I 

108TH CONGRESS 

1ST SESSION H. R. 2802

To reauthorize the Small Business Act and the Small Business Investment 

Act of 1958, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 21, 2003

Mr. MANZULLO (for himself and Ms. VELA ́ZQUEZ) introduced the following 

bill; which was referred to the Committee on Small Business 

A BILL

To reauthorize the Small Business Act and the Small 

Business Investment Act of 1958, and for other purposes.

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

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Small Business Reauthorization and Manufacturing Re6 vitalization Act of 2003’’. 

7 (b) TABLE OF CONTENTS.—The table of contents for 

8 this Act is as follows:

Sec. 1. Short title; table of contents. 

TITLE I—SMALL BUSINESS INVESTMENT ACT OF 1958 

AMENDMENTS AND RELATED PROVISIONS 
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Sec. 101. State defined. 

Sec. 102. Small manufacturer defined. 

Sec. 103. Maximum participating securities rate. 

Sec. 104. Maximum leverage for buying operations. 

Sec. 105. Maximum aggregate amount of leverage. 

Sec. 106. Investments in smaller enterprises. 

Sec. 107. Actions of administrator with respect to capital impairment. 

Sec. 108. Conditions for distribution. 

Sec. 109. Modification of aggregate limitation. 

Sec. 110. Notice and comment rulemaking. 

Sec. 111. Low-income geographic area definition. 

Sec. 112. Unmet equity investment needs of certain small manufacturers. 

Sec. 113. Participation agreement requirement. 

Sec. 114. Final approval requirement. 

Sec. 115. Conditionally approved companies. 

Sec. 116. Applications for new markets venture capital companies. 

Sec. 117. Authorization of appropriations. 

Sec. 118. Repeal of lease guarantee authority. 

Sec. 119. Amendment of congressional findings relating to State development 

companies. 

Sec. 120. Qualification of State development companies. 

Sec. 121. Job requirements; definition. 

Sec. 122. Small business concern loan limitations. 

Sec. 123. Approval requirement. 

Sec. 124. Effective date for termination of certain fees. 

Sec. 125. Accredited lenders program. 

Sec. 126. Premier certified lenders program. 

Sec. 127. Foreclosure and liquidation of loans. 

Sec. 128. Additions to title V. 

Sec. 129. Regulations to carry out amendments to loan program. 

TITLE II—SMALL BUSINESS ACT AMENDMENTS AND RELATED 

PROVISIONS. 

Sec. 201. Short title. 

Sec. 202. Findings; statements of policy. 

Sec. 203. Definitions. 

Sec. 204. Small Business Administration. 

Sec. 205. Financial management. 

Sec. 206. Organization and staff. 

Sec. 207. Loan programs. 

Sec. 208. Government contract and business development assistance for small 

business concerns, etc. 

Sec. 209. Training and assistance. 

Sec. 210. Contracting assistance; etc. 

Sec. 211. Authorization of appropriations; etc. 

Sec. 212. Small business development centers. 

Sec. 213. Assignment of employees of the Office of International Trade. 

Sec. 214. Supervisory and enforcement authority for small business lending 

companies. 

Sec. 215. Reauthorization of Paul D. Coverdell drug-free workplace program. 

Sec. 216. Women’s business center program. 

Sec. 217. HUBZone program. 

Sec. 218. Other repeals and reorganizations. 

Sec. 219. Rules of construction. 
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TITLE III—OTHER PROVISIONS 

Sec. 301. Report regarding national database of small manufacturers. 

Sec. 302. Workforce transformation plan. 

Sec. 303. Repeal of certain provisions of the Disaster Relief Act of 1970. 

Sec. 304. Regulations on size standards of franchisees. 

Sec. 305. Temporary small business development center assistance to Indian 

tribe members, Native Alaskans, and Native Hawaiians. 

Sec. 306. Temporary small business development center assistance for vocational and technical entrepreneurship development. 

Sec. 307. Very small business concern contract data collection. 

Sec. 308. Very small business concern pilot program for competition award to 

home-based business. 

Sec. 309. Socially and economically disadvantaged business. 

Sec. 310. Study and report on effectiveness of aggregate limitations on amount 

of assistance to any single enterprise. 

Sec. 311. Study and report on coordination of new markets venture capital program with new markets tax credit program. 

Sec. 312. Study and report on premier certified lenders program.

1 TITLE I—SMALL BUSINESS IN2 VESTMENT ACT OF 1958 

3 AMENDMENTS AND RELATED 

4 PROVISIONS 

5 SEC. 101. STATE DEFINED. 

6 Paragraph (4) of section 103 of the Small Business 

7 Investment Act of 1958 (15 U.S.C. 662) is amended to 

8 read as follows: 

9 ‘‘(4) the term ‘State’ has the meaning given 

10 such term in section 3 of the Small Business Act;’’. 

11 SEC. 102. SMALL MANUFACTURER DEFINED. 

12 Section 103 of the Small Business Investment Act 

13 of 1958 (15 U.S.C. 662) is amended—

14 (1) in paragraph (16), by striking ‘‘and’’ after 

15 the semicolon at the end; 
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1 (2) in paragraph (17), by striking the period at 

2 the end and inserting ‘‘; and’’; and 

3 (3) by adding at the end the following new 

4 paragraph: 

5 ‘‘(18) the term ‘small manufacturer’ has the 

6 meaning given that term in section 3 of the Small 

7 Business Act (15 U.S.C. 632).’’. 

8 SEC. 103. MAXIMUM PARTICIPATING SECURITIES RATE. 

9 Section 303(g)(2) of the Small Business Investment 

10 Act of 1958 (15 U.S.C. 683(g)(2)) is amended by striking 

11 ‘‘1.38 percent’’ and inserting ‘‘1.52 percent’’. 

12 SEC. 104. MAXIMUM LEVERAGE FOR BUYING OPERATIONS. 

13 Section 303(b)(2) of the Small Business Investment 

14 Act of 1958 (15 U.S.C. 683(b)(2)) is amended by striking 

15 subparagraphs (A) and (B) and inserting the following 

16 new subparagraphs: 

17 ‘‘(A) IN GENERAL.—The outstanding le18 verage made available to a licensee under sec19 tion 301(c) shall not exceed 300 percent of pri20 vate capital, up to a maximum of 

21 $115,000,000, except that the maximum shall 

22 be $150,000,000 if the licensee certifies in writ23 ing that more than 50 percent of its aggregate 

24 dollar amount of financings are in small manu25 facturers. 
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1 ‘‘(B) COMMONLY CONTROLLED LICENS2 EES.—

3 ‘‘(i) In the case of 2 or more licensees 

4 that are commonly controlled (as deter5 mined by the Administrator), upon applica6 tion to the Administrator, the outstanding 

7 leverage made available shall not exceed 

8 $150,000,000, except that the maximum 

9 shall be $185,000,000 if the licensees cer10 tify in writing that more than 50 percent 

11 of their aggregate dollar amount of 

12 financings are in small manufacturers. The 

13 Administrator shall have 10 business days 

14 to approve or disapprove an application 

15 under the preceding sentence. Approval or 

16 disapproval is final agency action for pur17 poses of chapter 7 of title 5, United States 

18 Code. 

19 ‘‘(ii) Not later than 120 days after 

20 the enactment of this subparagraph, the 

21 Administrator shall prescribe regulations 

22 providing standards and conditions for in23 creases in leverage, including the standards 

24 for determining common control of licens25 ees. 
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1 ‘‘(iii) Until regulations are prescribed 

2 under clause (ii), the Administrator shall 

3 approve the application of each commonly 

4 controlled licensee under the definition of 

5 common control in section 107.50 of title 

6 13, Code of Federal Regulations, as in ef7 fect on January 1, 2003.’’. 

8 SEC. 105. MAXIMUM AGGREGATE AMOUNT OF LEVERAGE. 

9 Section 303(b) of the Small Business Investment Act 

10 of 1958 (15 U.S.C. 683(b)) is amended by striking para11 graph (4) and all that follows through the end of the sen12 tence beginning ‘‘For purposes of’’ after that paragraph. 

13 SEC. 106. INVESTMENTS IN SMALLER ENTERPRISES. 

14 Sections 303(d) of the Small Business Investment 

15 Act of 1958 (15 U.S.C. 683(d)) is amended to read as 

16 follows: 

17 ‘‘(d) INVESTMENTS IN SMALLER ENTERPRISES.—As 

18 a condition of approval of an application for leverage, the 

19 Administrator shall require a licensee to certify in writing 

20 that not less than 25 percent of the licensee’s aggregate 

21 dollar amount of financings will be provided to smaller en22 terprises.’’. 
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1 SEC. 107. ACTIONS OF ADMINISTRATOR WITH RESPECT TO 

2 CAPITAL IMPAIRMENT. 

3 Section 303(e) of the Small Business Investment Act 

4 of 1958 (15 U.S.C. 683(e)) is amended—

5 (1) by striking ‘‘and’’ at the end of paragraph 

6 (1); 

7 (2) by striking the period at the end of para8 graph (2) and inserting ‘‘; and’’; and 

9 (3) by adding at the end the following new 

10 paragraphs: 

11 ‘‘(3) shall not, for reasons of capital impair12 ment, restrict the operations of the licensee or direct 

13 the use of the licensee’s capital to any purpose other 

14 than the purposes for which the license was granted; 

15 and 

16 ‘‘(4) notwithstanding paragraph (3), may take 

17 action to restrict the operations of, or liquidate a li18 censee for failure to comply with any other provision 

19 of the law or regulation promulgated pursuant to 

20 this Act.’’. 

21 SEC. 108. CONDITIONS FOR DISTRIBUTION. 

22 Sections 303(g)(9) of the Small Business Investment 

23 Act of 1958 (15 U.S.C. 683(g)(9)) is amended to read 

24 as follows: 

25 ‘‘(9) Subject to subparagraphs (A), (B), and 

26 (C), after making distributions under paragraph (8), 
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1 a company with outstanding participating securities 

2 may distribute the balance of income to its investors, 

3 if there are no accumulated and unpaid prioritized 

4 payments. 

5 ‘‘(A) Amounts received by the Administra6 tion under this paragraph and paragraph 8 

7 shall be applied first as prepayment of the prin8 cipal amount of the outstanding participating 

9 securities or debentures of the company at the 

10 time of such distribution and then to the alloca11 tion under paragraph (11). 

12 ‘‘(B) Distributions under this paragraph 

13 shall be made to private investors and to the 

14 Administration in the ratio of private capital to 

15 leverage as of the day before the distribution 

16 until the outstanding participating securities or 

17 debentures of the company are paid in full, 

18 after which any remaining distributions under 

19 this paragraph shall be made to private inves20 tors and to the Administration in the ratio that 

21 is provided for the allocation of profits in para22 graph (11). 

23 ‘‘(C) The Administrator shall prescribe 

24 such regulations as are required to assure that 

25 management fees for the company are not un-
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1 reasonably reduced due to a reduction in com2 bined capital as a result of distributions made 

3 under this paragraph.’’. 

4 SEC. 109. MODIFICATION OF AGGREGATE LIMITATION. 

5 Section 306(a) of the Small Business Investment Act 

6 of 1958 (15 U.S.C. 686(a)) is amended by inserting ‘‘(and 

7 not including any obligations or securities issued under 

8 section 7(a) of the Small Business Act or title V of this 

9 Act)’’ after ‘‘under the provisions of this title’’. 

10 SEC. 110. NOTICE AND COMMENT RULEMAKING. 

11 Section 308(c) of the Small Business Investment Act 

12 of 1958 (15 U.S.C. 687) is amended by adding at the end 

13 the following: ‘‘Any rules or regulations issued under this 

14 Act, other than those relating to agency management or 

15 personnel, shall be issued pursuant to section 553(b) of 

16 title 5, United States Code.’’.

17 SEC. 111. LOW-INCOME GEOGRAPHIC AREA DEFINITION. 

18 (a) IN GENERAL.—Section 351(3)(A)(ii)(I) of the 

19 Small Business Investment Act of 1958 (15 U.S.C. 

20 689(3)(A)(ii)(I)) is amended by striking ‘‘50 percent’’ and 

21 all that follows through the end and inserting ‘‘the median 

22 family income in that tract does not exceed 80 percent 

23 of the greater of statewide median family income or the 

24 metropolitan area median family income; or’’. 
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1 (b) APPLICATION OF AMENDED DEFINITION.—The 

2 definition of low-income geographic area in section 351(3) 

3 of the Small Business Investment Act of 1958 (15 U.S.C. 

4 689(3)), as amended by subsection (a), shall apply to pri5 vate capital raised under section 354(d)(1) of the Small 

6 Business Investment Act of 1958 (15 U.S.C. 689c(d)(1)) 

7 before, on, or after the effective date of the amendment 

8 made by subsection (a). 

9 SEC. 112. UNMET EQUITY INVESTMENT NEEDS OF CERTAIN 

10 SMALL MANUFACTURERS. 

11 Section 352(2) of the Small Business Investment Act 

12 of 1958 (15 U.S.C. 689a(2)) is amended by inserting after 

13 ‘‘small enterprises’’ the following: ‘‘and small manufactur14 ers’’. 

15 SEC. 113. PARTICIPATION AGREEMENT REQUIREMENT. 

16 Section 353(1) of the Small Business Investment Act 

17 of 1958 (15 U.S.C. 689b(1)) is amended by inserting after 

18 ‘‘section 352’’ the following: ‘‘(with at least one such 

19 agreement to be with a company engaged primarily in de20 velopment of and investment in small manufacturers)’’. 

21 SEC. 114. FINAL APPROVAL REQUIREMENT. 

22 Section 354(d) of the Small Business Investment Act 

23 of 1958 (15 U.S.C. 689c(d)) is amended, in the matter 

24 before paragraph (1), by striking ‘‘a period of time not 

25 to exceed’’. 
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1 SEC. 115. CONDITIONALLY APPROVED COMPANIES. 

2 Section 358(a) of the Small Business Investment Act 

3 of 1958 (15 U.S.C. 689(a)) is amended by adding at the 

4 end the following new paragraphs: 

5 ‘‘(6) GRANTS TO CONDITIONALLY APPROVED

6 COMPANIES.—Upon the request of a company condi7 tionally-approved under section 354(c), the Adminis8 trator shall provide up to $50,000 in grant assist9 ance for establishment of an operational assistance 

10 program under this title. 

11 ‘‘(7) REPAYMENT.—If a company receives a 

12 grant under paragraph (6) and does not enter into 

13 a participation agreement for final approval, the 

14 company shall repay the amount of the grant to the 

15 Administrator. 

16 ‘‘(8) DEDUCTION.—If a company receives a 

17 grant under paragraph (6) and receives final ap18 proval under section 354(e), the Administrator shall 

19 deduct the amount of the grant under that para20 graph from the total grant amount that the com21 pany receives for operational assistance.’’. 

22 SEC. 116. APPLICATIONS FOR NEW MARKETS VENTURE 

23 CAPITAL COMPANIES. 

24 Not later than 60 days after the date of the enact25 ment of this section, the Administrator shall prescribe 

26 standard documents for final New Markets Venture Cap-
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1 ital Company approval application under section 354(e) of 

2 the Small Business Investment Act of 1958 (15 U.S.C. 

3 689c(e)). The Administrator shall assure that the stand4 ard documents shall be designed to substantially reduce 

5 the cost burden of the application process on the compa6 nies involved. 

7 SEC. 117. AUTHORIZATION OF APPROPRIATIONS. 

8 Section 368(a) of the Small Business Investment Act 

9 of 1958 (15 U.S.C. 689q(a)) is amended—

10 (1) in the matter before paragraph (1) by strik11 ing ‘‘fiscal years 2001 through 2006’’ and inserting 

12 ‘‘fiscal years 2004 and 2005’’; 

13 (2) in paragraph (1), by striking 

14 ‘‘$150,000,000’’ and inserting ‘‘$75,000,000’’; and 

15 (3) in paragraph (2), by striking 

16 ‘‘$30,000,000’’ and inserting ‘‘$15,000,000’’. 

17 SEC. 118. REPEAL OF LEASE GUARANTEE AUTHORITY. 

18 (a) REPEAL.—Sections 401, 402, and 404 of the 

19 Small Business Investment Act of 1958 (15 U.S.C. 692, 

20 693, and 694-1) are hereby repealed. 

21 (b) APPLICATION TO OUTSTANDING GUARANTEES.—

22 The repeals made by subsection (a) shall not affect the 

23 rights, powers, duties, or obligations of the Administrator 

24 or any other person with respect to any guarantee made 

25 under section 401 or 404 of the Small Business Invest-
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1 ment Act of 1958 on or before the date of the enactment 

2 of this Act. 

3 SEC. 119. AMENDMENT OF CONGRESSIONAL FINDINGS RE4 LATING TO STATE DEVELOPMENT COMPA5 NIES. 

6 Section 501(a) of the Small Business Investment Act 

7 of 1958 (15 U.S.C. 695(a)) is amended by striking ‘‘pur8 pose’’ and all that follows through ‘‘areas’’ and inserting 

9 the following: ‘‘purposes of this title are to foster economic 

10 development and create or preserve job opportunities in 

11 both urban and rural areas, and to enhance the ability 

12 of America’s small manufacturers to expand’’. 

13 SEC. 120. QUALIFICATION OF STATE DEVELOPMENT COM14 PANIES. 

15 Section 501(d) of the Small Business Investment Act 

16 of 1958 (15 U.S.C. 695(d)) is amended—

17 (1) in paragraph (2), by inserting after ‘‘area,’’ 

18 the following: ‘‘increasing the productive capacity of 

19 small manufacturers,’’; 

20 (2) in paragraph (3) by striking subparagraph 

21 (D) and inserting the following: 

22 ‘‘(D) development in a community with a 

23 population of less than 50,000 that is not lo24 cated within a Standard Metropolitan Statis25 tical Area,’’; and 
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1 (3) by striking the sentence beginning ‘‘If eligi2 bility’’ after subparagraph (H) of paragraph (3). 

3 SEC. 121. JOB REQUIREMENTS; DEFINITION. 

4 Section 501 of the Small Business Investment Act 

5 of 1958 (15 U.S.C. 695) is amended by adding at the end 

6 the following new subsection: 

7 ‘‘(e)(1) A project meets the objective set forth in sub8 section (d)(1) if the project creates or retains one job for 

9 every $50,000 guaranteed by the Administration, except 

10 that the amount is $100,000 in the case of a project of 

11 a small manufacturer. 

12 ‘‘(2) Paragraph (1) does not apply to a project for 

13 which eligibility is based on the objectives set forth in 

14 paragraph (2) or (3) of subsection (d), if the development 

15 company’s portfolio of outstanding debentures creates or 

16 retains one job for every $50,000 guaranteed by the Ad17 ministration. 

18 ‘‘(3) For projects in Alaska, Hawaii, State-designated 

19 urban or rural jobs and enterprise zones, empowerment 

20 zones and enterprise communities, labor surplus areas, as 

21 determined by the Secretary of Labor, and for other areas 

22 designated by the Administrator, the development com23 pany’s portfolio may average not more than $75,000 per 

24 job created or retained. 
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1 ‘‘(4) Loans for projects of small manufacturers shall 

2 be excluded from calculations under paragraph (2) or (3). 

3 ‘‘(5) Under regulations prescribed by the Adminis4 trator, the Administrator may waive any requirement of 

5 this subsection (other than paragraph (4)). Such regula6 tions shall be issued after notice and comment and shall 

7 be codified in the Code of Federal Regulations.’’. 

8 SEC. 122. SMALL BUSINESS CONCERN LOAN LIMITATIONS. 

9 Section 502(2) of the Small Business Investment Act 

10 of 1958 (15 U.S.C. 696(2)) is amended—

11 (1) by striking ‘‘$1,000,000’’ and inserting 

12 ‘‘$2,000,000’’; 

13 (2) by striking ‘‘$1,300,000’’ and inserting 

14 ‘‘$2,500,000’’; and 

15 (3) by inserting after ‘‘small business concern’’ 

16 the last place it appears the following: ‘‘and loans to 

17 small manufacturers shall be limited to $4,000,000 

18 and loans under this section shall not be limited by 

19 reason of any loan guaranteed by the Administration 

20 under section 7(a) of the Small Business Act (15 

21 U.S.C. 636(a)).’’. 

22 SEC. 123. APPROVAL REQUIREMENT. 

23 Section 503(b) of the Small Business Investment Act 

24 of 1958 (15 U.S.C. 697(b)) is amended by striking para25 graph (6) and inserting the following: 
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1 ‘‘(6) except as provided in section 508, the Ad2 ministration approves each loan to be made from 

3 such proceeds in accordance with section 512, (but 

4 such approval shall not require a small business in5 vestment company licensed under title III of this Act 

6 to guarantee a loan without regard to its ownership 

7 percentage of the borrower); and’’. 

8 SEC. 124. EFFECTIVE DATE FOR TERMINATION OF CERTAIN 

9 FEES. 

10 Section 503(f) of the Small Business Investment Act 

11 of 1958 (15 U.S.C. 697(f)) is amended by striking ‘‘2003’’ 

12 and inserting ‘‘2005’’. 

13 SEC. 125. ACCREDITED LENDERS PROGRAM. 

14 Section 507 of the Small Business Investment Act 

15 of 1958 (15 U.S.C. 697d) is amended—

16 (1) in subsection (b)(1), by inserting ‘‘and’’ 

17 after the semicolon at the end; 

18 (2) in subsection (b), by striking paragraphs 

19 (2) through (6) and inserting the following: 

20 ‘‘(2) has a loan default rate, as determined by 

21 the Bureau of Premier Certified Lenders Program 

22 Oversight, that is—

23 ‘‘(A) less than the national average; 

24 ‘‘(B) one percent higher than the national 

25 average, if at least 20 percent of the develop-
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1 ment company’s portfolio is for projects in 

2 areas referred to in section 501(e)(3); or 

3 ‘‘(C) two percent higher than the national 

4 average, if at least 30 percent of the develop5 ment company’s portfolio is for projects of 

6 small manufacturers.’’; 

7 (3) by striking subsection (c); and 

8 (4) in subsection (d)(1), by striking ‘‘that—’’ 

9 and all that follows through the end and inserting: 

10 ‘‘that the development company has not continued to 

11 meet the requirements of subsection (b).’’.

12 SEC. 126. PREMIER CERTIFIED LENDERS PROGRAM. 

13 Section 508 of the Small Business Investment Act 

14 of 1958 (15 U.S.C. 697e) is amended to read as follows: 

15 ‘‘SEC. 508. PREMIER CERTIFIED LENDERS PROGRAM. 

16 ‘‘(a) ESTABLISHMENT.—The Administrator may es17 tablish a Premier Certified Lenders Program for qualified 

18 State and local development companies that meet the re19 quirements of subsection (b). 

20 ‘‘(b) REQUIREMENTS.—

21 ‘‘(1) APPLICATION.—To be eligible to partici22 pate in the Premier Certified Lenders Program es23 tablished under subsection (a), a qualified State and 

24 local development company shall prepare and submit 

25 to the Administrator an application at such time, in 
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1 such manner, and containing such information as 

2 the Administrator may require. 

3 ‘‘(2) DESIGNATION.—The Administrator may 

4 designate a qualified State and local development 

5 company as a premier certified lender—

6 ‘‘(A) if the company is an active qualified 

7 State and local development company in good 

8 standing and has been an active participant in 

9 the accredited lenders program during the en10 tire 12-month period preceding the date on 

11 which the company submits an application 

12 under paragraph (1), except that the Adminis13 trator may waive this requirement if the com14 pany is qualified to participate in the accredited 

15 lenders program; 

16 ‘‘(B) if the company has a history of—

17 ‘‘(i) submitting to the Administrator 

18 adequately analyzed debenture guarantee 

19 application packages; and 

20 ‘‘(ii) of properly closing section 504 

21 loans and servicing its loan portfolio; 

22 ‘‘(C) if the company agrees to assume and 

23 to reimburse the Administration for 10 percent 

24 of any loss sustained by the Administration as 

25 a result of default by the company in the pay-
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1 ment of principal or interest on a debenture 

2 issued by such company and guaranteed by the 

3 Administrator under this section (15 percent in 

4 the case of any such loss attributable to a de5 benture issued by the company during any pe6 riod for which an election is in effect under sub7 section (c)(7) for such company); and 

8 ‘‘(D) the Administrator determines, with 

9 respect to the company, that the loss reserve es10 tablished in accordance with subsection (c) is 

11 sufficient for the company to meet its obliga12 tions to protect the Federal Government from 

13 risk of loss. 

14 ‘‘(3) APPLICABILITY OF CRITERIA AFTER DES15 IGNATION.—The Administrator may revoke the des16 ignation of a qualified State and local development 

17 company as a premier certified lender under this 

18 section at any time, if the Administrator determines 

19 that the qualified State and local development com20 pany does not meet any requirement described in 

21 subparagraphs (A) through (D) of paragraph (2). 

22 ‘‘(c) LOSS RESERVE.—

23 ‘‘(1) ESTABLISHMENT.—A company designated 

24 as a premier certified lender shall establish a loss re-
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1 serve for financing approved pursuant to this sec2 tion. 

3 ‘‘(2) AMOUNT.—The amount of each loss re4 serve established under paragraph (1) shall be 10 

5 percent of the amount of the company’s exposure, as 

6 determined under subsection (b)(2)(C). 

7 ‘‘(3) ASSETS.—Each loss reserve established 

8 under paragraph (1) shall be comprised of—

9 ‘‘(A) segregated funds on deposit in an ac10 count or accounts with a federally insured de11 pository institution or institutions selected by 

12 the company, subject to a collateral assignment 

13 in favor of, and in a format acceptable to, the 

14 Administrator; 

15 ‘‘(B) irrevocable letter or letters of credit, 

16 with a collateral assignment in favor of, and a 

17 commercially reasonable format acceptable to, 

18 the Administrator; or 

19 ‘‘(C) any combination of the assets de20 scribed in subparagraphs (A) and (B). 

21 ‘‘(4) CONTRIBUTIONS.—The company shall 

22 make contributions to the loss reserve, either cash or 

23 letters of credit as provided above, in the following 

24 amounts and at the following intervals: 
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1 ‘‘(A) 50 percent when a debenture is 

2 closed. 

3 ‘‘(B) 25 percent additional not later than 

4 1 year after a debenture is closed. 

5 ‘‘(C) 25 percent additional not later than 

6 2 years after a debenture is closed. 

7 ‘‘(5) REPLENISHMENT.—If a loss has been sus8 tained by the Administration, any portion of the loss 

9 reserve, and other funds provided by the premier 

10 company as necessary, may be used to reimburse the 

11 Administrator for the premier company’s 10 percent 

12 share of the loss as provided in subsection (b)(2)(C). 

13 If the company utilizes the reserve, within 30 days 

14 it shall replace an equivalent amount of funds. 

15 ‘‘(6) DISBURSEMENTS.—The Administrator 

16 shall allow the qualified State and local development 

17 company to withdraw from the loss reserve such 

18 amounts as are in excess of 1 percent of the aggre19 gate outstanding balances of debentures to which 

20 such loss reserve relates. The preceding sentence 

21 shall not apply with respect to any debenture before 

22 100 percent of the contribution described in para23 graph (4) with respect to such debenture has been 

24 made. 

25 ‘‘(7) ALTERNATIVE LOSS RESERVE.—
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1 ‘‘(A) ELECTION.—With respect to any eli2 gible calendar quarter, a qualified high loss re3 serve premier certified lender may elect to have 

4 the requirements of this paragraph apply in lieu 

5 of the requirements of paragraphs (2) and (4) 

6 for that quarter. 

7 ‘‘(B) CONTRIBUTIONS.—

8 ‘‘(i) ORDINARY RULES INAPPLI9 CABLE.—Except as provided under clause 

10 (ii) and paragraph (5), a qualified high 

11 loss reserve premier certified lender that 

12 makes the election described in subpara13 graph (A) with respect to a calendar quar14 ter shall not be required to make contribu15 tions to its loss reserve during that quar16 ter. 

17 ‘‘(ii) BASED ON LOSS.—A qualified 

18 high loss reserve premier certified lender 

19 that makes the election described in sub20 paragraph (A) with respect to a calendar 

21 quarter shall, before the last day of that 

22 quarter, make such contributions to its 

23 loss reserve as are necessary to ensure that 

24 the amount of the loss reserve of the lend25 er—
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1 ‘‘(I) is not less than $100,000; 

2 and 

3 ‘‘(II) is sufficient, as determined 

4 by a qualified independent auditor, for 

5 the lender to meet its obligations to 

6 protect the Government from risk of 

7 loss. 

8 ‘‘(iii) CERTIFICATION.—Before the 

9 end of a calendar quarter for which an 

10 election is in effect under subparagraph 

11 (A), the head of the premier certified lend12 er shall submit to the Administrator a cer13 tification that the loss reserve of the lender 

14 is sufficient to meet the lender’s obligation 

15 to protect the Government from risk of 

16 loss. The certification shall be submitted in 

17 such form and manner as the Adminis18 trator may require and shall be signed by 

19 the head of the lender and by the auditor 

20 making the determination under clause 

21 (ii)(II). 

