89–006 

116TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 116–112 

SMALL BUSINESS DEVELOPMENT CENTER CYBER 

TRAINING ACT OF 2019 

JUNE 13, 2019.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Ms. VELA ́ ZQUEZ, from the Committee on Small Business, 

submitted the following 

R E P O R T 

[To accompany H.R. 1649] 

[Including cost estimate of the Congressional Budget Office] 

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

(H.R. 1649) to amend the Small Business Act to require cyber certification for small business development center counselors, and for 

other purposes, having considered the same, report favorably thereon without amendment and recommend that the bill do pass. 

CONTENTS 

I. Purpose and Bill Summary ........................................................................ 1 

II. Background and Need for Legislation ....................................................... 2 

III. Hearings ....................................................................................................... 2 

IV. Committee Consideration ........................................................................... 2 

V. Committee Votes ......................................................................................... 3 

VI. Section-by-Section Analysis for H.R. 1649 ................................................ 5 

VII. Congressional Budget Office Cost Estimate ............................................. 5 

VIII. Unfunded Mandates .................................................................................... 6 

IX. New Budget Authority, Entitlement Authority, and Tax Expenditures 6 

X. Oversight Findings ...................................................................................... 6 

XI. Statement of Constitutional Authority ...................................................... 6 

XII. Congressional Accountability Act .............................................................. 6 

XIII. Federal Advisory Committee Act Statement ............................................ 7 

XIV. Statement of No Earmarks ........................................................................ 7 

XV. Statement of Duplication of Federal Programs ........................................ 7 

XVI. Disclosure of Directed Rule Makings ........................................................ 7 

XVII. Performance Goals and Objectives ............................................................ 7 

XVIII. Changes in Existing Law, Made by the Bill, As Reported ...................... 7 

I. PURPOSE AND BILL SUMMARY

The purpose of H.R. 1649, the ‘‘Small Business Development 

Center Cyber Training Act of 2019,’’ is to amend the Small BusiVerDate Sep 11 2014 04:24 Jun 15, 2019 Jkt 089006 PO 00000 Frm 00001 Fmt 6659 Sfmt 6602 E:\HR\OC\HR112.XXX HR112

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1 Rebuilding America: Small Business Perspective, Hearing Before the H. Comm. On Small 

Bus., 116th Cong. (2019). 2Flipping the Switch on Rural Digital Entrepreneurship, Hearing Before the H. Comm. On 

Small Bus., 116th Cong. (2019). 

ness Act to help Small Business Development Centers (SBDCs) become better trained to assist small businesses with their cyber security and cyber strategy needs. Specifically, the bill would establish a cyber counseling certification program in lead SBDCs to better assist small businesses with planning and implementing cybersecurity measures to defend against cyber attacks. The Small Business Administration (SBA) would be authorized to reimburse 

SBDCs for employee certification costs up to $350,000 per fiscal 

year. 

II. BACKGROUND AND NEED FOR LEGISLATION

H.R. 1649 was introduced by Ranking Member Steve Chabot (R– 

OH), Representative Dwight Evans (D–PA), and Chairwoman 

Nydia M. Vela ́zquez (D–NY) on March 8, 2019. The Committee determined significant challenges face small businesses seeking to 

strengthen their cybersecurity posture. Those challenges were a 

lack of access to cybersecurity resources and inadequately trained 

employees. The Committee also learned that many small businesses were unaware of existing federal cybersecurity resources 

and they would benefit from guidance provided by cyber trained 

professionals. 

III. HEARINGS

In the 116th Congress, the Committee has held four hearings exploring the issues of cybersecurity. On March 6, 2019, the Committee held a hearing titled ‘‘Rebuilding America: Small Business 

Perspective.’’ 1 The hearing examined the nation’s infrastructure 

needs, including that of a robust cybersecurity infrastructure and 

what steps America has taken to strengthen the cybernetwork. 

Small businesses are inevitably a critical component to this infrastructure but remain challenged by the complexities and resources 

necessary to be cybersafe or engage as a contractor. One witness 

detailed the human and financial resources small firms need to 

comply with national security cyber standards and how they can be 

limited as a government contractor, particularly as primes if they 

do not comply. On March 13, 2019, the Committee held a hearing 

titled ‘‘Flipping the Switch on Rural Digital Entrepreneurship,’’ 2

which focused on the importance of broadband to rural communities. The hearing examined the relationship of building digital 

platforms in conjunction with ensuring small firms take the steps 

to remain cybersecure against bad actors. It was stressed by one 

witness that cybersecurity efforts should not be targeted solely at 

biggest breaches and the large businesses because that leaves the 

small business community vulnerable to cyberbreaches and hackers. The witness spoke in support of H.R. 1649 as a solution to a 

complex challenge. 

IV. COMMITTEE CONSIDERATION

The Committee on Small Business met in open session, with a 

quorum being present, on May 1, 2019 and ordered H.R. 1649 reVerDate Sep 11 2014 04:24 Jun 15, 2019 Jkt 089006 PO 00000 Frm 00002 Fmt 6659 Sfmt 6602 E:\HR\OC\HR112.XXX HR112

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ported to the House. During the markup, no amendments were offered. 

V. COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the recorded votes on the motion to report legislation and amendments thereto. The Committee 

voted by voice vote to favorably report H.R. 1649 to the House at 

12:08 P.M. 


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VI. SECTION-BY-SECTION OF H.R. 1649 

Section 1. Short title 

This section designates the bill as the ‘‘Small Business Development Center Cyber Training Act of 2019.’’ 

Section 2. Duties of the Small Business Development Center counselors 

This section amends Section 21(a) of the Small Business Act by 

adding Cyber Strategy Training for Small Business Development 

Centers. The section requires the Small Business Administrator to 

establish, or certify, an existing cyber counseling certification program to certify employees at small business development centers 

(that have directly received a grant from the Administration) to 

provide assistance to small businesses for planning cybersecurity 

practices and strategies to respond to cyber attacks. The bill requires that at least five (5) employees, or ten (10) percent of the 

total number of employees, be certified to provide cyber planning 

assistance to small businesses. 

The Small Business Administrator is instructed to consider cyber 

strategy methods included in the Small Business Development 

Center’s Cyber Strategy that was developed pursuant to section 

1841(a) of the National Defense Authorization Act for Fiscal Year 

2017 (P.L. 114–328; 130 Stat. 2662). 

