II 

109TH CONGRESS 

2D SESSION S. 2396 

To direct the Administrator of the Small Business Administration to establish 

a pilot program to make grants to eligible entities for the development 

of peer learning opportunities for second-stage small business concerns. 

IN THE SENATE OF THE UNITED STATES 

MARCH 9, 2006 

Mr. SANTORUM (for himself and Mr. ALLEN) introduced the following bill; 

which was read twice and referred to the Committee on Small Business 

and Entrepreneurship 

A BILL 

To direct the Administrator of the Small Business Administration to establish a pilot program to make grants to 

eligible entities for the development of peer learning opportunities for second-stage small business concerns. 

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 ‘‘Second-Stage Small 

5 Business Development Act of 2006’’. 

6 SEC. 2. PURPOSE. 

7 The purpose of this Act is to establish a 4-year pilot 

8 program to— 


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1 (1) identify second-stage small business con2 cerns that have the capacity for significant business 

3 growth and job creation; 

4 (2) facilitate business growth and job creation 

5 by second-stage small business concerns through the 

6 development of peer learning opportunities; 

7 (3) utilize the network of small business devel8 opment centers to expand access to peer learning op9 portunities for second-stage small business concerns; 

10 and 

11 (4) assist businesses owned by minority individ12 uals, service-disabled veterans, and women. 

13 SEC. 3. DEFINITIONS. 

14 In this Act: 

15 (1) ADMINISTRATOR.—The term ‘‘Adminis16 trator’’ means the Administrator of the Small Busi17 ness Administration. 

18 (2) COMMUNITY COLLEGE.—The term ‘‘commu19 nity college’’ has the meaning given that term in sec20 tion 3301(3) of the Higher Education Act of 1965 

21 (20 U.S.C. 7011(3)). 

22 (3) ELIGIBLE ENTITIES.—The term ‘‘eligible 

23 entity’’ means an entity that— 


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1 (A) is eligible to receive funding under sec2 tion 21 of the Small Business Act (15 U.S.C. 

3 648); and 

4 (B) submits to the Administrator an appli5 cation that includes— 

6 (i) a plan to— 

7 (I) offer peer learning opportuni8 ties to second-stage small business 

9 concerns; and 

10 (II) transition to providing such 

11 opportunities using non-governmental 

12 funding; and 

13 (ii) any other information and assur14 ances that the Administrator may require. 

15 (4) HISTORICALLY BLACK COLLEGE.—The term 

16 ‘‘historically Black college’’ means a part B institu17 tion, as defined in section 322(2) of the Higher 

18 Education Act of 1965 (20 U.S.C. 1061(2)). 

19 (5) HISPANIC-SERVING INSTITUTION.—The 

20 term ‘‘Hispanic-serving institution’’ has the meaning 

21 given that term in section 502(a)(5) of the Higher 

22 Education Act of 1965 (20 U.S.C. 1101a(a)(5)). 

23 (6) MINORITY INSTITUTION.—The term ‘‘mi24 nority institution’’ has the meaning given that term 


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1 in section 365(3) of the Higher Education Act of 

2 1965 (20 U.S.C. 1067k(3)). 

3 (7) PEER LEARNING OPPORTUNITIES.—The 

4 term ‘‘peer learning opportunities’’ means formally 

5 organized peer groups of owners, presidents and 

6 chief executive officers in non-competing second7 stage business concerns, meeting regularly with a 

8 professionally trained facilitator. 

9 (8) PILOT PROGRAM.—The term ‘‘pilot pro10 gram’’ means the program established under section 

11 4(a). 

12 (9) SECOND-STAGE SMALL BUSINESS CON13 CERN.—The term ‘‘second-stage small business con14 cern’’ means a small business concern that— 

15 (A) has experienced high growth dem16 onstrated by— 

17 (i) an average annual revenue or em18 ployee growth rate of at least 15 percent 

19 during the preceding 3 years; or 

20 (ii) any 3 of the following: 

21 (I) Owning proprietary intellec22 tual property. 

23 (II) Addressing an underserved 

24 or growing market. 


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1 (III) Having a sustainable com2 petitive advantage. 

3 (IV) Exporting goods or services 

4 outside of its community. 

5 (V) Having a product or service 

6 that is scalable to a large market. 

7 (VI) Ownership by minority indi8 viduals, service-disabled veterans, or 

9 women; and 

10 (B) does not exceed the size standard for 

11 the North American Industrial Classification 

12 System code of such concern, as established 

13 pursuant to section 3(a) of the Small Business 

14 Act (15 U.S.C. 632(a)). 

15 (10) SMALL BUSINESS CONCERN.—The term 

16 ‘‘small business concern’’ has the meaning given 

17 that term under section 3 of the Small Business Act 

18 (15 U.S.C. 632). 