22 ‘‘(C) DISBURSEMENTS.—

23 ‘‘(i) ORDINARY RULE INAPPLI24 CABLE.—Paragraph (6) shall not apply 

25 with respect to any qualified high loss re-
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•HR 2802 IH 

1 serve premier certified lender for any cal2 endar quarter for which an election is in 

3 effect under subparagraph (A). 

4 ‘‘(ii) EXCESS FUNDS.—At the end of 

5 each calendar quarter for which an election 

6 is in effect under subparagraph (A), the 

7 Administrator shall allow the qualified high 

8 loss reserve premier certified lender to 

9 withdraw from its loss reserve the excess 

10 of—

11 ‘‘(I) the amount of the loss re12 serve, over 

13 ‘‘(II) the greater of $100,000 or 

14 the amount which is determined under 

15 subparagraph (B)(ii) to be sufficient 

16 to meet the lender’s obligation to pro17 tect the Government from risk of loss. 

18 ‘‘(D) RECONTRIBUTION.—If the require19 ments of this paragraph apply to a qualified 

20 high loss reserve premier certified lender for a 

21 calendar quarter and cease to apply to that 

22 lender for any subsequent calendar quarter, the 

23 lender shall make a contribution to its loss re24 serve in such amount as the Administrator may 

25 require, except that the amount shall not exceed 
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•HR 2802 IH 

1 the amount which would result in the total 

2 amount in the loss reserve being equal to the 

3 amount which would have been in the loss re4 serve had this paragraph never applied to the 

5 lender. The Administrator may require that the 

6 contribution be made as a single payment or as 

7 a series of payments. 

8 ‘‘(E) RISK MANAGEMENT.—If a qualified 

9 high loss reserve premier certified lender fails 

10 to meet the requirement of subparagraph 

11 (F)(iii) during any period for which an election 

12 is in effect under subparagraph (A) and the 

13 failure continues for 180 days, the requirements 

14 of paragraphs (2), (4), and (6) shall apply to 

15 the lender as of the end of the 180-day period 

16 and the lender shall make the contribution de17 scribed in subparagraph (D). The Adminis18 trator may waive the requirements of this sub19 paragraph. 

20 ‘‘(F) QUALIFIED HIGH LOSS RESERVE

21 PREMIER CERTIFIED LENDER.—The term 

22 ‘qualified high loss reserve premier certified 

23 lender’ means, with respect to a calendar year, 

24 a premier certified lender so designated by the 

25 Administrator for that year. The Administrator 
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•HR 2802 IH 

1 shall not designate a company under the pre2 ceding sentence unless the Administrator deter3 mines that—

4 ‘‘(i) the amount of the loss reserve of 

5 the company is not less than $100,000; 

6 ‘‘(ii) the company has established and 

7 is utilizing an appropriate and effective 

8 process for analyzing the risk of loss asso9 ciated with its portfolio of Premier Cer10 tified Lenders Program loans and for 

11 grading each Premier Certified Lenders 

12 Program loan made by the company on the 

13 basis of the risk of loss associated with 

14 such loan; and 

15 ‘‘(iii) the company meets or exceeds 4 

16 or more of the specified risk management 

17 benchmarks as of the most recent assess18 ment by the Administration or the Admin19 istrator has issued a waiver with respect to 

20 the requirement of this clause. 

21 ‘‘(G) SPECIFIED RISK MANAGEMENT

22 BENCHMARKS.—For purposes of this para23 graph, the term ‘specified risk management 

24 benchmarks’ means the following rates, as de25 termined by the Administrator: 
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•HR 2802 IH 

1 ‘‘(i) Currency rate. 

2 ‘‘(ii) Delinquency rate. 

3 ‘‘(iii) Default rate. 

4 ‘‘(iv) Liquidation rate. 

5 ‘‘(v) Loss rate. 

6 ‘‘(H) QUALIFIED INDEPENDENT AUDI7 TOR.—For purpose of this paragraph, the term 

8 ‘qualified independent auditor’ means an audi9 tor who—

10 ‘‘(i) is compensated by the qualified 

11 high loss reserve premier certified lender; 

12 ‘‘(ii) is independent of the lender; and 

13 ‘‘(iii) has been approved by the Ad14 ministrator during the preceding year. 

15 ‘‘(I) PREMIER CERTIFIED LENDERS PRO16 GRAM LOAN.—For purposes of this paragraph, 

17 the term ‘Premier Certified Lenders Program 

18 loan’ means a loan guaranteed under this sec19 tion. 

20 ‘‘(J) ELIGIBLE CALENDAR QUARTER.—For 

21 purposes of this paragraph, the term ‘eligible 

22 calendar quarter’ means—

23 ‘‘(i) the first calendar quarter that be24 gins after the end of the 90-day period be-
28

•HR 2802 IH 

1 ginning with the date of the enactment of 

2 this paragraph; and 

3 ‘‘(ii) the 7 succeeding calendar quar4 ters. 

5 ‘‘(K) REGULATIONS.—Not later than 60 

6 days after the date of the enactment of this 

7 paragraph, the Administrator shall publish in 

8 the Federal Register and transmit to the Con9 gress regulations to carry out this paragraph. 

10 Such regulations shall include provisions relat11 ing to—

12 ‘‘(i) the approval of auditors under 

13 subparagraph (H); and 

14 ‘‘(ii) the designation of qualified high 

15 loss reserve premier certified lenders under 

16 subparagraph (F), including the deter17 mination of whether a process for ana18 lyzing risk of loss is appropriate and effec19 tive for purposes of subparagraph (F)(ii). 

20 ‘‘(8) BUREAU OF PREMIER CERTIFIED LEND21 ERS PROGRAM OVERSIGHT.—

22 ‘‘(A) ESTABLISHMENT.—There is hereby 

23 established in the Small Business Administra24 tion a bureau to be known as the Bureau of 

25 Premier Certified Lenders Program Oversight. 
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•HR 2802 IH 

1 ‘‘(B) PURPOSE.—The Bureau shall carry 

2 out such functions of the Administration under 

3 this subsection as the Administrator may des4 ignate. The functions of the Bureau under the 

5 preceding sentence may not be delegated to a 

6 deputy director or any other employee assigned 

7 to a district office or regional office established 

8 by the Administrator under section 4 of the 

9 Small Business Act (15 U.S.C. 633). 

10 ‘‘(C) DEADLINE.—Not later than 90 days 

11 after the date of the enactment of this para12 graph—

13 ‘‘(i) the Administrator shall ensure 

14 that the Bureau is prepared to carry out 

15 the functions designated under subpara16 graph (B), and 

17 ‘‘(ii) the Inspector General of the Ad18 ministration shall report to the Congress 

19 on the preparedness of the Bureau to carry 

20 out such functions. 

21 ‘‘(D) If the Administrator does not comply 

22 with subparagraph (C)(i), the certifications re23 quired under this section shall be deemed ap24 proved until the date of compliance. Certifi-
30

•HR 2802 IH 

1 cations so deemed approved shall continue in ef2 fect notwithstanding any later compliance.

3 ‘‘(d) SALE OF CERTAIN DEFAULTED LOANS.—

4 ‘‘(1) NOTICE.—If, upon default in repayment, 

5 the Administrator acquires a loan guaranteed under 

6 this section and identifies such loan for inclusion in 

7 a bulk asset sale of defaulted or repurchased loans 

8 or other financings, it shall give prior notice thereof 

9 to any qualified State and local development com10 pany which has a contingent liability under this sec11 tion. The notice shall be given to the company as 

12 soon as possible after the financing is identified, but 

13 not less than 90 days before the date the Adminis14 trator first makes any records on such financing 

15 available for examination by prospective purchasers 

16 prior to its offering in a package of loans for bulk 

17 sale. 

18 ‘‘(2) LIMITATIONS.—The Administrator shall 

19 not offer any loan described in paragraph (1) as 

20 part of a bulk sale unless it—

21 ‘‘(A) provides prospective purchasers with 

22 the opportunity to examine the Administrator’s 

23 records with respect to such loan; and 

24 ‘‘(B) provides the notice required by para25 graph (1). 
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•HR 2802 IH 

1 ‘‘(e) LOAN APPROVAL AUTHORITY.—

2 ‘‘(1) IN GENERAL.—Notwithstanding section 

3 503(b)(6), and subject to such terms and conditions 

4 as the Administrator may establish, the Adminis5 trator may permit a company designated as a pre6 mier certified lender under this section to approve, 

7 authorize, close, service, foreclose, litigate (except 

8 that the Administrator may monitor the conduct of 

9 any such litigation to which a premier certified lend10 er is a party), and liquidate loans that are funded 

11 with the proceeds of a debenture issued by such 

12 company and may authorize the guarantee of such 

13 debenture. 

14 ‘‘(2) SCOPE OF REVIEW.—The approval of a 

15 loan by a premier certified lender shall be subject to 

16 final approval as to eligibility of any guarantee by 

17 the Administrator pursuant to section 503(a), but 

18 such final approval shall not include review of deci19 sions by the lender involving creditworthiness, loan 

20 closing, or compliance with legal requirements im21 posed by law or regulation. 

22 ‘‘(f) REVIEW.—After the issuance and sale of deben23 tures under this section, the Administrator, at intervals 

24 not greater than 12 months, shall review the financings 

25 made by each premier certified lender. The review shall 
32

•HR 2802 IH 

1 include the lender’s credit decisions and general compli2 ance with the eligibility requirements for each financing 

3 approved under the program authorized under this sec4 tion. The Administrator shall consider the findings of the 

5 review in carrying out its responsibilities under subsection 

6 (g), but such review shall not affect any outstanding de7 benture guarantee. 

8 ‘‘(g) SUSPENSION OR REVOCATION.—The designa9 tion of a qualified State and local development company 

10 as a premier certified lender may be suspended or revoked 

11 if the Administrator determines that the company—

12 ‘‘(1) has not continued to meet the criteria for 

13 eligibility under subsection (b); 

14 ‘‘(2) has not established or maintained the loss 

15 reserve required under subsection (c); 

16 ‘‘(3) is failing to adhere to the Administrator’s 

17 rules and regulations; or 

18 ‘‘(4) is violating any other applicable provision 

19 of law. 

20 ‘‘(h) EFFECT OF SUSPENSION OR REVOCATION.—A 

21 suspension or revocation under subsection (g) shall not af22 fect any outstanding debenture guarantee. 

23 ‘‘(i) PROGRAM GOALS.—Each qualified State and 

24 local development company participating in the program 

25 under this section shall establish a goal of processing a 
33

•HR 2802 IH 

1 minimum of not less than 50 percent of the loan applica2 tions for assistance under section 504 pursuant to the pro3 gram authorized under this section. 

4 ‘‘(j) REPORT.—The Administrator shall annually re5 port to the Committee on Small Business of the House 

6 of Representatives and the Committee on Small Business 

7 and Entrepreneurship of the Senate on the implementa8 tion of this section. Each report shall include—

9 ‘‘(1) the number of qualified State and local de10 velopment companies designated as premier certified 

11 lenders; 

12 ‘‘(2) the debenture guarantee volume of such 

13 companies; 

14 ‘‘(3) a comparison of the loss rate for premier 

15 certified lenders to the loss rate for accredited and 

16 other lenders, specifically comparing default rates 

17 and recovery rates on liquidations; and 

18 ‘‘(4) such other information as the Adminis19 trator deems appropriate.’’. 

20 (b) EFFECTIVE DATE.—Section 508(c)(6) of the 

21 Small Business Act (as amended by subsection (a)) shall 

22 apply to withdrawals after the end the 90-day period be23 ginning on the date of the enactment of this Act. 
34

•HR 2802 IH 

1 SEC. 127. FORECLOSURE AND LIQUIDATION OF LOANS. 

2 Section 510 of the Small Business Investment Act 

3 of 1958 (15 U.S.C. 697g) is amended—

4 (1) in subsection (a), by striking ‘‘that meets 

5 the eligibility requirements of subsection (b)(1)’’; 

6 and 

7 (2) by striking subsection (b) and all that fol8 lows through the end and inserting the following new 

9 subsections: 

10 ‘‘(b) ELECTION BY QUALIFIED STATE OR LOCAL DE11 VELOPMENT COMPANY.—

12 ‘‘(1) A qualified State or local development 

13 company shall be eligible for the delegation of au14 thority under subsection (a) if such company elects 

15 to accept such delegation during the 90-day period 

16 beginning on the date of the enactment of this sub17 section. 

18 ‘‘(2) One year after the date of the initial elec19 tion, and annually thereafter by a date specified by 

20 the Administrator, a qualified State or local develop21 ment company may make a new election to accept 

22 the delegation under subsection (a). 

23 ‘‘(3) An election under this subsection shall 

24 apply to all loans in the portfolio involved. An elec25 tion made in a subsequent year does not terminate 
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•HR 2802 IH 

1 any foreclosure or liquidation under a previous elec2 tion. 

3 ‘‘(c) SCOPE OF DELEGATED AUTHORITY.—

4 ‘‘(1) Each qualified State or local development 

5 company that makes an election under subsection 

6 (b) shall perform all functions related to liquidation 

7 and foreclosure without obtaining prior approval of 

8 the Administrator. 

9 ‘‘(2) Not later than 5 calendar days after exer10 cising delegated authority with respect to a specific 

11 loan, the qualified State or local development com12 pany shall report to the Administrator the actions 

13 that the company proposes to take with respect to 

14 the loan. 

15 ‘‘(3) The Administrator may prohibit an action 

16 proposed under paragraph (2) by so notifying the 

17 company in writing. The notification shall state the 

18 reasons for the prohibition, including a detailed ex19 planation of how the proposed actions—

20 ‘‘(A) will have a serious adverse effect on 

21 management of the Administration’s activities 

22 under this title; or 

23 ‘‘(B) will affect the legal rights of the Ad24 ministration or other agencies or instrumental25 ities of the United States. 
36

•HR 2802 IH 

1 ‘‘(4) A prohibition under paragraph (3) shall 

2 apply only to the loan involved and shall not affect 

3 any other delegation. 

4 ‘‘(d) PURCHASE OF INDEBTEDNESS.—A qualified 

5 State or local development company may not commit the 

6 Administration to the purchase of additional indebtedness 

7 secured by property that is the subject of a defaulted loan 

8 without the written approval of the Administrator. The 

9 Administrator shall have 7 calendar days in which to act 

10 on a request for approval for such an additional purchase. 

11 Action by the Administrator under this subsection shall 

12 have no other effect on the delegation of authority exer13 cised by the qualified State or local development company. 

14 ‘‘(e) FORECLOSURE AND LIQUIDATION BY ADMINIS15 TRATOR.—

16 ‘‘(1) The Administrator shall issue contracts to 

17 foreclose or liquidate loans made during any year for 

18 which a qualified State or local development com19 pany did not make an election under subsection (b). 

20 ‘‘(2) In awarding contracts under this sub21 section, the Administrator shall not consolidate con22 tract requirements that relate to more than one 

23 qualified State or local development company unless 

24 the Administrator determines that such consolida25 tion will achieve—
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•HR 2802 IH 

1 ‘‘(A) a reduction in cost of not less than 

2 10 percent; or 

3 ‘‘(B) an increase in the recovered amount 

4 of not less than 10 percent. 

5 ‘‘(3) In awarding contracts under this section, 

6 the Administrator shall consider the experience and 

7 expertise of the offeror regarding conducting similar 

8 foreclosure and liquidation of indebtedness, the 

9 bankruptcy laws of the United States, valuation of 

10 property, and successful litigation. 

11 ‘‘(4) Reimbursement to contractors under this 

12 subsection shall be based on recovery of their costs 

13 (including salaries, expenses, and overhead) and a 

14 contingent fee, with respect to each loan which is 

15 subject to the contract, as follows: 

16 ‘‘(A) in the case of recovery of at least 50 

17 percent of outstanding amount of such loan, a 

18 contingent fee equal to 5 percent of the recov19 ery; and 

20 ‘‘(B) in the case of recovery of at least 75 

21 percent of such amount, a contingent fee equal 

22 to 10 percent of the recovery. 
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•HR 2802 IH 

1 SEC. 128. ADDITIONS TO TITLE V. 

2 Title V of the Small Business Investment Act of 1958 

3 (15 U.S.C. 695 et seq.) is amended by adding at the end 

4 the following new sections: 

5 ‘‘SEC. 511. SHORT FORM APPLICATION. 

6 ‘‘(a) IN GENERAL.—Not later than 120 days after 

7 the date of the enactment of this section, the Adminis8 trator shall prescribe—

9 ‘‘(1) a low documentation loan application form 

10 for use in making loans under section 502 for guar11 antees of not more than $500,000; and 

12 ‘‘(2) for all other loans made under section 502, 

13 a short form application form that reduces the 

14 amount of information needed to process the loan by 

15 30 percent from the size of the loan application in 

16 effect on January 1, 2003. 

17 ‘‘(b) USE OF DEVELOPMENT COMPANY FORMS.—If 

18 the Administrator does not comply with paragraph (1) or 

19 (2) of subsection (a), a qualified State or local develop20 ment company may use its own forms until the Adminis21 trator prescribes the form involved. 

22 ‘‘SEC. 512. CENTRALIZED DEVELOPMENT COMPANY LOAN 

23 PROCESSING. 

24 ‘‘(a) ESTABLISHMENT.—

25 ‘‘(1) Not later than 180 days after the date of 

26 the enactment of this section, the Administration 
39

•HR 2802 IH 

1 shall, using already appropriated funds and fees 

2 paid by qualified State and local development com3 panies, establish two centers for approving loans 

4 under section 502, except as otherwise provided in 

5 section 508. 

6 ‘‘(2) The loan centers may not be located in the 

7 same Federal Region. One center shall be located in 

8 Region 1, 2, 3, 4, or 5, and one center shall be lo9 cated in Region 6, 7, 8, 9, or 10. 

10 ‘‘(3) The Administration is authorized to locate 

11 the centers with its existing LowDoc Loan Applica12 tion Centers in Hazard, KY and Sacramento, CA, 

13 but employees who review applications for loans 

14 under section 502 shall not review applications for 

15 loan guarantees under section 7 of the Small Busi16 ness Act (15 U.S.C. 636).

17 ‘‘(4) If the Administration does not establish 

18 the centers required by paragraph (1), the qualified 

19 State and local development companies shall have 

20 the authority to approve or deny applications with21 out the consent of the Administration. 

22 ‘‘(b) TIMING.—

23 ‘‘(1)(A) From the date on which a loan applica24 tion is received at a center established under sub-
40

•HR 2802 IH 

1 section (a), the Administration shall have 5 business 

2 days to approve or deny the application. 

3 ‘‘(B) Not later than one business day after the 

4 date on which an application is received, the Admin5 istration shall notify the applicant and the qualified 

6 State or local development company in writing that 

7 the application was received and was either complete 

8 or incomplete. The notification shall specify the date 

9 and time at which the application was received. If 

10 the application is incomplete, the notification shall 

11 specify the material needed to make the application 

12 complete. 

13 ‘‘(C) The Administration may return an appli14 cation for incompleteness not more than 3 times 

15 after which the applicant may use forms developed 

16 by the qualified State or local development company. 

17 ‘‘(2) An accredited lender designated under sec18 tion 507 shall have the authority to approve or deny 

19 a loan application if the Administration does not act 

20 within 5 business days from the date a complete ap21 plication is received by the center. Notwithstanding 

22 any other law, a qualified State or local development 

23 company that is not designated as an accredited or 

24 premier certified lender shall have the authority to 
41

•HR 2802 IH 

1 approve or deny a loan if the Administration does 

2 not make a decision within 20 business days. 

3 ‘‘(c) APPEAL OF DENIAL.—

4 ‘‘(1) An applicant shall have the right to appeal 

5 a denial to the Regional Administrator for the region 

6 in which the qualified State or local development 

7 company is headquartered. Not later than 3 business 

8 days after receipt, the Regional Administrator shall 

9 either concur with the denial or approve the loan. 

10 ‘‘(2) If the Regional Administrator denies the 

11 loan, the applicant shall have the right of appeal to 

12 the Deputy Administrator. Not later than 3 business 

13 days after receipt, the Deputy Administrator shall 

14 either concur with the denial by the Regional Ad15 ministrator or approve the loan. 

16 ‘‘(3) The decision of the Deputy Administrator 

17 shall constitute final agency action for purposes of 

18 chapter 7 of title 5, United States Code. 

19 ‘‘SEC. 513. REPORTS. 

20 ‘‘The Administrator shall report on the performance 

21 of the loans made under this title on a semi-annual basis 

22 to the Committee on Small Business of the House of Rep23 resentatives and the Committee on Small Business and 

24 Entrepreneurship of the Senate. Such report shall include 

25 the currency and default rates.’’. 
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•HR 2802 IH 

1 SEC. 129. REGULATIONS TO CARRY OUT AMENDMENTS TO 

2 LOAN PROGRAM. 

3 (a) ISSUANCE.—The Administrator shall, not later 

4 than 90 days after the date of the enactment of this Act, 

5 prescribe such regulations as are necessary to carry out 

6 the provisions of this Act that relate to title V of the Small 

7 Business Investment Act of 1958 and shall provide a min8 imum of 30 days notice and comment with respect to such 

9 regulations. 

10 (b) TEMPORARY PROHIBITION ON OTHER RULE11 MAKING.—During the period beginning on the date of the 

12 enactment of this Act and ending on the date that is 1 

13 year after the date on which the centralized loan proc14 essing centers described in section 512 of the Small Busi15 ness Investment Act of 1958 begin operations, the Admin16 istration shall not begin any rulemaking to modify the pro17 gram established by title V of such Act unless such rule18 making is necessary to carry out the provisions of this Act 

19 described in subsection (a).

20 TITLE II—SMALL BUSINESS ACT 

21 AMENDMENTS AND RELATED 

22 PROVISIONS. 

23 SEC. 201. SHORT TITLE. 

24 This title may be cited as the ‘‘Small Business 

25 Amendments Act of 2003’’. 
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•HR 2802 IH 

1 SEC. 202. FINDINGS; STATEMENTS OF POLICY. 

2 Section 2 of the Small Business Act (15 U.S.C. 631) 

3 is amended to read as follows: 

4 ‘‘SEC. 2. FINDINGS; STATEMENTS OF POLICY. 

5 ‘‘(a) AID, COUNSEL, ASSISTANCE, ETC., TO SMALL

6 BUSINESS CONCERNS.—The essence of the American eco7 nomic system of private enterprise is free competition. The 

8 preservation and expansion of such competition is basic 

9 not only to the economic well-being but to the security of 

10 this Nation. Such security and well-being cannot be real11 ized unless the actual and potential capacity of small busi12 ness, including small manufacturers, is encouraged and 

13 developed. It is the declared policy of the Congress that 

14 the Government should aid, counsel, assist, and protect, 

15 insofar as is possible, the interests of small business con16 cerns, including small manufacturers, in order to preserve 

17 free competitive enterprise, to insure that a fair proportion 

18 of the total purchases and contracts or subcontracts for 

19 manufactured goods, and property and services for the 

20 Government (including but not limited to contracts or sub21 contracts for maintenance, repair, and construction) be 

22 placed with small business concerns, to insure that a fair 

23 proportion of the total sales of Government property be 

24 made to such concerns, and to maintain and strengthen 

25 the overall economy of the Nation. 
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•HR 2802 IH 

1 ‘‘(b) ASSISTANCE TO COMPETE IN INTERNATIONAL

2 MARKETS.—

3 ‘‘(1) It is the declared policy of the Congress 

4 that the Federal Government, through the Small 

5 Business Administration, acting in cooperation with 

6 the Department of Commerce and other relevant 

7 State and Federal agencies, should aid and assist 

8 small business concerns and small manufacturers to 

9 increase their ability to compete in international 

10 markets by—

11 ‘‘(A) enhancing their ability to export; 

12 ‘‘(B) facilitating technology transfers; 

13 ‘‘(C) enhancing their ability to compete ef14 fectively and efficiently against imports; 

15 ‘‘(D) increasing the access of small busi16 ness concerns to long-term capital for the pur17 chase of new plant and equipment used in the 

18 production of goods and services involved in 

19 international trade; 

20 ‘‘(E) disseminating information concerning 

21 State, Federal, and private programs and initia22 tives to enhance the ability of small business 

23 concerns to compete in international markets; 

24 ‘‘(F) ensuring that the interests of small 

25 business concerns are adequately represented in 
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•HR 2802 IH 

1 bilateral and multilateral trade negotiations; 

2 and 

3 ‘‘(G) improving the economic health of 

4 small manufacturers through reduction in un5 necessary regulation and improvements in the 

6 procurement process that will enhance the abil7 ity of small manufacturers to compete against 

8 foreign manufacturers. 

9 ‘‘(2) The Congress recognizes that the Depart10 ment of Commerce is the principal Federal agency 

11 for trade development, export promotion, and manu12 facturing assistance, and that the Department of 

13 Commerce and the Small Business Administration 

14 work together to advance joint interests. It is the 

15 purpose of this Act to enhance, not alter, their re16 spective roles. 

17 ‘‘(c) AID FOR AGRICULTURALLY RELATED INDUS18 TRIES; FINANCIAL ASSISTANCE.—It is the declared policy 

19 of the Congress that the Government, through the Small 

20 Business Administration, should provide aid and assist21 ance, including the financial assistance authorized by this 

22 Act, to small business concerns which are engaged in the 

23 production of food and fiber, ranching, and raising of live24 stock, aquaculture, and all other farming and agricultural 

25 related industries. 
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•HR 2802 IH 

1 ‘‘(d) USE OF ASSISTANCE PROGRAMS TO ESTABLISH, 

2 PRESERVE, AND STRENGTHEN SMALL BUSINESS CON3 CERNS.—

4 ‘‘(1) The assistance programs authorized by 

5 sections 7(i) and 8(a) should be utilized to assist in 

6 the establishment, preservation, and strengthening 

7 of small business concerns and the improvement of 

8 the managerial skills employed in such concerns, 

9 with special attention to small business concerns—

10 ‘‘(A) located in urban or rural areas with 

11 high proportions of unemployed or low-income 

12 individuals; and 

13 ‘‘(B) owned by low-income individuals. 

14 ‘‘(2) With respect to the programs authorized 

15 by section 8(a), the Congress finds—

16 ‘‘(A) that ownership and control of produc17 tive capital is concentrated in the economy of 

18 the United States and certain groups, therefore, 

19 own and control little productive capital; 

20 ‘‘(B) that certain groups in the United 

21 States own and control little productive capital 

22 because they have limited opportunities for 

23 small business ownership; 

24 ‘‘(C) that the broadening of small business 

25 ownership among groups that presently own 
47

•HR 2802 IH 

1 and control little productive capital is essential 

2 to provide for the well-being of this Nation by 

3 promoting their increased participation in the 

4 free enterprise system of the United States; 

5 ‘‘(D) that such development of business 

6 ownership among groups that presently own 

7 and control little productive capital will be 

8 greatly facilitated through the creation of a 

9 small business ownership development program, 

10 which shall provide services, including, but not 

11 limited to, financial, management, and technical 

12 assistance; 

13 ‘‘(E) that the power to let Federal con14 tracts pursuant to section 8(a) can be an effec15 tive procurement assistance tool for develop16 ment of business ownership, including owner17 ship of small manufacturers, among groups 

18 that own and control little productive capital; 

19 and 

20 ‘‘(F) that the procurement authority under 

21 section 8(a) shall be used only as a tool for de22 veloping business ownership among groups that 

23 own and control little productive capital. 

24 ‘‘(3) It is therefore the purpose of the programs 

25 authorized by section 8(a) to—
48

•HR 2802 IH 

1 ‘‘(A) foster business ownership and devel2 opment by individuals in groups that own and 

3 control little productive capital; and 

4 ‘‘(B) promote the competitive viability of 

5 such firms in the marketplace by creating a 

6 small business and capital ownership develop7 ment program to provide such available finan8 cial, technical, and management assistance as 

9 may be necessary. 

10 ‘‘(e) PARTICIPATION IN FREE ENTERPRISE SYSTEM

11 BY SOCIALLY AND ECONOMICALLY DISADVANTAGED PER12 SONS.—

13 ‘‘(1) With with respect to the business develop14 ment programs carried out by the Administrator, the 

15 Congress finds—

16 ‘‘(A) that the opportunity for full partici17 pation in our free enterprise system by socially 

18 and economically disadvantaged individuals is 

19 essential if we are to obtain social and economic 

20 equality for such individuals and improve the 

21 functioning of our national economy; 

22 ‘‘(B) that many such individuals are so23 cially disadvantaged because of their identifica24 tion as members of certain groups that have 

25 suffered the effects of discriminatory practices 
49

•HR 2802 IH 

1 or similar invidious circumstances over which 

2 they have no control; 

3 ‘‘(C) that such groups include, but are not 

4 limited to, Black Americans, Hispanic Ameri5 cans, Native Americans, Asian Pacific Ameri6 cans, Native Hawaiian Organizations, and other 

7 minorities; 

8 ‘‘(D) that it is in the national interest to 

9 expeditiously ameliorate the conditions of so10 cially and economically disadvantaged groups; 

11 ‘‘(E) that such conditions can be improved 

12 by providing the maximum practicable oppor13 tunity for the development of small business 

14 concerns and small manufacturers owned by 

15 members of socially and economically disadvan16 taged groups; 

17 ‘‘(F) that such development can be materi18 ally advanced through the procurement by the 

19 United States of articles, equipment, supplies, 

20 services, materials, and construction work from 

21 small business concerns and small manufactur22 ers; and 

23 ‘‘(G) that such procurements also benefit 

24 the United States by encouraging the expansion 

25 of suppliers for such procurements, thereby en-
50

•HR 2802 IH 

1 couraging competition among such suppliers 

2 and promoting economy in such procurements. 