The Small Business Administrator is also instructed to reimburse lead small business development centers for any costs relating to cyber strategy training certification of an employee up to 

$350,000 in a fiscal year. 

VII. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

The Congressional Budget Office pursuant to 402 of the Congressional Budget Act of 1974, submitted a cost estimate for H.R. 1649 

that stated enacting the legislation would not increase net direct 

spending or on budget deficits in any of the four consecutive 10- 

year periods beginning in 2030. 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, May 10, 2019. 

Hon. NYDIA M. VELA ́ ZQUEZ, 

Chairwoman, Committee on Small Business, 

House of Representatives, Washington, DC. 

DEAR MADAM CHAIRWOMAN: The Congressional Budget Office 

has prepared the enclosed cost estimate for H.R. 1649, the Small 

Business Development Center Cyber Training Act. If you wish further details on this estimate, we will be pleased to provide them. 

The CBO staff contact is David Hughes. 

Sincerely, 

KEITH HALL, 

Director. 

Enclosure. 

H.R. 1649 would require the Small Business Administration 

(SBA) to establish a certification program for employees of small 

business development centers (SBDCs) to provide assistance to 


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small businesses on cyber security planning. Under the bill the 

SBA could spend up to $350,000 per year to reimburse SBDCs for 

certification costs. Such spending would be subject to the availability of appropriations. Based on that authorization level, CBO 

estimates that implementing H.R. 1649 would cost $2 million over 

the 2020–2024 period to fund certification programs at 63 SBDCs. 

On April 23, 2019, CBO transmitted a cost estimate for S. 771, 

the Small Business Cyber Training Act of 2019 as ordered reported 

by the Senate Committee on Small Business and Entrepreneurship 

on April 1, 2019. The two bills are similar and CBO’s estimates of 

their costs are the same. The CBO staff contact for this estimate 

is David Hughes. 

The estimate was reviewed by H. Samuel Papenfuss, Deputy Assistant Director for Budget Analysis. 

VIII. UNFUNDED MANDATES

H.R. 1649 contains no intergovernmental or private sector mandates as defined in the Unfunded Mandates Reform Act, Public 

Law No. 104–4, and would impose no costs on state, local, or tribal 

governments. 

IX. NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House, the Committee provides the following opinion and estimate 

with respect to new budget authority, entitlement authority, and 

tax expenditures. While the Committee has not received an estimate of new budget authority contained in the cost estimate prepared by the Director of the Congressional Budget Office pursuant 

to § 402 of the Congressional Budget Act of 1974, the Committee 

does not believe that there will be any additional costs attributable 

to this legislation. H.R. 1649 does not direct new spending, but instead reallocates funding independently authorized and appropriated. 

X. OVERSIGHT FINDINGS

In accordance with clause 2(b)(1) of rule X of the Rules of the 

House, the oversight findings and recommendations of the Committee on Small Business with respect to the subject matter contained in H.R. 1649 are incorporated into the descriptive portions 

of this report. 

XI. STATEMENT OF CONSTITUTIONAL AUTHORITY

Pursuant to clause 7 of rule XII of the Rules of the House of Representatives, the Committee finds the authority for this legislation 

in Art. I, § 8, cl. 1 of the Constitution of the United States. 

XII. CONGRESSIONAL ACCOUNTABILITY ACT

H.R. 1649 does not relate to the terms and conditions of employment or access to public services or accommodations within the 

meaning of § 102(b)(3) of Public Law No. 104–1. 


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XIII. FEDERAL ADVISORY COMMITTEE ACT STATEMENT

H.R. 1649 does not establish or authorize the establishment of 

any new advisory committees as that term is defined in the Federal 

Advisory Committee Act, 5 U.S.C. App. 2. 

XIV. STATEMENT OF NO EARMARKS

Pursuant to clause 9 of rule XXI, H.R. 1649 does not contain any 

congressional earmarks, limited tax benefits, or limited tariff benefits as defined in subsections (d), (e), or (f) of clause 9 of rule XXI 

of the Rules of the House. 

XV. STATEMENT OF DUPLICATION OF FEDERAL PROGRAMS

Pursuant to clause 3 of rule XIII of the Rules of the House, no 

provision of H.R. 1649 establishes or reauthorizes a program of the 

federal government known to be duplicative of another federal program, a program that was included in any report from the United 

States Government Accountability Office pursuant to § 21 of Pub. 

L. No. 111–139, or a program related to a program identified in the 

most recent catalog of federal domestic assistance. 

XVI. DISCLOSURE OF DIRECTED RULEMAKINGS

Pursuant to clause 3 of rule XIII of the Rules of the House, H.R. 

1649 does not direct any rulemaking. 

XVII. PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XII of the Rules of the House, 

the Committee establishes the following performance-related goals 

and objectives for this legislation: 

H.R. 1649 includes a number of provisions designed to increase 

Small Business Development Center preparedness to assist small 

business concerns with cybersecurity related activities. 

XVIII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause (E) of rule XIII of the Rules of the 

House, changes in existing law made by the bill, as reported, as 

shown as follows: existing law proposed to be omitted is enclosed 

in black brackets, new matter is printed in italic, and existing law 

in which no change is proposed is shown in roman: 

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): 

SMALL BUSINESS ACT 

* * * * * * * 

SEC. 21. (a)(1) The Administration is authorized to make grants 

(including contracts and cooperative agreements) to any State government or any agency thereof, any regional entity, any State-charVerDate Sep 11 2014 04:24 Jun 15, 2019 Jkt 089006 PO 00000 Frm 00007 Fmt 6659 Sfmt 6602 E:\HR\OC\HR112.XXX HR112

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tered development, credit or finance corporation, any women’s business center operating pursuant to section 29, any public or private 

institution of higher education, including but not limited to any 

land-grant college or university, any college or school of business, 

engineering, commerce, or agriculture, community college or junior 

college, or to any entity formed by two or more of the above entities 

(herein referred to as ‘‘applicants’’) to assist in establishing small 

business development centers and to any such labor for: small business oriented employment or natural resources development programs; studies, research, and counseling concerning the managing, 

financing, and operation of small business enterprises, management and technical assistance regarding small business participation in international markets, export promotion and technology 

transfer; delivery or distribution of such services and information; 

providing access to business analysts who can refer small business 

concerns to available experts; and, to the extent practicable, providing assistance in furtherance of the Small Business Development Center Cyber Strategy developed under section 1841(a) of the 