19 (11) STATE.—The term ‘‘State’’ means each of 

20 the several States, the District of Columbia, the 

21 Commonwealth of Puerto Rico, the Virgin Islands, 

22 Guam, and American Samoa. 

23 SEC. 4. PILOT PROGRAM. 

24 (a) ESTABLISHMENT.—The Administrator shall es25 tablish and carry out a pilot program to make grants to 


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1 eligible entities for the development of peer learning op2 portunities for second-stage small business concerns in ac3 cordance with this Act. 

4 (b) SELECTION OF GRANT RECIPIENTS.— 

5 (1) IN GENERAL.—The Administrator shall se6 lect 2 eligible entities from each of the 10 regions 

7 described in paragraph (3) to receive grants. 

8 (2) CRITERIA FOR SELECTION.—The Adminis9 trator shall evaluate the plans described in section 

10 3(3) submitted by eligible entities and select eligible 

11 entities to receive grants on the basis of the merit 

12 of such plans. 

13 (3) REGIONS DESCRIBED.—The regions de14 scribed in this paragraph are as follows: 

15 (A) REGION 1.—Maine, Massachusetts, 

16 New Hampshire, Connecticut, Vermont, and 

17 Rhode Island. 

18 (B) REGION 2.—New York, New Jersey, 

19 Puerto Rico, and the Virgin Islands. 

20 (C) REGION 3.—Pennsylvania, Maryland, 

21 West Virginia, Virginia, the District of Colum22 bia, and Delaware. 

23 (D) REGION 4.—Georgia, Alabama, North 

24 Carolina, South Carolina, Mississippi, Florida, 

25 Kentucky, and Tennessee. 


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1 (E) REGION 5.—Illinois, Ohio, Michigan, 

2 Indiana, Wisconsin, and Minnesota. 

3 (F) REGION 6.—Texas, New Mexico, Ar4 kansas, Oklahoma, and Louisiana. 

5 (G) REGION 7.—Missouri, Iowa, Nebraska, 

6 and Kansas. 

7 (H) REGION 8.—Colorado, Wyoming, 

8 North Dakota, South Dakota, Montana, and 

9 Utah. 

10 (I) REGION 9.—California, Guam, Hawaii, 

11 Nevada, Arizona, and American Samoa. 

12 (J) REGION 10.—Washington, Alaska, 

13 Idaho, and Oregon. 

14 (4) CONSULTATION.—If small business develop15 ment centers have formed an association to pursue 

16 matters of common concern as authorized under sec17 tion 21(a)(3)(A) of the Small Business Act (15 

18 U.S.C. 648(a)(3)(A)), the Administrator shall con19 sult with such association and give substantial 

20 weight to the recommendations of such association 

21 in selecting the grant recipients. 

22 (5) DEADLINE FOR INITIAL SELECTIONS.—The 

23 Administrator shall make selections under paragraph 

24 (1) not later than 60 days after the promulgation of 

25 regulations under section 5. 


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1 (c) USE OF FUNDS.—An eligible entity that receives 

2 a grant under the pilot program shall use the grant to— 

3 (1) identify second-stage small business con4 cerns in the service delivery areas of the eligible enti5 ty; and 

6 (2) establish and conduct peer learning oppor7 tunities for such second-stage small business con8 cerns. 

9 (d) AMOUNT OF GRANT.— 

10 (1) IN GENERAL.—Except as provided in para11 graph (2), a grant under the pilot program shall be 

12 in an amount that does not exceed the product ob13 tained by multiplying— 

14 (A) the amount made available for grants 

15 under the pilot program for the fiscal year for 

16 which the grant is made; and 

17 (B) the ratio that the population of the 

18 State in which the eligible entity is located 

19 bears to the aggregate population the States in 

20 which eligible entities receiving grants for that 

21 fiscal year are located. 

22 (2) MINIMUM AMOUNT OF GRANT.—A grant 

23 under the pilot program shall be in an amount not 

24 less than $50,000. 


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1 (e) MATCHING REQUIREMENT.—As a condition of a 

2 grant under the pilot program, the Administrator shall re3 quire that a matching amount be provided from sources 

4 other than the Federal Government that— 

5 (1) is equal to the amount of the grant, or in 

6 the case of an eligible entity that is a community 

7 college, historically Black college, Hispanic-serving 

8 institution, or other minority institution, is equal to 

9 50 percent of the amount of the grant; 

10 (2) is not less than 50 percent cash; 

11 (3) is not more than 50 percent comprised of 

12 indirect costs and in-kind contributions; and 

13 (4) does not include any indirect cost or in-kind 

14 contribution derived from any Federal program. 

