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[Senate Report 110-185]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 386
110th Congress                                                   Report
                                 SENATE
 1st Session                                                    110-185

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

 
  SMALL BUSINESS LENDING REAUTHORIZATION AND IMPROVEMENTS ACT OF 2007

                                _______
                                

               September 26, 2007.--Ordered to be printed

                                _______
                                

 Mr. Kerry, from the Committee on Small Business and Entrepreneurship, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 1671]

    On June 26, 2007, the Senate Committee on Small Business 
and Entrepreneurship to which was referred the bill (S. 1671) 
to reauthorize and improve the entrepreneurial development 
programs of the Small Business Administration, and for other 
purposes, having considered the same, reports favorably thereon 
with an amendment in the nature of a substitute and recommends 
that the bill, as amended, do pass.

                            I. INTRODUCTION

    The Entrepreneurial Development Act of 2007 (S. 1671) was 
introduced by Senator John F. Kerry, for himself and Senator 
Snowe, on June 20, 2007. The bill reauthorizes the SBA's 
entrepreneurial development programs for Fiscal Years 2008, 
2009, and 2010. In addition to updating the SBA's 
entrepreneurial development programs, the bill authorizes four 
new pilot program initiatives.
    During markup of the bill, the Committee unanimously 
adopted by voice vote, a bipartisan managers' substitute 
amendment, offered by Chairman Kerry for himself and Ranking 
Member Snowe. The bill was subsequently adopted as amended by a 
roll call vote of 19-0.
    S. 1671 is based on S. 3778, the Small Business 
Reauthorization and Improvements Act of 2007, which was a 
comprehensive reauthorization bill developed under Senator 
Snowe, then the chair of the Committee, incorporating virtually 
all of the entrepreneurial development provisions that were 
adopted by the Committee in the 109th Congress. S. 1671 builds 
on the Committee's work in the prior Congress, making a few 
changes to the provisions, including updating the language to 
reflect passage of Senate Amendment 187, which created a 
permanent three year renewal grant program for Women's Business 
Centers. S. 1671 also calls for a National Small Business 
Summit. Aside from technical changes, other changes include 
extending SBDC privacy requirements to SCORE clients and 
increasing from 9 to 10 the Members of the National Small 
Business Development Center Advisory Board.

                        II. DESCRIPTION OF BILL

                       Authorization of Programs

Title I--Reauthorization

    The bill reauthorizes the Small Business Development Center 
(SBDC) program, SCORE and the Paul Coverdell Drug-Free 
Workplace program for Fiscal Years 2008, 2009, and 2010.