National Defense Authorization Act for Fiscal Year 2017: Provided, 

That after December 31, 1990, the Administration shall not make 

a grant to any applicant other than an institution of higher education or a women’s business center operating pursuant to section 

29 as a Small Business Development Center unless the applicant 

was receiving a grant (including a contract or cooperative agreement) on such date. The Administration shall require any applicant 

for a small business development center grant with performance 

commencing on or after January 1, 1992 to have its own budget 

and to primarily utilize institutions of higher education and women’s business centers operating pursuant to section 29 to provide 

services to the small business community. The term of such grants 

shall be made on a calendar year basis or to coincide with the Federal fiscal year. 

(2) COOPERATION TO PROVIDE INTERNATIONAL TRADE SERVICES.— 

(A) INFORMATION AND SERVICES.—The small business development centers shall work in close cooperation with the 

Administration’s regional and local offices, the Department 

of Commerce, appropriate Federal, State and local agencies (including State trade agencies), and the small business community to serve as an active information dissemination and service delivery mechanism for existing trade 

promotion, trade finance, trade adjustment, trade remedy 

and trade data collection programs of particular utility for 

small businesses. 

(B) COOPERATION WITH STATE TRADE AGENCIES AND EXPORT ASSISTANCE CENTERS.—A small business development 

center that counsels a small business concern on issues relating to international trade shall— 

(i) consult with State trade agencies and Export Assistance Centers to provide appropriate services to the 

small business concern; and 

(ii) as necessary, refer the small business concern to 

a State trade agency or an Export Assistance Center 

for further counseling or assistance. 


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(C) DEFINITION.—In this paragraph, the term ‘‘Export 

Assistance Center’’ has the same meaning as in section 22. 

(3) The Small Business Development Center Program shall be 

under the general management and oversight of the Administration for the delivery of programs and services to the small business 

community. Such programs and services shall be jointly developed, 

negotiated, and agreed upon, with full participation of both parties, 

pursuant to an executed cooperative agreement between the Small 

Business Development Center applicant and the Administration. 

(A) Small business development centers are authorized to form 

an association to pursue matters of common concern. If more than 

a majority of the small business development centers which are operating pursuant to agreements with the Administration are members of such an association, the Administration is authorized and 

directed to recognize the existence and activities of such an association and to consult with it and develop documents (i) announcing 

the annual scope of activities pursuant to this section, (ii) requesting proposals to deliver assistance as provided in this section and 

(iii) governing the general operations and administration of the 

Small Business Development Center Program, specifically including the development of regulations and a uniform negotiated cooperative agreement for use on an annual basis when entering into 

individual negotiated agreements with small business development 

centers. 

(B) Provisions governing audits, cost principles and administrative requirements for Federal grants, contracts and cooperative 

agreements which are included in uniform requirements of Office 

of Management and Budget (OMB) Circulars shall be incorporated 

by reference and shall not be set forth in summary or other form 

in regulations. 

(C) Whereas On an annual basis, the Small Business Development Center shall review and coordinate public and private 

partnerships and cosponsorships with the Administration for 

the purpose of more efficiently leveraging available resources 

on a National and a State basis. 

(4) SMALL BUSINESS DEVELOPMENT CENTER PROGRAM LEVEL.— (A) IN GENERAL.—The Administration shall require as a condition of any grant (or amendment or modification thereof) 

made to an applicant under this section, that a matching 

amount (excluding any fees collected from recipients of such 

assistance) equal to the amount of such grant be provided from 

sources other than the Federal Government, to be comprised of 

not less than 50 percent cash and not more than 50 percent 

of indirect costs and in-kind contributions. 

(B) RESTRICTION.—The matching amount described in subparagraph (A) shall not include any indirect costs or in-kind 

contributions derived from any Federal program. 

(C) FUNDING FORMULA.— 

(i) IN GENERAL.—Subject to clause (iii), the amount of a 

formula grant received by a State under this subparagraph 

shall be equal to an amount determined in accordance 

with the following formula: 

(I) The annual amount made available under section 

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ized by clause (v) of this subparagraph, shall be divided on a pro rata basis, based on the percentage of 

the population of each State, as compared to the population of the United States. 

(II) If the pro rata amount calculated under subclause (I) for any State is less than the minimum 

funding level under clause (iii), the Administration 

shall determine the aggregate amount necessary to 

achieve that minimum funding level for each such 

State. 

(III) The aggregate amount calculated under subclause (II) shall be deducted from the amount calculated under subclause (I) for States eligible to receive more than the minimum funding level. The deductions shall be made on a pro rata basis, based on 

the population of each such State, as compared to the 

total population of all such States. 

(IV) The aggregate amount deducted under subclause (III) shall be added to the grants of those States 

that are not eligible to receive more than the minimum funding level in order to achieve the minimum 

funding level for each such State, except that the eligible amount of a grant to any State shall not be reduced to an amount below the minimum funding level. 

(ii) GRANT DETERMINATION.—The amount of a grant that 

a State is eligible to apply for under this subparagraph 

shall be the amount determined under clause (i), subject to 

any modifications required under clause (iii), and shall be 

based on the amount available for the fiscal year in which 

performance of the grant commences, but not including 

amounts distributed in accordance with clause (iv). The 

amount of a grant received by a State under any provision 

of this subparagraph shall not exceed the amount of 

matching funds from sources other than the Federal Government, as required under subparagraph (A). 

(iii) MINIMUM FUNDING LEVEL.—The amount of the minimum funding level for each State shall be determined for 

each fiscal year based on the amount made available for 

that fiscal year to carry out this section, as follows: 

(I) If the amount made available is not less than 

$81,500,000 and not more than $90,000,000, the minimum funding level shall be $500,000. 

(II) If the amount made available is less than 

$81,500,000, the minimum funding level shall be the 

remainder of $500,000 minus a percentage of $500,000 

equal to the percentage amount by which the amount 

made available is less than $81,500,000. 

