79–006

106TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 106–784

BusinessLINC ACT OF 2000

JULY 25, 2000.—Committed to the Committee of the Whole House on the State of

the Union and ordered to be printed

Mr. TALENT, from the Committee on Small Business,

submitted the following

R E P O R T

[To accompany H.R. 4464]

[Including cost estimate of the Congressional Budget Office]

The Committee on Small Business, to whom was referred the bill

(H.R. 4464) to amend the Small Business Act to authorize the Administrator of the Small Business Administration to make grants

and to enter into cooperative agreements to encourage the expansion of business-to-business relationships and the provision of certain information, having considered the same, report favorably

thereon with an amendment and recommend that the bill as

amended do pass.

The amendment is as follows:

Strike out all after the enacting clause and insert in lieu thereof

the following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘BusinessLINC Act of 2000’’.

SEC. 2. AUTHORIZATION.

Section 8 of the Small Business Act (15 U.S.C. 637) is amended by adding at the

end the following:

‘‘(m) BUSINESSLINC GRANTS AND COOPERATIVE AGREEMENTS.—

‘‘(1) IN GENERAL.—In accordance with this subsection, the Administrator may

make grants to and 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-prote ́ge ́ programs or community-based, state-wide, 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.

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‘‘(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 2003.’’.

PURPOSE

The purpose of H.R. 4464, BusinessLINC, is to promote business

growth in inner cities and economically distressed rural areas by

matching large and small firms into business-to-business

partnering and mentoring relationships. H.R. 4464 will accomplish

this by providing seed funding to third party entities such as local

Chambers of Commerce to promote such relationships. In addition

to seed funding, such entities will also receive funds for technical

assistance programs to small businesses to supplement the mentorprote ́

ge ́ relationships established as a result of BusinessLINC.

BusinessLINC will help small businesses by providing online information and a database of companies that are interested in mentor-prote ́

ge ́ programs.

Grants may be made to a coalition/combination of private and

public entities only if the coalition/combination provides an

amount, either in kind or in cash, equal to the grant amount for

the purposes above.

NEED FOR LEGISLATION

Despite the unprecedented economic prosperity we are experiencing in this country, there are several areas of the country that

have still not achieved parity. These areas are primarily inner cities, rural areas, and Native American communities. BusinessLINC

will enable business opportunities for small businesses who would

otherwise have no access to outside larger markets. While these

small businesses have strong potential, they are located in communities where corporate America would not necessarily look.

BusinessLINC will break that barrier. When the BusinessLINC

model has been applied in the past, small businesses have seen

growth as much as 45 percent. With this assistance, the local community will be charting its own path to recovery. The ‘‘LINC’’ in

BusinessLINC stands for ‘‘Learning, Information, Networking, and

Collaboration.’’

COMMITTEE ACTION

The Committee on Small Business held no separate hearings on

H.R. 4464. However, during the Committee’s hearing on the Reauthorization of the Small Business Administration programs and the

Agency’s Fiscal Year 2001 Budget Request held at 10:00 a.m. on

March 1, 2000, SBA Administrator Alvarez outlined the Agency’s

position on BusinessLINC. At the time of the testimony,

BusinessLINC had been linked with the New Markets Initiative

(NMI) and, although the SBA was appropriated $1.5 million for

BusinessLINC in FY 2000, they were unable to spend the money

as NMI had not yet passed. So, essentially, the money appropriated

for BusinessLINC was, at that time, not authorized.

The Administrator’s written statement included reference to

SBA’s request for $6.6 million for the BusinessLINC Program. Administrator Alvarez went on to discuss, in her written statement,

the purpose of BusinessLINC which she stated ‘‘encourages large

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businesses to work with small business owners as technical advisors and mentors—especially in America’s rural areas and inner

cities.’’ Finally, the written statement of the Administrator stated

that ‘‘$1.25 million for reservation-based BusinessLINC’’ would be

made available to ‘‘tap into the entrepreneurial drive within the

Native American community.’’

The Administrator stated that BusinessLINC would involve

funding to ‘‘not-for-profit’’ or other economic development organizations, such as Chambers of Commerce, to facilitate mentoring between large and small businesses. The SBA had been working with

the National Chamber of Commerce to create mentor networking

that would effectively ‘‘mediate and create’’ mentor-prote ́ge ́ relationships between large and small businesses, with the sole focus

being on small businesses located in inner cities and rural areas.