3 ‘‘(2) It is therefore the purpose of section 8(a) 

4 to—

5 ‘‘(A) promote the business development of 

6 small business concerns and small manufactur7 ers owned and controlled by socially and eco8 nomically disadvantaged individuals so that 

9 such concerns can compete on an equal basis in 

10 the American economy; 

11 ‘‘(B) promote the competitive viability of 

12 such concerns in the marketplace by providing 

13 such available contract, financial, technical, and 

14 management assistance as may be necessary; 

15 and 

16 ‘‘(C) clarify and expand the program for 

17 the procurement by the United States of arti18 cles, supplies, services, materials, and construc19 tion work from small business concerns and 

20 small manufacturers owned by socially and eco21 nomically disadvantaged individuals. 

22 ‘‘(f) ASSISTANCE TO DISASTER VICTIMS UNDER DIS23 ASTER LOAN PROGRAM.—In administering the disaster 

24 loan program authorized by section 7, the Administrator 

25 should—
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•HR 2802 IH 

1 ‘‘(1) provide assistance and counseling to dis2 aster victims in filing applications; 

3 ‘‘(2) provide information relevant to loan proc4 essing and loan closing; 

5 ‘‘(3) promptly disburse loan proceeds; and 

6 ‘‘(4) give the disaster program a high priority 

7 in allocating funds for administrative expenses. 

8 ‘‘(g) ASSISTANCE TO WOMEN OWNED BUSINESS.—

9 ‘‘(1) With respect to the programs and activi10 ties authorized by this Act, the Congress finds 

11 that—

12 ‘‘(A) women owned business has become a 

13 major contributor to the American economy by 

14 providing goods and services, revenues, and 

15 jobs; 

16 ‘‘(B) over the past two decades there have 

17 been substantial gains in the social and eco18 nomic status of women as they have sought eco19 nomic equality and independence; 

20 ‘‘(C) despite such progress, women, as a 

21 group, are subjected to discrimination in entre22 preneurial endeavors due to their gender; 

23 ‘‘(D) such discrimination takes many overt 

24 and subtle forms adversely affecting the ability 
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•HR 2802 IH 

1 to raise or secure capital, to acquire managerial 

2 talents, and to capture market opportunities; 

3 ‘‘(E) it is in the national interest to expe4 ditiously remove discriminatory barriers to the 

5 creation and development of small business con6 cerns owned and controlled by women; 

7 ‘‘(F) the removal of such barriers is essen8 tial to provide a fair opportunity for full partici9 pation in the free enterprise system by women 

10 and to further increase the economic vitality of 

11 the Nation; 

12 ‘‘(G) increased numbers of small business 

13 concerns owned and controlled by women will 

14 directly benefit the United States Government 

15 by expanding the potential number of suppliers 

16 of goods and services to the Government; and 

17 ‘‘(H) programs and activities designed to 

18 assist small business concerns owned and con19 trolled by women must be implemented in such 

20 a way as to remove such discriminatory barriers 

21 while not adversely affecting the rights of so22 cially and economically disadvantaged individ23 uals. 
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•HR 2802 IH 

1 ‘‘(2) It is, therefore, the purpose of those pro2 grams and activities conducted under the authority 

3 of this Act that assist women entrepreneurs to—

4 ‘‘(A) vigorously promote the legitimate in5 terests of small business concerns owned and 

6 controlled by women; 

7 ‘‘(B) remove, insofar as possible, the dis8 criminatory barriers that are encountered by 

9 women in accessing capital and other factors of 

10 production; and 

11 ‘‘(C) require that the Government engage 

12 in a systematic and sustained effort to identify, 

13 define and analyze those discriminatory barriers 

14 facing women and that such effort directly in15 volve the participation of women business own16 ers in the partnership of the public and private 

17 sectors. 

18 ‘‘(h) CONTRACT BUNDLING.—It is the declared policy 

19 of the Congress that each Federal agency should—

20 ‘‘(1) comply with congressional intent to foster 

21 the participation of small business concerns as prime 

22 contractors, subcontractors, and suppliers; 

23 ‘‘(2) structure its contracting requirements to 

24 facilitate competition by and among small business 
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•HR 2802 IH 

1 concerns, taking all reasonable steps to eliminate ob2 stacles to their participation; and 

3 ‘‘(3) avoid unnecessary and unjustified bundling 

4 of contract requirements that precludes small busi5 ness participation in procurements as prime contrac6 tors. 

7 ‘‘(i) SMALL MANUFACTURERS.—

8 ‘‘(1) With respect to the programs and activi9 ties authorized by this Act, the Congress finds 

10 that—

11 ‘‘(A) the manufacturing sector is a critical 

12 element of the Nation’s economic security be13 cause it provides high-paying jobs that support 

14 other sectors of the economy dominated by 

15 small business; 

16 ‘‘(B) America’s small manufacturers face 

17 substantial competition from large manufactur18 ers that source components and equipment 

19 from business concerns located in other coun20 tries with lower wage rates, fewer regulatory re21 strictions, and beneficial currency policies; 

22 ‘‘(C) it is in the national interest to expedi23 tiously grow America’s small manufacturers; 

24 and 
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•HR 2802 IH 

1 ‘‘(D) such growth can be achieved through 

2 better access to capital, improved technical as3 sistance, and increased procurement of manu4 factured goods by the United States and Amer5 ica’s universities. 

6 ‘‘(2) It is therefore, the purpose of those pro7 grams and activities conducted under the authority 

8 of this Act that assist small manufacturers to—

9 ‘‘(A) vigorously promote the legitimate in10 terests of small manufacturers; 

11 ‘‘(B) remove, insofar as possible, barriers 

12 that are encountered by small manufacturers in 

13 accessing capital, obtaining necessary technical 

14 assistance, and selling goods to the United 

15 States and America’s universities; 

16 ‘‘(C) require the Administrator to engage 

17 in a systematic and sustained effort to identify, 

18 define, and analyze the barriers to growth fac19 ing America’s small manufacturers, recommend 

20 changes in policy that will reduce those bar21 riers, and promote the involvement of America’s 

22 small manufacturers in the partnership of the 

23 public and private sectors.’’. 
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1 SEC. 203. DEFINITIONS. 

2 Section 3 of the Small Business Act (15 U.S.C. 632) 

3 is amended to read as follows: 

4 ‘‘SEC. 3. DEFINITIONS. 

5 ‘‘(a) SMALL BUSINESS CONCERNS.—

6 ‘‘(1) IN GENERAL.—For the purposes of this 

7 Act, a small-business concern, including but not lim8 ited to enterprises that are engaged in the business 

9 of production of food and fiber, ranching and raising 

10 of livestock, aquaculture, and all other farming and 

11 agricultural related industries, shall be deemed to be 

12 one which is independently owned and operated and 

13 which is not dominant in its field of operation. 

14 ‘‘(2) ESTABLISHMENT OF SIZE STANDARDS.—

15 ‘‘(A) IN GENERAL.—In addition to the cri16 teria specified in paragraph (1), the Adminis17 trator may specify detailed definitions or stand18 ards by which a business concern may be deter19 mined to be a small business concern for the 

20 purposes of this Act or any other Act. 

21 ‘‘(B) ADDITIONAL CRITERIA.—The stand22 ards described in paragraph (1) may utilize 

23 number of employees, dollar volume of business, 

24 net worth, net income, a combination thereof, 

25 or other appropriate factors. 
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•HR 2802 IH 

1 ‘‘(C) REQUIREMENTS.—Unless specifically 

2 authorized by statute, no Federal department 

3 or agency may prescribe a size standard for cat4 egorizing a business concern as a small business 

5 concern, unless such proposed size standard—

6 ‘‘(i) is proposed after an opportunity 

7 for public notice and comment; 

8 ‘‘(ii) provides for determining—

9 ‘‘(I) the size of a manufacturing 

10 concern as measured by the manufac11 turing concern’s average employment 

12 based upon employment during each 

13 of the manufacturing concern’s pay 

14 periods for the preceding 12 months; 

15 ‘‘(II) the size of a business con16 cern providing services on the basis of 

17 the annual average gross receipts of 

18 the business concern over a period of 

19 not less than 3 years; 

20 ‘‘(III) the size of other business 

21 concerns on the basis of data over a 

22 period of not less than 3 years; or 

23 ‘‘(IV) other appropriate factors; 

24 and 
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•HR 2802 IH 

1 ‘‘(iii) is approved by the Adminis2 trator. 

3 ‘‘(D) INDUSTRY VARIATION.—When estab4 lishing or approving any size standard pursuant 

5 to this paragraph, the Administrator shall en6 sure that the size standard varies from industry 

7 to industry to the extent necessary to reflect the 

8 differing characteristics of the various indus9 tries and consider other factors deemed to be 

10 relevant by the Administrator. 

11 ‘‘(3) AGRICULTURAL ENTERPRISES.—Notwith12 standing paragraphs (1) and (2), an agricultural en13 terprise shall be deemed to be a small business con14 cern if it (including its affiliates) has annual receipts 

15 not in excess of $750,000. 

16 ‘‘(4) RECERTIFICATIONS.—

17 ‘‘(A) TIMING RESTRICTION.—For purposes 

18 of determining if a business concern that has 

19 been awarded a contracting opportunity as a 

20 small business concern is still a small business 

21 concern, the Administrator shall not require 

22 such concern to be recertified as a small busi23 ness concern more frequently than each 5 years. 

24 ‘‘(B) GROWTH THRESHOLD.—In the case 

25 of any recertification described in subparagraph 
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•HR 2802 IH 

1 (A) of a business concern, such concern shall 

2 not fail to be treated as a small business con3 cern for purposes of contracting opportunities 

4 awarded before the date of such recertification 

5 solely because such concern exceeds—

6 ‘‘(i) the annual receipts standard ap7 plicable to such concern by 20 percent or 

8 less of such standard; or 

9 ‘‘(ii) the number of employees stand10 ard applicable to such concern by 5 per11 cent or less of such standard. 

12 ‘‘(b) AGENCY.—For purposes of this Act, any ref13 erence to an agency or department of the United States, 

14 and the term ‘Federal agency’, shall have the meaning 

15 given the term ‘agency’ by section 551(1) of title 5, United 

16 States Code, but does not include the United States Postal 

17 Service or the General Accounting Office. 

18 ‘‘(c) QUALIFIED EMPLOYEE TRUSTS.—For purposes 

19 of this Act: 

20 ‘‘(1) The term ‘qualified employee trust’ means, 

21 with respect to a small business concern, a trust—

22 ‘‘(A) which forms part of an employee 

23 stock ownership plan (as defined in section 

24 4975(e)(7) of the Internal Revenue Code of 

25 1986)—
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•HR 2802 IH 

1 ‘‘(i) which is maintained by such con2 cern; and 

3 ‘‘(ii) which provides that each partici4 pant in the plan is entitled to direct the 

5 plan as to the manner in which voting 

6 rights under qualifying employer securities 

7 (as defined in section 4975(e)(8) of such 

8 Code) which are allocated to the account of 

9 such participant are to be exercised with 

10 respect to a corporate matter which (by 

11 law or charter) must be decided by a ma12 jority vote of outstanding common shares 

13 voted; and 

14 ‘‘(B) in the case of any loan guarantee 

15 under section 7(a), the trustee of which enters 

16 into an agreement with the Administrator 

17 which is binding on the trust and on such small 

18 business concern and which provides that—

19 ‘‘(i) the loan guaranteed under section 

20 7(a) shall be used solely for the purchase 

21 of qualifying employer securities of such 

22 concern; 

23 ‘‘(ii) all funds acquired by the concern 

24 in such purchase shall be used by such 
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•HR 2802 IH 

1 concern solely for the purposes for which 

2 such loan was guaranteed; 

3 ‘‘(iii) such concern will provide such 

4 funds as may be necessary for the timely 

5 repayment of such loan, and the property 

6 of such concern shall be available as secu7 rity for repayment of such loan; and 

8 ‘‘(iv) all qualifying employer securities 

9 acquired by such trust in such purchase 

10 shall be allocated to the accounts of par11 ticipants in such plan who are entitled to 

12 share in such allocation, and each partici13 pant has a nonforfeitable right, not later 

14 than the date such loan is repaid, to all 

15 such qualifying employer securities which 

16 are so allocated to the participant’s ac17 count. 

18 ‘‘(2) Under regulations which may be pre19 scribed by the Administrator, a trust may be treated 

20 as a qualified employee trust with respect to a small 

21 business concern if—

22 ‘‘(A) the trust is maintained by an em23 ployee organization which represents at least 51 

24 percent of the employees of such concern; and 

25 ‘‘(B) such concern maintains a plan—
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•HR 2802 IH 

1 ‘‘(i) which is an employee benefit plan 

2 which is designed to invest primarily in 

3 qualifying employer securities (as defined 

4 in section 4975(e)(8) of the Internal Rev5 enue Code of 1986); 

6 ‘‘(ii) which provides that each partici7 pant in the plan is entitled to direct the 

8 plan as to the manner in which voting 

9 rights under qualifying employer securities 

10 which are allocated to the account of such 

11 participant are to be exercised with respect 

12 to a corporate matter which (by law or 

13 charter) must be decided by a majority 

14 vote of the outstanding common shares 

15 voted; 

16 ‘‘(iii) which provides that each partici17 pant who is entitled to distribution from 

18 the plan has a right, in the case of quali19 fying employer securities which are not 

20 readily tradable on an established market, 

21 to require that the concern repurchase 

22 such securities under a fair valuation for23 mula; and 

24 ‘‘(iv) which meets such other require25 ments (similar to requirements applicable 
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•HR 2802 IH 

1 to employee stock ownership plans as de2 fined in section 4975(e)(7) of such Code) 

3 as the Administrator may prescribe; and 

4 ‘‘(C) in the case of a loan guarantee under 

5 section 7(a), such organization enters into an 

6 agreement with the Administration which is de7 scribed in paragraph (2)(B). 

8 ‘‘(d) QUALIFIED INDIAN TRIBE.—For purposes of 

9 this Act, the term ‘qualified Indian tribe’ means an Indian 

10 tribe as defined in section 4(e) of the Indian Self-Deter11 mination and Education Assistance Act, which owns and 

12 controls 100 percent of a small business concern, except 

13 as otherwise provided in section 8. 

14 ‘‘(e) STATE; UNITED STATES.—For purposes of this 

15 Act, the terms ‘State’ and ‘United States’ include each 

16 of the several States, the District of Columbia, the Com17 monwealth of Puerto Rico, the United States Virgin Is18 lands, Guam, American Samoa, and the Commonwealth 

19 of the Northern Mariana Islands. 

20 ‘‘(f) CONTRACTING OFFICER.—For purposes of this 

21 Act, the term ‘contracting officer’ has the meaning given 

22 such term in section 27(f)(5) of the Office of Federal Pro23 curement Policy Act (41 U.S.C. 423(f)(5)). 

24 ‘‘(g) SMALL BUSINESS DEVELOPMENT CENTER.—

25 For purposes of this Act, the term ‘small business develop-
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•HR 2802 IH 

1 ment center’ means any office that provides any portion 

2 of the services described in section 21 under such section. 

3 ‘‘(h) CREDIT ELSEWHERE.—For purposes of this 

4 Act, the term ‘credit elsewhere’ means the availability of 

5 credit from non-Federal sources on reasonable terms and 

6 conditions taking into consideration the prevailing rates 

7 and terms in the community in or near where the concern 

8 transacts business, or the homeowner resides, for similar 

9 purposes and periods of time. 

10 ‘‘(i) HOMEOWNERS.—For purposes of this Act, the 

11 term ‘homeowners’ includes owners and lessees of residen12 tial property and also includes personal property. 

13 ‘‘(j) SMALL AGRICULTURAL COOPERATIVE.—For 

14 purposes of this Act, the term ‘small agricultural coopera15 tive’ means an association (corporate or otherwise) acting 

16 pursuant to the provisions of the Agricultural Marketing 

17 Act (12 U.S.C. 1141j), whose size does not exceed the size 

18 standard established by the Administrator for other simi19 lar agricultural small business concerns. In determining 

20 such size, the Administrator shall regard the association 

21 as a business concern and shall not include the income 

22 or employees of any member shareholder of such coopera23 tive. 

24 ‘‘(k) DISASTER.—For purposes of this Act, the term 

25 ‘disaster’ means a sudden event which causes severe dam-
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•HR 2802 IH 

1 age including floods, hurricanes, tornadoes, earthquakes, 

2 fires, explosions, volcanoes, windstorms, landslides or 

3 mudslides, tidal waves, riots, civil disorders, acts of ter4 rorism, or other catastrophes. 

5 ‘‘(l) AGRICULTURAL ENTERPRISES.—For purposes of 

6 this Act, the term ‘agricultural enterprises’ means those 

7 businesses engaged in the production of food and fiber, 

8 ranching, and raising of livestock, aquaculture, and all 

9 other farming and agricultural related industries. 

10 ‘‘(m) SIMPLIFIED ACQUISITION THRESHOLD.—For 

11 purposes of this Act, the term ‘simplified acquisition 

12 threshold’ has the meaning given such term in section 

13 4(11) of the Office of Federal Procurement Policy Act (41 

14 U.S.C. 403(11)). 

15 ‘‘(n) SMALL BUSINESS CONCERN OWNED AND CON16 TROLLED BY WOMEN.—For purposes of this Act, the 

17 term ‘small business concern owned and controlled by 

18 women’ means any small business concern if—

19 ‘‘(1) at least 51 percent of the small business 

20 concern is owned by one or more women or, in the 

21 case of any publicly owned business, at least 51 per22 cent of the stock of which is owned by one or more 

23 women; and 
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•HR 2802 IH 

1 ‘‘(2) the management and daily business oper2 ations of the business are controlled by one or more 

3 women. 

4 ‘‘(o) DEFINITIONS OF BUNDLING OF CONTRACT RE5 QUIREMENTS AND RELATED TERMS.—For purposes of 

6 this Act: 

7 ‘‘(1) BUNDLED CONTRACT.—The term ‘bundled 

8 contract’ means a contract that is entered into to 

9 meet requirements that are consolidated in a bun10 dling of contract requirements without regard to its 

11 designation by the procuring agency or whether a 

12 study of the effects of the solicitation on civilian or 

13 military personnel has been made. 

14 ‘‘(2) BUNDLING OF CONTRACT REQUIRE15 MENTS.—The term ‘bundling of contract require16 ments’ means the use of any bundling methodology 

17 to satisfy 2 or more requirements for goods or serv18 ices, including construction services, that have pre19 viously been provided to, or performed for, the Fed20 eral agency under 2 or more separate contracts 

21 lower in cost than the total cost of the contract or 

22 order for which the offers are solicited that is likely 

23 to be unsuitable for award to a small business con24 cern due to—
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•HR 2802 IH 

1 ‘‘(A) the diversity, size, or specialized na2 ture of the elements of the performance speci3 fied; 

4 ‘‘(B) the aggregate dollar value of the an5 ticipated award; 

6 ‘‘(C) the geographical dispersion of the 

7 contract performance sites; or 

8 ‘‘(D) any combination of the factors de9 scribed in subparagraphs (A), (B), and (C). 

10 ‘‘(3) BUNDLING METHODOLOGY.—The term 

11 ‘bundling methodology’ means—

12 ‘‘(A) a solicitation to obtain offers for a 

13 single contract or a multiple award contract; 

14 ‘‘(B) a solicitation of offers for the 

15 issuance of a task or a delivery order under an 

16 existing single or multiple award contract; or 

17 ‘‘(C) the creation of any new procurement 

18 requirement that permits a consolidation of 

19 contract requirements. 

20 ‘‘(4) SEPARATE SMALLER CONTRACT.—The 

21 term ‘separate smaller contract’, with respect to a 

22 bundling of contract requirements, means a contract 

23 that has been performed by 1 or more small busi24 ness concerns or was suitable for award to 1 or more 

25 small business concerns. 
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•HR 2802 IH 

1 ‘‘(p) DEFINITIONS RELATING TO HUBZONES.—For 

2 purposes of this Act: 

3 ‘‘(1) HISTORICALLY UNDERUTILIZED BUSINESS

4 ZONE.—The term ‘historically underutilized business 

5 zone’ means any area located within 1 or more—

6 ‘‘(A) qualified census tracts; 

7 ‘‘(B) qualified nonmetropolitan counties; 

8 ‘‘(C) lands within the external boundaries 

9 of an Indian reservation; or 

10 ‘‘(D) redesignated areas. 

11 ‘‘(2) HUBZONE.—The term ‘HUBZone’ means 

12 a historically underutilized business zone. 

13 ‘‘(3) HUBZONE SMALL BUSINESS CONCERN.—

14 The term ‘HUBZone small business concern’ 

15 means—

16 ‘‘(A) a small business concern that is 

17 owned and controlled by one or more persons, 

18 each of whom is a United States citizen; 

19 ‘‘(B) a small business concern that is—

20 ‘‘(i) an Alaska Native Corporation 

21 owned and controlled by Natives (as deter22 mined pursuant to section 29(e)(1) of the 

23 Alaska Native Claims Settlement Act (43 

24 U.S.C. 1626(e)(1))); or 
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•HR 2802 IH 

1 ‘‘(ii) a direct or indirect subsidiary 

2 corporation, joint venture, or partnership 

3 of an Alaska Native Corporation qualifying 

4 pursuant to section 29(e)(1) of the Alaska 

5 Native Claims Settlement Act (43 U.S.C. 

6 1626(e)(1)), if that subsidiary, joint ven7 ture, or partnership is owned and con8 trolled by Natives (as determined pursuant 

9 to section 29(e)(2)) of the Alaska Native 

10 Claims Settlement Act (43 U.S.C. 

11 1626(e)(2))); 

12 ‘‘(C) a small business concern—

13 ‘‘(i) that is wholly owned by one or 

14 more Indian tribal governments, or by a 

15 corporation that is wholly owned by one or 

16 more Indian tribal governments; or 

17 ‘‘(ii) that is owned in part by one or 

18 more Indian tribal governments, or by a 

19 corporation that is wholly owned by one or 

20 more Indian tribal governments, if all 

21 other owners are either United States citi22 zens or small business concerns; or 

23 ‘‘(D) a small business concern that is—

24 ‘‘(i) wholly owned by a community de25 velopment corporation that has received fi-
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•HR 2802 IH 

1 nancial assistance under part 1 of sub2 chapter A of the Community Economic De3 velopment Act of 1981 (42 U.S.C. 9805 et 

4 seq.); or 

5 ‘‘(ii) owned in part by one or more 

6 community development corporations, if all 

7 other owners are either United States citi8 zens or small business concerns. 

9 ‘‘(4) QUALIFIED AREAS.—

10 ‘‘(A) QUALIFIED CENSUS TRACT.—The 

11 term ‘qualified census tract’ has the meaning 

12 given that term in section 42(d)(5)(C)(ii) of the 

13 Internal Revenue Code of 1986. 

14 ‘‘(B) QUALIFIED NONMETROPOLITAN

15 COUNTY.—The term ‘qualified nonmetropolitan 

16 county’ means any county—

17 ‘‘(i) that was not located in a metro18 politan statistical area (as defined in sec19 tion 143(k)(2)(B) of the Internal Revenue 

20 Code of 1986) at the time of the most re21 cent census taken for purposes of selecting 

22 qualified census tracts under section 

23 42(d)(5)(C)(ii) of such Code; and 

24 ‘‘(ii) in which—
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•HR 2802 IH 

1 ‘‘(I) the median household in2 come is less than 80 percent of the 

3 nonmetropolitan State median house4 hold income, based on the most recent 

5 data available from the Bureau of the 

6 Census of the Department of Com7 merce; or 

8 ‘‘(II) the unemployment rate is 

9 not less than 140 percent of the 

10 Statewide average unemployment rate 

11 for the State in which the county is 

12 located, based on the most recent data 

13 available from the Secretary of Labor. 

14 ‘‘(C) REDESIGNATED AREA.—The term 

15 ‘redesignated area’ means any census tract that 

16 ceases to be qualified under subparagraph (A) 

17 and any nonmetropolitan county that ceases to 

18 be qualified under subparagraph (B), except 

19 that a census tract or a nonmetropolitan county 

20 may be a ‘redesignated area’ only for the 3-year 

21 period following the date on which the census 

22 tract or nonmetropolitan county ceased to be so 

23 qualified. 

24 ‘‘(5) QUALIFIED HUBZONE SMALL BUSINESS

25 CONCERN.—
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•HR 2802 IH 

1 ‘‘(A) IN GENERAL.—The term ‘qualified 

2 HUBZone small business concern’ means any 

3 small business concern if the small business 

4 concern has certified in writing to the Adminis5 trator (or the Administrator otherwise deter6 mines, based on information submitted to the 

7 Administrator by the small business concern, or 

8 based on certification procedures, which shall be 

9 established by the Administration by regulation) 

10 that—

11 ‘‘(i) it is a HUBZone small business 

12 concern—

13 ‘‘(I) pursuant to subparagraph 

14 (A), (B), or (D) of paragraph (3), and 

15 that its principal office is located in a 

16 HUBZone and not fewer than 35 per17 cent of its employees reside in a 

18 HUBZone; or 

19 ‘‘(II) pursuant to paragraph 

20 (3)(C), and not fewer than 35 percent 

21 of its employees engaged in per22 forming a contract awarded to the 

23 small business concern on the basis of 

24 a preference provided under section 

25 31(b) reside within any Indian res-
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•HR 2802 IH 

1 ervation governed by one or more of 

2 the tribal government owners, or re3 side within any HUBZone adjoining 

4 any such Indian reservation; 

5 ‘‘(ii) the small business concern will 

6 attempt to maintain the applicable employ7 ment percentage under clause (i) during 

8 the performance of any contract awarded 

9 to the small business concern on the basis 

10 of a preference provided under section 

11 31(b); and 

12 ‘‘(iii) with respect to any subcontract 

13 entered into by the small business concern 

14 pursuant to a contract awarded to the 

15 small business concern under section 31, 

16 the small business concern will ensure 

17 that—

18 ‘‘(I) in the case of a contract for 

19 services (except construction), not less 

20 than 50 percent of the cost of con21 tract performance incurred for per22 sonnel will be expended for its employ23 ees or for employees of other 

24 HUBZone small business concerns; 
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•HR 2802 IH 

1 ‘‘(II) in the case of a contract for 

2 procurement of supplies (other than 

3 procurement from a regular dealer in 

4 such supplies), not less than 50 per5 cent of the cost of manufacturing the 

6 supplies (not including the cost of ma7 terials) will be incurred in connection 

8 with the performance of the contract 

9 in a HUBZone by 1 or more 

10 HUBZone small business concerns; 

11 ‘‘(III) it is a small business con12 cern, the majority of which is owned 

13 and controlled by one or more individ14 uals determined by the Administrator 

15 to be economically disadvantaged in 

16 accordance with section 8(a)(6); and 

17 ‘‘(IV) it has received a site visit 

18 from a district counsel to verify its eli19 gibility before first responding to a so20 licitation from a Federal agency for 

21 goods or services under section 31 and 

22 again before first responding to a so23 licitation from a Federal agency for 

24 goods or services under section 31 
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•HR 2802 IH 

1 after any change in the primary loca2 tion of the concern. 

3 ‘‘(B) SITE VISITS BY DISTRICT COUN4 SEL.—A district counsel, not later than 5 days 

5 after conducting any site visit described in sub6 paragraph (A)(iii)(IV), shall make a certifi7 cation regarding the status of the concern as a 

8 qualified HUBZone small business concern. 

9 ‘‘(C) PROVISION OF FALSE INFORMA10 TION.—Such term shall not include any small 

11 business concern if any certification made or in12 formation provided by such concern under sub13 paragraph (A) has been, in accordance with the 

14 procedures established under section 31(c)(1)—

15 ‘‘(i) successfully challenged by an in16 terested party; or 

17 ‘‘(ii) otherwise determined by the Ad18 ministrator to be materially false. 

19 ‘‘(D) PERCENTAGE ADJUSTMENTS.—The 

20 Administrator may utilize a percentage other 

21 than the percentage specified in subclause (I) 

22 or (II) of subparagraph (A)(iii), if the Adminis23 trator determines that such action is necessary 

24 to reflect conventional industry practices among 

25 small business concerns that are below the nu-
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•HR 2802 IH 

1 merical size standard for businesses in that in2 dustry category. 