(III) If the amount made available is more than 

$90,000,000, the minimum funding level shall be the 

sum of $500,000 plus a percentage of $500,000 equal 

to the percentage amount by which the amount made 

available exceeds $90,000,000. 

(iv) DISTRIBUTIONS.—Subject to clause (iii), if any State 

does not apply for, or use, its full funding eligibility for a 


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fiscal year, the Administration shall distribute the remaining funds as follows: 

(I) If the grant to any State is less than the amount 

received by that State in fiscal year 2000, the Administration shall distribute such remaining funds, on a 

pro rata basis, based on the percentage of shortage of 

each such State, as compared to the total amount of 

such remaining funds available, to the extent necessary in order to increase the amount of the grant to 

the amount received by that State in fiscal year 2000, 

or until such funds are exhausted, whichever first occurs. 

(II) If any funds remain after the application of subclause (I), the remaining amount may be distributed 

as supplemental grants to any State, as the Administration determines, in its discretion, to be appropriate, 

after consultation with the association referred to in 

subsection (a)(3)(A). 

(v) USE OF AMOUNTS.— (I) IN GENERAL.—Of the amounts made available in 

any fiscal year to carry out this section— (aa) not more than $500,000 may be used by the 

Administration to pay expenses enumerated in 

subparagraphs (B) through (D) of section 20(a)(1); 

and 

(bb) not more than $500,000 may be used by the 

Administration to pay the examination expenses 

enumerated in section 20(a)(1)(E). 

(II) LIMITATION.—No funds described in subclause 

(I) may be used for examination expenses under section 20(a)(1)(E) if the usage would reduce the amount 

of grants made available under clause (i)(I) of this subparagraph to less than $85,000,000 (after excluding 

any amounts provided in appropriations Acts, or accompanying report language, for specific institutions 

or for purposes other than the general small business 

development center program) or would further reduce 

the amount of such grants below such amount. 

(vi) EXCLUSIONS.—Grants provided to a State by the Administration or another Federal agency to carry out subsection (a)(6) or (c)(3)(G), or for supplemental grants set 

forth in clause (iv)(II) of this subparagraph, shall not be 

included in the calculation of maximum funding for a 

State under clause (ii) of this subparagraph. 

(vii) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to carry out this subparagraph— 

(I) $130,000,000 for fiscal year 2005; and 

(II) $135,000,000 for fiscal year 2006. 

(viii) LIMITATION.—From the funds appropriated pursuant to clause (vii), the Administration shall reserve not 

less than $1,000,000 in each fiscal year to develop portable 

assistance for startup and sustainability non-matching 

grant programs to be conducted by eligible small business 

development centers in communities that are economically 


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challenged as a result of a business or government facility 

down sizing or closing, which has resulted in the loss of 

jobs or small business instability. A non-matching grant 

under this clause shall not exceed $100,000, and shall be 

used for small business development center personnel expenses and related small business programs and services. 

(ix) STATE DEFINED.—In this subparagraph, the term 

‘‘State’’ means each of the several States, the District of 

Columbia, the Commonwealth of Puerto Rico, the Virgin 

Islands, Guam, and American Samoa. 

(5) FEDERAL CONTRACTS WITH SMALL BUSINESS DEVELOPMENT

CENTERS.— 

(A) IN GENERAL.—Subject to the conditions set forth in subparagraph (B), a small business development center may enter 

into a contract with a Federal department or agency to provide 

specific assistance to small business concerns. 

(B) CONTRACT PREREQUISITES.—Before bidding on a contract 

described in subparagraph (A), a small business development 

center shall receive approval from the Associate Administrator 

of the small business development center program of the subject and general scope of the contract. Each approval under 

subparagraph (A) shall be based upon a determination that the 

contract will provide assistance to small business concerns and 

that performance of the contract will not hinder the small business development center in carrying out the terms of the grant 

received by the small business development center from the 

Administration. 

(C) EXEMPTION FROM MATCHING REQUIREMENT.—A contract 

under this paragraph shall not be subject to the matching 

funds or eligibility requirements of paragraph (4). 

(D) ADDITIONAL PROVISION.—Notwithstanding any other provision of law, a contract for assistance under this paragraph 

shall not be applied to any Federal department or agency’s 

small business, woman-owned business, or socially and economically disadvantaged business contracting goal under section 15(g). 

(6) Any applicant which is funded by the Administration as 

a Small Business Development Center may apply for an additional grant to be used solely to assist— 

(A) with the development and enhancement of exports by 

small business concerns; 

(B) in technology transfer; and 

(C) with outreach, development, and enhancement of minority-owned small business startups or expansions, 

HUBZone small business concerns, veteran-owned small 

business startups or expansions, and women-owned small 

business startups or expansions, in communities impacted 

by base closings or military or corporate downsizing, or in 

rural or underserved communities; 

as provided under subparagraphs (B) through (G) of subsection 

(c)(3). Applicants for such additional grants shall comply with 

all of the provisions of this section, including providing matching funds, except that funding under this paragraph shall be 

effective for any fiscal year to the extent provided in advance 

in appropriations Acts and shall be in addition to the dollar 


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program limitations specified in paragraphs (4) and (5). No recipient of funds under this paragraph shall receive a grant 

which would exceed its pro rata share of a $15,000,000 program based upon the populations to be served by the Small 

Business Development Center as compared to the total population of the United States. The minimum amount of eligibility 

for any State shall be $100,000. 

(7) PRIVACY REQUIREMENTS.— (A) IN GENERAL.—A small business development center, 

consortium of small business development centers, or contractor or agent of a small business development center 

may not disclose the name, address, or telephone number 

of any individual or small business concern receiving assistance under this section without the consent of such individual or small business concern, unless— 

(i) the Administrator is ordered to make such a disclosure by a court in any civil or criminal enforcement 

action initiated by a Federal or State agency; or 

(ii) the Administrator considers such a disclosure to 

be necessary for the purpose of conducting a financial 

audit of a small business development center, but a 

disclosure under this clause shall be limited to the information necessary for such audit. 

(B) ADMINISTRATOR USE OF INFORMATION.—This section 

shall not— 

(i) restrict Administrator access to program activity 

data; or 

(ii) prevent the Administrator from using client information to conduct client surveys. 