CONSIDERATION OF H.R. 4464

At 10:20 a.m. on May 25, 2000, the Committee on Small Business met to consider H.R. 4464. Following a brief opening statement by the Chairman, the Ranking Democrat, and Mr. Davis, the

author of the bill and Ranking Democrat on the Empowerment

Subcommittee, H.R. 4454 was declared open for amendment.

Mr. Davis offered an amendment in the nature of a substitute to

H.R. 4454 which was accepted by unanimous voice vote. Chairman

Talent then moved the bill be reported, and at 10:30 a.m., by unanimous voice vote, a quorum being present, the Committee passed

H.R. 4464, as amended, and ordered it reported.

SECTION-BY-SECTION ANALYSIS

Section 1. Short Title

Designates the bill as the ‘‘BusinessLINC Act of 2000.’’

Section 2. Authorization

This Section amends the Small Business Act by adding a new

paragraph (m), ‘‘BusinessLINC grants and cooperative agreements.’’

Paragraph (1) allows the Administrator to make grants or enter

into cooperative agreements with any coalition/combination of private and/or public entities to (a) promote business-to-business relationships between large and small businesses and (b) to provide online information and a database of companies that are interested

in mentor-prote ́ge ́ programs.

It is the opinion of the Committee that private and/or public entities eligible for grants should be limited to Chambers of Commerce

and other not-for-profit business organizations. The Committee also

intends that grant money be provided to large businesses. Further,

if a grant is made to a combination of entities, one entity must be

designated as the lead grantee.

It is further the opinion of the Committee that promotion of business-to-business relationships between large and small businesses

referenced in paragraph (a) above should include the facilitation of

such relationships as mentor-prote ́ge ́, prime/subcontractor, and

teaming.

The Committee intends that an element to be considered by the

Administrator when evaluating a grant proposal, shall be the trainVerDate 11-MAY-2000 05:28 Jul 27, 2000 Jkt 079006 PO 00000 Frm 00003 Fmt 6659 Sfmt 6602 E:\HR\OC\HR784.XXX pfrm07 PsN: HR784
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ing of small businesses or ‘‘prote ́ge ́s.’’ An additional evaluation element intended by the Committee shall be measurable goals to be

achieved through the businss-to-business partnerships.

The Committee further intends that the online database referenced in paragraph (b) above, should make use of the SBA’s current PRO-Net database to the greatest extent practicable. The

Committee is concerned that online privacy issues should also be

addressed by the SBA in the implementation of the databases. Further, it is the Committee’s opinion that the databases should be

vigilantly maintained by the SBA to ensure that only firms eligible

to be mentors should be included in the mentor database, and only

those firms eligible to serve as intermediaries should be included

in the intermediary database.

Paragraph (2) specifies that the Administrator may make grants

as long as the coalition/combination of public and/or private entities

provides an amount, either in kind or in cash, equal to the grant

amount for the purposes delineated in paragraph (1) above.

The Committee is well aware that it may be difficult for some entities to raise their entire match during the application stage.

Those entities that are unable to raise the required match, but

have submitted to the Administrator a reasonable plan to meet the

requirement, may be granted a conditional approval from the Administrator and be allowed to draw one dollar of federal matching

funds for every dollar of private funds raised. This conditional approval shall be made with the expectation that the required funding commitments will be obtained within two years of the conditional approval.

The Committee believes that it is important to give entities the

flexibility to obtain the required private operational assistance

funds, however, from a safety and soundness standpoint, federal

funds should not be placed at greater risk than private capital.

Paragraph (3) specifies the authorization for the program for fiscal

years 2001 and 2003. This amount shall be $6,600,000 for each of

the three fiscal years.

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

Pursuant to clause 7(d) of rule XIII of the Rules of the House of

Representatives the Committee includes the following cost estimate

supplied by the Congressional Budget Office pursuant to section

403 of the Budget Act of 1974 in lieu of a committee cost estimate.

The Congressional Budget Office estimate is included in this report

pursuant to clause 2(l)(3)(C) of rule XI.

