I 

112TH CONGRESS 

1ST SESSION H. R. 3754 

To amend the Small Business Act to improve the program under section 

8(a), and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 20, 2011 

Ms. RICHARDSON introduced the following bill; which was referred to the 

Committee on Small Business 

A BILL 

To amend the Small Business Act to improve the program 

under section 8(a), and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Small Business Reform 

5 Act of 2011’’ or the ‘‘Not Too Small to Succeed in Busi6 ness Act of 2011’’. 

7 SEC. 2. FINDINGS. 

8 Congress finds the following: 

9 (1) Small businesses are a vital part of the 

10 economy of the United States. 


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1 (2) The 26,800,000 small businesses in the 

2 United States account for more than 99.7 percent of 

3 all employer firms. 

4 (3) Small businesses employ just over half of all 

5 private sector employees. 

6 (4) The 4,100,000 small businesses owned by 

7 individuals who are members of economically dis8 advantaged groups generate approximately 

9 $694,000,000,000 in revenues and employ approxi10 mately 4,800,000 individuals each year. 

11 (5) Small businesses need help to remain com12 petitive in the global economy, particularly during 

13 difficult economic times. 

14 (6) Together, women-owned and minority15 owned businesses receive less than 7 percent of ven16 ture capital. 

17 (7) Seventy percent of small businesses survive 

18 at least 2 years, but less than half survive 5 years. 

19 (8) The Small Business Administration was es20 tablished in 1953 by the Federal Government to aid, 

21 counsel, assist, and protect the interests of small 

22 business concerns, to preserve free competitive enter23 prise, and to maintain and strengthen the overall 

24 economy of the United States. 


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1 (9) The Small Business Administration assists 

2 firms owned and controlled by economically dis3 advantaged individuals to enter the economic main4 stream by providing firm-specific analysis, coun5 seling, management training, professional consulting 

6 and monitoring services, and access to business de7 velopment opportunities under section 8(a) of the 

8 Small Business Act. 

9 (10) Although the program under section 8(a) 

10 is well intended, the problems of the program are 

11 well known. 

12 (11) The program under section 8(a) has a 

13 record of graduating companies that are not suffi14 ciently prepared to compete for contracts with large 

15 and established companies in the private sector, re16 sulting in a large number of former participants in 

17 the program failing to remain in business shortly 

18 after leaving the program. 

19 (12) The problem of graduating companies 

20 from the program under section 8(a) that are not 

21 sufficiently prepared to compete for contracts with 

22 large and established companies in the private sector 

23 is caused by the reliance of the Small Business Ad24 ministration on outdated measures of adjusted gross 

25 income and net worth in determining whether a 


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1 company participating in the program continues to 

2 be economically disadvantaged. 

3 (13) Reliance by the Small Business Adminis4 tration on measures that do not reflect contem5 porary conditions has had, and will continue to have, 

6 the unintended consequence of keeping small busi7 nesses too small to succeed, which is as undesirable 

8 as protecting companies that are too big to fail. 

9 SEC. 3. IMPROVEMENT OF PROGRAM UNDER SECTION 8(a) 

10 OF THE SMALL BUSINESS ACT. 

11 (a) PERIOD OF ELIGIBILITY.— 

12 (1) EXTENSION.—Section 7(j)(15) of the Small 

13 Business Act (15 U.S.C. 636(j)(15)) is amended— 

14 (A) in the matter preceding subparagraph 

15 (A) by striking ‘‘nine years’’ and inserting ‘‘11 

16 years’’; and 

17 (B) in subparagraph (B) by striking ‘‘five 

18 years’’ and inserting ‘‘7 years’’. 

19 (2) COMPLETED PERIODS.—A small business 

20 concern that completed a 9-year period of participa21 tion in the program under section 8(a) of the Small 

22 Business Act (15 U.S.C. 637(a)) prior to the date 

23 of enactment of this Act and that is otherwise eligi24 ble to participate in such program except for having 

25 completed such 9-year period, including that such 


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1 concern satisfies net worth requirements applicable 

2 to continued eligibility after initial program admis3 sion, may participate in such program during the 2- 

4 year period beginning on the date of enactment of 

5 this Act. 

6 (b) NET WORTH AND INCOME LIMITATIONS.— 

7 (1) INCREASE.—Section 8(a)(6)(A) of the 

8 Small Business Act (15 U.S.C. 637(a)(6)(A)) is 

9 amended by inserting after ‘‘disadvantaged indi10 vidual.’’ the following: ‘‘For purposes of eligibility 

11 for admission as a Program Participant the net 

12 worth of such individual may be any amount not ex13 ceeding $750,000 and for purposes of continued eli14 gibility after admission the net worth of such indi15 vidual may be any amount not exceeding 

16 $2,250,000. For purposes of eligibility for admission 

17 as a Program Participant and continued eligibility 

18 after admission, the modified adjusted gross income 

19 (as such term is defined in section 25A(d)(3) of the 

20 Internal Revenue Code of 1986) of such individual 

21 for an applicable taxable year may be any amount 

22 not exceeding $500,000.’’. 

23 (2) COMPLETED PERIODS OF PARTICIPATION.— 

24 If the Administrator of the Small Business Adminis25 tration graduated a small business concern from the 


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1 program under section 8(a) of the Small Business 

2 Act (15 U.S.C. 637(a)) prior to the date of enact3 ment of this Act as a result of a determination that 

4 such concern did not meet standards relating to eco5 nomic disadvantage and such concern meets require6 ments under such section as amended by this Act, 

7 such concern may participate in such program for a 

8 period— 

9 (A) of 11 years less the period of time 

10 such concern previously participated in such 

11 program; and 

12 (B) beginning on the date of enactment of 

13 this Act. 

Æ 


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