(C) REGULATIONS.— (i) IN GENERAL.—The Administrator shall issue regulations to establish standards— 

(I) for disclosures with respect to financial audits under subparagraph (A)(ii); and 

(II) for client surveys under subparagraph 

(B)(ii), including standards for oversight of such 

surveys and for dissemination and use of client information. 

(ii) MAXIMUM PRIVACY PROTECTION.—Regulations 

under this subparagraph, shall, to the extent practicable, provide for the maximum amount of privacy 

protection. 

(iii) INSPECTOR GENERAL.—Until the effective date of 

regulations under this subparagraph, any client survey and the use of such information shall be approved 

by the Inspector General who shall include such approval in his semi-annual report. 

(8) CYBERSECURITY ASSISTANCE.— 

(A) IN GENERAL.—The Department of Homeland Security, and any other Federal department or agency in coordination with the Department of Homeland Security, 

may leverage small business development centers to provide assistance to small business concerns by disseminating information relating to cybersecurity risks and 

other homeland security matters to help small business 


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concerns in developing or enhancing cybersecurity infrastructure, awareness of cyber threat indicators, and cyber 

training programs for employees. 

(B) DEFINITIONS.—In this paragraph, the terms ‘‘cybersecurity risk’’ and ‘‘cyber threat indicator’’ have the meanings given such terms, respectively, under section 2209(a) 

of the Homeland Security Act of 2002. 

(b)(1) Financial assistance shall not be made available to any applicant if approving such assistance would be inconsistent with a 

plan for the area involved which has been adopted by an agency 

recognized by the State government as authorized to do so and approved by the Administration in accordance with the standards and 

requirements established pursuant to this section. 

(2) An applicant may apply to participate in the program by submitting to the Administration for approval a plan naming those authorized in subsection (a) to participate in the program, the geographic area to be served, the services that it would provide, the 

method for delivering services, a budget, and any other information 

and assurances the Administration may require to insure that the 

applicant will carry out the activities eligible for assistance. The 

Administration is authorized to approve, conditionally approve or 

reject a plan or combination of plans submitted. In all cases, the 

Administration shall review plans for conformity with the plan submitted pursuant to paragraph (1) of this subsection, and with a 

view toward providing small business with the most comprehensive 

and coordinated assistance in the State or part thereof to be 

served. 

(3) ASSISTANCE TO OUT-OF-STATE SMALL BUSINESS CON- CERNS.— 

(A) IN GENERAL.—At the discretion of the Administration, the Administration is authorized to permit a small 

business development center to provide advice, information 

and assistance, as described in subsection (c), to small 

businesses located outside the State, but only to the extent 

such businesses are located within close geographical proximity to the small business development center, as determined by the Administration. 

(B) DISASTER RECOVERY ASSISTANCE.— (i) IN GENERAL.—At the discretion of the Administrator, the Administrator may authorize a small business development center to provide advice, information, and assistance, as described in subsection (c), to 

a small business concern located outside of the State, 

without regard to geographic proximity to the small 

business development center, if the small business 

concern is located in an area for which the President 

has declared a major disaster. 

(ii) TERM.— 

(I) IN GENERAL.—A small business development 

center may provide advice, information, and assistance to a small business concern under clause 

(i) for a period of not more than 2 years after the 

date on which the President declared a major disaster for the area in which the small business concern is located. 


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(II) EXTENSION.—The Administrator may, at the 

discretion of the Administrator, extend the period 

described in subclause (I). 

(iii) CONTINUITY OF SERVICES.—A small business development center that provides counselors to an area 

described in clause (i) shall, to the maximum extent 

practicable, ensure continuity of services in any State 

in which the small business development center otherwise provides services. 

(iv) ACCESS TO DISASTER RECOVERY FACILITIES.—For 

purposes of this subparagraph, the Administrator 

shall, to the maximum extent practicable, permit the 

personnel of a small business development center to 

use any site or facility designated by the Administrator for use to provide disaster recovery assistance. 

(c)(1) Applicants receiving grants under this section shall assist 

small businesses in solving problems concerning operations, manufacturing, engineering, technology exchange and development, personnel administration, marketing, sales, merchandising, finance, 

accounting, business strategy development, and other disciplines 

required for small business growth and expansion, innovation, increased productivity, and management improvement, and for decreasing industry economic concentrations. Applicants receiving 

grants under this section may also assist small businesses by providing, where appropriate, education on the requirements applicable to small businesses under the regulations issued under section 

38 of the Arms Export Control Act (22 U.S.C. 2778) and on compliance with those requirements. 

(2) A small business development center shall provide services as 

close as possible to small businesses by providing extension services and utilizing satellite locations when necessary. The facilities 

and staff of each Small Business Development Center shall be located in such places as to provide maximum accessibility and benefits to the small businesses which the center is intended to serve. 

To the extent possible, it also shall make full use of other Federal 

and State government programs that are concerned with aiding 

small business. A small business development center shall have— 

(A) a full-time staff, including a full-time director who shall 

have the authority to make expenditures under the center’s 

budget and who shall manage the program activities; 

(B) access to business analysts to counsel, assist, and inform 

small business clients; 

(C) access to technology transfer agent to provide state or art 

technology to small businesses through coupling with national 

and regional technology data sources; 

(D) access to information specialists to assist in providing information searches and referrals to small business; 

(E) access to part-time professional specialists to conduct research or to provide counseling assistance whenever the need 

arises; 

(F) access to laboratory and adaptive engineering facilities; 

and 

(G) access to cybersecurity specialists to counsel, assist, and 

inform small business concern clients, in furtherance of the 

Small Business Development Center Cyber Strategy developed 


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under section 1841(a) of the National Defense Authorization 

Act for Fiscal Year 2017. 