Title II--Women's small business ownership programs

    During the Committee's SBA reauthorization in 2003, the 
Committee determined that the SBA's programs had not evolved to 
meet the changing needs of women-owned small businesses. 
Specifically, women business leaders expressed their 
frustration with the agency, the lack of results from agency 
programs and services for existing women business owners, the 
inactivity of the National Women's Business Council and 
Interagency Committee on Women's Business Enterprise, and the 
lack of connection with the `real world problems' facing women 
entrepreneurs on a day-to-day basis.
    In response, Senator Snowe introduced the Women's Small 
Business Programs Improvement Act (S. 1154) and Senators Snowe 
and Kerry introduced the Women's Business Centers Preservation 
Act of 2003 (S. 1247). Provisions from these bills were then 
incorporated into S. 1375, the Small Business Administration 
50th Anniversary Reauthorization Act of 2003.
    However, in Fiscal Year 2005, a revised version of SBA's 
reauthorization was inserted into Division K of H.R. 4818, the 
Consolidated Appropriations Act for 2005. While this version 
included the reauthorization of the Women's Business Center 
program, it excluded the authorization for the Women's Business 
Center Program Sustainability Pilot program. The pilot program 
was created in bipartisan legislation, the Women's Business 
Center Sustainability Act of 1999, sponsored by Senator Kerry 
and cosponsored by Senator Snowe. Since 2005, the pilot program 
has been only reauthorized on an annual basis in Appropriations 
bills, leaving the most experienced centers, in years five 
through ten, operating with the uncertainty of whether they 
would have an opportunity to continue to participate in the 
program.
    To address these concerns and to meet the increasing demand 
for the program's services, in 2006, Senators Snowe and Kerry 
introduced the Women's Small Business Ownership Programs Act of 
2006 (S. 3659). The provisions of that bill were then 
incorporated into S. 3778. Senate Amendment 187, sponsored by 
Senators Kerry, Snowe and Sununu, also addressed this issue and 
was unanimously passed by the Senate as an amendment to H.R. 2, 
the Fair Minimum Wage Act of 2007, on January 24, 2007. The 
Fair Minimum Wage Act was subsequently attached to the U.S. 
Troop Readiness, Veterans' Care, Katrina Recovery and Iraq 
Accountability Appropriations Act of 2007. The President signed 
this legislation into law on May 25, 2007. The legislationwould 
allow established women's business centers--those beyond the first five 
years of funding--to apply for 3-year renewal grants on a continuous 
basis.
    The legislation is similar to language that passed out of 
the Committee on Small Business and Entrepreneurship as part of 
S. 3778 and based on the Women's Business Center Sustainability 
Pilot Program Senator Kerry created in 1999. Senator Snowe 
cosponsored the bill.
            Small Business Administration Office of Women's Business 
                    Ownership
    The bill provides authority for the SBA's Office of Women's 
Business Ownership to develop and make available new programs 
and services for established women owned businesses addressing 
issues in the areas of women in manufacturing, technology, 
professional services, retail and product sales, travel and 
tourism, international trade and Federal government 
procurement. The Committee expects that these new programs and 
services will be developed in consultation with the National 
Women's Business Council, the Interagency Committee on Women's 
Business Enterprise, and representatives of the women's 
business centers associations.
    The bill also directs the SBA to conduct training for 
District Office Women Business Ownership Representatives 
(existing personnel who are responsible for marketing and 
outreach activities) and District Office Technical 
Representatives (existing personnel who are responsible for 
grant programmatic and financial oversight duties) as well as 
providing resources for the District Offices to carry out their 
responsibilities.
    The Women's Business Center Program, established in 1988, 
provides long-term training and counseling to encourage small 
business ownership through more than 100 non-profit 
organizations. The Women's Business Center program has been 
well received and has become a unique resource for women 
entrepreneurs--proving to be of great benefit to the SBA in its 
quest to serve greater numbers of entrepreneurs. Therefore, 
some members of the Committee have questioned agency actions in 
support of opening new centers in new locations before 
stabilizing established centers through continued funding 
opportunities. The SBA has stated that after initial funding, 
the centers should be able to provide services independent of 
the grant program. However, since a requirement of the Women's 
Business Center program is to conduct outreach and long-term 
assistance to the under-served markets on a `no-fee' basis, it 
would be difficult for many centers to become self-sufficient. 
The Committee supports the agency's positioning itself to first 
meet the obligations of renewal grant funding for productive 
centers before creating new centers.
    To improve this process, the bill directs the agency to 
streamline and reduce the reporting requirements and costs of 
the centers, recognizing the limited grant award and limited 
human resources within the centers. All of the eligible 
associations that represent Women's Business Centers will also 
have an opportunity to consult with the SBA Office of Women's 
Business Ownership for the purpose of developing training 
programs for centers and recommendations to improve the 
policies and procedures governing the operations and 
administration of the program.
            National Women's Business Council
    The National Women's Business Council was created by the 
Women's Business Ownership Act of 1988 to serve as an advisory 
body to the President, the Congress and the SBA. Its members 
came from the public and private sectors, and it was 
constituted to respond to criticism of the Interagency 
Committee's inactivity. By separating from the Interagency 
Committee, the Council was better able to focus on its advisory 
mission. The 1997 Small Business Reauthorization Act provided 
for improved reporting duties and Council appointments. The 
2000 Small Business Reauthorization Act increased the annual 
authorized appropriation from $600,000 to $1 million to allow 
the Council to broaden its scope in research and reports, 
establish advisory councils, conduct conferences, and establish 
an interstate communication network.
    To build upon the foundation previously established for the 
Council, the Committee incorporated the Council's requests to 
change its research formula and establishes a 30 percent 
allocation of appropriated funds for specific research. In 
addition, the bill provides the Council with the authority to 
create an electronic clearinghouse on women's business 
ownership. At the Council's request, the bill enables the 
Council to establish working groups. The bill also provides the 
Council with the same cosponsorship authority as the SBA in 
order for it to expand research and program activities for 
women-owned small businesses.
    To ensure the Council's continuity and independence, the 
bill clarifies membership representation. The Council has 15 
members representing small businesses and small business 
organizations, with the Chairperson appointed by the President, 
six members representing women's business organizations, and 
the remaining eight members appointed by the SBA Administrator 
based upon recommendations of the Chair and Ranking Members of 
the Senate Committee on Small Business and Entrepreneurship and 
the House Committee on Small Business. Of these eight `party-
affiliated' members, four are to come from the same political 
party as the President and four are not to be of the 
President's party.
    In 2003, Senator Landrieu proposed an amendment, which was 
adopted by the Committee, to establish fairness in the 
appointment of Council members as a result of an imbalance in 
membership representation between the two political parties. 
This amendment calls for equal representation of the two 
political parties in the process of appointing members to fill 
vacant seats on the Council and requires the Administrator to 
report to Congress on vacancies that remain unfilled for more 
than 30 days. In 2006, as part of S. 3778, the Committee 
clarified the amendment to recognize a party balance for the 
eight `party-affiliated' members. The report must cite in 
detail the status of all vacancies, identifying the type of 
vacancies, the process the Council will follow, and the notice 
of any anticipated delays in filling the vacancies.
            Interagency Committee on Women's Business Enterprise
    In 1977, an interagency task force was formed and was 
subsequently renamed the Interagency Council in May 1979 by 
Executive Order 11213. In 1988, the Women's Business Ownership 
Act (Public Law 100-533) replaced the Interagency Council with 
a joint public-private sector National Women's Business 
Council. The SBA Reauthorization and Amendment Act of 1994 
(Public Law 103-403) revised the Interagency Council's 
structure, returning all public-sector participants to comprise 
an expanded Interagency Committee on Women's Business 
Enterprise.
    In 1994, by separating the private-sector Council from the 
public-sector Interagency Committee, it was intended that the 
Council would be the pro-active force to inspire action by the 
Interagency Committee. The 1997 Reauthorization Act 
incorporated a requirement that representatives on the 
Interagency Committee report directly to the head of their 
agency on the Interagency Committee's activities. There is no 
funding authorization provided under current law to support the 
activities of the Interagency Committee. Nor are there clear 
directives on the operations and interaction of the Federal 
agency and department representatives.
    Currently, the Interagency Committee includes 
representatives from the U.S. Departments of Commerce, Defense, 
Education, Energy, Health & Human Services, Labor, 
Transportation, and Treasury, the SBA, General Services 
Administration, Office of Federal Procurement Policy, National 
Aeronautics and Science Administration, Environmental 
Protection Agency, the Federal Reserve, and the Executive 
Office of the President.
    The Federal agencies and departments represented on the 
Interagency Committee allocate existing personnel and resources 
to support participation on the Interagency Committee. The 
Interagency Committee is required to submit an annual report to 
the President and Congress, through the SBA, but there is no 
recent record of annual reports being prepared or forwarded to 
the President and Congress. In addition, the President has not 
appointed a Chairperson to carry out the mission of the 
Interagency Committee, and therefore, the Interagency Committee 
is inactive.
    To reactivate the Interagency Committee so that it can 
accomplish its intended mission, the bill directs the SBA 
Deputy Administrator to assume temporarily the responsibilities 
of the Interagency Committee Chair, if vacant, until the 
President makes an appointment. This action provides for the 
continuity of activities and avoid periods of inactivity. The 
bill also provides operational direction for the Interagency 
Committee by requiring that the Interagency Committee conduct 
three official meetings each year to plan upcoming Fiscal Year 
activities; track year-to-date agency contracting goals; and 
evaluate Fiscal Year progress and begin the report process.
    The bill also establishes, as a subcommittee to the 
Interagency Committee, a policy advisory group consisting of 
representatives from the SBA, the Department of Commerce, the 
Department of Labor, the Department of Defense, the Department 
of the Treasury, two individuals and two organizations that are 
members of the National Women's Business Council. The Committee 
believes that the policy advisory group will return the 
Interagency Committee to a mix of public/private members to 
provide the support and direction so badly needed to revive the 
intent of the Interagency Committee.