3 ‘‘(E) CONSTRUCTION AND OTHER CON4 TRACTS.—The Administrator shall promulgate 

5 final regulations imposing requirements that 

6 are similar to those specified in subclauses (I) 

7 and (II) of subparagraph (A)(iii) on contracts 

8 for general and specialty construction, and on 

9 contracts for any other industry category that 

10 would not otherwise be subject to those require11 ments. The percentage applicable to any such 

12 requirement shall be determined in accordance 

13 with subparagraph (C). 

14 ‘‘(6) NATIVE AMERICAN SMALL BUSINESS CON15 CERNS.—

16 ‘‘(A) ALASKA NATIVE CORPORATION.—The 

17 term ‘Alaska Native Corporation’ has the same 

18 meaning as the term ‘Native Corporation’ in 

19 section 3 of the Alaska Native Claims Settle20 ment Act (43 U.S.C. 1602). 

21 ‘‘(B) ALASKA NATIVE VILLAGE.—The term 

22 ‘Alaska Native Village’ has the same meaning 

23 as the term ‘Native village’ in section 3 of the 

24 Alaska Native Claims Settlement Act (43 

25 U.S.C. 1602). 
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1 ‘‘(C) INDIAN RESERVATION.—The term 

2 ‘Indian reservation’—

3 ‘‘(i) has the same meaning as the 

4 term ‘Indian country’ in section 1151 of 

5 title 18, United States Code, except that 

6 such term does not include—

7 ‘‘(I) any lands that are located 

8 within a State in which a tribe did not 

9 exercise governmental jurisdiction on 

10 December 21, 2000, unless that tribe 

11 is recognized after that date by either 

12 an Act of Congress or pursuant to 

13 regulations of the Secretary of the In14 terior; and 

15 ‘‘(II) lands taken into trust or 

16 acquired by an Indian tribe after De17 cember 21, 2000, if such lands are 

18 not located within the external bound19 aries of an Indian reservation or 

20 former reservation or are not contig21 uous to the lands held in trust or re22 stricted status on that date of the en23 actment; and 

24 ‘‘(ii) in the State of Oklahoma, means 

25 lands that—
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1 ‘‘(I) are within the jurisdictional 

2 areas of an Oklahoma Indian tribe (as 

3 determined by the Secretary of the In4 terior); and 

5 ‘‘(II) are recognized by the Sec6 retary of the Interior as eligible for 

7 trust land status under part 151 of 

8 title 25, Code of Federal Regulations 

9 (as in effect on December 21, 2000). 

10 ‘‘(q) DEFINITIONS RELATING TO VETERANS.—For 

11 purposes of this Act: 

12 ‘‘(1) SERVICE-DISABLED VETERAN.—The term 

13 ‘service-disabled veteran’ means a veteran with a 

14 disability that is service-connected (as defined in sec15 tion 101(16) of title 38, United States Code). 

16 ‘‘(2) SMALL BUSINESS CONCERN OWNED AND

17 CONTROLLED BY SERVICE-DISABLED VETERANS.—

18 The term ‘small business concern owned and con19 trolled by service-disabled veterans’ means a small 

20 business concern—

21 ‘‘(A) not less than 51 percent of which is 

22 owned by one or more service-disabled veterans 

23 or, in the case of any publicly owned business, 

24 not less than 51 percent of the stock of which 
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1 is owned by one or more service-disabled vet2 erans; and 

3 ‘‘(B) the management and daily business 

4 operations of which are controlled by one or 

5 more service-disabled veterans or, in the case of 

6 a veteran with permanent and severe disability, 

7 the spouse or permanent caregiver of such vet8 eran. 

9 ‘‘(3) SMALL BUSINESS CONCERN OWNED AND

10 CONTROLLED BY VETERANS.—The term ‘small busi11 ness concern owned and controlled by veterans’ 

12 means a small business concern—

13 ‘‘(A) not less than 51 percent of which is 

14 owned by one or more veterans or, in the case 

15 of any publicly owned business, not less than 51 

16 percent of the stock of which is owned by one 

17 or more veterans; and 

18 ‘‘(B) the management and daily business 

19 operations of which are controlled by one or 

20 more veterans. 

21 ‘‘(4) VETERAN.—The term ‘veteran’ has the 

22 meaning given the term in section 101(2) of title 38, 

23 United States Code. 
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1 ‘‘(r) SMALL MANUFACTURER.—For purposes of this 

2 Act, the term ‘small manufacturer’ means any small busi3 ness concern if—

4 ‘‘(1) the primary business of the concern is 

5 classified in sector 31, 32, or 33 of the North Amer6 ican Industrial Classification System; and 

7 ‘‘(2) all of its facilities that are used for pro8 duction are located in the United States. 

9 ‘‘(s) SMALL BUSINESS LENDING COMPANY.—For 

10 purposes of this Act, the term ‘small business lending com11 pany’ means a business concern that is authorized by the 

12 Administrator to make loans pursuant to section 7(a) and 

13 whose lending activities are not subject to regulation by 

14 any Federal or State regulatory agency. 

15 ‘‘(t) NON-FEDERALLY REGULATED SBA LEND16 ERS.—For purposes of this Act, the term ‘Non-Federally 

17 regulated SBA lenders’ means a business concern if—

18 ‘‘(1) such concern is authorized by the Adminis19 trator to make loans under section 7; 

20 ‘‘(2) such concern is subject to regulation by a 

21 State; and 

22 ‘‘(3) the lending activities of such concern are 

23 not regulated by any Federal banking authority. 

24 ‘‘(u) PROCUREMENT CENTER REPRESENTATIVE.—

25 For purposes of this Act, the term ‘procurement center 
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1 representative’ means an employee of the Administration 

2 whose sole responsibility is to perform the functions re3 ferred to in section 15(l). 

4 ‘‘(v) COMMERCIAL MARKETING REPRESENTATIVE.—

5 For purposes of this Act, the term ‘commercial marketing 

6 representative’ means an employee of the Administration 

7 whose sole responsibility is to perform the functions re8 ferred to in section 8(d). 

9 ‘‘(w) TEAM.—For purposes of this Act, the term 

10 ‘team’ means two or more small business concerns who 

11 respond together to a solicitation, as one entity, for the 

12 purposes of providing goods or services to a Federal agen13 cy. A team shall be considered a small business concern 

14 provided that each member of the team is a small business 

15 concern.’’. 

16 SEC. 204. SMALL BUSINESS ADMINISTRATION. 

17 (a) IN GENERAL.—Section 4 of the Small Business 

18 Act (15 U.S.C. 633) is amended to read as follows: 

19 ‘‘SEC. 4. SMALL BUSINESS ADMINISTRATION. 

20 ‘‘(a) ESTABLISHMENT.—In order to carry out the 

21 policies of this Act, there is an agency known as the ‘Small 

22 Business Administration’ (also referred to in this Act as 

23 the Administration), which Administration shall be under 

24 the general direction and supervision of the President and 

25 shall not be affiliated with or be within any other agency 
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1 or department of the Federal Government. The principal 

2 office of the Administration shall be located in the District 

3 of Columbia. 

4 ‘‘(b) APPOINTMENT OF ADMINISTRATOR AND DEP5 UTY ADMINISTRATOR.—

6 ‘‘(1) ADMINISTRATOR.—The management of 

7 the Administration shall be vested in an Adminis8 trator who shall be appointed from civilian life by 

9 the President, by and with the advice and consent 

10 of the Senate, and who shall be a person of out11 standing qualifications known to be familiar and 

12 sympathetic with the needs and problems of small 

13 business concerns. The Administrator shall not en14 gage in any other business, vocation, or employment 

15 other than that of serving as Administrator. 

16 ‘‘(2) DEPUTY ADMINISTRATOR.—The President 

17 shall appoint, by and with the advice and consent of 

18 the Senate, a Deputy Administrator, whose principal 

19 function shall be to assist the Administrator in the 

20 daily management of the Administration. 

21 ‘‘(c) POWERS OF THE ADMINISTRATOR.—

22 ‘‘(1) USE OF SEAL.—The Administrator may 

23 adopt, alter, and use a seal, which shall be judicially 

24 noticed. 
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1 ‘‘(2) SUE AND BE SUED.—The Administrator 

2 may sue and be sued in any court of record of a 

3 State having general jurisdiction, or in any United 

4 States district court, and jurisdiction is conferred 

5 upon such district court to determine such con6 troversies without regard to the amount in con7 troversy; but no attachment, garnishment, or other 

8 similar process, mesne or final, shall be issued 

9 against the Administrator or his property. 

10 ‘‘(3) RULES AND REGULATIONS.—The Adminis11 trator may make such rules and regulations as he 

12 deems necessary to carry out this Act. Any such 

13 rules or regulations, other than those relating to 

14 agency management or personnel, shall be issued 

15 pursuant to section 553(b) of title 5, United States 

16 Code. 

17 ‘‘(4) FACILITIES AND STAFF OF FEDERAL

18 AGENCIES.—Upon request of the Administrator, the 

19 head of any Federal department or agency may pro20 vide, on a reimbursable or nonreimbursable basis, in21 formation, services, facilities (including any field 

22 service thereof), or any of the personnel of that de23 partment or agency to the Administrator to assist in 

24 carrying out this Act and the Small Business Invest25 ment Act of 1958. 
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1 ‘‘(5) INVESTIGATIONS; SUBPOENAS.—

2 ‘‘(A) INVESTIGATIONS.—The Adminis3 trator may make such investigations as the Ad4 ministrator deems necessary to determine 

5 whether a recipient of or participant in any as6 sistance under this Act or any other person has 

7 engaged, or is about to engage, in any acts or 

8 practices which constitute, or will constitute, a 

9 violation of any provision of this Act, or of any 

10 rule or regulation under this Act, or of any 

11 order issued under this Act. 

12 ‘‘(B) STATEMENTS.—The Administrator 

13 shall permit any person to file with it a state14 ment in writing, under oath or otherwise as the 

15 Administrator shall determine, as to all the 

16 facts and circumstances concerning the matter 

17 to be investigated. 

18 ‘‘(C) SUBPOENAS.—For the purpose of any 

19 investigation, the Administrator may administer 

20 oaths and affirmations, subpoena witnesses, 

21 compel their attendance, take evidence, and re22 quire the production of any books, papers, and 

23 documents which are relevant to the inquiry. 

24 Such attendance of witnesses and the produc-
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1 tion of any such records may be required from 

2 any place in the United States. 

3 ‘‘(D) CONTEMPT PROCEEDINGS.—In case 

4 of contumacy by, or refusal to obey a subpoena 

5 issued to, any person, including a recipient or 

6 participant, the Administrator may invoke the 

7 aid of any court of the United States within the 

8 jurisdiction of which such investigation or pro9 ceeding is carried on, or where such person re10 sides or carries on business, in requiring the at11 tendance and testimony of witnesses and the 

12 production of books, papers, and documents; 

13 and such court may issue an order requiring 

14 such person to appear before the Administrator, 

15 there to produce records, if so ordered, or to 

16 give testimony touching the matter under inves17 tigation. Any failure to obey such order of the 

18 court may be punished by such court as a con19 tempt thereof. All process in any such case may 

20 be served in the judicial district whereof such 

21 person is an inhabitant or wherever he may be 

22 found. 

23 ‘‘(6) GIFTS.—

24 ‘‘(A) IN GENERAL.—The Administrator 

25 may solicit, accept, hold, administer, and utilize 
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1 gifts, devises, bequests, and temporary use of 

2 property, both real and personal, and donations 

3 of personal services for the purpose of aiding or 

4 facilitating the Administrator in providing 

5 training to persons, employees, small business 

6 concerns and small manufacturers, and tech7 nical assistance to small business concerns and 

8 small manufacturers. 

9 ‘‘(B) AUDITS.—Any such gifts, devises, or 

10 bequests of property shall be held in a separate 

11 account and shall be subject to quarterly audits 

12 by the Inspector General of the Administration 

13 who shall report quarterly to the Congress on 

14 the Administrator’s use of such gifts, bequests, 

15 devises, and donations of personal services in16 cluding an assessment of whether such gifts, 

17 bequests, devises, and personal services have 

18 advanced the purposes of this Act. 

19 ‘‘(C) CONFLICTS OF INTEREST.—No em20 ployee of the Administration may accept or so21 licit any gift, bequest, devise, or donation of 

22 personal services if such acceptance or solicita23 tion would, in the opinion of the General Coun24 sel, create a conflict of interest. 
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1 ‘‘(D) ACCEPTANCE OF SERVICES AND FACILI2 TIES FOR DISASTER LOAN PROGRAM.—The Adminis3 trator may accept the services and facilities of Fed4 eral, State, and local agencies and groups, both pub5 lic and private, and utilize such gratuitous services 

6 and facilities as may, from time to time, be nec7 essary, to further the objectives of section 7(b). 

8 Paragraph (6)(B) shall not apply to any services or 

9 facilities accepted under this subparagraph. 

10 ‘‘(7) CO-SPONSORSHIP OF EVENTS.—

11 ‘‘(A) AUTHORIZATION.—The Adminis12 trator, after consultation with the General 

13 Counsel, may permit any eligible donor of any 

14 gift, bequest, devise, or donation of personal 

15 services to be a named cosponsor of any event 

16 conducted by the Administrator or any publica17 tion of the Administrator. 

18 ‘‘(B) ELIGIBLE DONOR.—For purposes of 

19 this paragraph, the term ‘eligible donor’ means, 

20 with respect to any event or publication, any 

21 donor if such donor provides, directly or in22 kind, at least 50 percent of the cost of such 

23 event or publication. provided further that any 

24 such co-sponsorship must be approved by an 
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1 Associate Administrator, after consultation with 

2 the General Counsel. 

3 ‘‘(C) LIMITED DELEGATION.—The Admin4 istrator may not delegate the authority de5 scribed in subparagraph (A) except to the Dep6 uty Administrator or any Associate Adminis7 trator. 

8 ‘‘(D) REPORT TO CONGRESS.—The Inspec9 tor General of the Administration shall report 

10 semi-annually to Congress on the Administra11 tor’s use of co-sponsorship. Such report shall 

12 include the Inspector General’s assessment of 

13 whether such co-sponsorships have advanced 

14 the purposes of this Act. 

15 ‘‘(d) OTHER PROVISIONS.—

16 ‘‘(1) REQUIREMENTS FOR ASSISTANCE.—No 

17 loan shall be made or equipment, facilities, or serv18 ices furnished by the Administrator under this Act 

19 to any business concern unless the owners, partners, 

20 or officers of such business concern—

21 ‘‘(A) certify to the Administrator the 

22 names of any attorneys, agents, or other per23 sons engaged by or on behalf of such business 

24 enterprise for the purpose of expediting applica25 tions made to the Administrator for assistance 
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1 of any sort, and the fees paid or to be paid to 

2 any such persons; 

3 ‘‘(B) execute an agreement binding any 

4 such business concern for a period of two years 

5 after any assistance is rendered by the Admin6 istrator to such business concern, to refrain 

7 from employing, tendering any office or employ8 ment to, or retaining for professional services, 

9 any person who, on the date such assistance or 

10 any part thereof was rendered, or within one 

11 year prior thereto, shall have served as an offi12 cer, attorney, agent, or employee of the Admin13 istration occupying a position or engaging in 

14 activities which the Administrator shall have de15 termined involve discretion with respect to the 

16 granting of assistance under this Act; and 

17 ‘‘(C) furnish the names of lending institu18 tions to which such business enterprise has ap19 plied for loans together with dates, amounts, 

20 terms, and proof of refusal. 

21 ‘‘(2) AUTHORITY RELATING TO TRANSFER OF

22 FUNCTIONS.—The President may transfer to the Ad23 ministrator any functions, powers, and duties of any 

24 department or agency which relate primarily to 

25 small business problems. In connection with any 
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1 such transfer, the President may provide for appro2 priate transfers of records, property, necessary per3 sonnel, and unexpended balances of appropriations 

4 and other funds available to the department or agen5 cy from which the transfer is made. 

6 ‘‘(3) FAIR CHARGES.—To the fullest extent the 

7 Administrator deems practicable, he shall make a 

8 fair charge for the use of Government-owned prop9 erty and make and let contracts on a basis that will 

10 result in a recovery of the direct costs incurred by 

11 the Administrator. 

12 ‘‘(4) NON-DUPLICATION.—The Administrator 

13 shall not duplicate the work or activity of any other 

14 department or agency of the Federal Government. 

15 Nothing contained in this Act shall be construed to 

16 authorize any such duplication unless such work or 

17 activity is expressly provided for in this Act. If loan 

18 applications are being refused or loans denied by 

19 such other department or agency responsible for 

20 such work or activity due to administrative with21 holding from obligation or withholding from appor22 tionment, or due to administratively declared mora23 torium, then, for purposes of this section, no dupli24 cation shall be deemed to have occurred. 
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1 ‘‘(5) PREPAYMENT OF RENTALS.—Subsections 

2 (a) and (b) of section 3324 of title 31, United States 

3 Code, shall not apply to prepayments of rentals 

4 made by the Administration on safety deposit boxes 

5 used by the Administration for the safeguarding of 

6 instruments held as security for loans or for the 

7 safeguarding of other documents. 

8 ‘‘(6) NONDISCRIMINATION.—In carrying out 

9 this Act and the Small Business Investment Act of 

10 1958, the Administrator shall not discriminate on 

11 the basis of sex or marital status against any person 

12 or small business concern applying for or receiving 

13 assistance from the Administrator. 

14 ‘‘(7) GROUPS RECEIVING SPECIAL CONSIDER15 ATION.—In providing assistance under this Act and 

16 the Small Business Investment Act of 1958, the Ad17 ministrator shall give special consideration to—

18 ‘‘(A) veterans of the Armed Forces of the 

19 United States and their survivors or depend20 ents; and 

21 ‘‘(B) small manufacturers. 

22 ‘‘(8) UNLAWFUL RESIDENTS.—None of the 

23 funds made available pursuant to this Act may be 

24 used to provide any direct benefit or assistance to 

25 any individual in the United States if the Adminis-
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1 trator or the official to which the funds are made 

2 available receives notification that the individual is 

3 not lawfully within the United States. 

4 ‘‘(9) OBSCENE PRODUCTS AND SERVICES.—The 

5 Administrator is prohibited from providing any fi6 nancial or other assistance to any business concern 

7 or other person engaged in the production or dis8 tribution of any product or service that has been de9 termined to be obscene by a court of competent ju10 risdiction. 

11 ‘‘(10) ECONOMIC DATABASE; INDICES AND RE12 PORTS.—The Administrator shall—

13 ‘‘(A) establish and maintain an external 

14 small business economic data base for the pur15 pose of providing the Congress and the Presi16 dent information on the economic condition and 

17 the expansion or contraction of the small busi18 ness sector; 

19 ‘‘(B) publish on a regular basis national 

20 small business economic indices and, to the ex21 tent feasible, regional small business economic 

22 indices, which shall include data on—

23 ‘‘(i) employment, layoffs, and new 

24 hires; 
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1 ‘‘(ii) number of business establish2 ments and the types of such establish3 ments such as sole proprietorships, cor4 porations, and partnerships; 

5 ‘‘(iii) number of business formations 

6 and failures; 

7 ‘‘(iv) sales and new orders; 

8 ‘‘(v) back orders; 

9 ‘‘(vi) investment in plant and equip10 ment; 

11 ‘‘(vii) changes in inventory and rate of 

12 inventory turnover; 

13 ‘‘(viii) sources and amounts of capital 

14 investment, including debt, equity, and in15 ternally generated funds; 

16 ‘‘(ix) debt to equity ratios; 

17 ‘‘(x) exports; 

18 ‘‘(xi) number and dollar amount of 

19 mergers and acquisitions by size of acquir20 ing and acquired firm; and 

21 ‘‘(xii) concentration ratios; and 

22 ‘‘(C) in consultation with the Chief Coun23 sel for Advocacy, publish annually a report giv24 ing a comparative analysis and interpretation of 

25 the historical trends of the small business sector 
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1 as reflected by the data acquired pursuant to 

2 subparagraph (A).’’. 

3 (b) RELATED REPEALS.—

4 (1) Section 12 of the Small Business Act (15 

5 U.S.C. 641) is amended to read as follows: 

6 ‘‘SEC. 12. [ RESERVED. ]’’. 

7 (2) Section 13 of the Small Business Act (15 

8 U.S.C. 642) is amended to read as follows: 

9 ‘‘SEC. 13. [ RESERVED. ]’’. 

10 (3) Section 14 of the Small Business Act (15 

11 U.S.C. 643) is amended to read as follows: 

12 ‘‘SEC. 14. [ RESERVED. ]’’. 

13 (4) Section 18 of the Small Business Act (15 

14 U.S.C. 647) is amended to read as follows: 

15 ‘‘SEC. 18. [ RESERVED. ]’’. 

16 SEC. 205. FINANCIAL MANAGEMENT. 

17 (a) IN GENERAL.—Section 5 of the Small Business 

18 Act (15 U.S.C. 634) is amended to read as follows: 

19 ‘‘SEC. 5. FINANCIAL MANAGEMENT. 

20 ‘‘(a) ACCOUNTS.—

21 ‘‘(1) IN GENERAL.—All repayments of loans, 

22 debentures, payments of interest and other receipts 

23 arising out of transactions heretofore or hereafter 

24 entered into by the Administrator shall be deposited 
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1 into appropriate accounts and funds as determined 

2 by the Administrator. 

3 ‘‘(2) REPORT AND BUDGET.—The Adminis4 trator shall submit to the Committees on Appropria5 tions, the Committee on Small Business and Entre6 preneurship of the Senate, and the Committee on 

7 Small Business of the House of Representatives, as 

8 soon as possible after the beginning of each calendar 

9 quarter a full and complete report on the status of 

10 each of the accounts and funds referred to in para11 graph (1). Business-type budgets for each of the ac12 counts and funds referred to in paragraph (1) shall 

13 be prepared, transmitted to the Committees on Ap14 propriations, the Committee on Small Business and 

15 Entrepreneurship of the Senate, and the Committee 

16 on Small Business of the House of Representatives, 

17 and considered, and enacted in the manner pre18 scribed by for wholly owned Government corpora19 tions under sections 9103 and 9104 of title 31, 

20 United States Code. 

21 ‘‘(4) ISSUANCE OF NOTES.—

22 ‘‘(A) ISSUANCE.—The Administrator may 

23 issue notes to the Secretary of the Treasury for 

24 the purpose of obtaining funds necessary for 

25 discharging obligations under the accounts and 
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1 funds referred to in paragraph (1) and for au2 thorized expenditures out of the accounts and 

3 funds. 

4 ‘‘(B) FORM.—The notes authorized by this 

5 paragraph shall be in such form and denomina6 tions and have such maturities and be subject 

7 to such terms and conditions as may be pre8 scribed by the Administrator with the approval 

9 of the Secretary of the Treasury. 

10 ‘‘(C) INTEREST RATE.—Such notes shall 

11 bear interest at a rate fixed by the Secretary of 

12 the Treasury, taking into consideration the cur13 rent average market yield of outstanding mar14 ketable obligations of the United States having 

15 maturities comparable to the notes issued by 

16 the Administration under this paragraph. 

17 ‘‘(D) PURCHASE BY TREASURY.—The Sec18 retary of the Treasury shall purchase any notes 

19 of the Administration issued under paragraph 

20 (1). For purposes of purchasing such notes, the 

21 Secretary of the Treasury may use as a public 

22 debt transaction the proceeds from the sale of 

23 any securities issued under chapter 31 of title 

24 31, United States Code. The purposes for which 

25 such securities may be issued under such chap-
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1 ter are extended to include the purchase of 

2 notes issued by the Administrator under para3 graph (1). All redemptions, purchases, and 

4 sales by the Secretary of the Treasury of such 

5 notes shall be treated as public debt trans6 actions of the United States. 

7 ‘‘(5) PAYMENTS TO TREASURY.—

8 ‘‘(A) EXCESS FUNDS.—Moneys in any ac9 count or fund referred to in paragraph (1) 

10 which are not needed for current operations 

11 shall remain in such account or fund and shall 

12 be available solely to carry out the provisions 

13 and purposes of programs operated from such 

14 account or fund pursuant to law as provided in 

15 appropriations Acts. 

16 ‘‘(B) ACTUAL INTEREST.—Following the 

17 close of each fiscal year, the Administrator shall 

18 pay into the miscellaneous receipts of the 

19 United States Treasury the actual interest that 

20 the Administrator collects during that fiscal 

21 year on all financings made under this Act. 

22 ‘‘(C) OTHER INTEREST.—Except on those 

23 loan disbursements on which interest is paid 

24 under subparagraph (B), the Administration 

25 shall pay into miscellaneous receipts of the 
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1 Treasury, following the close of each fiscal year, 

2 interest received by the Administration on fi3 nancing functions performed under this Act and 

4 titles III and V of the Small Business Invest5 ment Act of 1958 if the capital used to perform 

6 such functions originated from appropriated 

7 funds. Such payments shall be treated by the 

8 Department of the Treasury as interest income, 

9 not as retirement of indebtedness. 

10 ‘‘(6) CONTRIBUTIONS TO EMPLOYEES COM11 PENSATION FUND.—The Administrator shall con12 tribute to the employee’s compensation fund, on the 

13 basis of annual billings as determined by the Sec14 retary of Labor, for the benefit payments made from 

15 such fund on account of employees engaged in car16 rying out functions financed by the accounts and 

17 funds referred to in paragraph (1). The annual bil18 lings shall also include a statement of the fair por19 tion of the cost of the administration of such funds, 

20 which shall be paid by the Administrator into the 

21 Treasury as miscellaneous receipts. 

22 ‘‘(7) AUTHORIZATION OF APPROPRIATIONS.—

23 There are authorized to be appropriated, in any fis24 cal year, such sums as may be necessary for losses 

25 and interest subsidies incurred by the accounts and 
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1 funds referred to in paragraph (1) and not pre2 viously reimbursed. All borrowing authority con3 tained in this subsection shall be effective only to 

4 such extent or in such amounts as are provided in 

5 advance in appropriation Acts. 

6 ‘‘(b) FINANCIAL MANAGEMENT POWERS.—

7 ‘‘(1) SALE OF FINANCINGS, ETC.—The Admin8 istrator, under regulations prescribed by him, may 

9 assign or sell at public or private sale, or otherwise 

10 dispose of for cash or credit, in his discretion and 

11 upon such terms and conditions and for such consid12 eration as he shall determine to be reasonable, any 

13 evidence of debt, contract, claim, personal property, 

14 or security assigned to or held by him in connection 

15 with the payment of loans granted under this Act, 

16 and to collect or compromise all obligations assigned 

17 to or held by him and all legal or equitable rights 

18 accruing to him in connection with the payment of 

19 such loans until such time as such obligations may 

20 be referred to the Attorney General for suit or col21 lection. 

22 ‘‘(2) USE OF FEDERAL RESERVE DEPOSI23 TORIES.—All moneys of the Administrator not oth24 erwise employed may be deposited with the Treasury 

25 of the United States subject to check by authority 
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1 of the Administrator. The Federal Reserve banks 

2 are authorized and directed to act as depositaries, 

3 custodians, and fiscal agents for the Administrator 

4 in the general performance of its powers conferred 

5 by this Act. Any banks insured by the Federal De6 posit Insurance Corporation, when designated by the 

7 Secretary of the Treasury, shall act as custodians 

8 and financial agents for the Administrator. Each 

9 Federal Reserve bank, when designated by the Ad10 ministrator as fiscal agent for the Administrator, 

11 shall be entitled to be reimbursed for all expenses in12 curred as such fiscal agent. 

13 ‘‘(3) REAL PROPERTY.—

14 ‘‘(A) CONVEYANCE.—The Administrator 

15 may convey and execute in the name of the Ad16 ministration deeds of conveyance, deeds of re17 lease, assignments and satisfactions of mort18 gages, and any other written instrument relat19 ing to real property or any interest therein ac20 quired by the Administrator pursuant to the 

21 provisions of this Act. Such authority may be 

22 exercised by the Administrator or by any officer 

23 or agent appointed by him without the execu24 tion of any express delegation of power or 

25 power of attorney. 
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1 ‘‘(B) OTHER AUTHORITY.—The Adminis2 trator may deal with, complete, renovate, im3 prove, modernize, insure, or rent, or sell for 

4 cash or credit upon such terms and conditions 

5 and for such consideration as the Administrator 

6 shall determine to be reasonable, any real prop7 erty conveyed to or otherwise acquired by him 

8 in connection with the payment of loans grant9 ed under this Act. 

10 ‘‘(4) COLLECTIONS.—The Administrator may 

11 pursue to final collection, by way of compromise or 

12 otherwise, all claims against third parties assigned 

13 to the Administrator in connection with loans made 

14 by him, including by obtaining deficiency judgments 

15 or otherwise in the case of mortgages assigned to 

16 the Administrator. 

17 ‘‘(5) ACQUISITION OF PROPERTY.—The Admin18 istrator may acquire, in any lawful manner, any 

19 property (real, personal, or mixed, tangible or intan20 gible), whenever deemed necessary or appropriate to 

21 the conduct of the activities authorized in subsection 

22 (a) or (b) of section 7. 

23 ‘‘(6) POWER OF ATTORNEY.—Nothing in this 

24 section shall prevent the Administrator from dele25 gating any authority provided under this section by 
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1 power of attorney to any officer or agent he may ap2 point. 