(3) Services provided by a small business development center 

shall include, but shall not be limited to— 

(A) furnishing one-to-one individual counseling to small businesses, including— 

(i) working with individuals to increase awareness of 

basic credit practices and credit requirements; 

(ii) working with individuals to develop business plans, 

financial packages, credit applications, and contract proposals; 

(iii) working with the Administration to develop and provide informational tools for use in working with individuals on pre-business startup planning, existing business 

expansion, and export planning; and 

(iv) working with individuals referred by the local offices 

of the Administration and Administration participating 

lenders; 

(B) assisting in technology transfer, research and development, including applied research, and coupling from existing 

sources to small businesses, including— 

(i) working to increase the access of small businesses to 

the capabilities of automated flexible manufacturing systems; 

(ii) working through existing networks and developing 

new networks for technology transfer that encourage partnership between the small business and academic communities to help commercialize university-based research and 

development and introduce university-based engineers and 

scientists to their counterparts in small technology-based 

firms; and 

(iii) exploring the viability of developing shared production facilities, under appropriate circumstances; 

(C) in cooperation with the Department of Commerce and 

other relevant Federal agencies, actively assisting small businesses in exporting by identifying and developing potential export markets, facilitating export transactions, developing linkages between United States small business firms and 

prescreened foreign buyers, assisting small businesses to participate in international trade shows, assisting small businesses in obtaining export financing, and facilitating the development or reorientation of marketing and production strategies; where appropriate, the Small Business Development Center and the Administration may work in cooperation with the 

State to establish a State international trade center for these 

purposes; 

(D) developing a program in conjunction with the Export-Import Bank and local and regional Administration offices that 

will enable Small Business Development Centers to serve as 

an information network and to assist small business applicants 

for Export-Import Bank financing programs, and otherwise 

identify and help to make available export financing programs 

to small businesses; 

(E) working closely with the small business community, 

small business consultants, State agencies, universities and 


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17 

other appropriate groups to make translation services more 

readily available to small business firms doing business, or attempting to develop business, in foreign markets; 

(F) in providing assistance under this subsection, applicants 

shall cooperate with the Department of Commerce and other 

relevant Federal agencies to increase access to available export 

market information systems, including the CIMS system; 

(G) assisting small businesses to develop and implement 

strategic business plans to timely and effectively respond to 

the planned closure (or reduction) of a Department of Defense 

facility within the community, or actual or projected reductions 

in such firms’ business base due to the actual or projected termination (or reduction) of a Department of Defense program or 

a contract in support of such program— 

(i) by developing broad economic assessments of the adverse impacts of— 

(I) the closure (or reduction) of the Department of 

Defense facility on the small business concerns providing goods or services to such facility or to the military and civilian personnel currently stationed or 

working at such facility; and 

(II) the termination (or reduction) of a Department 

of Defense program (or contracts under such program) 

on the small business concerns participating in such 

program as a prime contractor, subcontractor or supplier at any tier; 

(ii) by developing, in conjunction with appropriate Federal, State, and local governmental entities and other private sector organizations, the parameters of a transition 

adjustment program adaptable to the needs of individual 

small business concerns; 

(iii) by conducting appropriate programs to inform the 

affected small business community regarding the anticipated adverse impacts identified under clause (i) and the 

economic adjustment assistance available to such firms; 

and 

(iv) by assisting small business concerns to develop and 

implement an individualized transition business plan. 

(H) maintaining current information concerning Federal, 

State, and local regulations that affect small businesses and 

counsel small businesses on methods of compliance. Counseling 

and technology development shall be provided when necessary 

to help small businesses find solutions for complying with environmental, energy, health, safety, and other Federal, State, 

and local regulations; 

(I) coordinating and conducting research into technical and 

general small business problems for which there are no ready 

solutions; 

(J) providing and maintaining a comprehensive library that 

contains current information and statistical data needed by 

small businesses; 

(K) maintaining a working relationship and open communications with the financial and investment communities, legal 

associations, local and regional private consultants, and local 

and regional small business groups and associations in order 


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18 

to help address the various needs of the small business community; 

(L) conducting in-depth surveys for local small business 

groups in order to develop general information regarding the 

local economy and general small businesses strengths and 

weaknesses in the locality; 

(M) in cooperation with the Department of Commerce, the 

Administration and other relevant Federal agencies, actively 

assisting rural small businesses in exporting by identifying 

and developing potential export markets for rural small businesses, facilitating export transactions for rural small businesses, developing linkages between United States’ rural small 

businesses and prescreened foreign buyers, assisting rural 

small businesses to participate in international trade shows, 

assisting rural small businesses in obtaining export financing 

and developing marketing and production strategies; 

(N) assisting rural small businesses— 

(i) in developing marketing and production strategies 

that will enable them to better compete in the domestic 

market— 

(ii) by providing technical assistance needed by rural 

small businesses; 

(iii) by making available managerial assistance to rural 

small business concerns; and 

(iv) by providing information and assistance in obtaining 

financing for business startups and expansion; 

(O) in conjunction with the United States Travel and Tourism Administration, assist rural small business in developing 

the tourism potential of rural communities by— 

(i) identifying the cultural, historic, recreational, and 

scenic resources of such communities; 

(ii) providing assistance to small businesses in developing tourism marketing and promotion plans relating to 

tourism in rural areas; and 

(iii) assisting small business concerns to obtain capital 

for starting or expanding businesses primarily serving 

tourists; 

(P) maintaining lists of local and regional private consultants 

to whom small business can be referred; 

(Q) providing information to small business concerns regarding compliance with regulatory requirements; 

(R) developing informational publications, establishing resource centers of reference materials, and distributing compliance guides published under section 312(a) of the Small Business Regulatory Enforcement Fairness Act of 1996; 

(S) providing small business owners with access to a wide 

variety of export-related information by establishing on-line 

computer linkages between small business development centers and an international trade data information network with 

ties to the Export Assistance Center program; 

(T) providing information and assistance to small business 

concerns with respect to establishing drug-free workplace programs on or before October 1, 2006; and 

(U) encouraging and assisting the provision of succession 

planning to small business concerns with a focus on 


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transitioning to cooperatives, as defined in section 7(a)(35), and 

qualified employee trusts (collectively referred to in this subparagraph as ‘‘employee-owned business concerns’’), including 

by— 

(i) providing training to individuals to promote the successful management, governance, or operation of a business purchased by those individuals in the formation of an 

employee-owned business concern; 

(ii) assisting employee-owned business concerns that 

meet applicable size standards established under section 

3(a) with education and technical assistance with respect 

to financing and contracting programs administered by the 

Administration; 

(iii) coordinating with lenders on conducting outreach on 

financing through programs administered by the Administration that may be used to support the transition of ownership to employees; 

(iv) supporting small business concerns in exploring or 

assessing the possibility of transitioning to an employeeowned business concern; and 

(v) coordinating with the cooperative development centers of the Department of Agriculture, the land grant extension network, the Manufacturing Extension Partnership, community development financial institutions, employee ownership associations and service providers, and 

local, regional and national cooperative associations. 