Title III--International trade

    Exporters support over 12 million jobs and pay wages 18 
percent higher than average. Ninety-seven percent of exporters 
are small businesses and account for almost $300 billion of 
yearly export sales--nearly one-third of total U.S. exports. 
Over the last decade the number of small businesses that export 
has increased by more than 250 percent. Exporting offers the 
opportunity for small businesses to retain and create jobs, 
position themselves for growth, enter new markets, expand their 
customer base, and add product and service lines.
    The SBA plays an important role in this growth through 
United States Export Assistance Centers (USEACs), which provide 
small or medium sized businesses with local export assistance. 
In particular, USEACs provide lending and technical assistance 
and help small businesses in obtaining adequate export 
financing. The Committee is aware that, at a cost of less than 
$2 million per year, the current group of SBA International 
Finance Specialists has obtained bank financing for more than 
$10 billion in U.S. exports since 1999. The $10 billion in 
export sales financed by these specialists has helped to create 
over 140,000 new, high-paying U.S. jobs.
    However, despite these figures, the Committee is concerned 
that this program is experiencing a record staffing low of 16 
specialists nationwide as of July 2007--down from a peak of 22 
specialists in January 2000. These vacancies force the current 
group of finance specialists to cover more extensive 
territories, often with limited travel budgets, which 
negatively impacts U.S. export potential in high export 
markets. In order to expand and assist small businesses 
exporters, the bill expands the trade distribution network by 
ensuring SBA maintains a sufficient level of USEAC employees. 
The bill ensures that in filling USEAC positions, the SBA must 
first address existing positions that have been vacant since 
January 2003 before filling new positions.
    This provision was included in S. 3778 but originated in 
the 109th Congress from S. 3663, the Small Business 
International Trade Enhancements Act of 2006, introduced by 
Senator Landrieu on July 14, 2006 and co-sponsored by Senators 
Bayh, Kerry, and Pryor. This provision was also included in S. 
738, the Small Business International Trade Enhancement Act of 
2007, introduced by Senator Landrieu in the 110th Congress on 
March 1, 2007. Cosponsors included Senators Snowe, Kerry, Pryor 
and Coleman.
    Finally, to improve the overall administration of the SBA's 
international trade loan programs, the bill designates one 
individual within the SBA as a trade financial specialist to 
oversee the ITL programs. This provision was also from S. 3778 
and included in S. 738.

Title IV--Native American Small Business Development Program

    The SBA's Office of Native American Affairs implements the 
agency's outreach program for Native American communities on or 
near tribal lands. The bill codifies the Office of Native 
American Affairs, and outlines the qualifications and 
responsibilities of the Office and its head. Additionally, the 
section establishes a program that provides financial 
assistance to tribal governments, tribal colleges, Native 
Hawaiian organizations, and Alaska Native corporations to 
create Native American business centers. These centers shall 
conduct five year projects that offer culturally tailored 
business development assistance. A Native American business 
center may enter into a contract or cooperative agreement with 
a Federal department or agency to provide specific assistance 
to Native American and other under-served small business 
concerns located on or near tribal lands, to the extent that 
such contract or cooperative agreement is consistent with the 
terms of any federal assistance received by the Native American 
business center. This program would be authorized at $5 million 
per year for Fiscal Years 2008 through 2010.
    The bill establishes two Native American small business 
development pilot programs. First, the Native American 
Development Grant Pilot Program awards Native American 
development grants to provide culturally tailored business 
development training and related services to Native Americans 
and Native American small business concerns. The grants may be 
awarded to (i) any small business development center, or (ii) 
any private, nonprofit organization that has members of an 
Indian tribe comprising a majority of its board of directors, 
is a Native Hawaiian organization; or an Alaska Native 
corporation. The program would be authorized at $1 million per 
year for Fiscal Years 2008 through 2010.
    Second, the American Indian Tribal Assistance Center Grant 
Pilot Program awards not less than three American Indian Tribal 
Assistance Center grants to establish joint projects to provide 
culturally tailored business development assistance to 
prospective and current owners of small business concerns 
located on or near tribal lands. The program would be 
authorized at $1,000,000 per year for Fiscal Years 2008 through 
2010.
    The Native American small business development programs 
contained in S. 1671 are originally from legislation introduced 
in the 109th Congress--the Native American Small Business 
Development Act (S. 1907), sponsored by Senator Johnson and 
cosponsored by Senators Kerry, Pryor, Cantwell, Akaka, 
Stabenow, Boxer, Dorgan, Inouye, Murray, Smith and Enzi, and an 
amendment sponsored by Senators Thune and Enzi. S. 3778 also 
incorporated this language.