3 ‘‘(c) SALE OF GUARANTEED LOANS BY LENDERS.—

4 ‘‘(1) IN GENERAL.—The guaranteed portion of 

5 any loan made pursuant to this Act may be sold by 

6 the lender, and by any subsequent holder, consistent 

7 with regulations on such sales as the Administrator 

8 shall establish, subject to the following limitations: 

9 ‘‘(A) Prior to the approval of the sale, or 

10 upon any subsequent sale, of any loan guaran11 teed by the Administrator, if the lender certifies 

12 that such loan has been properly closed and 

13 that the lender has substantially complied with 

14 the provisions of the guarantee agreement and 

15 the regulations of the Administrator, the Ad16 ministrator shall review and approve only mate17 rials not previously approved. 

18 ‘‘(B) All fees due the Administrator on a 

19 guaranteed loan shall have been paid in full 

20 prior to any sale. 

21 ‘‘(C) Each loan, except each loan made 

22 under section 7(a)(14), shall have been fully 

23 disbursed to the borrower prior to any sale. 

24 ‘‘(2) TREATMENT IN SECONDARY MARKET.—

25 After a loan is sold in the secondary market, the 
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1 lender shall remain obligated under its guarantee 

2 agreement with the Administrator, and shall con3 tinue to service the loan in a manner consistent with 

4 the terms and conditions of such agreement. 

5 ‘‘(3) PROCEDURES.—The Administrator shall 

6 develop such procedures as are necessary for: 

7 ‘‘(A) The facilitation, administration, and 

8 promotion of secondary market operations. 

9 ‘‘(B) Assessing the increase of small busi10 ness access to capital at reasonable rates and 

11 terms as a result of secondary market oper12 ations. 

13 ‘‘(4) CERTAIN REGULATIONS REQUIRED.—The 

14 unguaranteed portion of any loan made under sec15 tion 7(a) shall not be sold unless a final regulation 

16 promulgated by the Administrator is in effect that 

17 applies uniformly to both depository institutions and 

18 other lenders and sets forth the terms and condi19 tions under which such sales can be permitted, in20 cluding maintenance of appropriate reserve require21 ments and other safeguards to protect the safety 

22 and soundness of the program. 

23 ‘‘(5) PREPAYMENTS.—Nothing in this sub24 section or subsection (d) shall be interpreted to im25 pede or extinguish the right of the borrower or the 
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1 successor in interest to such borrower to prepay (in 

2 whole or in part) any loan made pursuant to section 

3 7(a), the guaranteed portion of which may be in4 cluded in such trust or pool, or to impede or extin5 guish the rights of any party pursuant to subsection 

6 (f)(3). 

7 ‘‘(d) ISSUANCE OF TRUST CERTIFICATES.—

8 ‘‘(1) IN GENERAL.—The Administrator may 

9 issue trust certificates representing ownership of all 

10 or a fractional part of the guaranteed portion of one 

11 or more loans which have been guaranteed by the 

12 Administration under this Act, or under section 502 

13 of the Small Business Investment Act of 1958. Such 

14 trust certificates shall be based on and backed by a 

15 trust or pool approved by the Administrator and 

16 composed solely of the entire guaranteed portion of 

17 such loans. 

18 ‘‘(2) GUARANTEE.—

19 ‘‘(A) AUTHORIZATION.—The Adminis20 trator is authorized, upon such terms and con21 ditions as are deemed appropriate, to guarantee 

22 the timely payment of the principal of and in23 terest on trust certificates issued by the Admin24 istrator or its agent for purposes of this sub25 section. Such guarantee shall be limited to the 
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1 extent of principal and interest on the guaran2 teed portions of loans which compose the trust 

3 or pool. The full faith and credit of the United 

4 States is pledged to the payment of all amounts 

5 which may be required to be paid under any 

6 guarantee of such trust certificates issued by 

7 the Administrator or its agent pursuant to this 

8 subsection. 

9 ‘‘(B) PREPAYMENT.—In the event that a 

10 loan in such trust or pool is prepaid, either vol11 untarily or in the event of default, the guar12 antee of timely payment of principal and inter13 est on the trust certificates shall be reduced in 

14 proportion to the amount of principal and inter15 est such prepaid loan represents in the trust or 

16 pool. 

17 ‘‘(C) INTEREST; REDEMPTION.—Interest 

18 on prepaid or defaulted loans shall accrue and 

19 be guaranteed by the Administrator only 

20 through the date of payment on the guarantee. 

21 During the term of the trust certificate, it may 

22 be called for redemption due to prepayment or 

23 default of all loans constituting the pool. 

24 ‘‘(3) FEES.—
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1 ‘‘(A) IN GENERAL.—The Administrator 

2 may collect a fee for any loan guarantee sold 

3 into the secondary market under subsection (c) 

4 in an amount equal to not more than 50 per5 cent of the portion of the sale price that exceeds 

6 110 percent of the outstanding principal 

7 amount of the portion of the loan guaranteed 

8 by the Administrator. 

9 ‘‘(B) COLLECTION.—Any such fee imposed 

10 by the Administrator shall be collected by the 

11 Administrator or by the agent which carries out 

12 on behalf of the Administrator the central reg13 istration functions required by subsection (e) 

14 and shall be paid to the Administrator and used 

15 solely to reduce the subsidy on loans guaran16 teed under section 7(a). Any such fee shall not 

17 be charged to the borrower whose loan is guar18 anteed. Nothing in this paragraph shall pre19 clude any agent of the Administrator from col20 lecting a fee approved by the Administrator for 

21 the functions described in subsection (e). 

22 ‘‘(C) LATE FEES.—The Administrator is 

23 authorized to impose and collect, either directly 

24 or through a fiscal and transfer agent, a rea25 sonable penalty on late payments of the fee au-
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1 thorized under subparagraph (A) in an amount 

2 not to exceed 5 percent of such fee per month 

3 plus interest. 

4 ‘‘(4) SUBROGATION.—In the event the Adminis5 trator pays a claim under a guarantee issued under 

6 this subsection, it shall be subrogated fully to the 

7 rights satisfied by such payment. 

8 ‘‘(5) LAWS SUPERSEDED.—No federal, state, or 

9 local law, shall preclude or limit the exercise by the 

10 Administrator of its ownership rights in the portions 

11 of loans constituting the trust or pool against which 

12 the trust certificates are issued. 

13 ‘‘(e) CENTRAL REGISTRY OF LOANS AND TRUST

14 CERTIFICATES.—

15 ‘‘(1) ESTABLISHMENT.—Upon the adoption of 

16 final rules and regulations, the Administrator 

17 shall—

18 ‘‘(A) provide for a central registration of 

19 all loans and trust certificates sold pursuant to 

20 subsections (c) and (d); 

21 ‘‘(B) contract with an agent to carry out 

22 on behalf of the Administrator the central reg23 istration functions of this subsection and the 

24 issuance of trust certificates to facilitate pool25 ing; 
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1 ‘‘(C) prior to any sale, require the seller to 

2 disclose to a purchaser of the guaranteed por3 tion of a loan guaranteed under this Act, and 

4 to the purchaser of a trust certificate issued 

5 pursuant to subsection (d), information on the 

6 terms, conditions, and yield of such instrument; 

7 and 

8 ‘‘(D) have the authority to regulate bro9 kers and dealers in guaranteed loans and trust 

10 certificates sold pursuant to subsections (c) and 

11 (d). 

12 ‘‘(2) BONDING REQUIREMENT.—The agent re13 ferred to in paragraph (1)(B) shall provide a fidelity 

14 bond or insurance in such amounts as the Adminis15 trator determines to be necessary to fully protect the 

16 interest of the Government. 

17 ‘‘(3) SELLER.—For purposes of this subsection, 

18 the term ‘seller’, with respect to the sale of any loan, 

19 does not include the entity which made the loan or 

20 any individual or entity which sells three or fewer 

21 guaranteed loans per year. 

22 ‘‘(4) BOOK-ENTRY SYSTEM.—Nothing in this 

23 subsection shall prohibit the utilization of a book24 entry or other electronic form of registration for 

25 trust certificates. The Administrator may, with the 
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1 consent of the Secretary of the Treasury, use the 

2 book-entry system of the Federal Reserve System. 

3 ‘‘(5) AGENT FEES.—The Administrator may 

4 compensate an agent described in paragraph (1)(B) 

5 through transaction and servicing fees charged to 

6 program users and through interest earnings on pay7 ments under the agent’s control. 

8 ‘‘(f) OTHER SPECIAL RULES AND AUTHORITIES RE9 LATED TO LOAN PROGRAMS.—

10 ‘‘(1) IN GENERAL.—The Administrator may 

11 take any and all actions (including the procurement 

12 of the services of attorneys by contract in any office 

13 where an attorney or attorneys are not or cannot be 

14 economically employed full time to render such serv15 ices) when he determines such actions are necessary 

16 or desirable in making, servicing, compromising, 

17 modifying, liquidating, or otherwise dealing with or 

18 realizing on loans made under the provisions of this 

19 Act. With respect to deferred participation loans, the 

20 Administrator may, in the discretion of and pursu21 ant to regulations promulgated by the Adminis22 trator, authorize participating lending institutions to 

23 take actions relating to loan servicing on behalf of 

24 the Administrator, including determining eligibility 
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1 and creditworthiness and loan monitoring, collection, 

2 and liquidation. 

3 ‘‘(2) FEES.—The Administrator may impose, 

4 retain, and use only those fees which are specifically 

5 authorized by law or which are in effect on Sep6 tember 30, 1994, and in the amounts and at the 

7 rates in effect on such date, except that the Admin8 istrator may, subject to approval in appropriations 

9 Acts, impose, retain, and utilize, additional fees—

10 ‘‘(A) not to exceed $100 for each loan 

11 servicing action (other than a loan assumption) 

12 requested after disbursement of the loan, in13 cluding any substitution of collateral, release or 

14 substitution of a guarantor, reamortization, or 

15 similar action; 

16 ‘‘(B) not to exceed $300 for loan assump17 tions; 

18 ‘‘(C) not to exceed 1 percent of the amount 

19 of requested financings under title III of the 

20 Small Business Investment Act of 1958 for 

21 which the applicant requests a commitment 

22 from the Administration for funding during the 

23 following year; and 

24 ‘‘(D) to recover the direct, incremental cost 

25 involved in the production and dissemination of 
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1 compilations of information produced by the 

2 Administrator under the authority of this Act 

3 and the Small Business Investment Act of 

4 1958; and 

5 ‘‘(E) collect, retain and utilize, subject to 

6 approval in appropriations Acts, any amounts 

7 collected by fiscal transfer agents and not used 

8 by such agent as payment of the cost of loan 

9 pooling or debenture servicing operations, ex10 cept that amounts collected under this sub11 section shall be utilized solely to facilitate the 

12 administration of the program that generated 

13 the excess amounts. 

14 ‘‘(3) POWER TO UNDERTAKE AND SUSPEND

15 LOANS.—

16 ‘‘(A) IN GENERAL.—Subject to the re17 quirements and conditions contained in this 

18 paragraph, upon application by a small business 

19 concern which is the recipient of a loan made 

20 under this Act, the Administrator may under21 take the small business concern’s obligation to 

22 make the required payments under such loan or 

23 may suspend such obligation if the loan was a 

24 direct loan made by the Administrator. While 

25 such payments are being made by the Adminis-
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1 trator pursuant to the undertaking of such obli2 gation or while such obligation is suspended, no 

3 such payment with respect to the loan may be 

4 required from the small business concern. 

5 ‘‘(B) REQUIREMENTS.—The Administrator 

6 may undertake or suspend for a period of not 

7 to exceed 5 years any small business concern’s 

8 obligation under this paragraph only if—

9 ‘‘(i) without such undertaking or sus10 pension of the obligation, the small busi11 ness concern would, in the sole discretion 

12 of the Administrator, become insolvent or 

13 remain insolvent; 

14 ‘‘(ii) with the undertaking or suspen15 sion of the obligation, the small business 

16 concern would, in the sole discretion of the 

17 Administrator, become or remain a viable 

18 small business concern; and 

19 ‘‘(iii) the small business concern exe20 cutes an agreement in writing satisfactory 

21 to the Administration as provided by sub22 paragraph (D) and takes such actions as 

23 are required under subparagraph (E). 

24 ‘‘(C) EXTENSION OF MATURITY.—Notwith25 standing the provisions of sections 7(a)(9) and 
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1 7(i)(1), the Administrator may extend the ma2 turity of any loan on which the Administrator 

3 undertakes or suspends the obligation pursuant 

4 to this paragraph for a corresponding period of 

5 time. 

6 ‘‘(D) AGREEMENT.—Prior to the under7 taking or suspension by the Administrator of 

8 any small business concern’s obligation under 

9 this subsection, the Administrator, consistent 

10 with the purposes sought to be achieved under 

11 this paragraph, shall require the small business 

12 concern to agree in writing to repay to it the 

13 aggregate amount of the payments which were 

14 required under the loan during the period for 

15 which such obligation was undertaken or sus16 pended, either—

17 ‘‘(i) by periodic payments not less in 

18 amount or less frequently falling due than 

19 those which were due under the loan dur20 ing such period; 

21 ‘‘(ii) pursuant to a repayment sched22 ule agreed upon by the Administrator and 

23 the small business concern; or 

24 ‘‘(iii) by a combination of the pay25 ments described in clauses (i) and (ii). 
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1 ‘‘(E) SECURITY; OTHER ACTIONS.—The 

2 Administrator shall, prior to the undertaking or 

3 suspension of the obligation, take such action, 

4 and require the small business concern to take 

5 such action as the Administrator deems appro6 priate in the circumstances, including the provi7 sion of such security as the Administrator 

8 deems necessary or appropriate to insure that 

9 the rights and interests of the lender (Adminis10 tration or participant) will be safeguarded ade11 quately during and after the period in which 

12 such obligation is so undertaken or suspended. 

13 ‘‘(F) REQUIRED PAYMENTS.—For pur14 poses of this paragraph, the term ‘required pay15 ments’ means, with respect to any loan, pay16 ments of principal and interest under the loan. 

17 ‘‘(4) INTEREST RATE ON DEFERRED PARTICI18 PATION SHARE.—Upon purchase by the Adminis19 trator of any deferred participation entered into 

20 under section 7, the Administrator may continue to 

21 charge a rate of interest not to exceed that initially 

22 charged by the participating institution on the 

23 amount so purchased for the remaining term of the 

24 indebtedness. 
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1 ‘‘(5) SUBORDINATION TO CERTAIN STATE TAX

2 LIENS.—Any interest held by the Administrator in 

3 property, as security for a loan, shall be subordinate 

4 to any lien on such property for taxes due on the 

5 property to a State, or political subdivision thereof, 

6 in any case where such lien would, under applicable 

7 State law, be superior to such interest if such inter8 est were held by any party other than the United 

9 States. 

10 ‘‘(g) RISK MANAGEMENT DATABASE.—

11 ‘‘(1) ESTABLISHMENT.—The Administrator 

12 shall maintain, within the management system for 

13 the loan programs authorized by subsections (a) and 

14 (b) of section 7 and title V of the Small Business 

15 Investment Act of 1958, a management information 

16 system that will generate a database capable of pro17 viding timely and accurate information in order to 

18 identify loan underwriting, collections, recovery, and 

19 liquidation problems. 

20 ‘‘(2) CONTENTS.—In addition to such other in21 formation as the Administrator considers appro22 priate, the database established under this sub23 section shall, with respect to each loan program de24 scribed in paragraph (1), include information relat25 ing to—
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1 ‘‘(A) the identity of the institution making 

2 the guaranteed loan or issuing the debenture; 

3 ‘‘(B) the identity of the borrower; 

4 ‘‘(C) the total dollar amount of the loan or 

5 debenture; 

6 ‘‘(D) the total dollar amount of govern7 ment exposure in each loan; 

8 ‘‘(E) the district of the Administration in 

9 which the borrower has its principal office; 

10 ‘‘(F) the principal line of business of the 

11 borrower, as identified by North American In12 dustrial Classification System Code; 

13 ‘‘(G) the delinquency rate for each pro14 gram (including number of instances and days 

15 overdue); 

16 ‘‘(H) the number and amount of repur17 chases, losses, and recoveries in each program; 

18 ‘‘(I) the number of deferrals or 

19 forbearances in each program (including days 

20 and number of instances); 

21 ‘‘(J) comparisons on the basis of loan pro22 gram, lender, Administration district and re23 gion, for all the data elements maintained; and 

24 ‘‘(K) underwriting characteristics of each 

25 loan that has entered into default, including 
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1 term, amount and type of collateral, loan-to2 value and other actual and projected ratios, line 

3 of business, credit history, and type of loan.’’. 

4 (b) RELATED REPEAL.—Section 17 of the Small 

5 Business Act (15 U.S.C. 646) is amended to read as fol6 lows: 

7 ‘‘SEC. 17. [ RESERVED. ]’’. 

8 SEC. 206. ORGANIZATION AND STAFF. 

9 (a) IN GENERAL.—Section 6 of the Small Business 

10 Act (15 U.S.C. 635) is amended to read as follows: 

11 ‘‘SEC. 6. ORGANIZATION AND STAFF. 

12 ‘‘(a) GENERAL ORGANIZATIONAL AUTHORITY.—

13 ‘‘(1) OFFICES.—Except as otherwise provided 

14 in this Act, the Administrator may create subsidiary 

15 offices in the Administration to carry out this Act 

16 and the Small Business Investment Act of 1958. 

17 ‘‘(2) EMPLOYEES.—The Administrator may, in 

18 accordance with applicable provisions of title 5, 

19 United States Code, select, employ, appoint, and fix 

20 the compensation of such officers, employees, attor21 neys, and agents as shall be necessary to carry out 

22 this Act and the Small Business Investment Act of 

23 1958. 
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1 ‘‘(b) ASSOCIATE ADMINISTRATORS.—The Adminis2 trator shall only appoint the following associate Adminis3 trators: 

4 ‘‘(1) The Associate Administrator for Capital 

5 Access, who shall be appointed from civilian life and 

6 have a minimum of five years experience in pro7 viding investment or banking services to businesses. 

8 ‘‘(2) The Associate Administrator for Govern9 ment Contracting and Minority Small Business Op10 portunities, who shall have a minimum of five years 

11 of experience in Federal procurement. 

12 ‘‘(3) The Associate Administrator for Enter13 prise Outreach and Training, who shall have a min14 imum of five years experience in community-based 

15 outreach programs. 

16 ‘‘(4) The Associate Administrator for Adminis17 tration and Management, who shall act as the Chief 

18 Operating Officer for the Administration and who 

19 shall oversee the activities of the regional adminis20 trators. 

21 ‘‘(c) ESTABLISHMENT OF CERTAIN OFFICES.—There 

22 are in the Administration the following offices: 

23 ‘‘(1) The Office of Minority Small Business and 

24 Capital Ownership Development, which shall be ad-
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1 ministered by the assistant administrator appointed 

2 under subsection (d)(1). 

3 ‘‘(2) The Office of Veterans Business, which 

4 shall be administered by the assistant administrator 

5 appointed under subsection (d)(2). 

6 ‘‘(3) The Office of Small Business Development 

7 Centers, which shall be administered by the assistant 

8 administrator appointed under subsection (d)(3). 

9 ‘‘(4) The Office of Investment, which shall be 

10 administered by the assistant administrator ap11 pointed under subsection (d)(4). 

12 ‘‘(5) The Office of Lender Oversight, which 

13 shall be administered by the assistant administrator 

14 appointed under subsection (d)(5). 

15 ‘‘(6) The Office of Congressional and Legisla16 tive Affairs, which shall be administered by the as17 sistant administrator appointed under subsection 

18 (d)(6). 

19 ‘‘(7) The Office of International Trade, which 

20 shall be administered by the assistant administrator 

21 appointed under subsection (d)(7). 

22 ‘‘(8) The Office of Women’s Business Owner23 ship, which shall be administered by the assistant 

24 administrator appointed under subsection (d)(8). 
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1 ‘‘(d) ASSISTANT ADMINISTRATORS.—The Adminis2 trator shall appoint the following Assistant Administra3 tors: 

4 ‘‘(1) The Assistant Administrator for Minority 

5 Small Business and Capital Ownership Development, 

6 who—

7 ‘‘(A) shall have a minimum of 5 years ex8 perience within the Administration in assisting 

9 minority small businesses before being ap10 pointed under this paragraph; 

11 ‘‘(B) shall be responsible for carrying out 

12 subsections (a), (b), and (c) of section 8; 

13 ‘‘(C) shall be a career employee in the Sen14 ior Executive Service; and 

15 ‘‘(D) shall report to the Associate Adminis16 trator for Government Contracting and Minor17 ity Small Business Opportunities. 

18 ‘‘(2) The Assistant Administrator for Veterans 

19 Business, who—

20 ‘‘(A) shall have a minimum of 5 years ex21 perience within the Administration or the De22 partment of Veterans Affairs (or in combina23 tion) in providing entrepreneurial outreach to 

24 veterans before being appointed under this 

25 paragraph; 
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1 ‘‘(B) shall be responsible for the formula2 tion, execution, and promotion of the policies 

3 and programs of the Administration that pro4 vide assistance to small business concerns 

5 owned and controlled by veterans and small 

6 business concerns owned and controlled by serv7 ice-disabled veterans; 

8 ‘‘(C) shall act as an ombudsman for full 

9 consideration of veterans in all programs of the 

10 Administration; 

11 ‘‘(D) shall be a career employee and may 

12 be an appointee in the Senior Executive Service; 

13 and 

14 ‘‘(E) shall report to the Associate Adminis15 trator for Enterprise Outreach and Training. 

16 ‘‘(3) The Assistant Administrator for Small 

17 Business Development Centers who—

18 ‘‘(A) shall have a minimum of 5 years ex19 perience in entrepreneurial outreach to small 

20 businesses or as an educator in a business pro21 gram in an institution of higher learning (or in 

22 combination), before being appointed under this 

23 paragraph; 

24 ‘‘(B) shall carry out section 21; 
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1 ‘‘(C) shall be a career employee and may 

2 be an appointee in the Senior Executive Service; 

3 and 

4 ‘‘(D) shall report to the Associate Adminis5 trator for Enterprise Outreach and Training. 

6 ‘‘(4) The Assistant Administrator for Invest7 ment who—

8 ‘‘(A) shall carry out title III of the Small 

9 Business Investment Act of 1958; 

10 ‘‘(B) shall be a career employee and may 

11 be an appointee in the Senior Executive Service; 

12 and 

13 ‘‘(C) shall report to the Associate Adminis14 trator for Capital Access. 

15 ‘‘(5) The Assistant Administrator for Lender 

16 Oversight who—

17 ‘‘(A) shall have a minimum of 5 years ex18 perience in oversight of lending institutions be19 fore being appointed under this paragraph; 

20 ‘‘(B) shall carry out section 7(a) and assist 

21 the Administrator in carrying out section 23; 

22 ‘‘(C) shall be a career employee and may 

23 be an appointee in the Senior Executive Service; 

24 and 
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1 ‘‘(D) shall report to the Associate Adminis2 trator for Capital Access. 

3 ‘‘(6) The Assistant Administrator for Congres4 sional and Legislative Affairs who—

5 ‘‘(A) shall have a minimum of 5 years ex6 perience as an employee reimbursed pursuant to 

7 the Senators’ Clerk Hire Allowance Account es8 tablished under section 1 of Public Law 100–

9 137 (2 U.S.C. 58c) or the Members’ Represen10 tational Allowance established under section 

11 101 of the House of Representatives Adminis12 trative Reform Technical Corrections Act (2 

13 U.S.C. 57b) or as an employee of a committee 

14 of the House or Senate (or in combination) be15 fore being appointed under this paragraph; and 

16 ‘‘(B) shall report directly to the Adminis17 trator. 

18 ‘‘(7) The Assistant Administrator for Inter19 national Trade who—

20 ‘‘(A) shall have a minimum of 5 years ex21 perience in international trade matters; 

22 ‘‘(B) shall carry out section 22; 

23 ‘‘(C) shall be a career employee and may 

24 be an appointee in the Senior Executive Service; 

25 and 
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1 ‘‘(D) shall report to the Associate Adminis2 trator for Enterprise Training and Outreach. 

3 ‘‘(8) The Assistant Administrator for Women’s 

4 Business Ownership who—

5 ‘‘(A) shall carry out section 29; 

6 ‘‘(B) may be an appointee in the Senior 

7 Executive Service; 

8 ‘‘(C) shall report to the Associate Adminis9 trator for Enterprise Outreach and Training; 

10 ‘‘(D) shall advise the Administrator on ap11 pointments to the Women’s Business Council; 

12 ‘‘(E) serve as the vice chairperson of the 

13 Interagency Committee on Women’s Business 

14 Enterprise; and 

15 ‘‘(F) serve as liaison for the National 

16 Women’s Business Council. 

17 ‘‘(e) GENERAL COUNSEL.—The Administrator shall 

18 appoint a General Counsel. 

19 ‘‘(f) REGIONAL OFFICES.—There are 10 regional of20 fices each of which shall be administered by a regional 

21 administrator. Such offices shall have the same jurisdic22 tions as the 10 Federal regions or such regions as are 

23 created by statute or by regulation of the Administrator 

24 of the General Services Administration. 

25 ‘‘(g) DISTRICT OFFICES.—
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1 ‘‘(1) ESTABLISHMENT.—The Administrator 

2 may establish district offices throughout the United 

3 States to provide services under this Act and the 

4 Small Business Investment Act of 1958. 

5 ‘‘(2) CLOSURE.—Except as provided in para6 graph (3), the Administrator may close or combine 

7 district offices as the Administrator determines ap8 propriate. 

9 ‘‘(3) MINIMUM NUMBER.—Each State shall 

10 have at least one district office, except that one dis11 trict office may serve Guam, American Samoa, and 

12 the Commonwealth of the Northern Mariana Is13 lands. 

14 ‘‘(4) DISTRICT DIRECTORS.—

15 ‘‘(A) IN GENERAL.—Each district office 

16 shall have a director appointed by the Adminis17 trator whose salary shall not exceed the rate in 

18 effect for step 10 of GS–15 of the General 

19 Schedule. Each district director shall assist the 

20 Administrator in carrying out the programs es21 tablished by this Act and the Small Business 

22 Investment Act of 1958. 

23 ‘‘(B) APPEAL OF DECISIONS.—The Admin24 istrator shall issue regulations providing proce25 dures for the appeal of any decision made by 
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1 any district director. Such regulations shall be 

2 codified in the Code of Federal Regulations. 

3 ‘‘(C) REVIEW AND REMOVAL.—The Ad4 ministrator shall remove and replace any dis5 trict director if such district director has failed, 

6 with respect to any year, to meet goals devel7 oped by the Administrator for increasing—

8 ‘‘(i) the number of loans made pursu9 ant to section 7 (other than section 7(b)); 

10 ‘‘(ii) the number of participants in the 

11 programs established pursuant to section 

12 8; 

13 ‘‘(iii) the amount Federal Government 

14 procurements from small business concerns 

15 or from any subcategory of small business 

16 concern referred to in section 15(g); or 

17 ‘‘(iv) the amount of dollar financings 

18 for small businesses under the Small Busi19 ness Investment Act of 1958. 

20 ‘‘(D) REASSIGNMENT.—Any district direc21 tor who is removed under subparagraph (C) 

22 shall be reassigned by the Administrator as a 

23 procurement center representative or a commer24 cial marketing representative, as determined by 

25 the Administrator in consultation with the re-
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1 gional administrator. Any such reassignment 

2 shall, for the first year after reassignment, be 

3 at the same grade and salary. 

4 ‘‘(5) DISTRICT COUNSEL.—Each district office 

5 shall have a district counsel. Each district counsel 

6 shall—

7 ‘‘(A) be assigned by, and report to, the 

8 General Counsel; 

9 ‘‘(B) provide legal assistance to the district 

10 director and employees in the district office; 

11 and 

12 ‘‘(C) carry out the required review of 

13 HUBZone firms specified in section 3. 

14 ‘‘(6) BUSINESS OPPORTUNITY SPECIALISTS.—

15 Each district office shall have a business opportunity 

16 specialist who shall assist the district director and 

17 Assistant Administrator for Minority Small Business 

18 and Capital Ownership Development. The majority 

19 of the hours worked by the business opportunity spe20 cialist shall be devoted to the programs established 

21 by section 8(a), unless the district director dem22 onstrates to the Assistant Administrator for Minor23 ity Small Business and Capital Ownership Develop24 ment that there are an insufficient number of firms 
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1 certified pursuant to section 8(a) to require the em2 ployee to devote such hours to such programs. 

3 ‘‘(7) PROCUREMENT CENTER REPRESENTA4 TIVES.—The Associate Administrator for Govern5 ment Contracting and Minority Small Business, 

6 after consultation with the regional administrators 

7 and district directors, shall assign such procurement 

8 center representatives to district offices as the Asso9 ciate Administrator determines to be appropriate. 