(U) in conjunction with the United States Patent and Trademark Office, providing training— 

(i) to small business concerns relating to— 

(I) domestic and international intellectual property 

protections; and 

(II) how the protections described in subclause (I) 

should be considered in the business plans and growth 

strategies of the small business concerns; and 

(ii) that may be delivered— 

(I) in person; or 

(II) through a website. 

(4) A small business development center shall continue to upgrade and modify its services, as needed, in order to meet the 

changing and evolving needs of the small business community. 

(5) In addition to the methods prescribed in section 21(c)(2), a 

small business development center shall utilize and compensate as 

one of its resources qualified small business vendors, including but 

not limited to, private management consultants, private consulting 

engineers and private testing laboratories, to provide services as 

described in this subsection to small businesses on behalf of such 

small business development center. 

(6) In any State (A) in which the Administration has not made 

a grant pursuant to paragraph (1) of subsection (a), or (B) in which 

no application for a grant has been made by a Small Business Development Center pursuant to paragraph (6) of such subsection 

within 60 days after the effective date of any grant under subsection (a)(1) to such center or the date the Administration notifies 

the grantee funded under subsection (a)(1) that funds are available 

for grant applications pursuant to subsection (a)(6), whichever date 


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occurs last, the Administration may make grants to a non-profit 

entity in that State to carry out the activities specified in paragraph (6) of subsection (a). Any such applicants shall comply with 

the matching funds requirement of paragraph (4) of subsection (a). 

Such grants shall be effective for any fiscal year only to the extent 

provided in advance in appropriations Acts, and each State shall be 

limited to the pro rata share provisions of paragraph (6) of subsection (a). 

(7) In performing the services identified in paragraph (3), the 

Small Business Development Centers shall work in close cooperation with the Administration’s regional and local offices, 

the local small business community, and appropriate State and 

local agencies. 

(8) The Associate Administrator for Small Business Development Centers, in consultation with the Small Business Development Centers, shall develop and implement an information 

sharing system. Subject to amounts approved in advance in appropriations Acts, the Administration may make grants or 

enter cooperative agreements with one or more centers to carry 

out the provisions of this paragraph. Said grants or cooperative 

agreements shall be awarded for periods of no more than five 

years duration. The matching funds provisions of subsection (a) 

shall not be applicable to grants or cooperative agreements 

under this paragraph. The system shall— 

(A) allow Small Business Development Centers participating in the program to exchange information about their 

programs; and 

(B) provide information central to technology transfer. 

(d) Where appropriate, the Small Business Development Centers 

shall work in conjunction with the relevant State agency and the 

Department of Commerce to develop a comprehensive plan for enhancing the export potential of small businesses located within the 

State. This plan may involve the cofunding and staffing of a State 

Office of International Trade within the State Small Business Development Center, using joint State and Federal funding, and any 

other appropriate measures directed at improving the export performance of small businesses within the State. 

(e) Laboratories operated and funded by the Federal Government 

are authorized and directed to cooperate with the Administration 

in developing and establishing programs to support small business 

development centers by making facilities and equipment available; 

providing experiment station capabilities in adaptive engineering; 

providing library and technical information processing capabilities; 

and providing professional staff for consulting. The Administration 

is authorized to reimburse the laboratories for such services. 

(f) The National Science Foundation is authorized and directed 

to cooperate with the Administration and with the Small Business 

Development Centers in developing and establishing programs to 

support the centers. 

(g) NATIONAL AERONAUTICS AND SPACE ADMINISTRATION AND RE- GIONAL TECHNOLOGY TRANSFER CENTERS.—The National Aeronautics and Space Administration and regional technology transfer 

centers supported by the National Aeronautics and Space Administration are authorized and directed to cooperate with small business development centers participating in the program. 


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(h) ASSOCIATE ADMINISTRATOR FOR SMALL BUSINESS DEVELOP- MENT CENTERS.— (1) APPOINTMENT AND COMPENSATION.—The Administrator 

shall appoint an Associate Administrator for Small Business 

Development Centers who shall report to an official who is not 

more than one level below the Office of the Administrator and 

who shall serve without regard to the provisions of title 5, governing appointments in the competitive service, and without 

regard to chapter 51, and subchapter III of chapter 53 of such 

title relating to classification and General Schedule pay rates, 

but at a rate not less than the rate of GS–17 of the General 

Schedule. 

(2) DUTIES.— (A) IN GENERAL.—The sole responsibility of the Associate 

Administrator for Small Business Development Centers 

shall be to administer the small business development center program. Duties of the position shall include recommending the annual program budget, reviewing the annual 

budgets submitted by each applicant, establishing appropriate funding levels therefore, selecting applicants to participate in this program, implementing the provisions of 

this section, maintaining a clearinghouse to provide for the 

dissemination and exchange of information between small 

business development centers and conducting audits of recipients of grants under this section. 

(B) CONSULTATION REQUIREMENTS.—In carrying out the 

duties described in this subsection, the Associate Administrator shall confer with and seek the advice of the Board 

established by subsection (i) and Administration officials 

in areas served by the small business development centers; 

however, the Associate Administrator shall be responsible 

for the management and administration of the program 

and shall not be subject to the approval or concurrence of 

such Administration officials. 

(i)(1) There is established a National Small Business Development Center Advisory Board (herein referred to as ‘‘Board’’) which 

shall consist of nine members appointed from civilian life by the 

Administrator and who shall be persons of outstanding qualifications known to be familiar and sympathetic with small business 

needs and problems. No more than three members shall be from 

universities or their affiliates and six shall be from small businesses or associations representing small businesses. At the time 

of the appointment of the Board, the Administrator shall designate 

one-third of the members and at least one from each category 

whose term shall end in two years from the date of appointment, 

a second third whose term shall end in three years from the date 

of appointment, and the final third whose term shall end in four 

years from the date of appointment. Succeeding Boards shall have 

three-year terms, with one-third of the Board changing each year. 