Title V--National Small Business Regulatory Assistance

    The Committee continues to strongly advocate for a targeted 
regulatory reform agenda that would reduce the burdens that 
Federal regulations bear on small businesses. Small businesses 
are essential to the health of the U.S. economy, and future 
economic growth, especially in a globally competitive world, 
will depend on the success of the small business and 
entrepreneurial sector of the economy. Small business 
entrepreneurs are risk takers who are currently producing over 
50 percent of our Gross Domestic Product and creating 
approximately three-quarters of all new jobs. Reducing 
regulatory burdens for the nation's 25 million small businesses 
will help to stimulate innovation and creativity, lower the 
costs of starting and operating a business, and provide the 
tools and resources that small businesses need to grow and 
expand.
    Unfortunately, as the number and complexity of Federal 
regulations increase, there is often a greater burden placed on 
small businesses than on larger businesses. A recent report 
prepared for the SBA's Office of Advocacy found that in 2004, 
the per-employee cost of federal regulations for firms with 
fewer than 20 employees was $7,647. That number is 44.8 percent 
higher than the $5,282 per-employee cost faced by businesses 
with 500 or more workers.
    At the same time, small business owners have found it 
increasingly difficult to meet their regulatory obligations 
while trying to successfully operate their businesses. In many 
cases, small business owners do not learn about their failure 
to comply with a regulation until it is too late and an 
inspector or auditor walks through the door. The Committee 
believes that small business owners need additional compliance 
assistance tools and resources to both understand and comply 
with complex regulatory actions. To that end, in the 109th 
Congress, Senator Kerry introduced the National Small Business 
Regulatory Assistance Act, S. 1411, cosponsored by Senator 
Snowe. The provisions of S. 1411 are included as Title V of 
this bill.
    Title V establishes a pilot project for SBDCs to expand 
their small business regulatory compliance assistance programs. 
This title capitalizes on the current SBDC structure, which 
provides management and technical assistance counseling and 
educational programs to small business owners across the 
country. Currently, there are over 1,100 SBDC service locations 
in every state and territory.
    The bill also establishes a four-year pilot program to 
provide resources to SBDCs so they may provide free regulatory 
compliance assistance and counseling to small business owners. 
Section 1703 would require the SBA to provide matching grants 
to SBDC programs in two states in each of the SBA's 10 regions. 
The grants would be more than $150,000, but less than $300,000 
and shall be consistent with the matching requirement under 
current law. The bill also authorizes $5 million in 
appropriations for the first fiscal year beginning after the 
date of enactment, and $5 million in appropriations for each of 
the three subsequent fiscal years.
    The bill also requires the SBDCs to use the grants to 
provide: access to information and resources, including current 
Federal and State non-punitive compliance and technical 
assistance programs; conduct training and educational 
activities; and offer confidential, free-of-charge, one-on-one, 
in-depth counseling to small business owners regarding 
compliance with Federal regulations.
    SBDCs participating in the pilot program would be required 
to submit a quarterly report, and the SBA would have 
responsibility for evaluating the pilot program and making 
recommendations on the extension of the program to other SBDCs. 
Finally, the SBA would promulgate final regulations to carry 
out the pilot program within 180 days of passage.