H.R. 4464—A bill to amend the Small Business Act to authorize the

Administrator of the Small Business Administration to make

grants and to enter into cooperative agreements to encourage

the expansion of business-to-business relationships and the provision of certain information

Summary: H.R. 4464 would reauthorize the BusinessLINC

(learning, information, networking, and collaboration) program,

through which the Small Business Administration (SBA) makes

grants and enters into cooperative agreements to expand relationships between large and small businesses. The bill would authorize

the SBA to make grants to coalitions of private and public entities,

provided that such entities match the grant with an equal amount

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of cash or in-kind contributions. Finally, the bill would authorize

the appropriation of $6.6 million for each of fiscal years 2001, 2002,

and 2003 for BusinessLINC grants.

Based on the historical spending patterns of this program and

other programs administered by the SBA, CBO estimates that implementing H.R. 4464 would cost about $19 million over the 2001–

2005 period. H.R. 4464 would not affect direct spending or receipts;

therefore, pay-as-you-go procedures would not apply.

H.R. 4464 contains no private-sector or intergovernmental mandates as defined in the Unfunded Mandates Reform Act (UMRA).

Any costs to state and local governments would be the result of

complying with new grant conditions and would be voluntary.

Estimated Cost to the Federal Government: For the purpose of

this estimate, CBO assumes that H.R. 4464 will be enacted during

fiscal year 2000, and that amounts authorized in the bill will be

provided each year. The estimated budgetary impact on H.R. 4464

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—

2000 2001 2002 2003 2004 2005

SPENDING SUBJECT TO APPROPRIATION

BusinessLINC Spending Under Current Law:

Budget Authority 1 ....................................................................................... 2 0 0 0 0 0

Estimated Outlays ....................................................................................... 1 1 0 0 0 0

Proposed Changes:

Authorization Level ...................................................................................... 0 7 7 7 0 0

Estimated Outlays ....................................................................................... 0 3 6 6 3 1

BusinessLINC Spending Under H.R. 4464:

Authorization Level 1 .................................................................................... 2 7 7 7 0 0

Estimated Outlays ....................................................................................... 1 4 6 6 3 1

1 The 2000 level is the amount appropriated for that year.

Pay-as-You-Go Considerations: None.

Intergovernmental and Private-Sector Impact: H.R. 4464 contains no intergovernmental mandates as defined in UMRA. The bill

would authorize the Administrator of the SBA to make grants and

enter into cooperative agreements with any coalition of entities, including public entries, that further certain goals of the

BusinessLINC program and provide 100 percent matching funds.

Participation in the program is voluntary, and thus any costs incurred by participating state and local governments would be voluntary.

Estimate Prepared by: Federal Costs, Mark Hadley; Impact on

State, Local, and Tribal Governments, Shelley Finlayson; Impact

on the Private Sector, Patrice Gordon.

Estimate Approved by: Robert A. Sunshine, Assistant Director

for Budget Analysis.

OVERSIGHT FINDINGS

In accordance with clause 4(c)(2) of rule X of the Rules of the

House of Representatives, the Committee states that no oversight

findings or recommendations have been made by the Committee on

Government Reform with respect to the subject matter contained

in H.R. 4454. In accordance with clause (2)(b)(1) of rule X of the

Rules of the House of Representatives, the oversight findings and

recommendations of the Committee on Small Business with respect

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to the subject matter contained in H.R. 4454 are incorporated into

the descriptive portions of this report.

STATEMENT OF CONSTITUTIONAL AUTHORITY

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House

of Representatives, the Committee finds the authority for this legislation in Article I, section 8, clause 18, of the Constitution of the

United States.

CONGRESSIONAL ACCOUNTABILITY ACT

The Committee finds that H.R. 4454 does not relate to the terms

and conditions of employment or access to public services or accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act (P.L. 104–1).

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the

House of Representatives, changes in existing law made by the bill,

as reported, are shown as follows (new matter is printed in italic

and existing law in which no change is proposed is shown in

roman):

SECTION 8 OF THE SMALL BUSINESS ACT

SEC. 8. (a) * * *

* * * * * * *

(m) BUSINESSLINC GRANTS AND COOPERATIVE AGREEMENTS.—

(1) IN GENERAL.—In accordance with this subsection, the Administrator may make grants to and 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-prote ́

ge ́ programs or community-based,

state-wide, 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 2003.

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