(2) The Board shall elect a Chairman and advise, counsel, and 

confer with the Associate Administrator for Small Business Development Centers in carrying out the duties described in this section. 

The Board shall meet at least semiannually and at the call of the 

Chairman of the Board. Each member of the Board shall be entitled to be compensated at the rate not in excess of the per diem 


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equivalent of the highest rate of pay for individuals occupying the 

position under GS–18 of the General Schedule for each day engaged in activities of the Board and shall be entitled to be reimbursed for expenses as a member of the Board. 

(j)(1) Each small business development center shall establish an 

advisory board. 

(2) Each small business development center advisory board shall 

elect a chairman and advise, counsel, and confer with the director 

of the small business development center on all policy matters pertaining to the operation of the small business development center, 

including who may be eligible to receive assistance from, and how 

local and regional private consultants may participate with the 

small business development center. 

(k) PROGRAM EXAMINATION AND ACCREDITATION.— 

(1) EXAMINATION.—Not later than 180 days after the date of 

enactment of this subsection, the Administration shall develop 

and implement a biennial programmatic and financial examination of each small business development center established 

pursuant to this section. 

(2) ACCREDITATION.—The Administration may provide financial support, by contract or otherwise, to the association authorized by subsection (a)(3)(A) for the purpose of developing a 

small business development center accreditation program. 

(3) EXTENSION OR RENEWAL OF COOPERATIVE AGREEMENTS.— 

(A) IN GENERAL.—In extending or renewing a cooperative 

agreement of a small business development center, the Administration shall consider the results of the examination 

and accreditation program conducted pursuant to paragraphs (1) and (2). 

(B) ACCREDITATION REQUIREMENT.—After September 30, 

2000, the Administration may not renew or extend any cooperative agreement with a small business development 

center unless the center has been approved under the accreditation program conducted pursuant to this subsection, 

except that the Associate Administrator for Small Business 

Development Centers may waive such accreditation requirement, in the discretion of the Associate Administrator, upon a showing that the center is making a good 

faith effort to obtain accreditation. 

(l) CONTRACT AUTHORITY.—The authority to enter into contracts 

shall be in effect for each fiscal year only to the extent and in the 

amounts as are provided in advance in appropriations Acts. After 

the administration has entered a contract, either as a grant or a 

cooperative agreement, with any applicant under this section, it 

shall not suspend, terminate, or fail to renew or extend any such 

contract unless the Administration provides the applicant with 

written notification setting forth the reasons therefore and affording the applicant an opportunity for a hearing, appeal, or other administrative proceeding under the provisions of chapter 5 of title 5, 

United States Code. If any contract or cooperative agreement under 

this section with an entity that is covered by this section is not renewed or extended, any award of a successor contract or cooperative agreement under this section to another entity shall be made 

on a competitive basis. 


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(m) PROHIBITION ON CERTAIN FEES.—A small business development center shall not impose or otherwise collect a fee or other 

compensation in connection with the provision of counseling services under this section. 

(n) VETERANS ASSISTANCE AND SERVICES PROGRAM.— (1) IN GENERAL.—A small business development center may 

apply for a grant under this subsection to carry out a veterans 

assistance and services program. 

(2) ELEMENTS OF PROGRAM.—Under a program carried out 

with a grant under this subsection, a small business development center shall— 

(A) create a marketing campaign to promote awareness 

and education of the services of the center that are available to veterans, and to target the campaign toward veterans, service-disabled veterans, military units, Federal 

agencies, and veterans organizations; 

(B) use technology-assisted online counseling and distance learning technology to overcome the impediments to 

entrepreneurship faced by veterans and members of the 

Armed Forces; and 

(C) increase coordination among organizations that assist veterans, including by establishing virtual integration 

of service providers and offerings for a one-stop point of 

contact for veterans who are entrepreneurs or owners of 

small business concerns. 

(3) AMOUNT OF GRANTS.—A grant under this subsection shall be for not less than $75,000 and not more than $250,000. 

(4) FUNDING.—Subject to amounts approved in advance in 

appropriations Acts, the Administration may make grants or 

enter into cooperative agreements to carry out the provisions 

of this subsection. 

(o) CYBER STRATEGY TRAINING FOR SMALL BUSINESS DEVELOP- MENT CENTERS.— (1) DEFINITIONS.—In this subsection— 

(A) the term ‘‘cyber strategy’’ means resources and tactics 

to assist in planning for cybersecurity and defending 

against cyber risks and cyber attacks; and 

(B) the term ‘‘lead small business development center’’ 

means a small business development center that has received a grant from the Administration. 

(2) CERTIFICATION PROGRAM.—The Administrator shall establish a cyber counseling certification program, or approve a similar existing program, to certify the employees of lead small business development centers to provide cyber planning assistance 

to small business concerns. 

(3) NUMBER OF CERTIFIED EMPLOYEES.—The Administrator 

shall ensure that the number of employees of each lead small 

business development center who are certified in providing 

cyber planning assistance under this subsection is not fewer 

than the lesser of— 

(A) 5; or 

(B) 10 percent of the total number of employees of the 

lead small business development center. 

(4) CONSIDERATION OF SMALL BUSINESS DEVELOPMENT CENTER CYBER STRATEGY.—In carrying out this subsection, the AdVerDate Sep 11 2014 04:24 Jun 15, 2019 Jkt 089006 PO 00000 Frm 00023 Fmt 6659 Sfmt 6603 E:\HR\OC\HR112.XXX HR112

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ministrator, to the extent practicable, shall consider any cyber 

strategy methods included in the Small Business Development 

Center Cyber Strategy developed under section 1841(a) of the 

National Defense Authorization Act for Fiscal Year 2017 (Public Law 114–328; 130 Stat. 2662). 

(5) REIMBURSEMENT FOR CERTIFICATION.— (A) IN GENERAL.—Subject to the availability of appropriations and subparagraph (B), the Administrator shall 

reimburse a lead small business development center for 

costs relating to the certification of an employee of the lead 

small business development center under the program established under paragraph (2). 

(B) LIMITATION.—The total amount reimbursed by the 

Administrator under subparagraph (A) may not exceed 

$350,000 in any fiscal year. 

* * * * * * * 

Æ 


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