Title VI--Other provisions

            Minority Entrepreneurship and Innovation Pilot Program of 
                    2007
    This section was based on the Minority Entrepreneurship 
Development Act of 2007, (S. 98), introduced by Senator Kerry, 
on the first day of the new Congress in January 2007, and co-
sponsored by Senators Cardin, Landrieu and Clinton. Modeled 
after a program launched by the Kauffman Foundation, the goal 
of this section is to target minority students who are pursuing 
careers in highly skilled fields such as engineering, 
manufacturing, science and technology, and guide them towards 
entrepreneurship as a career option. Minority-owned businesses 
already participate in a wide variety of industries, but are 
disproportionately represented in traditionally low-growth and 
low-opportunity service sectors. Promoting entrepreneurial 
education to undergraduate students at colleges and 
universities expands the pool of potential business owners to 
technology, financial services, legal services, and other `non-
traditional' areas in which the overall development of minority 
firms has been slow. Growing the size and capacity of existing 
minority firms and promoting entrepreneurship among minority 
students already committed to higher education will have a 
direct relationship on the employment rate, income levels and 
wealth creation of minorities throughout the nation.
    Beyond offering business courses, this program is intended 
to transform the way colleges and universities prepare students 
for success by making entrepreneurship education available 
across campuses that serve large minority populations. The goal 
is to enable any student, regardless of field of study, to 
access entrepreneurial training and to involve faculty and 
students from a variety of academic disciplines.
    Specifically, the bill directs the Administrator of the SBA 
to make grants to historically black colleges and universities, 
tribal colleges, and Hispanic serving institutions, or to any 
entity formed by a combination of such institutions: (1) To 
assist in establishing a campus-wide entrepreneurship 
curriculum for undergraduate or graduate studies; and (2) for 
the placement of SBDCs on the physical campus of the 
institution. The bill requires an institution of higher 
education receiving a grant to: (1) Develop a curriculum that 
includes training in various skill sets needed by successful 
entrepreneurs, including business management and marketing, 
financial management and accounting, market analysis and 
competitive analysis and innovation and strategic planning; and 
(2) open a SBDC to provide business counseling, training and 
referrals to small businesses in the local community 
surrounding the campus. The SBDC is intended to foster a 
culture of entrepreneurship on the campus by bringing together 
the local small business community and the academic community, 
the faculty and students. Recognizing the economic challenges 
faced by many of these campuses serving minority communities, 
the institutions are not required to provide matching funds for 
the establishment of the SBDC.
    The bill authorizes the pilot program for two fiscal years, 
to provide grants of $500,000 per fiscal year for institutions 
of higher education, and it authorizes appropriations of $10 
million for each of FY 2008 and 2009.
    The bill also includes protections to ensure that the funds 
are not diverted to other campus expenses or budgets not 
directly related to implementation of the Minority 
Entrepreneurship and Innovation program.
            Institutions of higher education
    The bill requires SBDC grantees that are institutions of 
higher education to be accredited and grandfathers any SBDC 
grantee institution of higher education that is not yet 
accredited but is seeking accreditation.
            Health insurance options information for small business 
                    concerns
    The most pressing issue facing small business today is the 
rising cost of health insurance. Small businesses face a crisis 
when it comes to securing quality, affordable health insurance 
for their employees. Health insurance costs are skyrocketing, 
and small businesses are trapped in stagnant, dysfunctional 
state insurance markets that have little, if any, competition. 
Further compounding matters, many small businesses do not 
possess the resources, the personnel, or the information to 
navigate the complex health care landscape.
    The Committee supports efforts to increase small business 
awareness of all health insurance options available to them. 
The bill establishes a four-year, pilot grant program to 
provide information, counseling, and educational materials to 
small businesses, through the well-established national 
framework of the SBDCs. The Committee believes that SBDCs 
provide an appropriate mechanism to disseminate information 
about health insurance options to small businesses.
    This section is based on the Small Business Health 
Information Options Act of 2007, S. 1690, introduced by Senator 
Snowe in the 110th Congress and cosponsored by Senators Kerry 
and Bennett. It is based on recent research conducted by the 
non-partisan Healthcare Leadership Council, which found that 
with a short educational and counseling session, small 
businesses were up to 33 percent more likely to offer health 
insurance to their employees.
    Specifically, the bill requires the SBA Administrator to 
establish the pilot, competitive grant program within 30 days 
of enactment. The program will make grants to SBDCs to provide 
information and educational materials regarding small business 
health insurance options. The grant amounts authorized under 
the program shall be not less than $150,000 per fiscal year, 
and not more than $300,000 per fiscal year.
    The bill also requires each participating SBDC to submit a 
quarterly report to the Administrator and Chief Counsel for the 
SBA Office of Advocacy. Finally, the bill authorizes $5 million 
in appropriations for the first fiscal year beginning after the 
date of enactment, and $5 million in appropriations for each of 
the three subsequent fiscal years.
            National Small Business Development Center Advisory Board
    Although SBDCs are grouped into 10 regions throughout the 
country, the National Small Business Development Center 
Advisory Board presently only has 9 members on its board. In 
order to ensure that all regions are represented on the board, 
this bill would allow 10 members to serve on the board.
            Office of Native American Affairs pilot program
    To identify and implement Native American economic 
development opportunities available from the Federal government 
and private enterprise, the SBA's Office of Native American 
Affairs is directed to develop and publish a self-assessment 
tool for Indian tribes that will allow such tribes to evaluate 
and implement best practices for economic development, and 
provide assistance to Indian tribes, through the Inter-Agency 
Working Group.
            Privacy requirements for SCORE chapters
    Maintaining the privacy of clients is of vital importance 
in allowing a client to share business details and thus receive 
help from a counselor. This provision extends the privacy rules 
which apply to SBDC clients to SCORE clients.
            National Small Business Summit
    The last national small business summit, the White House 
Conference on Small Business, took place over 12 years ago. 
Many of the recommendations from that conference were enacted 
into law and have helped small businesses continue to drive the 
American economy. However, much has changed since that time, 
and small businesses continue to face new challenges such as 
rising health care costs, increasing regulations and low cost 
competition. This summit will be an opportunity to highlight 
the importance of small businesses in the economy and focus 
attention on the problems and the solutions necessary to 
address the obstacles that may be hindering the ability of 
small businesses to start up and grow.