10 Any procurement center representative assigned to a 

11 district office or procuring agency activity shall re12 port to the district director. The Associate Adminis13 trator shall assign at least one procurement center 

14 representative in each State. 

15 ‘‘(8) COMMERCIAL MARKETING REPRESENTA16 TIVE.—The Associate Administrator for Government 

17 Contracting and Minority Small Business, after con18 sultation with the regional administrators and dis19 trict directors, shall assign commercial marketing 

20 representatives to district offices as the Associate 

21 Administrator determines to be appropriate. Any 

22 commercial marketing representative assigned to a 

23 district office shall report to the district director. 

24 ‘‘(h) GENERAL PERSONNEL AUTHORITY.—
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1 ‘‘(1) EXPERTS AND CONSULTANTS.—The Ad2 ministrator may procure, for purposes of carrying 

3 out this Act and the Small Business Investment Act 

4 of 1958, temporary and intermittent services under 

5 section 3109(b) of title 5, United States Code. 

6 ‘‘(2) TRAVEL EXPENSES.—Each employee may, 

7 at the discretion of the Administrator, receive travel 

8 expenses, including per diem in lieu of subsistence, 

9 in accordance with applicable provisions under sub10 chapter I of chapter 57 of title 5, United States 

11 Code. Notwithstanding such subchapter, the Admin12 istrator may pay the transportation expenses and 

13 per diem in lieu of subsistence expenses, for travel 

14 of any person employed by the Administration to 

15 render temporary services not in excess of 6 months 

16 in connection with any disaster referred to in section 

17 7(b) from place of appointment to, and while at, the 

18 disaster area and any other temporary posts of duty 

19 and return upon completion of the assignment. The 

20 Administrator may extend the 6-month limitation 

21 for an additional 6 months if the Administrator de22 termines the extension is necessary to continue effi23 cient disaster loan making activities. 
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1 ‘‘(3) NOTARY PUBLIC EXPENSES.—The Admin2 istrator may pay the costs of any employee to qual3 ify as a notary public. 

4 ‘‘(4) DELEGATIONS.—Except as otherwise pro5 vided in this Act or the Small Business Investment 

6 Act of 1958, the Administrator may delegate a func7 tion or responsibility to any employee of the Admin8 istration. The Administrator shall provide by regula9 tion codified in the Code of Federal Regulations the 

10 procedures for determining which delegations are to 

11 be codified in the Code of Federal Regulations. With 

12 respect to any delegations not promulgated by regu13 lation, the Administrator shall collect and collate 

14 such delegations and place them in a prominent lo15 cation on the website maintained for the Administra16 tion.’’. 

17 (b) CONFORMING AMENDMENTS.—

18 (1) So much of section 22 of the Small Busi19 ness Act (15 U.S.C. 649) as precedes subsection (b) 

20 is amended to read as follows: 

21 ‘‘SEC. 22. OFFICE OF INTERNATIONAL TRADE. 

22 ‘‘(a) DUTIES OF ASSISTANT ADMINISTRATOR.—Ex23 cept as otherwise provided in this section, the powers, du24 ties, and responsibilities described in this section shall be 
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1 carried out by the Assistant Administrator for Inter2 national Trade.’’. 

3 (2) Subsection (b) of section 22 of the Small 

4 Business Act (15 U.S.C. 649) is amended by strik5 ing ‘‘The Office’’ the first place it appears and in6 serting ‘‘The Office of International Trade’’. 

7 (c) RELATED REPEAL.—Section 32 of the Small 

8 Business Act (15 U.S.C. 657b) is amended to read as fol9 lows: 

10 ‘‘SEC. 32. [ RESERVED. ].’’. 

11 (d) TRANSITION RULES.—

12 (1) EXCEPTION TO SALARY LIMITATION OF DIS13 TRICT DIRECTORS.—The salary limitation specified 

14 in section 6(g)(4)(A) of the Small Business Act (as 

15 amended by this section) shall not apply with respect 

16 to any district director whose salary exceeds such 

17 limitation on July 1, 2003. 

18 (2) REMOVAL AND REASSIGNMENT OF DEPUTY

19 DISTRICT DIRECTORS.—

20 (A) REMOVAL.—The Administrator may 

21 not appoint any individual to serve as a deputy 

22 district director. Any individual serving as a 

23 deputy district director on the date of the en24 actment of this Act shall be removed from such 
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1 position and reassigned as provided in this 

2 paragraph. 

3 (B) REASSIGNMENT.—Any individual re4 moved from office under subsection (A) shall be 

5 reassigned by the Administrator as a procure6 ment center representative or a commercial 

7 marketing representative, as determined by the 

8 Administrator in consultation with the regional 

9 administrator. Any such reassignment shall be 

10 at not less than the grade and salary which ap11 plied to such individual prior to reassignment. 

12 SEC. 207. LOAN PROGRAMS. 

13 (a) SMALL BUSINESS LOAN PROGRAM.—So much of 

14 section 7 of the Small Business Act (15 U.S.C. 636) as 

15 precedes subsection (b) is amended to read as follows: 

16 ‘‘SEC. 7. LOAN PROGRAMS. 

17 ‘‘(a) SMALL BUSINESS LOAN PROGRAM.—

18 ‘‘(1) LOAN AUTHORITY.—The Administrator 

19 may, to the extent and in such amounts as provided 

20 in advance in appropriation Acts, make loans for 

21 plant acquisition, construction, conversion, or expan22 sion, including the acquisition of land, material, sup23 plies, equipment, and working capital to any small 

24 business concern, including those owned by qualified 

25 Indian tribes for purposes of this Act. 
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1 ‘‘(2) METHODS OF PARTICIPATION.—The Ad2 ministrator may make such loans either directly or 

3 in cooperation with banks or other financial institu4 tions through agreements to participate on an imme5 diate or deferred (guaranteed) basis, except that no 

6 immediate participation may be purchased unless it 

7 is shown that a deferred participation is not avail8 able and no direct financing may be made unless it 

9 is shown that a participation is not available. 

10 ‘‘(3) NO CREDIT ELSEWHERE.—The Adminis11 trator may not make a loan under this subsection if 

12 the applicant can obtain credit elsewhere. 

13 ‘‘(4) CRIMINAL BACKGROUND CHECK.—Before 

14 making any loan under this subsection or section 

15 502 or 503 of the Small Business Investment Act of 

16 1958, the Administrator may verify the applicant’s 

17 criminal background, or lack thereof, through the 

18 best available means, including, if possible, use of 

19 the National Crime Information Center computer 

20 system at the Federal Bureau of Investigation. 

21 ‘‘(5) SOUND AND SECURE REQUIREMENT.—

22 ‘‘(A) IN GENERAL.—Except as otherwise 

23 provided in this paragraph, any loan made 

24 under this subsection shall be of such sound 
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1 value or so secured as reasonably to assure re2 payment. 

3 ‘‘(B) SPECIAL RULES.—For purposes of 

4 subparagraph (A), any reasonable doubt re5 garding the likelihood of repayment shall be re6 solved in favor of the applicant if the applicant 

7 is—

8 ‘‘(i) a disabled person (as defined in 

9 paragraph (8)); or 

10 ‘‘(ii) a small manufacturer. 

11 ‘‘(C) COLLATERAL.—The Administrator 

12 shall not refuse to make a loan under this sub13 section solely due to inadequate collateral, but 

14 a loan shall be secured as fully as possible with 

15 available assets. If the assets of the business 

16 are not sufficient to fully secure the loan, other 

17 assets of the owners of the small business con18 cern may be taken as collateral to the extent 

19 the aggregate amount of collateral does not ex20 ceed the amount necessary to fully secure the 

21 loan. 

22 ‘‘(6) LEVEL OF PARTICIPATION IN GUARAN23 TEED LOANS.—

24 ‘‘(A) IN GENERAL.—Except as provided in 

25 subparagraph (B), in an agreement to partici-
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1 pate in a loan on a deferred basis under this 

2 subsection (including a loan made under the 

3 Preferred Lenders Program), such participation 

4 by the Administrator shall be equal to—

5 ‘‘(i) 75 percent of the balance of the 

6 financing outstanding at the time of dis7 bursement of the loan, if such balance ex8 ceeds $150,000; or 

9 ‘‘(ii) 85 percent of the balance of the 

10 financing outstanding at the time of dis11 bursement of the loan, if such balance is 

12 less than or equal to $150,000. 

13 ‘‘(B) REDUCED PARTICIPATION UPON RE14 QUEST.—

15 ‘‘(i) IN GENERAL.—The guarantee 

16 percentage specified by subparagraph (A) 

17 for any loan under this subsection may be 

18 reduced upon the request of the partici19 pating lender. 

20 ‘‘(ii) PROHIBITION.—The Adminis21 trator shall not use the guarantee percent22 age requested by a participating lender 

23 under clause (i) as a criterion for estab24 lishing priorities in approving loan guar25 antee requests under this subsection. 
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1 ‘‘(C) PARTICIPATION UNDER EXPORT

2 WORKING CAPITAL PROGRAM.—Notwithstanding 

3 subparagraph (A), in an agreement to partici4 pate in a loan on a deferred basis under the 

5 Export Working Capital Program established 

6 pursuant to paragraph (14), such participation 

7 by the Administrator shall not exceed 90 per8 cent. 

9 ‘‘(7) MAXIMUM LOAN AMOUNTS.—No loan shall 

10 be made under this subsection—

11 ‘‘(A) if the total amount outstanding and 

12 committed (by participation or otherwise) solely 

13 for purposes of this subsection to the borrower 

14 from the business loan and investment fund es15 tablished by this Act would exceed $1,000,000 

16 (or if the gross loan amount would exceed 

17 $2,000,000), except as provided in subpara18 graph (B); 

19 ‘‘(B) if the total amount outstanding and 

20 committed (on a deferred basis) solely for the 

21 purposes provided in paragraph (16) to the bor22 rower from the business loan and investment 

23 fund established by this Act would exceed 

24 $2,000,000 of which not more than $1,200,000 

25 may be used for working capital, supplies, or 
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1 financings under paragraph (14) for export 

2 purposes; and 

3 ‘‘(C) if made either directly or in coopera4 tion with banks or other lending institutions 

5 through agreements to participate on an imme6 diate basis if the amount would exceed 

7 $350,000. 

8 ‘‘(8) INTEREST RATES.—

9 ‘‘(A) MAXIMUM RATE SET BY ADMINIS10 TRATOR.—Notwithstanding any State limitation 

11 on the rate or amount of interest which may be 

12 charged, taken, received, or reserved, the max13 imum legal rate of interest on any financing 

14 made on a deferred basis pursuant to this sub15 section shall not exceed a rate prescribed by the 

16 Administrator. 

17 ‘‘(B) IMMEDIATE AND DIRECT LOANS.—

18 The rate of interest for the Administrator’s 

19 share of any direct or immediate participation 

20 loan shall not exceed the current average mar21 ket yield on outstanding marketable obligations 

22 of the United States with remaining periods to 

23 maturity comparable to the average maturities 

of such loans and adjusted to the nearest 1 24 ⁄8 of 

25 1 percent, and an additional amount as deter-
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1 mined by the Administrator, but not to exceed 

2 1 percent per year; 

3 ‘‘(C) PREFERRED LENDERS PROGRAM.—

4 The maximum interest rate for a loan guaran5 teed under the Preferred Lenders Program con6 ducted pursuant to paragraph (31) shall not ex7 ceed the maximum interest rate, as determined 

8 by the Administrator, applicable to other loans 

9 guaranteed under this subsection. 

10 ‘‘(D) DISABLED PERSONS.—

11 ‘‘(i) IN GENERAL.—The maximum in12 terest rate for a loan made under this sub13 section to a disabled person for the estab14 lishment, acquisition or operation of a 

15 small business concern shall be 3 percent 

16 per year. 

17 ‘‘(ii) DISABLED PERSON.—For the 

18 purposes of this subparagraph, the term 

19 ‘disabled person’ means any individual 

20 who—

21 ‘‘(I) is a service-disabled veteran; 

22 or 

23 ‘‘(II) has a disability (as defined 

24 in section 3 of the Americans with 

25 Disabilities Act of 1990) which limits 
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1 such individual’s selection of any type 

2 of employment for which such indi3 vidual would otherwise be qualified or 

4 qualifiable. 

5 ‘‘(9) PREPAYMENT CHARGES.—

6 ‘‘(A) IN GENERAL.—A borrower who pre7 pays any loan guaranteed under this subsection 

8 shall remit to the Administrator a subsidy 

9 recoupment fee calculated in accordance with 

10 subparagraph (B) if—

11 ‘‘(i) the loan is for a term of not less 

12 than 15 years; 

13 ‘‘(ii) the prepayment is voluntary; 

14 ‘‘(iii) the amount of prepayment in 

15 any calendar year is more than 25 percent 

16 of the outstanding balance of the loan; and 

17 ‘‘(iv) the prepayment is made within 

18 the first 3 years after disbursement of the 

19 loan proceeds. 

20 ‘‘(B) SUBSIDY RECOUPMENT FEE.—The 

21 subsidy recoupment fee charged under subpara22 graph (A) shall be—

23 ‘‘(i) 5 percent of the amount of pre24 payment, if the borrower prepays during 

25 the first year after disbursement; 
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1 ‘‘(ii) 3 percent of the amount of pre2 payment, if the borrower prepays during 

3 the second year after disbursement; and 

4 ‘‘(iii) 1 percent of the amount of pre5 payment, if the borrower prepays during 

6 the third year after disbursement. 

7 ‘‘(10) MAXIMUM TERM.—No loans made under 

8 this subsection, including renewals and extensions 

9 thereof, may be made for a period or periods exceed10 ing 25 years, except that such portion of a loan 

11 made for the purpose of acquiring real property or 

12 constructing, converting, or expanding facilities may 

13 have a maturity of 25 years plus such additional pe14 riod as is estimated may be required to complete 

15 such construction, conversion, or expansion. 

16 ‘‘(11) CONSTRUCTION AND REHABILITATION OF

17 REAL PROPERTY.—The Administrator may make a 

18 loan under this subsection to finance residential or 

19 commercial construction or rehabilitation for sale if 

20 such loan is not used primarily for the acquisition of 

21 land. 

22 ‘‘(12) UNEMPLOYED AND LOW-INCOME INDIVID23 UALS.—The Administrator may make loans under 

24 this subsection to any small business concern, or to 

25 any qualified person seeking to establish such a con-
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1 cern, if the Administrator determines that such loan 

2 will further the policies established in section 2, with 

3 particular emphasis on the preservation or establish4 ment of small business concerns located in urban or 

5 rural areas with high proportions of unemployed or 

6 low-income individuals or owned by low-income indi7 viduals. 

8 ‘‘(13) STATE AND LOCAL DEVELOPMENT COM9 PANIES.—The Administrator may make loans under 

10 this subsection to State and local development com11 panies for the purposes of, and subject to the re12 strictions in, title V of the Small Business Invest13 ment Act of 1958. 

14 ‘‘(14) EXPORT WORKING CAPITAL PROGRAM.—

15 ‘‘(A) IN GENERAL.—The Administrator 

16 may provide extensions of credit, standby let17 ters of credit, revolving lines of credit for export 

18 purposes, and other financing to enable small 

19 business concerns, including small business ex20 port trading companies and small business ex21 port management companies, to develop foreign 

22 markets. 

23 ‘‘(B) INTEREST RATES.—A bank or par24 ticipating lending institution may establish the 
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1 rate of interest on such financings as may be 

2 legal and reasonable. 

3 ‘‘(C) CRITERIA FOR LOANS.—When consid4 ering loan or guarantee applications, the Ad5 ministrator shall give weight to export-related 

6 benefits, including opening new markets for 

7 United States goods and services abroad and 

8 encouraging the involvement of small busi9 nesses, including agricultural concerns, in the 

10 export market. 

11 ‘‘(D) MARKETING.—The Administrator 

12 shall aggressively market its export financing 

13 program to small businesses. 

14 ‘‘(15) QUALIFIED EMPLOYEE TRUSTS.—

15 ‘‘(A) LOAN GUARANTEES.—The Adminis16 trator may guarantee loans under this sub17 section to qualified employee trusts with respect 

18 to a small business concern for the purpose of 

19 purchasing stock of the concern under a plan 

20 approved by the Administrator which, when car21 ried out, results in the qualified employee trust 

22 owning at least 51 percent of the stock of the 

23 concern. A qualified employee trust shall be eli24 gible for any loan guarantee under this sub25 section with respect to a small business concern 
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1 on the same basis as if such trust were the 

2 same legal entity as such concern. 

3 ‘‘(B) APPROVAL OF PLAN.—The plan re4 quiring the Administrator’s approval under sub5 paragraph (A) shall be submitted to the Admin6 istrator by the trustee of such trust with its ap7 plication for the guarantee. Such plan shall in8 clude an agreement with the Administrator 

9 which is binding on such trust and on the small 

10 business concern and which provides that—

11 ‘‘(i) not later than the date the loan 

12 guaranteed under subparagraph (A) is re13 paid (or as soon thereafter as is consistent 

14 with the requirements of section 401(a) of 

15 the Internal Revenue Code of 1986, at 

16 least 51 percent of the total stock of such 

17 concern shall be allocated to the accounts 

18 of at least 51 percent of the employees of 

19 such concern who are entitled to share in 

20 such allocation; 

21 ‘‘(ii) there will be periodic reviews of 

22 the role in the management of such con23 cern of employees to whose accounts stock 

24 is allocated; and 
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1 ‘‘(iii) there will be adequate manage2 ment to assure management expertise and 

3 continuity. 

4 ‘‘(C) CERTAIN CHARACTERISTICS OF EM5 PLOYEE-OWNERS DISREGARDED.—In deter6 mining whether to guarantee any loan under 

7 this paragraph, the individual business experi8 ence or personal assets of employee-owners shall 

9 not be used as criteria, except that the business 

10 experience of employee-owners who assume 

11 managerial responsibilities may be considered. 

12 ‘‘(D) CERTAIN CORPORATIONS TREATED

13 AS SMALL BUSINESS CONCERNS.—For purposes 

14 of this paragraph, a corporation which is con15 trolled by any other person shall be treated as 

16 a small business concern if such corporation 

17 would, after the plan described in subparagraph 

18 (B) is carried out, be treated as a small busi19 ness concern. 

20 ‘‘(16) INTERNATIONAL TRADE.—

21 ‘‘(A) IN GENERAL.—If the Administrator 

22 determines that a loan guaranteed under this 

23 subsection will allow an eligible small business 

24 concern in an industry engaged in or adversely 

25 affected by international trade to improve its 
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1 competitive position, the Administrator may 

2 make such loan to assist such concern in—

3 ‘‘(i) the financing of the acquisition, 

4 construction, renovation, modernization, 

5 improvement or expansion of productive fa6 cilities or equipment to be used in the 

7 United States in the production of goods 

8 and services involved in international 

9 trade; or 

10 ‘‘(ii) the refinancing of existing in11 debtedness which is not structured with 

12 reasonable terms and conditions. 

13 ‘‘(B) SECURITY.—Each loan made under 

14 this paragraph shall be secured by a first lien 

15 position or first mortgage on the property or 

16 equipment financed by the loan or on other as17 sets of the concern. 

18 ‘‘(C) ENGAGED IN OR ADVERSELY AF19 FECTED BY INTERNATIONAL TRADE.—For pur20 poses of this paragraph, a small business con21 cern shall be considered to be engaged in or ad22 versely affected by international trade if such 

23 concern is determined by the Administrator 

24 (under regulations prescribed by the Adminis25 trator to be—
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1 ‘‘(i) in a position to significantly ex2 pand existing export markets or develop 

3 new export markets; or 

4 ‘‘(ii) adversely affected by import 

5 competition in that it—

6 ‘‘(I) is confronting increased di7 rect competition with foreign firms in 

8 the relevant market; and 

9 ‘‘(II) can demonstrate injury at10 tributable to such competition. 

11 ‘‘(D) FINDINGS BY INTERNATIONAL TRADE

12 COMMISSION.—For purposes of subparagraph 

13 (C)(ii)(II), the Administrator shall accept any 

14 finding of injury by the International Trade 

15 Commission. 

16 ‘‘(17) AUTHORIZED LENDING INSTITUTIONS.—

17 The Administrator shall authorize lending institu18 tions and other entities in addition to banks to make 

19 loans authorized under this subsection. 

20 ‘‘(18) GUARANTEE FEES.—

21 ‘‘(A) IN GENERAL.—With respect to each 

22 loan guaranteed under this subsection (other 

23 than a loan that is repayable in 1 year or less), 

24 the Administration shall collect a guarantee fee, 

25 which shall be payable by the participating 
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1 lender, but which may be collected in advance 

2 by the lender from the borrower, as follows: 

3 ‘‘(i) A guarantee fee equal to 1 per4 cent of the deferred participation share of 

5 a total loan amount that is not more than 

6 $150,000. 

7 ‘‘(ii) A guarantee fee equal to 2.5 per8 cent of the deferred participation share of 

9 a total loan amount that is more than 

10 $150,000, but not more than $700,000. 

11 ‘‘(iii) A guarantee fee equal to 3.5 

12 percent of the deferred participation share 

13 of a total loan amount that is more than 

14 $700,000. 

15 ‘‘(B) RETENTION OF CERTAIN FEES.—

16 Lenders participating in the programs estab17 lished under this subsection may retain not 

18 more than 25 percent of a fee collected under 

19 subparagraph (A)(i). 

20 ‘‘(19) CERTIFIED LENDERS PROGRAM.—

21 ‘‘(A) IN GENERAL.— There is a Certified 

22 Lenders Program for lenders who establish 

23 their knowledge of laws and regulations con24 cerning the guaranteed loan program and their 

25 proficiency in program requirements as set 
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1 forth in regulations codified in the Code of Fed2 eral Regulations. 

3 ‘‘(B) SUSPENSION AND REVOCATION OF

4 DESIGNATION.—The designation of a lender as 

5 a certified lender shall be suspended or revoked 

6 at any time that the Administrator determines 

7 that the lender is not adhering to established 

8 rules and regulations or that the loss experience 

9 of the lender is excessive as compared to other 

10 lenders, but such suspension or revocation shall 

11 not affect any outstanding guarantee. 

12 ‘‘(C) AUTHORITY TO LIQUIDATE LOANS.—

13 ‘‘(i) IN GENERAL.—The Administrator 

14 may permit lenders participating in the 

15 Certified Lenders Program to liquidate 

16 loans made with a guarantee from the Ad17 ministrator pursuant to a liquidation plan 

18 approved by the Administrator. 

19 ‘‘(ii) AUTOMATIC APPROVAL.—If the 

20 Administrator does not approve or deny a 

21 request for approval of a liquidation plan 

22 within 10 business days of the date on 

23 which the request is made (or with respect 

24 to any routine liquidation activity under 
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1 such a plan, within 5 business days) such 

2 request shall be deemed to be approved. 

3 ‘‘(20) MINORITY BUSINESS DEVELOPMENT PRO4 GRAM PARTICIPANTS.—

5 ‘‘(A) IN GENERAL.—The Administrator 

6 may make loans either directly or in coopera7 tion with banks or other financial institutions 

8 through agreements to participate on an imme9 diate or deferred (guaranteed) basis to small 

10 business concerns eligible for assistance under 

11 section 8(a). Such assistance may be provided 

12 only if the Administrator determines that—

13 ‘‘(i) the type and amount of such as14 sistance requested by such concern is not 

15 otherwise available on reasonable terms 

16 from other sources; 

17 ‘‘(ii) with such assistance such con18 cern has a reasonable prospect for oper19 ating soundly and profitably within a rea20 sonable period of time; 

21 ‘‘(iii) the proceeds of such assistance 

22 will be used within a reasonable time for 

23 plant construction, conversion, or expan24 sion, including the acquisition of equip25 ment, facilities, machinery, supplies, or 
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1 material or to supply such concern with 

2 working capital to be used in the manufac3 ture of articles, equipment, supplies, or 

4 material for defense or civilian production 

5 or as may be necessary to insure a well6 balanced national economy; and 

7 ‘‘(iv) such assistance is of such sound 

8 value as reasonably to assure that the 

9 terms under which it is provided will not 

10 be breached by the small business concern. 

11 ‘‘(B) MAXIMUM AMOUNT OF LOANS.—No 

12 loan shall be made under this paragraph if the 

13 total amount outstanding and committed (by 

14 participation or otherwise) to the borrower 

15 would exceed $750,000. 

16 ‘‘(C) MINIMUM PARTICIPATION.—Subject 

17 to the limitation of subparagraph (B), in agree18 ments to participate in loans on a deferred 

19 (guaranteed) basis, participation by the Admin20 istrator shall be not less than 85 percent of the 

21 balance of the financing outstanding at the time 

22 of disbursement. 

23 ‘‘(D) INTEREST RATE.—The rate of inter24 est on financings made on a deferred (guaran25 teed) basis shall be legal and reasonable. 
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1 ‘‘(E) METHODS OF PARTICIPATION.—No 

2 immediate participation may be purchased 

3 under this paragraph unless it is shown that a 

4 deferred participation is not available. No direct 

5 financing may be made under this paragraph 

6 unless it is shown that a participation is un7 available. A direct loan or the Administrator’s 

8 share of an immediate participation loan made 

9 pursuant to this paragraph shall be any secured 

10 debt instrument—

11 ‘‘(i) that is subordinated by its terms 

12 to all other borrowings of the issuer; 

13 ‘‘(ii) the rate of interest on which 

14 shall not exceed the current average mar15 ket yield on outstanding marketable obliga16 tions of the United States with remaining 

17 periods to maturity comparable to the av18 erage maturities of such loan and adjusted 

to the nearest 1 19 ⁄8 of 1 percent; 

20 ‘‘(iii) the term of which is not more 

21 than 25 years; 

22 ‘‘(iv) the principal on which is amor23 tized at such rate as may be deemed ap24 propriate by the Administrator; and 
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1 ‘‘(v) the interest on which is payable 

2 not less often than annually. 

3 ‘‘(21) CLOSURE OF DOD INSTALLATIONS.—

4 ‘‘(A) IN GENERAL.—The Administrator 

5 may make loans on a guaranteed basis under 

6 the authority of this subsection—

7 ‘‘(i) to a small business concern that 

8 has been (or can reasonably be expected to 

9 be) detrimentally affected by—

10 ‘‘(I) the closure (or substantial 

11 reduction) of a Department of De12 fense installation; or 

13 ‘‘(II) the termination (or sub14 stantial reduction) of a Department of 

15 Defense program on which such small 

16 business was a prime contractor or 

17 subcontractor (or supplier) at any 

18 tier; or 

19 ‘‘(ii) to a qualified individual or a vet20 eran seeking to establish (or acquire) and 

21 operate a small business concern. 

22 ‘‘(B) REASONABLE DOUBT GIVEN TO AP23 PLICANT.—Recognizing that greater risk may 

24 be associated with a loan to a small business 

25 concern described in subparagraph (A)(i), any 
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1 reasonable doubts concerning the firm’s pro2 posed business plan for transition to non3 defense-related markets shall be resolved in 

4 favor of the loan applicant when making any 

5 determination regarding the sound value of the 

6 proposed loan in accordance with paragraph 

7 (5). 

8 ‘‘(C) AUTHORIZATION.—Loans pursuant to 

9 this paragraph shall be authorized in such 

10 amounts as provided in advance in appropria11 tion Acts for the purposes of loans under this 

12 paragraph. 

13 ‘‘(D) QUALIFIED INDIVIDUAL.—For pur14 poses of this paragraph a qualified individual 

15 is—

16 ‘‘(i) a member of the Armed Forces of 

17 the United States, honorably discharged 

18 from active duty involuntarily or pursuant 

19 to a program providing bonuses or other 

20 inducements to encourage voluntary sepa21 ration or early retirement; 

22 ‘‘(ii) a civilian employee of the De23 partment of Defense involuntarily sepa24 rated from Federal service or retired pur-
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1 suant to a program offering inducements 

2 to encourage early retirement; or 

3 ‘‘(iii) an employee of a prime con4 tractor, subcontractor, or supplier at any 

5 tier of a Department of Defense program 

6 whose employment is involuntarily termi7 nated (or voluntarily terminated pursuant 

8 to a program offering inducements to en9 courage voluntary separation or early re10 tirement) due to the termination (or sub11 stantial reduction) of a Department of De12 fense program. 

13 ‘‘(E) JOB CREATION AND COMMUNITY

14 BENEFIT.—In providing assistance under this 

15 paragraph, the Administrator shall develop pro16 cedures to ensure, to the maximum extent prac17 ticable, that such assistance is used for projects 

18 that—

19 ‘‘(i) have the greatest potential for—

20 ‘‘(I) creating new jobs for indi21 viduals whose employment is involun22 tarily terminated due to reductions in 

23 Federal defense expenditures; or 

24 ‘‘(II) preventing the loss of jobs 

25 by employees of small business con-
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1 cerns described in subparagraph 

2 (A)(i); and 

3 ‘‘(ii) have substantial potential for 

4 stimulating new economic activity in com5 munities most affected by reductions in 

6 Federal defense expenditures. 

7 ‘‘(22) LATE FEES.—The Administrator may 

8 permit participating lenders to impose and collect a 

9 reasonable penalty fee on late payments of loans 

10 guaranteed under this subsection in an amount not 

11 to exceed 5 percent of the monthly loan payment per 

12 month plus interest. 

