\) whether the applicant has demonstrated that a need exists to
increase the number or success of small high-technology businesses in
the State, as measured by the number of first phase and second phase
SBIR awards that have historically been received by small business
concerns in the State;

\(iii\) whether the projected costs of the proposed activities are
reasonable;

\(iv\) whether the proposal integrates and coordinates the proposed
activities with other State and local programs assisting small
high-technology firms in the State; and

\(v\) the manner in which the applicant will measure the results of the
activities to be conducted.

\(vi\) whether the proposal addresses the needs of small business
concerns---

\(I\) owned and controlled by women;

\(II\) owned and controlled by minorities; and

\(III\) located in areas that have historically not participated in the
SBIR and STTR programs.

\(3\) PROPOSAL LIMIT.---Not more than 1 proposal may be submitted for
inclusion in the FAST program under this section to provide services in
any one State in any 1 fiscal year.

\(4\) PROCESS.---Proposals and applications for assistance under this
section shall be in such form and subject to such procedures as the
Administrator shall establish. The Administrator shall promulgate
regulations establishing standards for the consideration of proposals
under paragraph (2), including standards regarding each of the
considerations identified in paragraph (2)(B).

\(d\) COOPERATION AND COORDINATION.---In carrying out the FAST program
under this section, the Administrator shall cooperate and coordinate
with---

\(1\) Federal agencies required by section 9 to have an SBIR program;
and

\(2\) entities, organizations, and individuals actively engaged in
enhancing or developing the technological capabilities of small business
concerns, including---

\(A\) State and local development agencies and entities;

\(B\) State committees established under the Experimental Program to
Stimulate Competitive Research of the National Science Foundation (as
established under section 113 of the National Science Foundation
Authorization Act of 1988 (42 U.S.C. 1862g));

\(C\) State science an technology councils; and

\(D\) representatives of technology-based small business concerns.

\(e\) ADMINISTRATIVE REQUIREMENTS.---

\(1\) COMPETITIVE BASIS.---Awards and cooperative agreements under this
section shall be made or entered into, as applicable, on a competitive
basis.

\(2\) MATCHING REQUIREMENTS.---

\(A\) IN GENERAL.---The non-Federal share of the cost of an activity
(other than a Planning activity) carried out using an award or under a
cooperative agreement under this section shall be---

\(i\) 50 cents for each Federal dollar, in the case of a recipient that
will serve small business concerns located in one of the 18 States
receiving the fewest SBIR first phase awards (as described in section
9(e)(4)(A));

\(ii\) except as provided in subparagraph (B), 1 dollar for each Federal
dollar, in the case of a recipient that will serve small business
concerns located in one of the 16 States receiving the greatest number
of such SBIR first phase awards; and

\(iii\) except as provided in subparagraph (B), 75 cents for each
Federal dollar, in the case of a recipient that will serve small
business concerns located in a State that is not described in clause (i)
or (ii) that is receiving such SBIR first phase awards.

\(B\) LOW-INCOME AREAS.---The non-Federal share of the cost of the
activity carried out using an award or under a cooperative agreement
under this section shall be 50 cents for each Federal dollar that will
be directly allocated by a recipient described in subparagraph (A) to
serve small business concerns located in a qualified census tract, as
that term is defined in section 42(d)(5)(C)(ii) of the Internal Revenue
Code of 1986. Federal dollars not so allocated by that recipient shall
be subject to the matching requirements of subparagraph (A).

\(C\) TYPES OF FUNDING.---The non-Federal share of the cost of an
activity carried out by a recipient shall be comprised of not less than
50 percent cash and not more than 50 percent of indirect costs and
in-kind contributions, except that no such costs or contributions may be
derived from funds from any other Federal program.

\(D\) RANKINGS.---For purposes of subparagraph (A), the Administrator
shall reevaluate the ranking of a State once every 2 fiscal years,
beginning with fiscal year 2001, based on the most recent statistics
compiled by the Administrator.

\(3\) DURATION.---Awards may be made or cooperative agreements entered
into under this section for multiple years, not to exceed 5 years in
total.

\(f\) REPORTS.---

\(1\) INITIAL REPORT.---Not later than 120 days after the date of
enactment of the Small Business Innovation Research Program
Reauthorization Act of 2000, the Administrator shall prepare and submit
to the Committee on Small Business of the Senate and the Committee on
Science and the Committee on Small Business of the House of
Representatives a report, which shall include, with respect to the FAST
program, including Mentoring Networks---

\(A\) a description of the structure and procedures of the program;

\(B\) a management Plan for the program; and

\(C\) a description of the merit-based review process to be used in the
program.

\(2\) ANNUAL REPORTS.---The Administrator shall submit an annual report
to the Committee on Small Business of the Senate and the Committee on
Science and the Committee on Small Business of the House of
Representatives regarding---

\(A\) the number and amount of awards provided and cooperative
agreements entered into under the FAST program during the preceding
year;

\(B\) a list of recipients under this section, including their location
and the activities being performed with the awards made or under the
cooperative agreements entered into; and

\(C\) the Mentoring Networks and the mentoring database, as provided for
under section 35, including---

\(i\) the status of the inclusion of mentoring information in the
database required by section 9(k); and

\(ii\) the status of the implementation and description of the usage of
the Mentoring Networks.

\(g\) REVIEWS BY INSPECTOR GENERAL.---

\(1\) IN GENERAL.---The Inspector General of the Administration shall
conduct a review of---

\(A\) the extent to which recipients under the FAST program are
measuring the performance of the activities being conducted and the
results of such measurements; and

\(B\) the overall management and effectiveness of the FAST program.