                          III. COMMITTEE VOTE

    In compliance with rule XXVI(7)(b) of the Standing Rules of 
the Senate, the following vote was recorded on June 26, 2007.
    A motion by the Chair to adopt the Entrepreneurial 
Development Act of 2007, as amended, to reauthorize the Small 
Business Administration's (SBA) entrepreneurial development 
programs, was approved by a unanimous 19-0 recorded vote with 
the following Senators voting in the affirmative: Kerry, Levin, 
Harkin, Lieberman, Landrieu, Cantwell, Bayh, Pryor, Cardin, 
Tester, Snowe, Bond, Coleman, Vitter, Dole, Thune, Corker, 
Enzi, and Isakson.

                           IV. COST ESTIMATE

    In compliance with rule XXVI(11)(a)(1) of the Standing 
Rules of the Senate, the Committee estimates the cost of the 
legislation will be equal to the amounts discussed in the 
following letter from the Congressional Budget Office.

                                                    August 9, 2007.
Hon. John F. Kerry,
Chair, Committee on Small Business and Entrepreneurship,
U.S. Senate, Washington, DC.
    Dear Mr. Chair: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 1671, the 
Entrepreneurial Development Act of 2007.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susan Willie.
            Sincerely,
                                                   Peter R. Orszag.
    Enclosure.
    Summary: S. 1671 would authorize funding for a number of 
Small Business Administration (SBA) programs that provide 
technical support and assistance to small business owners in 
targetedpopulations including Native Americans, women, and 
minorities. The bill also would create new grant programs to assist 
business owners in finding affordable health insurance for employees 
and meeting federal regulatory requirements.
    Assuming appropriation of the authorized amounts, CBO 
estimates that implementing S. 1671 would cost $32 million in 
2008 and $509 million over the 2008-2012 period. (Those totals 
include $3 million per year for estimated administrative 
costs.) Enacting the bill would not affect direct spending or 
revenues.
    S. 1671 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA); 
implementing the bill would benefit public institutions of 
higher education and tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 1671 is shown in the following table. 
The costs of this legislation fall within budget function 370 
(commerce and housing credit).

------------------------------------------------------------------------
                                      By fiscal year, in millions of
                                                 dollars--
                                 ---------------------------------------
                                   2008    2009    2010    2011    2012
------------------------------------------------------------------------
              CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Additional Grants:
    Authorization Level.........     190     197     205      10       0
    Estimated Outlays...........      29      88     152     126      99
Additional Administrative Costs:
    Estimated Authorization            3       3       3       3       3
     Level......................
    Estimated Outlays...........       3       3       3       3       3
    Total Changes:
        Estimated Authorization      193     200     208      13       3
         Level..................
        Estimated Outlays.......      32      91     155     129     102
------------------------------------------------------------------------

    Basis of estimate: S. 1671 would authorize appropriations 
mostly through fiscal year 2010 to continue several SBA 
programs that provide assistance to small business owners. The 
bill also would authorize SBA to create pilot programs to 
provide training and information to small business owners in 
targeted populations, and to offer certain research and 
information to small business owners.
    The bill would reauthorize the Service Corps of Retired 
Executives (SCORE) program, the Small Business Development 
Center (SBDC) program, and the Drug-free Workplace program 
through 2010. S. 1671 would authorize the appropriation of $459 
million over the 2008-2010 period for those three programs. CBO 
estimates that implementing those provisions would cost $22 
million in 2008 and $379 million over the 2008-2012 period, 
assuming appropriation of the specified amounts.
    S. 1671 would reauthorize SBA's Women's Small Business 
Center program and the National Women's Business Council for 
three years. CBO estimates that implementing those programs to 
support businesses owned by women would cost $2 million in 2008 
and $42 million over the 2008-2012 period.
    Several programs supporting business ownership by Native 
Americans would be authorized through 2010 under the 
legislation as well. S. 1671 would create a small business 
developmentprogram for Native Americans and two pilot programs 
to provide assistance that is tailored to the needs of the Native 
American small business community. CBO estimates that those provisions 
would cost $1 million in 2008 and $17 million over the 2008-2012 
period.
    The bill would create a program to provide grants to 
historically Black colleges and universities, Tribal colleges, 
certain institutions that serve Hispanic, Alaska Native, or 
Native Hawaiian populations, or any entity formed by a 
combination of such institutions to establish small business 
development centers to provide management training, research, 
and referral services to minority-owned small businesses. CBO 
estimates that implementing this program would cost $2 million 
in 2008 and $26 million over the 2008-2012 period.
    The bill would authorize the appropriation of $40 million 
over the 2008-2011 period to fund two new programs to provide 
specific information to small business owners through SBA's 
network of SBDCs:
      One pilot program would authorize SBA to award 
grants to SBDCs to help business owners comply with federal 
regulations. For this program, the bill would authorize $20 
million over the 2008-2011 period. CBO estimates that 
implementing this provision would cost $1 million in 2008 and 
$15 million over the 2008-2012 period, with an additional $5 
million to be spent after 2012.
      A second pilot program would authorize SBA to 
award grants to SBDCs to provide information to small 
businesses about health insurance options. The bill would 
authorize $20 million over the 2008-2011 period for this 
program as well. CBO estimates that implementing this provision 
would cost $1 million in 2008 and $15 million over the 2008-
2012 period, with the remaining $5 million in outlays to occur 
after 2012.
    Finally, based on information from SBA, CBO estimates that 
the agency would need an additional 16 full-time equivalent 
positions to establish an Office of Native American Affairs 
within SBA, and to fully staff and expand the operations of 
SBA's Office of International Trade. Costs for that additional 
administrative support would total an estimated $15 million 
over the 2008-2012 period.
    Intergovernmental and private-sector impact: S. 1671 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. The bill would benefit public institutions of 
higher education and tribal governments by authorizing grants 
for small business development programs. Any costs those 
entities would incur to comply with conditions of federal 
assistance would be incurred voluntarily.
    Previous CBO estimate: On June 15, 2007, CBO transmitted a 
cost estimate for H.R. 2359, the SBA Entrepreneurial 
Development Programs Act of 2007, as ordered reported by the 
House Committee on Small Business on May 23, 2007. The House 
bill would authorize two programs that are similar to programs 
authorized in S. 1671--grants to SBDCs to provide assistance 
with federal regulations and to provide information on health 
insurance options. CBO estimated that implementing those 
programs would cost $48 million over the 2008-2012 period.
    Estimate prepared by: Federal Costs: Susan Willie. Impact 
on State, Local, and Tribal Governments: Elizabeth Cove. Impact 
on the Private Sector: Jacob Kuipers.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                   V. EVALUATION OF REGULATORY IMPACT