13 ‘‘(23) ANNUAL FEE.—

14 ‘‘(A) IN GENERAL.—With respect to each 

15 loan guaranteed under this subsection, the Ad16 ministrator shall, in accordance with such terms 

17 and procedures as the Administrator shall es18 tablish by regulation, assess and collect an an19 nual fee in an amount equal to 0.5 percent of 

20 the outstanding balance of the deferred partici21 pation share of the loan. With respect to loans 

22 approved during the 2-year period beginning on 

23 October 1, 2002, the annual fee assessed and 

24 collected under the preceding sentence shall be 

25 in an amount equal to 0.25 percent of the out-
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1 standing balance of the deferred participation 

2 share of the loan. 

3 ‘‘(B) PAYER.—The annual fee assessed 

4 under subparagraph (A) shall be payable by the 

5 participating lender and shall not be charged to 

6 the borrower. 

7 ‘‘(C) AGENTS.—The Administrator may 

8 contract with any agent to carry out, on behalf 

9 of the Administrator, the assessment and collec10 tion of annual fees referred to in subparagraph 

11 (A). Such agent may receive as compensation 

12 for services any interest earned on the fees 

13 while in such agent’s control and prior to the 

14 time when the agent, pursuant to contract, is 

15 required to remit the fees to the Administrator. 

16 ‘‘(24) NOTIFICATION REQUIREMENT.—The Ad17 ministrator shall notify the Committee on Small 

18 Business of the House of Representatives and the 

19 Committee on Small Business and Entrepreneurship 

20 of the Senate not later than 15 days before making 

21 any significant policy or administrative change af22 fecting the operation of the loan program under this 

23 subsection, including the establishment of any pilot 

24 project pursuant to paragraph (25). 
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1 ‘‘(25) LIMITATION ON CONDUCTING PILOT

2 PROJECTS.—

3 ‘‘(A) LIMITATION ON NUMBER.—Not more 

4 than 10 percent of the total number of loans 

5 guaranteed in any fiscal year under this sub6 section may be awarded as part of a pilot pro7 gram which is commenced by the Administrator 

8 on or after January 1, 1994. 

9 ‘‘(B) DOLLAR LIMITATIONS.—

10 ‘‘(i) IN GENERAL.—In the case of any 

11 pilot program established on or after the 

12 date of the enactment of this subpara13 graph, no loan shall be made under such 

14 program if such loan would result in the 

15 total amount of loans made during the fis16 cal year under all such programs to be in 

17 excess of 5 percent of the total amount of 

18 loans guaranteed in such fiscal year under 

19 this subsection. 

20 ‘‘(ii) CERTAIN PRE-EXISTING PRO21 GRAMS.—In the case of any pilot program 

22 established before the date of the enact23 ment of this subparagraph, no loan shall 

24 be made under such program if such loan 

25 would result in the total amount of loans 
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1 made during the fiscal year under all such 

2 programs to be in excess of 15 percent of 

3 the total amount of loans guaranteed in 

4 such fiscal year under this subsection. 

5 ‘‘(C) MAXIMUM TERM.—The duration of 

6 any pilot program authorized by this paragraph 

7 shall not exceed 3 years. For purposes of this 

8 subparagraph, a pilot program shall not be 

9 treated as a new pilot program solely on the 

10 basis of a modification or change in a pilot pro11 gram, including the change of its name. With 

12 respect to any pilot program in existence on the 

13 date of the enactment of this subparagraph, 

14 this subparagraph shall apply without regard to 

15 any period ending before such date. 

16 ‘‘(D) REGULATIONS.—With respect to each 

17 pilot program under this subsection, the Admin18 istrator shall—

19 ‘‘(i) promulgate regulations for such 

20 program pursuant to section 553(b) of title 

21 5, United States Code; 

22 ‘‘(ii) provide not less than 60 days for 

23 notice and comment on such regulations; 

24 and 
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1 ‘‘(iii) ensure that such regulations are 

2 codified in the Code of Federal Regula3 tions. 

4 In the case of any pilot program established 

5 after the date of the enactment of this subpara6 graph, such program shall not go into effect 

7 until after the requirements of this subpara8 graph are satisfied. 

9 ‘‘(E) PILOT PROGRAM.—For purposes of 

10 this paragraph, the term ‘pilot program’ means 

11 any lending program initiative, project, innova12 tion, or other activity not specifically authorized 

13 by law. 

14 ‘‘(26) CALCULATION OF SUBSIDY RATE.—All 

15 fees, interest, and profits received and retained by 

16 the Administrator under this subsection shall be in17 cluded in the calculations made by the Director of 

18 the Office of Management and Budget to offset the 

19 cost (as that term is defined in section 502 of the 

20 Federal Credit Reform Act of 1990) to the Adminis21 trator of purchasing and guaranteeing loans under 

22 this Act. 

23 ‘‘(27) LOW DOCUMENTATION LOAN PRO24 GRAM.—
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1 ‘‘(A) IN GENERAL.—The Administrator 

2 may issue guarantees under this subsection for 

3 loans of $150,000 or less with less documenta4 tion than would otherwise be required by the 

5 Administrator under this subsection. 

6 ‘‘(B) REGULATIONS.—Not later than 120 

7 days after the date of the enactment of this 

8 paragraph, the Administrator shall promulgate 

9 regulations to carry out the provisions of this 

10 paragraph after the opportunity for notice and 

11 comment pursuant to section 553(b) of title 5, 

12 United States Code. Such regulations shall be 

13 codified in the Code of Federal Regulations. 

14 ‘‘(28) LEASING.—In addition to such other 

15 lease arrangements as may be authorized by the Ad16 ministrator, a borrower may permanently lease to 

17 one or more tenants not more than 20 percent of 

18 any property constructed with the proceeds of a loan 

19 guaranteed under this subsection, if the borrower 

20 permanently occupies and uses not less than 60 per21 cent of the total business space in the property. 

22 ‘‘(29) REAL ESTATE APPRAISALS.—With re23 spect to a loan under this subsection that is secured 

24 by commercial real property, an appraisal of such 

25 property by a State licensed or certified appraiser—
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1 ‘‘(A) shall be required by the Adminis2 trator in connection with any such loan for 

3 more than $250,000; or 

4 ‘‘(B) may be required by the Administrator 

5 or the lender in connection with any such loan 

6 for $250,000 or less, if such appraisal is nec7 essary for appropriate evaluation of credit8 worthiness. 

9 ‘‘(30) OWNERSHIP REQUIREMENTS.—Owner10 ship requirements to determine the eligibility of a 

11 small business concern that applies for assistance 

12 under any credit program under this Act shall be de13 termined without regard to any ownership interest of 

14 a spouse arising solely from the application of the 

15 community property laws of a State for purposes of 

16 determining marital interests. 

17 ‘‘(31) PREFERRED LENDERS PROGRAM.—

18 ‘‘(A) IN GENERAL.—There is a Preferred 

19 Lenders Program. 

20 ‘‘(B) PARTICIPATION.—The Administrator 

21 may designate a preferred lender under this 

22 paragraph only if the lender demonstrates 

23 knowledge of the Small Business Act and the 

24 regulations promulgated thereunder and estab-
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1 lishes to the satisfaction of the Administrator 

2 that it—

3 ‘‘(i) has the ability to process, close, 

4 service, and liquidate loans; 

5 ‘‘(ii) has the ability to develop and 

6 analyze complete loan packages; and 

7 ‘‘(iii) has a satisfactory performance 

8 history of participation in the lending pro9 gram established under this subsection as 

10 demonstrated by a default rate that does 

11 not exceed—

12 ‘‘(I) the national average; or 

13 ‘‘(II) in the case any lender 

14 which made at least 20 percent of its 

15 loans in Alaska, Hawaii, State-des16 ignated enterprise zones, enterprise 

17 zones, empowerment zones, enterprise 

18 communities, or labor surplus areas 

19 as determined by the Department of 

20 Labor, or to small manufacturers, the 

21 national average plus 2 percentage 

22 points. 

23 ‘‘(C) DELEGATED AUTHORITY.—With re24 spect to loans made under this subsection, pre-
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1 ferred lenders shall, without prior approval of 

2 the Administrator: 

3 ‘‘(i) Determine creditworthiness and 

4 eligibility. 

5 ‘‘(ii) Make and close loans with a 

6 guarantee from the Administrator. 

7 ‘‘(iii) Monitor loan performance. 

8 ‘‘(iv) Service and collect the loans. 

9 ‘‘(v) Foreclose and liquidate loans. 

10 ‘‘(D) PROHIBITED ACTIVITIES.—A pre11 ferred lender shall not take any action that cre12 ates an actual or apparent conflict of interest or 

13 places the Federal Government’s guarantee at 

14 significant risk beyond the risk associated with 

15 loan nonperformance. 

16 ‘‘(E) AREA OF OPERATIONS.—The des17 ignation by the Administrator of a lender to 

18 participate in the program established pursuant 

19 to this paragraph shall authorize the activities 

20 described in subparagraph (C) only with respect 

21 to small business concerns located in areas 

22 served by such office or offices as the Adminis23 trator designates with respect to such lender. 

24 ‘‘(F) DESIGNATION AS NATIONAL PRE25 FERRED LENDERS.—The Administrator, upon 
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1 application, may designate a preferred lender as 

2 a national preferred lender. A national pre3 ferred lender may conduct the activities de4 scribed in subparagraph (C) with respect to 

5 each area served by an office of the Adminis6 trator. The Administrator shall not grant such 

7 designation unless the applicant dem8 onstrates—

9 ‘‘(i) operation as a preferred lender in 

10 at least 5 States or within the territory 

11 served by at least 10 offices of the Admin12 istrator for a period of not less than 3 

13 years; 

14 ‘‘(ii) issuance of a minimum of 50 

15 loans per year as a preferred lender; 

16 ‘‘(iii) centralization of approval, loan 

17 servicing and liquidation functions that 

18 meet such standards as the Administrator 

19 may establish by regulations, which are 

20 promulgated after notice and the oppor21 tunity for public comment not later than 

22 180 days after the date of the enactment 

23 of this clause; 
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1 ‘‘(iv) maintenance of uniform written 

2 policies and procedures on the issuance of 

3 loans guaranteed under this subsection; 

4 ‘‘(v) maintenance of a portfolio of 

5 loans guaranteed under this subsection 

6 that do not exceed the national average de7 fault, currency, and recovery rates for pre8 ferred lenders; and 

9 ‘‘(vi) receipt of a substantially satis10 factory compliance review rating from the 

11 Administrator in its most recent audit and 

12 examination as a preferred lender and a 

13 small business lending company, if applica14 ble, or has received a substantially satisfac15 tory rating as a result of a follow-up re16 view. 

17 ‘‘(G) CORRECTIVE ACTION.—If a national 

18 preferred lender is deficient with respect to any 

19 requirement described in subparagraph (F), the 

20 Administrator shall notify such lender in writ21 ing and shall provide the lender a reasonable 

22 period of time to conform to such requirements 

23 before taking any corrective action. 

24 ‘‘(H) SUSPENSION OR REVOCATION.—The 

25 Administrator may, depending upon the severity 
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1 of the failure to comply with the standards set 

2 forth in this paragraph, suspend or revoke a 

3 lender’s status as a preferred lender or a na4 tional preferred lender. Any such suspension or 

5 revocation shall not affect any outstanding 

6 guarantee. 

7 ‘‘(I) LIMITATION ON DELEGATION.—No 

8 authority under this paragraph may be dele9 gated to any employee of the Administration 

10 who is based in a regional or district office. 

11 ‘‘(32) SIMPLIFIED FORM FOR SMALL GUARAN12 TEES.—The Administrator shall develop and allow 

13 participating lenders to solely utilize a uniform and 

14 simplified loan form for loans of $50,000 or less in 

15 guarantees to eligible applicants. 

16 ‘‘(33) SPECIAL RULE ON AFFILIATION.—A busi17 ness concern applying for assistance under this sub18 section shall be considered small for purposes of this 

19 subsection without regard to affiliation with another 

20 business concern if the applicant has no legal re21 course to have its affiliate repay any of its debt obli22 gations. 

23 (b) DISASTER LOAN PROGRAM.—Subsection (b) of 

24 section 7 of the Small Business Act (15 U.S.C.636) is 

25 amended to read as follows: 
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•HR 2802 IH 

1 ‘‘(b) DISASTER LOAN PROGRAM.—

2 ‘‘(1) PHYSICAL LOSS DISASTER LOANS.—

3 ‘‘(A) LOAN AUTHORITY.—Except as to ag4 ricultural enterprises, the Administrator may, 

5 to the extent and in such amounts as provided 

6 in advance in appropriation Acts, make such 

7 loans (either directly or in cooperation with 

8 banks or other lending institutions through 

9 agreements to participate on an immediate or 

10 deferred (guaranteed) basis) as the Adminis11 trator may determine to be necessary or appro12 priate to repair, rehabilitate or replace prop13 erty, real or personal, damaged or destroyed by 

14 or as a result of natural or other disasters. 

15 ‘‘(B) LOAN AMOUNT.—The amount of any 

16 loan made under this paragraph shall be equal 

17 to 100 percent of the loss except that the 

18 amount of the loan shall be reduced by—

19 ‘‘(i) any amount covered by insurance 

20 or otherwise; or 

21 ‘‘(ii) in the case of a loan used to refi22 nance a mortgage or other lien, any 

23 amount covered by insurance or otherwise. 

24 ‘‘(C) SPECIAL RULES.—The Administrator 

25 shall not—
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1 ‘‘(i) reduce the loan amount on real 

2 estate to below $100,000 unless the 

3 amount of loss calculated under subpara4 graph (B) is less than $100,000; 

5 ‘‘(ii) reduce the loan amount on per6 sonal property, whether held by a home7 owner or lessee, to below $20,000, unless 

8 the amount of the loss calculated under 

9 subparagraph (B) is less than $20,000; 

10 ‘‘(iii) take into account for purposes 

11 of subparagraph (B) any sums made avail12 able for refinancing pursuant to subpara13 graph (D); or 

14 ‘‘(iv) require collateral for loans of 

15 $10,000 or less. 

16 ‘‘(D) REFINANCINGS.—Such loans may be 

17 used to refinance any mortgage or other lien 

18 against a totally destroyed or substantially 

19 damaged home or business concern except that 

20 the Administrator shall not make any loan or 

21 guarantee under this paragraph unless the Ad22 ministrator finds—

23 ‘‘(i) the applicant is not able to obtain 

24 credit elsewhere; 
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•HR 2802 IH 

1 ‘‘(ii) such property is to be repaired, 

2 rehabilitated, or replaced; and 

3 ‘‘(iii) the amount refinanced shall not 

4 exceed the amount of physical loss sus5 tained. 

6 ‘‘(E) INCREASE FOR MITIGATING MEAS7 URES.—The Administrator may increase the 

8 amount of any loan under this subsection by up 

9 to an additional 20 percent if he determines 

10 such increase to be necessary or appropriate in 

11 order to protect the damaged or destroyed prop12 erty from possible future disasters by taking 

13 mitigating measures, including construction of 

14 retaining walls and sea walls, grading and 

15 contouring land, relocating utilities and modi16 fying structures. 

17 ‘‘(2) ECONOMIC INJURY DISASTER LOANS.—

18 ‘‘(A) LOAN AUTHORITY.—Except as to ag19 ricultural enterprises (other than small agricul20 tural cooperatives), the Administrator may, to 

21 the extent and in such amounts as provided in 

22 advance in appropriation Acts, make such loans 

23 (either directly or in cooperation with banks or 

24 other lending institutions through agreements 

25 to participate on an immediate or deferred 
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•HR 2802 IH 

1 (guaranteed) basis as the Administrator may 

2 determine to be necessary or appropriate to any 

3 small business concern or small agricultural co4 operative located in an area affected by a dis5 aster (which shall include all of the county in 

6 which the disaster occurred and counties contig7 uous to the county of the disaster as deter8 mined by the President or Administrator), if 

9 the Administrator determines that the concern 

10 or the cooperative has suffered a substantial 

11 economic injury as a result of such disaster and 

12 if such disaster constitutes—

13 ‘‘(i) a major disaster, as determined 

14 by the President under the Disaster Relief 

15 and Emergency Assistance Act; or 

16 ‘‘(ii) a natural disaster, as determined 

17 by the Secretary of Agriculture pursuant 

18 to the Consolidated Farmers Home Admin19 istration Act of 1961 (7 U.S.C. 1961); or 

20 ‘‘(iii) a disaster, as determined by the 

21 Administrator. 

22 ‘‘(B) STATE CERTIFICATION.—If no dis23 aster declaration has been issued under sub24 paragraph (A), the Governor of a State in 

25 which a disaster has occurred may certify to the 
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•HR 2802 IH 

1 Administrator that small business concerns or 

2 small agricultural cooperatives have suffered 

3 economic injury as a result of such disaster and 

4 are in need of financial assistance which is not 

5 available on reasonable terms in the disaster 

6 stricken area. Upon receipt of such certifi7 cation, the Administrator may then make such 

8 loans as would have been available under this 

9 paragraph if a disaster declaration had been 

10 issued. 

11 ‘‘(C) UNABLE TO OBTAIN CREDIT ELSE12 WHERE.—No loan or guarantee shall be ex13 tended pursuant to this paragraph unless the 

14 Administrator finds that the applicant is not 

15 able to obtain credit elsewhere. 

16 ‘‘(3) ESSENTIAL EMPLOYEES CALLED TO AC17 TIVE DUTY.—

18 ‘‘(A) DEFINITIONS.—For purposes of this 

19 paragraph: 

20 ‘‘(i) ESSENTIAL EMPLOYEE.—The 

21 term ‘essential employee’ means an indi22 vidual who is employed by a small business 

23 concern and whose managerial or technical 

24 expertise is critical to the successful day-
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1 to-day operations of that small business 

2 concern. 

3 ‘‘(ii) PERIOD OF MILITARY CON4 FLICT.—The term ‘period of military con5 flict’ has the meaning given the term in 

6 subsection (n)(1). 

7 ‘‘(iii) SUBSTANTIAL ECONOMIC IN8 JURY.—The term ‘substantial economic in9 jury’ means an economic harm to a busi10 ness concern that results in the inability of 

11 the business concern—

12 ‘‘(I) to meet its obligations as 

13 they mature; 

14 ‘‘(II) to pay its ordinary and nec15 essary operating expenses; or 

16 ‘‘(III) to market, produce, or pro17 vide a product or service ordinarily 

18 marketed, produced, or provided by 

19 the business concern. 

20 ‘‘(B) LOAN AUTHORITY.—The Adminis21 trator may make such disaster loans (either di22 rectly or in cooperation with banks or other 

23 lending institutions through agreements to par24 ticipate on an immediate or deferred basis) to 

25 assist a small business concern that has suf-
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1 fered or that is likely to suffer substantial eco2 nomic injury as the result of an essential em3 ployee of such small business concern being or4 dered to active military duty during a period of 

5 military conflict. 

6 ‘‘(C) PERIOD OF ELIGIBILITY.—A small 

7 business concern described in subparagraph (B) 

8 shall be eligible to apply for assistance under 

9 this paragraph during the period beginning on 

10 the date on which the essential employee is or11 dered to active duty and ending on the date 

12 that is 90 days after the date on which such es13 sential employee is discharged or released from 

14 active duty. 

15 ‘‘(D) INTEREST RATE.—Any loan or guar16 antee extended pursuant to this paragraph shall 

17 be made at the same interest rate as economic 

18 injury disaster loans under paragraph (2). 

19 ‘‘(E) MAXIMUM LOAN AMOUNT.—No loan 

20 may be made under this paragraph, either di21 rectly or in cooperation with banks or other 

22 lending institutions through agreements to par23 ticipate on an immediate or deferred basis, if 

24 the total amount outstanding and committed to 

25 the borrower under this subsection would ex-
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1 ceed $1,500,000, unless the applicant can es2 tablish pursuant to regulations promulgated by 

3 the Administrator pursuant to paragraph (9) 

4 that this maximum should be waived. 

5 ‘‘(F) NO DISASTER DECLARATION RE6 QUIRED.—For purposes of assistance under this 

7 paragraph, no declaration of a disaster area 

8 shall be required. 

9 ‘‘(4) SPECIAL RULE TO DETERMINE SMALL

10 CONCERNS.—For purposes of this subsection, a busi11 ness concern and an agricultural cooperative are 

12 considered small if the business concern or agricul13 tural cooperative has 500 or fewer employees. 

14 ‘‘(5) MAXIMUM TERM.— Except as provided in 

15 paragraph (6), no loan under this subsection, includ16 ing renewals and extensions thereof, may be made 

17 for a period or periods exceeding 30 years. No loan 

18 described in paragraph (11)(D)(iii) shall be made 

19 for a period or periods exceeding 3 years. 

20 ‘‘(6) SUSPENSION OF PAYMENTS.—

21 ‘‘(A) IN GENERAL.—The Administrator 

22 may consent to a suspension in the payment of 

23 principal and interest charges on, and to an ex24 tension in the maturity of, the Federal share of 
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1 any loan under this subsection for a period of 

2 not to exceed 5 years, if—

3 ‘‘(i) the borrower under such loan is a 

4 homeowner or a small business concern; 

5 ‘‘(ii) the loan was made to enable—

6 ‘‘(I) such homeowner to repair or 

7 replace his home; or 

8 ‘‘(II) such concern to repair or 

9 replace plant or equipment which was 

10 damaged or destroyed as the result of 

11 a disaster described in clause (i) or 

12 (ii) of paragraph (2)(A); and 

13 ‘‘(iii) the Administrator determines 

14 such action is necessary to avoid severe fi15 nancial hardship. 

16 ‘‘(B) PURCHASE OF NON-FEDERAL

17 SHARE.—During any period in which principal 

18 and interest charges are suspended on the Fed19 eral share of any loan under this paragraph, 

20 the Administrator shall, upon the request of 

21 any person, firm, or corporation having a par22 ticipation in such loan, purchase such participa23 tion, or assume the obligation of the borrower, 

24 for the balance of such period, to make prin25 cipal and interest payments on the non-Federal 
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1 share of such loan. No such payments shall be 

2 made by the Administrator in behalf of any bor3 rower unless—

4 ‘‘(i) the Administrator determines 

5 that such action is necessary in order to 

6 avoid a default; and 

7 ‘‘(ii) the borrower agrees to make pay8 ments to the Administration in an aggre9 gate amount equal to the amount paid in 

10 its behalf by the Administrator, in such 

11 manner and at such times (during or after 

12 the term of the loan) as the Administrator 

13 shall determine having due regard to the 

14 purposes sought to be achieved by this 

15 clause. 

16 ‘‘(7) ADDITIONAL DISASTER AREAS.—The Ad17 ministrator shall promulgate regulations for deter18 mining under what circumstances loans can be made 

19 under paragraph (2)(A) in counties beyond the 

20 counties designated pursuant to clause (i), (ii), or 

21 (iii) of paragraph (2)(A). 

22 ‘‘(8) CIVIL PENALTY FOR MISUSE OF LOAN.—

23 Whoever wrongfully misapplies the proceeds of a 

24 loan obtained under this subsection shall be civilly 

25 liable to the Administrator in an amount equal to 
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1 150 percent of the original principal amount of the 

2 loan. 

3 ‘‘(9) MAXIMUM LOAN AMOUNT.—The Adminis4 trator shall establish by regulation the maximum 

5 amount of indebtedness which may be committed to 

6 any borrower under this subsection. Such regulation 

7 shall be codified in the Code of Federal Regulations 

8 and shall specify the conditions under which the Ad9 ministrator shall waive any such maximum based on 

10 the need to speed economic recovery of the region. 

11 ‘‘(10) MAXIMUM GUARANTEED PARTICIPA12 TION.—In agreements to participate in loans on a 

13 deferred basis under this subsection, such participa14 tion by the Administrator shall not be in excess of 

15 90 percent of the balance of the loan outstanding at 

16 the time of disbursement. 

17 ‘‘(11) INTEREST RATE.—The interest rate on 

18 the Federal share of any loan made under para19 graph (1) or (2) shall not exceed the rate of interest 

20 which is in effect at the time of the occurrence of 

21 the disaster but shall otherwise be—

22 ‘‘(A) in the case of a homeowner unable to 

23 secure credit elsewhere, the rate prescribed by 

the Administration but not more than 1 24 ⁄2 the 

25 rate determined by the Secretary of the Treas-
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1 ury taking into consideration the current aver2 age market yield on outstanding marketable ob3 ligations of the United States with remaining 

4 periods to maturity comparable to the average 

5 maturities of such loan plus an additional 

6 charge of not to exceed 1 percent per year as 

7 determined by the Administrator, and adjusted 

to the nearest 1 8 ⁄8 of 1 percent, but not to ex9 ceed 4 percent per year; 

10 ‘‘(B) in the case of a homeowner able to 

11 secure credit elsewhere, the rate prescribed by 

12 the Administration but not more than the rate 

13 determined by the Secretary of the Treasury 

14 taking into consideration the current average 

15 market yield on outstanding marketable obliga16 tions of the United States with remaining peri17 ods to maturity comparable to the average ma18 turities of such loans plus an additional charge 

19 of not to exceed 1 percent per year as deter20 mined by the Administrator, and adjusted to 

the nearest 1 21 ⁄8 of 1 percent, but not to exceed 

22 8 percent per year; 

23 ‘‘(C) in the case of a business or other con24 cern, including agricultural cooperatives, unable 
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1 to obtain credit elsewhere, not to exceed 4 per2 cent per year; or 

3 ‘‘(D) in the case of a business concern able 

4 to obtain credit elsewhere, the rate prescribed 

5 by the Administration but not to excess of the 

6 lowest of—

7 ‘‘(i) the rate prevailing in the private 

8 market for similar loans, 

9 ‘‘(ii) the rate prescribed by the Ad10 ministration as the maximum interest rate 

11 for deferred participation (guaranteed) 

12 loans under subsection (a), or 

13 ‘‘(iii) 8 percent per year. 

14 (c) EXTENSION OR RENEWAL.—Subsection (c) of 

15 section 7 of the Small Business Act (15 U.S.C. 636) is 

16 amended to read as follows: 

17 ‘‘(c) EXTENSION OR RENEWAL.—

18 ‘‘(1) IN GENERAL.—The Administrator may 

19 further extend the maturity of or renew any loan 

20 made pursuant to this section for additional periods 

21 not to exceed 10 years beyond the period stated 

22 therein, if such extension or renewal will aid in the 

23 orderly liquidation of such loan. 
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1 ‘‘(2) LIMITATION.—No loan made under sub2 section (b) shall be extended under this subsection 

3 if the loan has a maturity in excess of 20 years.’’. 

4 (d) MICROLOAN PROGRAM.—Subsection (m) of sec5 tion 7 of the Small Business Act (15 U.S.C. 636) is 

6 amended to read as follows:

7 ‘‘(m) MICROLOAN PROGRAM.—

8 ‘‘(1) PURPOSES.—The purposes of the 

9 Microloan Program are—

10 ‘‘(A) to assist women, low-income, veteran, 

11 and minority entrepreneurs and business own12 ers, small manufacturers, and other individuals 

13 possessing the capability to operate successful 

14 business concerns; 

15 ‘‘(B) to assist small business concerns in 

16 those areas suffering from a lack of credit due 

17 to economic downturns; 

18 ‘‘(C) to establish a microloan program to 

19 be administered by the Administrator—

20 ‘‘(i) to make loans to eligible inter21 mediaries to enable such intermediaries to 

22 provide small-scale loans, particularly loans 

23 in amounts averaging not more than 

24 $10,000, to startup, newly established, or 

25 growing small business concerns for work-
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1 ing capital or the acquisition of materials, 

2 supplies, or equipment; 

3 ‘‘(ii) to make grants to eligible inter4 mediaries that, together with non-Federal 

5 matching funds, will enable such inter6 mediaries to provide intensive marketing, 

7 management, and technical assistance to 

8 microloan borrowers; 

9 ‘‘(iii) to make grants to eligible non10 profit entities that, together with non-Fed11 eral matching funds, will enable such enti12 ties to provide intensive marketing, man13 agement, and technical assistance to assist 

14 low-income entrepreneurs and other low-in15 come individuals obtain private sector fi16 nancing for their businesses, with or with17 out loan guarantees; 

18 ‘‘(iv) to report to the Committee on 

19 Small Business and Entrepreneurship of 

20 the Senate and the Committee on Small 

21 Business of the House of Representatives 

22 on the effectiveness of the microloan pro23 gram and the advisability and feasibility of 

24 implementing such a program nationwide; 

25 and 
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1 ‘‘(v) to establish a welfare-to-entrepre2 neurship microloan initiative, which shall 

3 be administered by the Administrator, in 

4 order to test the feasibility of 

5 supplementing the technical assistance 

6 grants provided under this subsection to 

7 individuals who are receiving assistance 

8 under the State program funded under 

9 part A of title IV of the Social Security 

10 Act (42 U.S.C. 601 et seq.), or under any 

11 comparable State funded means tested pro12 gram of assistance for low-income individ13 uals, in order to adequately assist those in14 dividuals in establishing small businesses 

15 and eliminating their dependence on that 

16 assistance. 