\(2\) REPORT.---During the first quarter of fiscal year 2004, the
Inspector General of the Administration shall submit a report to the
Committee on Small Business of the Senate and the Committee on Science
and the Committee on Small Business of the House of Representatives on
the review conducted under paragraph (1).

\(h\) PROGRAM LEVELS.---

\(1\) IN GENERAL.---There is authorized to be appropriated to carry out
the FAST program, including Mentoring Networks, under this section and
section 35, \$10,000,000 for each of fiscal years 2001 through 2005.

\(2\) MENTORING DATABASE.---Of the total amount made available under
paragraph (1) for fiscal years 2001 through 2005, a reasonable amount,
not to exceed a total of \$500,000, may be used by the Administration to
carry out section 35(d).

\(i\) TERMINATION.---The authority to carry out the FAST program under
this section shall terminate on September 30, 2005.

§ 35. MENTORING NETWORKS.

\(a\) FINDINGS.---Congress finds that---

\(1\) the SBIR and STTR programs create jobs, increase capacity for
technological innovation, and boost international competitiveness;

\(2\) increasing the quantity of applications from all States to the
SBIR and STTR programs would enhance competition for such awards and the
quality of the completed projects; and

\(3\) mentoring is a natural complement to the FAST program of reaching
out to new companies regarding the SBIR and STTR programs as an
effective and low-cost way to improve the likelihood that such companies
will succeed in such programs in developing and commercializing their
research.

\(b\) AUTHORIZATION FOR MENTORING NETWORKS.---The recipient of an award
or participant in a cooperative agreement under section 34 may use a
reasonable amount of such assistance for the establishment of a
Mentoring Network under this section.

\(c\) CRITERIA FOR MENTORING NETWORKS.---A Mentoring Network established
using assistance under section 34 shall---

\(1\) provide business advice and counseling to high technology small
business concerns located in the State or region served by the Mentoring
Network and identified under section 34(c)(1)(E)(ii) as potential
candidates for the SBIR or STTR programs;

\(2\) identify volunteer mentors who---

\(A\) are persons associated with a small business concern that has
successfully completed one or more SBIR or STTR funding agreements; and

\(B\) have agreed to guide small business concerns through all stages of
the SBIR or STTR program process, including providing assistance
relating to---

\(i\) proposal writing;

\(ii\) marketing;

\(iii\) Government accounting;

\(iv\) Government audits;

\(v\) project facilities and equipment;

\(vi\) human resources;

\(vii\) third phase partners;

\(viii\) commercialization;

\(ix\) venture capital networking; and

\(x\) other matters relevant to the SBIR and STTR programs;

\(3\) have experience working with small business concerns participating
in the SBIR and STTR programs;

\(4\) contribute information to the national database referred to in
subsection (d); and

\(5\) agree to reimburse volunteer mentors for out-of-pocket expenses
related to service as a mentor under this section.

\(d\) MENTORING DATABASE.---The Administrator shall---

\(1\) include in the database required by section 9(k)(1), in
cooperation with the SBIR, STTR, and FAST programs, information on
Mentoring Networks and mentors participating under this section,
including a description of their areas of expertise;

\(2\) work cooperatively with Mentoring Networks to maintain and update
the database;

\(3\) take such action as may be necessary to aggressively promote
Mentoring Networks under this section; and

\(4\) fulfill the requirements of this subsection either directly or by
contract.

§ 36. PROCUREMENT PROGRAM FOR SMALL BUSINESS CONCERNS OWNED AND
CONTROLLED BY SERVICE-DISABLED VETERANS.

\(a\) SOLE SOURCE CONTRACTS.---In accordance with this section, a
contracting officer may award a sole source contract to any small
business concern owned and controlled by service-disabled veterans if---

\(1\) such concern is determined to be a responsible contractor with
respect to performance of such contract opportunity and the contracting
officer does not have a reasonable expectation that 2 or more small
business concerns owned and controlled by service-disabled veterans will
submit offers for the contracting opportunity;

\(2\) the anticipated award price of the contract (including options)
will not exceed---

\(A\) \$5,000,000, in the case of a contract opportunity assigned a
standard industrial classification code for manufacturing; or

\(B\) \$3,000,000, in the case of any other contract opportunity; and

\(3\) in the estimation of the contracting officer, the contract award
can be made at a fair and reasonable price.

\(b\) RESTRICTED COMPETITION.---In accordance with this section, a
contracting officer may award contracts on the basis of competition
restricted to small business concerns owned and controlled by
service-disabled veterans if the contracting officer has a reasonable
expectation that not less than 2 small business concerns owned and
controlled by service-disabled veterans will submit offers and that the
award can be made at a fair market price.

\(c\) RELATIONSHIP TO OTHER CONTRACTING PREFERENCES.---A procurement may
not be made from a source on the basis of a preference provided under
subsection (a) or (b) if the procurement would otherwise be made from a
different source under section 4124 or 4125 of title 18, United States
Code, or the Javits-Wagner-O'Day Act (41 U.S.C. 46 *et seq*.).

\(d\) ENFORCEMENT; PENALTIES.---Rules similar to the rules of paragraphs
(5) and (6) of section 8(m) shall apply for purposes of this section.

\(e\) CONTRACTING OFFICER.---For purposes of this section, the term
"contracting officer" has the meaning given such term in section
27(f)(5) of the Office of Federal Procurement Policy Act (41 U.S.C.
423(f)(5)).

§ 37. All laws and parts of laws inconsistent with this Act are hereby
repealed to the extent of such inconsistency.