    In compliance with rule XXVI(11)(b) of the Standing Rules 
of the Senate, it is the opinion of the Committee that no 
significant additional regulatory impact will be incurred in 
carrying out the provisions of this legislation. There will be 
no additional impact on the personal privacy of companies or 
individuals who utilize the services provided.

                    VI. SECTION-BY-SECTION ANALYSIS

    Section 1. Short Title. The Entrepreneurial Development Act 
of 2007.
    Sec. 2. Table of Contents.
    Sec. 3. Definitions.

Title I--Reauthorization

    Sec. 101. Reauthorizations: Reauthorizes the Small Business 
Development Center (SBDC) program, SCORE and the Paul Coverdell 
Drug-Free Workplace program for 2008, 2009, and 2010.

Title II--Women's small business ownership programs

    Sec. 201. Office of Women's Business Ownership. This 
section amends the Small Business Act by directing the SBA 
Office of Women's Business Ownership to develop new programs 
and services for established women-owned businesses. In 
addition, this provision requires the Office of Women's 
Business Ownership to consult with the associations 
representing the Women's Business Centers, the National Women's 
Business Council, and the Interagency Committee onWomen's 
Business Enterprise. It also requires that training be provided for SBA 
District Office personnel responsible for carrying out Agency programs. 
Finally, this provision requires the Administration to improve the 
women's business center grant process and the programmatic and 
financial oversight process.
    Sec. 202. Women's Business Center Program. Reauthorizes the 
Women's Business Center (WBC) program for 2008, 2009, and 2010. 
Also recognizes the existence and activities of any 
associations of women's business centers representing 30 
percent or more of the WBCs. Requires the SBA Administrator to 
consult with any association of WBCs to develop training for 
WBC and improvement for the WBC program. Directs that grants to 
WBCs in the initial five years of funding to be equally 
allocated. In addition, the bill clearly sets forth the process 
and criteria that the agency must follow in administering the 
women's business center grant program. It requires the SBA to 
disburse grants as quickly as possible and to provide 
justification if new WBCs are located within 50 miles of an 
existing WBC.
    Sec. 203. National Women's Business Council. Reauthorizes 
the National Women's Business Council for 2008, 2009, and 2010. 
Provides the council with cosponsorship authority and clarifies 
membership representation on the Council. Also establishes 
working groups under the direction of the chairperson. In 
addition, provides authority for the Council to serve as an 
electronic clearinghouse for information on small business 
owned and controlled by women. Changes the Council's research 
allocation from $550,000 to 30 percent of appropriated funds.
    Sec. 204. Interagency Committee on Women's Business 
Enterprise. Provides an acting chairperson of the Interagency 
Committee on Women's Business Enterprise and establishes a 
Policy Advisory Group to assist the chairperson in developing 
policies and programs, and defines the composition of the 
Policy Advisory Group. The bill also provides operational 
direction for the Interagency Committee by requiring that the 
Interagency Committee conduct three official meetings each year 
to plan upcoming Fiscal Year activities; track year-to-date 
agency contracting goals; and evaluate Fiscal Year progress and 
begin the report process.
    Sec. 205. Preserving the independence of the National 
Women's Business Council. Requires an equal number of members 
appointed to serve on the Council representing each of the two 
major political parties. This also requires that if a vacancy 
is not filled, or if there exists an imbalance of party-
affiliated members on the Council, in a 30-day period, a report 
must be submitted to the Senate Committee on Small Business and 
Entrepreneurship and House Committees on Small Business and 
Entrepreneurship.

Title III--International trade

    Sec. 301. Small Business Administration Associate 
Administrator for International Trade. This provision 
establishes an Associate Administrator for International Trade 
and outlines responsibilities.
    Sec. 302. Office of International Trade. This section 
expands the trade distribution network to include the United 
States Export Assistance Centers. This section also designates 
one individual within the Administration as a trade financial 
specialist to oversee the international loan programs. This 
provision establishes a floor of International Finance 
Specialists at the level the SBA had in January 2003.