15 (f) QUARTERLY REPORT TO ADMINISTRATOR.— 

16 (1) IN GENERAL.—Each eligible entity that re17 ceives a grant under the pilot program shall submit 

18 to the Administrator a quarterly report that in19 cludes— 

20 (A) a summary of the peer learning oppor21 tunities established by the eligible entity using 

22 grant funds; 

23 (B) the number of second-stage small busi24 ness concerns assisted using grant funds; and 


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1 (C) in the case of an eligible entity that re2 ceives a grant for a second fiscal year or any 

3 subsequent fiscal year— 

4 (i) any measurable economic impact 

5 data resulting from the peer learning op6 portunities established using grant funds; 

7 and 

8 (ii) the number of peer learning op9 portunities established by the eligible enti10 ty that have transitioned from operating 

11 using Government funds to operating with12 out using Government funds. 

13 (2) FORM OF REPORT.—The report required 

14 under paragraph (1) shall be transmitted in elec15 tronic form. 

16 (g) DATA REPOSITORY AND CLEARINGHOUSE.—In 

17 carrying out the pilot program, the Administrator shall act 

18 as the repository of and clearinghouse for data and infor19 mation submitted by the eligible entities. 

20 (h) ANNUAL REPORT ON PILOT PROGRAM.—Not 

21 later than November 1 of each year, the Administrator 

22 shall submit to the President and to Congress, a report 

23 evaluating the success of the pilot program during the pre24 ceding fiscal year, which shall include the following: 


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1 (1) A description of the types of peer learning 

2 opportunities provided with grant funds. 

3 (2) The number of second-stage small business 

4 concerns assisted with grant funds. 

5 (3) For fiscal year 2007 and each subsequent 

6 fiscal year of the pilot program— 

7 (A) data regarding the economic impact of 

8 the peer learning opportunities provided with 

9 grant funds; and 

10 (B) the number of peer learning opportuni11 ties established by grant recipients that have 

12 transitioned from operating using Government 

13 funds to operating without using Government 

14 funds. 

15 (i) PRIVACY REQUIREMENT.— 

16 (1) IN GENERAL.—A small business develop17 ment center, consortium of small business develop18 ment centers, or contractor or agent of a small busi19 ness development center shall not disclose the name, 

20 address, or telephone number of any individual or 

21 small business concern receiving assistance under 

22 this section without the consent of such individual or 

23 small business concern, unless— 

24 (A) the Administrator is ordered to make 

25 such a disclosure by a court in any civil or 


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1 criminal enforcement action initiated by a Fed2 eral or State agency; or 

3 (B) the Administrator considers such a 

4 disclosure to be necessary for the purpose of 

5 conducting a financial audit of a small business 

6 development center, but a disclosure under this 

7 subparagraph shall be limited to the informa8 tion necessary for such audit. 

9 (2) ADMINISTRATOR USE OF INFORMATION.— 

10 The privacy requirement under this subsection shall 

11 not— 

12 (A) restrict Administrator access to pro13 gram activity data; or 

14 (B) prevent the Administrator from using 

15 client information to conduct client surveys. 

16 (j) EVALUATION AND REPORT.—Not later than 3 

17 years after the establishment of the pilot program, the 

18 Comptroller General of the United States shall— 

19 (1) conduct an evaluation of the pilot program; 

20 and 

21 (2) transmit to Congress and the Administrator 

22 a report containing the results of such evaluation 

23 along with any recommendations as to whether the 

24 pilot program, with or without modification, should 


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1 be extended to include the participation of all small 

2 business development centers. 

3 (k) TERMINATION.—The pilot program shall termi4 nate on September 30, 2010. 

5 SEC. 5. REGULATIONS. 

6 After providing notice and an opportunity for com7 ment and after consulting with the association described 

8 in section 4(b)(5) (if any such association has been 

9 formed), the Administrator shall promulgate final regula10 tions to carry out this Act, including regulations that es11 tablish— 

12 (1) standards relating to the establishment and 

13 conduct of peer learning opportunities to be provided 

14 by grant recipients, including the number of individ15 uals that may participate in a peer group that is 

16 part of a peer learning opportunity; 

17 (2) standards relating to the educational, tech18 nical, and professional competency of any facilitator 

19 who delivers peer learning opportunities under the 

20 pilot program; and 

21 (3) requirements for transitioning peer learning 

22 opportunities funded under the pilot program to 

23 non-governmental funding. 


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1 SEC. 6. AUTHORIZATION OF APPROPRIATIONS. 

2 (a) IN GENERAL.—There are authorized to be appro3 priated to carry out this Act, $1,500,000 for each of fiscal 

4 years 2007 through 2010. 

5 (b) LIMITATION ON USE OF OTHER FUNDS.—The 

6 Administrator shall carry out this Act using only amounts 

7 appropriated in advance specifically for the purpose of car8 rying out this Act. 

Æ 


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