Title IV--Native American Small Business Development Program

    Sec. 401. Short title. Native American Small Business 
Development Act of 2007.
    Sec. 402. Native American Small Business Development 
Program. The bill codifies the Office of Native American 
Affairs, and outlines the qualifications and responsibilities 
of the Office and its head. Additionally, this section provides 
financial assistance to tribal governments, tribal colleges, 
Native Hawaiian organizations, and Alaska Native corporations 
to create Native American business centers. These centers shall 
conduct five-year projects that offer culturally tailored 
business development assistance. This program would be 
authorized at $5 million per year for fiscal years 2007 through 
2010.
    Sec. 403. Pilot programs. Native American Development Grant 
Pilot program. This section awards Native American development 
grants to provide culturally tailored business development 
training and related services to Native Americans and Native 
American small business concerns. The grants may be awarded to 
(i) any small business development center; or (ii) any private, 
nonprofit organization that has members of an Indian tribe 
comprising a majority of its board of directors; is a Native 
Hawaiian organization; or is an Alaska Native corporation. 
American Indian Tribal Assistance Center Grant Pilot Program. 
This section awards not less than three American Indian Tribal 
Assistance Center grants to establish joint projects to provide 
culturally tailored business development assistance to 
prospective and current owners of small business concerns 
located on or near tribal lands.

Title V--National Small Business Regulatory Assistance

    Sec. 501. Short title. The National Small Business 
Regulatory Assistance Act of 2007.
    Sec. 502. Purpose. To establish a four-year pilot program 
to provide resources to SBDCs so they may provide free 
regulatory compliance assistance and counseling to small 
business owners.
    Sec. 503. Small Business Regulatory Assistance Pilot 
Program. This section requires the SBA to provide matching 
grants to the SBDC programs of two states in each of the SBA's 
10 regions. The grants shall be more than $150,000, but less 
than $300,000 and shall be consistent with the matching 
requirement under current law. SBDCs are required to use the 
grants to provide: access to information and resources, 
including current Federal and State non-punitive compliance and 
technical assistance programs; conduct training and educational 
activities; and offer confidential, free-of-charge, one-on-one, 
in-depth counseling to the owners and operators of small 
business concerns regarding compliance with Federal and State 
regulations derived fromFederal law. SBDCs participating in the 
pilot program would be required to submit a quarterly report, and the 
SBA would have responsibility for evaluating the pilot program and 
making recommendations on the extension of the program to other SBDCs. 
This section includes language stipulating that new programs not 
duplicate regulatory services already provided by Federal or State 
programs.
    Sec. 504. Rulemaking. The SBA must promulgate final 
regulations to carry out the pilot program within 180 days of 
passage.

Title VI--Other provisions

    Sec. 601. Minority Entrepreneurship and Innovation Pilot 
Program. This provision directs the SBA Administrator to make 
grants to historically black colleges and universities Hispanic 
serving institutions, Alaska Native-serving institutions, 
Native Hawaiian-serving institutions, or to any entity formed 
by a combination of such institutions: (1) To assist in 
establishing an entrepreneurship curriculum for undergraduate 
or graduate studies; and (2) for the placement of small 
business development centers or a small business incubator on 
the physical campus of the institution. Requires an institution 
of higher education receiving a grant to: (1) Develop a 
curriculum that includes training in various skill sets needed 
by successful entrepreneurs; and (2) open a small business 
development center. Authorizes this pilot program for two 
fiscal years, and authorizes grants of up to $500,000 per 
fiscal year for any one institution of higher education. In 
addition, there is authorized to be appropriated $10 million 
each FY 2008 and 2009.
    Sec. 602. Institutions of higher education. This provision 
requires SBDC grantees that are institutions of higher 
education to be accredited and grandfathers any SBDC grantee 
institution of higher education that is not yet accredited but 
is seeking accreditation.
    Sec. 603. Health insurance options information for small 
business concerns. Provides that, within 30 days of enactment, 
the SBA Administrator shall establish a pilot, competitive 
grant program to make grants to SBDCs to provide information 
and educational materials regarding small business health 
insurance options. The grant amounts authorized under this 
section shall be not less than $150,000 per fiscal year, and 
not more than $300,000 per fiscal year. Requires each 
participating SBDC to submit a quarterly report to the Senate 
Committee on Small Business and Entrepreneurship and to the 
House Committee on Small Business. Authorizes $5 million to be 
appropriated for the first fiscal year beginning after the date 
of enactment and authorizes $5 million to be appropriated for 
each of the three fiscal years following the year of enactment.
    Sec. 604. National Small Business Development Center 
Advisory Board. The bill adds one member to the National Small 
Business Development Center Advisory Board for a total of ten 
members, to ensure that all ten SBDC districts are represented 
on the board.
    Sec. 605. Office of Native American Affairs pilot program. 
This section authorizes a two-year pilot program for the Office 
of Native American Affairs to develop and publish a self-
assessment tool for evaluation and implementation of best 
practices for economic development for Indian tribes. The 
provision includes a reporting requirement on the effectiveness 
of the self-assessment tool. It also authorizes assistance in 
identifying economic development opportunities to Indian tribes 
through the Inter-Agency Working group, which is comprised of 
key federal agencies. The provision does not include nor 
require authorization of appropriations.
    Sec. 606. Privacy requirements for SCORE chapters. This 
provision extends the privacy protections afforded to SBDC 
clients to SCORE clients.
    Sec. 607. National Small Business Summit. Directs the 
President to convene a National Small Business Summit before 
December 31, 2009 to examine the present conditions and future 
of small businesses in the United States. The summit shall 
include small business owners, representatives of small 
business groups, labor, academia, nonprofit policy groups, and 
State and Federal governments. In addition, no later than 90 
days after the summit, the President will release a report 
identifying key challenges and making recommendations for 
promoting entrepreneurship and the growth of small businesses.

                                  
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