17 ‘‘(2) ESTABLISHMENT.—There is a Microloan 

18 Program, under which the Administrator may, con19 sistent with the requirements of this subsection—

20 ‘‘(A) make direct loans to eligible inter21 mediaries for the purpose of making short-term, 

22 fixed interest rate microloans to startup, newly 

23 established, and growing small business con24 cerns; 
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1 ‘‘(B) in conjunction with such loans make 

2 grants to such intermediaries for the purpose of 

3 providing intensive marketing, management, 

4 and technical assistance to small business con5 cerns that are borrowers under this subsection; 

6 and 

7 ‘‘(C) make grants to nonprofit entities for 

8 the purpose of providing marketing, manage9 ment, and technical assistance to low-income in10 dividuals seeking to start or enlarge their own 

11 businesses, if such assistance includes working 

12 with the grant recipient to secure loans in 

13 amounts not to exceed $35,000 from private 

14 sector lending institutions, with or without a 

15 loan guarantee from the nonprofit entity. 

16 ‘‘(3) ELIGIBILITY FOR PARTICIPATION.—An 

17 intermediary shall be eligible to receive loans and 

18 grants under subparagraphs (B) and (C) of para19 graph (2) if it has at least 1 year of experience mak20 ing microloans to startup, newly established, or 

21 growing small business concerns and providing, as 

22 an integral part of its microloan program, intensive 

23 marketing, management, and technical assistance to 

24 its borrowers or equivalent experience, as determined 

25 by the Administrator provided that the equivalent 
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1 experience evidences the capability of the inter2 mediary to assist microloan borrowers. 

3 ‘‘(4) INTERMEDIARY APPLICATIONS.—As part 

4 of its application for a loan, each intermediary shall 

5 submit a description to the Administrator of—

6 ‘‘(A) the type of businesses to be assisted; 

7 ‘‘(B) the size and range of loans to be 

8 made; 

9 ‘‘(C) the geographic area to be served and 

10 its economic, poverty, and unemployment char11 acteristics; 

12 ‘‘(D) the status of small business concerns 

13 in the area to be served and an analysis of their 

14 credit and technical assistance needs; 

15 ‘‘(E) any marketing, management, and 

16 technical assistance to be provided in connec17 tion with a loan made under this subsection; 

18 ‘‘(F) the local economic credit markets, in19 cluding the costs associated with obtaining 

20 credit locally; 

21 ‘‘(G) the qualifications of the applicant to 

22 carry out the purpose of this subsection; and 

23 ‘‘(H) any plan to involve other technical 

24 assistance providers (such as counselors from 

25 the Service Corps of Retired Executives or 
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1 small business development centers) or private 

2 sector lenders in assisting selected business con3 cerns. 

4 ‘‘(5) SELECTION OF INTERMEDIARIES.—In se5 lecting intermediaries to participate in the program 

6 established under this subsection, the Administrator 

7 shall give priority to those applicants that provide 

8 loans in amounts averaging not more than $10,000 

9 and to those applicants that primarily serve small 

10 manufacturers. 

11 ‘‘(6) INTERMEDIARY CONTRIBUTION.—As a 

12 condition of any loan made to an intermediary under 

13 this subsection, the Administrator shall require the 

14 intermediary to contribute not less than 15 percent 

15 of the loan amount in cash from non-Federal 

16 sources. 

17 ‘‘(7) LOANS TO INTERMEDIARIES.—

18 ‘‘(A) LOAN LIMITS.—No loan shall be 

19 made under this subsection if the total amount 

20 outstanding and committed to one intermediary 

21 (excluding outstanding grants) from the busi22 ness loan and investment fund established by 

23 this Act would, as a result of such loan, exceed 

24 $750,000 in the first year of such 

25 intermediary’s participation in the program, 
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1 and $3,500,000 in the remaining years of the 

2 intermediary’s participation in the program. 

3 ‘‘(B) LOAN DURATION.—Loans made by 

4 the Administrator under this subsection shall be 

5 for a term of 10 years. 

6 ‘‘(C) DELAYED PAYMENTS.—The Adminis7 trator shall not require repayment of interest or 

8 principal of a loan made to an intermediary 

9 under this subsection during the first year of 

10 the loan. 

11 ‘‘(D) FEES; COLLATERAL.—Except as oth12 erwise provided in this subsection, the Adminis13 trator shall not charge any fees or require col14 lateral other than an assignment of the notes 

15 receivable of the microloans with respect to any 

16 loan made to an intermediary under this sub17 section. 

18 ‘‘(E) INTEREST RATES.—

19 ‘‘(i) IN GENERAL.—Loans made by 

20 the Administrator under this subsection to 

21 an intermediary shall bear an interest rate 

22 equal to 1.25 percentage points below the 

23 rate determined by the Secretary of the 

24 Treasury for obligations of the United 

25 States with a period of maturity of 5 
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years, adjusted to the nearest 1 1 ⁄8 of 1 per2 cent. 

3 ‘‘(ii) CERTAIN SMALL LOANS.—Not4 withstanding clause (i), loans made by the 

5 Administrator to an intermediary that 

6 makes loans to small business concerns 

7 and entrepreneurs averaging not more 

8 than $10,000, shall bear an interest rate 

9 that is 2 percentage points below the rate 

10 determined by the Secretary of the Treas11 ury for obligations of the United States 

12 with a period of maturity of 5 years, adjusted to the nearest 1 13 ⁄8 of 1 percent. 

14 ‘‘(iii) MULTIPLE SITES OR OFFICES.—

15 Clause (ii) shall apply to each separate 

16 loan-making site or office of an inter17 mediary only if such site or office meets 

18 the requirements of that clause. 

19 ‘‘(iv) RATE BASIS.—The applicable 

20 rate of interest under this subparagraph 

21 shall—

22 ‘‘(I) be applied retroactively for 

23 the first year of an intermediary’s 

24 participation in the program, based 

25 upon the actual lending practices of 
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1 the intermediary as determined by the 

2 Administrator prior to the end of such 

3 year; and 

4 ‘‘(II) be based in the second and 

5 subsequent years of an intermediary’s 

6 participation in the program, upon the 

7 actual lending practices of the inter8 mediary during the term of the 

9 intermediary’s participation in the 

10 program. 

11 ‘‘(8) LOSS RESERVE OF INTERMEDIARIES.—

12 ‘‘(A) IN GENERAL.—The Administrator 

13 shall, by regulation to be codified in the Code 

14 of Federal Regulations, require each inter15 mediary to establish a loan loss reserve fund, 

16 and to maintain such reserve fund until all obli17 gations owed to the Administrator under this 

18 subsection are repaid. 

19 ‘‘(B) AMOUNT OF RESERVE FUND.—The 

20 Administrator shall require the loan loss reserve 

21 fund of an intermediary to be maintained at a 

22 level equal to 15 percent of the outstanding bal23 ance of the notes receivable owed to the inter24 mediary. 
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1 ‘‘(C) REDUCTION OF REQUIRED

2 AMOUNT.—Notwithstanding subparagraph (B), 

3 the Administrator may reduce the annual loan 

4 loss reserve requirement of an intermediary to 

5 reflect the actual average loan loss rate for the 

6 intermediary during the preceding 5-year pe7 riod, except that in no case shall the loan loss 

8 reserve be reduced to less than 10 percent of 

9 the outstanding balance of the notes receivable 

10 owed to the intermediary. The Administrator 

11 may reduce the annual loan loss reserve re12 quirement of an intermediary under this sub13 paragraph only if the intermediary dem14 onstrates to the satisfaction of the Adminis15 trator that—

16 ‘‘(i) the average annual loss rate for 

17 the intermediary during the preceding 5-

18 year period is less than 15 percent; and 

19 ‘‘(ii) no other factors exist that may 

20 impair the ability of the intermediary to 

21 repay all obligations owed to the Adminis22 trator under this subsection. 

23 ‘‘(D) REVIEW BY ADMINISTRATOR.—After 

24 the initial 5 years of an intermediary’s partici25 pation in the program authorized by this sub-
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1 section, the Administrator shall, at the request 

2 of the intermediary, conduct a review of the an3 nual loss rate of the intermediary. Any inter4 mediary that requests a reduction in its loan 

5 loss reserve shall be reviewed based on the most 

6 recent 5-year period preceding the request. 

7 ‘‘(9) LOANS TO SMALL BUSINESS CONCERNS

8 FROM ELIGIBLE INTERMEDIARIES.—

9 ‘‘(A) IN GENERAL.—An eligible inter10 mediary shall make fixed rate loans to startup, 

11 newly established, and growing small business 

12 concerns from the funds made available to it 

13 under paragraph (7) for working capital and 

14 the acquisition of materials, supplies, furniture, 

15 fixtures, and equipment. 

16 ‘‘(B) LOAN AMOUNT.—To the extent prac17 ticable, each intermediary that operates a 

18 microloan program under this subsection shall 

19 maintain a microloan portfolio with an average 

20 loan size of not more than $15,000. An inter21 mediary may make a loan under this subsection 

22 of more than $20,000 to a small business con23 cern only if such small business concern dem24 onstrates that it is unable to obtain credit else25 where at comparable interest rates and that it 
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1 has good prospects for success. In no case shall 

2 an intermediary make a loan under this sub3 section of more than $35,000, or have out4 standing or committed to any 1 borrower more 

5 than $35,000. 

6 ‘‘(C) INTEREST LIMIT.—Notwithstanding 

7 any State limitation on the rate or amount of 

8 interest that may be charged, taken, received, 

9 or reserved on a loan, the maximum rate of in10 terest to be charged on a microloan funded 

11 under this subsection shall not exceed the rate 

12 of interest applicable to a loan made to an 

13 intermediary by the Administrator—

14 ‘‘(i) in the case of a loan of more than 

15 $10,000 made by the intermediary to a 

16 small business concern or entrepreneur by 

17 more than 7.75 percentage points; and 

18 ‘‘(ii) in the case of a loan of not more 

19 than $10,000 made by the intermediary to 

20 a small business concern or entrepreneur 

21 by more than 8.5 percentage points. 

22 ‘‘(D) REVIEW RESTRICTION.—The Admin23 istrator shall not review individual microloans 

24 made by intermediaries prior to approval. 
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1 ‘‘(E) ESTABLISHMENT OF CHILD CARE OR

2 TRANSPORTATION BUSINESSES.—In addition to 

3 other eligible small businesses concerns, bor4 rowers under any program under this sub5 section may include individuals who will use the 

6 loan proceeds to establish for-profit or nonprofit 

7 child care establishments or businesses pro8 viding for-profit transportation services. 

9 ‘‘(10) PROGRAM FUNDING FOR MICROLOANS.—

10 ‘‘(A) NUMBER OF PARTICIPANTS.—Under 

11 the program authorized by this subsection, the 

12 Administrator may fund, on a competitive basis, 

13 not more than 300 intermediaries. 

14 ‘‘(B) MINIMUM ALLOCATION.—Subject to 

15 the availability of appropriations, of the total 

16 amount of new loan funds made available for 

17 award under this subsection in each fiscal year, 

18 the Administrator shall make available for 

19 award in each State an amount equal to the 

20 sum of—

21 ‘‘(i) the lesser of—

22 ‘‘(I) $800,000; or 

‘‘(II) 1 23 ⁄55 of the total amount of 

24 new loan funds made available for 
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1 award under this subsection for that 

2 fiscal year; and 

3 ‘‘(ii) any additional amount, as deter4 mined by the Administrator. 

5 ‘‘(C) REDISTRIBUTION.—If, at the begin6 ning of the third quarter of a fiscal year, the 

7 Administrator determines that any portion of 

8 the amount made available to carry out this 

9 subsection is unlikely to be made available 

10 under subparagraph (B) during that fiscal year, 

11 the Administrator may make that portion avail12 able for award in any one or more States with13 out regard to subparagraph (B). 

14 ‘‘(11) EQUITABLE DISTRIBUTION OF INTER15 MEDIARIES.—In approving microloan program appli16 cants and providing funding to intermediaries under 

17 this subsection, the Administrator shall select and 

18 provide funding to such intermediaries as will ensure 

19 appropriate availability of loans for small businesses 

20 in all industries located throughout each State, par21 ticularly those located in urban and in rural areas. 

22 ‘‘(12) MARKETING, MANAGEMENT AND TECH23 NICAL ASSISTANCE GRANTS TO INTERMEDIARIES.—

24 The Administrator may make grants described in 
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1 paragraph (2)(B) in accordance with the following 

2 requirements: 

3 ‘‘(A) GRANT AMOUNTS.—Except as other4 wise provided in subparagraph (C) and subject 

5 to subparagraph (B), each intermediary that re6 ceives a loan under this subsection shall be eli7 gible to receive a grant to provide marketing, 

8 management, and technical assistance to small 

9 business concerns that are borrowers under this 

10 subsection. Except as provided in subparagraph 

11 (C), each intermediary meeting the require12 ments of subparagraph (B) may receive a grant 

13 of not more than 25 percent of the total out14 standing balance of loans made to it under this 

15 subsection. 

16 ‘‘(B) CONTRIBUTION.—As a condition of 

17 any grant made under subparagraph (A), the 

18 Administrator shall require the intermediary to 

19 contribute an amount equal to 25 percent of the 

20 amount of the grant, obtained solely from non21 Federal sources. In addition to cash or other di22 rect funding, the contribution may include indi23 rect costs or in-kind contributions paid for 

24 under non-Federal programs. 
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1 ‘‘(C) ADDITIONAL TECHNICAL ASSISTANCE

2 GRANTS FOR MAKING CERTAIN LOANS.—

3 ‘‘(i) IN GENERAL.—Each intermediary 

4 that has a portfolio of loans made under 

5 this subsection that averages not more 

6 than $10,000 during the period of the 

7 intermediary’s participation in the program 

8 shall be eligible to receive a grant equal to 

9 5 percent of the total outstanding balance 

10 of loans made to the intermediary under 

11 this subsection, in addition to grants made 

12 under subparagraph (A). 

13 ‘‘(ii) PURPOSES.—A grant awarded 

14 under clause (i) may be used to provide 

15 marketing, management, and technical as16 sistance to small business concerns that 

17 are borrowers under this subsection. 

18 ‘‘(iii) CONTRIBUTION EXCEPTION.—

19 The contribution requirements in subpara20 graph (B) do not apply to grants made 

21 under this subparagraph. 

22 ‘‘(D) ELIGIBILITY FOR MULTIPLE SITES

23 OR OFFICES.—The eligibility for a grant de24 scribed in subparagraph (A) or (C) shall be de-
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•HR 2802 IH 

1 termined separately for each loan-making site 

2 or office of an intermediary. 

3 ‘‘(E) ASSISTANCE TO CERTAIN SMALL

4 BUSINESS CONCERNS.—

5 ‘‘(i) IN GENERAL.—Each intermediary 

6 may expend an amount not to exceed 25 

7 percent of the grant funds received under 

8 this subsection to provide information and 

9 technical assistance to small business con10 cerns that are prospective borrowers under 

11 this subsection. 

12 ‘‘(ii) TECHNICAL ASSISTANCE.—An 

13 intermediary shall not expend more than 

14 25 percent of the funds received under this 

15 subsection to enter into third party con16 tracts for the provision of technical assist17 ance. 

18 ‘‘(13) PRIVATE SECTOR BORROWING TECH19 NICAL ASSISTANCE GRANTS.—Grants described in 

20 paragraph (2)(C) shall be subject to the following 

21 requirements: 

22 ‘‘(A) GRANT AMOUNTS.—Subject to the re23 quirements of subparagraph (B), the Adminis24 trator may make not more than 55 grants an-
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1 nually, each in amounts not to exceed $200,000 

2 for the purposes specified in paragraph (2)(C). 

3 ‘‘(B) CONTRIBUTION.—As a condition of 

4 any grant made under subparagraph (A), the 

5 Administrator shall require the grant recipient 

6 to contribute an amount equal to 20 percent of 

7 the amount of the grant, obtained solely from 

8 non-Federal sources. In addition to cash or 

9 other direct funding, the contribution may in10 clude indirect costs or in-kind contributions 

11 paid for under non-Federal programs. 

12 ‘‘(14) GRANTS FOR MANAGEMENT, MARKETING, 

13 TECHNICAL ASSISTANCE, AND RELATED SERVICES.—

14 ‘‘(A) IN GENERAL.—The Administrator 

15 may procure technical assistance for inter16 mediaries participating in the Microloan Pro17 gram to ensure that such intermediaries have 

18 the knowledge, skills, and understanding of 

19 microlending practices necessary to operate suc20 cessful microloan programs. 

21 ‘‘(B) ASSISTANCE AMOUNT.—The Admin22 istrator shall transfer 7 percent of its annual 

23 appropriation for loans and loan guarantees 

24 under this subsection to the Administration’s 

25 Salaries and Expense Account for the specific 
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•HR 2802 IH 

1 purpose of providing 1 or more technical assist2 ance grants to experienced microlending organi3 zations and national and regional nonprofit or4 ganizations that have demonstrated experience 

5 in providing training support for microenter6 prise development and financing to achieve the 

7 purpose set forth in subparagraph (A). 

8 ‘‘(C) WELFARE-TO-ENTREPRENEURSHIP

9 MICROLOAN INITIATIVE.—Of amounts made 

10 available to carry out the welfare-to-entrepre11 neurship microloan initiative in any fiscal year, 

12 the Administrator may use not more than 5 

13 percent to provide technical assistance, either 

14 directly or through contractors, to welfare-to15 entrepreneurship microloan initiative grantees, 

16 to ensure that, as grantees, they have the 

17 knowledge, skills, and understanding of micro18 lending and welfare-to-entrepreneurship transi19 tion, and other related issues, to operate a suc20 cessful welfare-to-entrepreneurship microloan 

21 initiative. 

22 ‘‘(15) EVALUATION OF WELFARE-TO-ENTRE23 PRENEURSHIP MICROLOAN INITIATIVE.—On Janu24 ary 31, 1999, and annually thereafter, the Adminis25 trator shall submit to the Committee on Small Busi-
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1 ness of the House of Representatives and the Com2 mittee on Small Business and Entrepreneurship of 

3 the Senate a report on the welfare-to-entrepreneur4 ship microloan initiative, including a description of 

5 the amounts made available to carry out such initia6 tive. 

7 ‘‘(16) DEFINITIONS.—For purposes of this sub8 section—

9 ‘‘(A) INTERMEDIARY.—The term ‘inter10 mediary’ means—

11 ‘‘(i) a private, nonprofit entity; 

12 ‘‘(ii) a private, nonprofit community 

13 development corporation; 

14 ‘‘(iii) a consortium of private, non15 profit organizations or nonprofit commu16 nity development corporations; 

17 ‘‘(iv) a quasi-governmental economic 

18 development entity (such as a planning 

19 and development district), other than a 

20 State, county, municipal government, or 

21 any agency thereof, if—

22 ‘‘(I) no application is received 

23 from an eligible nonprofit organiza24 tion; or 
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1 ‘‘(II) the Administrator deter2 mines that the needs of a region or 

3 geographic area are not adequately 

4 served by an existing, eligible non5 profit organization that has submitted 

6 an application; or 

7 ‘‘(v) an agency of or nonprofit entity 

8 established by a Native American Tribal 

9 Government, that seeks to borrow or has 

10 borrowed funds from the Administrator to 

11 make microloans to small business con12 cerns under this subsection. 

13 ‘‘(B) MICROLOAN.—The term ‘microloan’ 

14 means a short-term, fixed rate loan of not more 

15 than $35,000, made by an intermediary to a 

16 startup, newly established, or growing small 

17 business concern. 

18 ‘‘(C) RURAL AREA.—The term ‘rural area’ 

19 means any political subdivision or unincor20 porated area—

21 ‘‘(i) in a nonmetropolitan county (as 

22 defined by the Secretary of Agriculture) or 

23 its equivalent thereof; or 

24 ‘‘(ii) in a metropolitan county or its 

25 equivalent that has a resident population 
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1 of less than 20,000 if the Administrator 

2 has determined such political subdivision 

3 or area to be rural.’’. 

4 (e) REPEAL OF CERTAIN PROVISIONS OF SECTION 7 

5 OF THE SMALL BUSINESS ACT.—Section 7 of the Small 

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

7 (1) by striking subsection (d) and inserting the 

8 following: 

9 ‘‘(d) [ Reserved ].’’; 

10 (2) by striking subsection (h) and inserting the 

11 following: 

12 ‘‘(h) [ Reserved ].’’; 

13 (3) by striking subsection (j) and inserting the 

14 following: 

15 ‘‘(j) [ Reserved ].’’; and 

16 (4) by striking subsection (k) and inserting the 

17 following: 

18 ‘‘(k) [ Reserved ].’’. 

19 (f) CONTINUATION OF TEMPORARY PREDISASTER

20 MITIGATION PROGRAM.—

21 (1) IN GENERAL.—There is a predisaster miti22 gation program under which the Administrator may 

23 make, under section 7(b)(1) of the Small Business 

24 Act (15 U.S.C. 636(b)(1)) such loans (either directly 

25 or in cooperation with banks or other lending insti-
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1 tutions through agreements to participate on an im2 mediate or deferred (guaranteed) basis), as the Ad3 ministrator may determine to be necessary or appro4 priate, to enable small businesses to use mitigation 

5 techniques in support of a formal mitigation pro6 gram established by the Federal Emergency Man7 agement Agency, except that no loan or guarantee 

8 may be extended to a small business under this 

9 paragraph unless the Administrator finds that the 

10 small business is otherwise unable to obtain credit 

11 for the purposes described in this paragraph. 

12 (2) TERMINATION.—No loan shall be made 

13 under this subsection after September 30, 2004. 

14 (g) EFFECTIVE DATE.—The amendments made this 

15 section shall apply to loans and grants made, and other 

16 assistance provided, after the date of the enactment of this 

17 Act. 

18 SEC. 208. GOVERNMENT CONTRACT AND BUSINESS DEVEL19 OPMENT ASSISTANCE FOR SMALL BUSINESS 

20 CONCERNS, ETC. 

21 (a) IN GENERAL.—Section 8 of the Small Business 

22 Act (15 U.S.C. 637) is amended by striking subsections 

23 (a) and (b) and inserting the following new subsections: 
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1 ‘‘(a) GOVERNMENT CONTRACT AND BUSINESS DE2 VELOPMENT ASSISTANCE FOR SMALL BUSINESS CON3 CERNS.—

4 ‘‘(1) ESTABLISHMENT.—There is within the 

5 Administration a program to be carried out by the 

6 Administrator to enhance the competitive viability of 

7 program participants by providing Government con8 tract and business development assistance to pro9 gram participants consistent with the requirements 

10 of this section. 

11 ‘‘(2)(A) CONTRACT AUTHORITY.—The Adminis12 trator shall, to the extent that Administrator deter13 mines it to be necessary or appropriate, enter into 

14 any contract with any contracting officer obligating 

15 the Administrator to furnish goods or service to the 

16 Government. 

17 ‘‘(B) NEGOTIATION WITH CONTRACTING OFFI18 CER.—In any case in which the Administrator cer19 tifies to a contracting officer that the Administrator 

20 is competent and responsible to perform any pro21 curement contract to be let by such officer, such of22 ficer may let such procurement contract to the Ad23 ministrator upon such terms and conditions as may 

24 be agreed upon between the Administrator and such 

25 officer. 
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1 ‘‘(C) FAIR MARKET PRICE RESTORATION.—A 

2 contracting officer shall not let a contract for goods 

3 or services under this paragraph if the amount of 

4 such contract exceeds the fair market price of such 

5 goods or services. 

6 ‘‘(D) APPEAL OF CONTRACTING OFFICER DECI7 SION.—(i) Whenever the Administrator and a con8 tracting officer fail to agree, the matter shall be sub9 mitted for determination by the Administrator to the 

10 head of the agency of the contracting officer. 

11 ‘‘(ii) Not later than 5 days from the date the 

12 Administrator is notified of a contracting officer’s 

13 adverse decision, the Administrator may notify the 

14 contracting officer of the intent to appeal such ad15 verse decision, and within 15 days of such date the 

16 Administrator shall file a written request for a re17 consideration of the adverse decision with head of 

18 the agency. 

19 ‘‘(iii) For purposes of this subparagraph, a con20 tracting officer’s adverse decision includes a decision 

21 not to make available for award pursuant to this 

22 subsection a particular procurement requirement or 

23 the failure to agree on the terms and conditions of 

24 a contract to be awarded noncompetitively under the 

25 authority of this subsection. 
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1 ‘‘(iv) Upon receipt of the notice of intent to ap2 peal, the head of the agency shall suspend further 

3 action regarding the procurement until a written de4 cision on the Administrator’s request for reconsider5 ation has been issued by such agency head, unless 

6 the head of the agency makes a written determina7 tion that urgent and compelling circumstances which 

8 significantly affect interests of the United States will 

9 not permit waiting for a reconsideration of the ad10 verse decision. 

11 ‘‘(v) If the Administrator’s request for reconsid12 eration is denied, the head of the agency shall speci13 fy the reasons why the selected firm was determined 

14 to be incapable to perform the procurement require15 ment, and the findings supporting such determina16 tion, which shall be made a part of the contract file 

17 for the requirement. 

18 ‘‘(E) DETERMINATION OF UNSUITABILITY.—If 

19 a contracting officer requests the Administrator to 

20 make the certification described in subparagraph (B) 

21 with respect to any contract that the Administrator 

22 determines is not suitable for award under this sub23 section, the Administrator shall notify the con24 tracting officer of the Administrator’s determination 

25 not later than 3 days after the date of such request. 
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1 ‘‘(F) SUBCONTRACTING AUTHORITY.—(i) The 

2 Administrator shall, to the extent that the Adminis3 trator determines it to be necessary or appropriate, 

4 arrange for the performance of such procurement 

5 contracts by negotiating or otherwise letting sub6 contracts to program participants for such goods or 

7 services as may be necessary to enable the Adminis8 trator to perform such contracts. 

9 ‘‘(ii)(I) Except as authorized by subclause (II) 

10 or (III), no award shall be made pursuant to this 

11 section to other than a small business concern. 

12 ‘‘(II) In determining the size of a small busi13 ness concern owned by a socially and economically 

14 disadvantaged Indian tribe (or a wholly owned busi15 ness entity of such tribe), each firm’s size shall be 

16 independently determined without regard to its af17 filiation with the tribe, any entity of the tribal gov18 ernment, or any other business enterprise owned by 

19 the tribe, unless the Administrator determines that 

20 one or more such tribally owned business concerns 

21 have obtained, or are likely to obtain, a substantial 

22 unfair competitive advantage within an industry cat23 egory. 

24 ‘‘(III) Any joint venture established under the 

25 authority of section 602(b) of the Business Oppor-
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1 tunity Development Reform Act of 1988 (Public 

2 Law 100–656) shall be eligible for award of a con3 tract pursuant to this section. 

4 ‘‘(G) DELEGATION OF CONTRACT ADMINISTRA5 TION.—(i) The Administrator and the head of the 

6 agency making the procurement shall enter into an 

7 agreement under which a subcontract awarded under 

8 this subsection shall be administered by the head of 

9 the agency making the procurement. 

10 ‘‘(ii) Notwithstanding clause (i), the Adminis11 trator shall negotiate and award any such sub12 contract and shall assist the program participant in 

13 the settlement of any dispute arising from the per14 formance of such subcontract. 

15 ‘‘(iii) Any agreement entered into by the Ad16 ministrator with the head of another agency before 

17 the date of the enactment of this clause that allows 

18 such agency head to negotiate or award a contract 

19 under this subsection shall not apply with respect to 

20 any subcontract offered for award after such date. 

21 ‘‘(H) AWARD AFTER GRADUATION.—The Ad22 ministrator shall, to the extent that the Adminis23 trator determines it to be necessary or appropriate, 

24 make an award to a small business concern which 
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1 has completed its period of program participation as 

2 described in paragraph (21)(F) if—

3 ‘‘(i) the contract will be awarded as a re4 sult of an offer (including price) submitted in 

5 response to a published solicitation relating to 

6 a competition conducted pursuant to subpara7 graph (H); and 

8 ‘‘(ii) the prospective contract awardee was 

9 a program participant eligible for award of the 

10 contract on the date specified for receipt of of11 fers contained in the contract solicitation. 

12 ‘‘(I) AWARD THROUGH COMPETITION.—(i) A 

13 subcontract offered for award pursuant to this sub14 section shall be awarded on the basis of competition 

15 restricted to program participants if—

16 ‘‘(I) there is a reasonable expectation that 

17 at least 2 program participants will submit of18 fers and that award can be made at a fair mar19 ket price; and 

20 ‘‘(II) the estimated anticipated award price 

21 of the contract (including options) may exceed 

22 $5,000,000 in the case of a contract oppor23 tunity assigned a North American Industrial 

24 Classification System code for manufacturing 
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•HR 2802 IH 

1 and $3,000,000 (including options) in the case 

2 of all other contract opportunities. 

3 ‘‘(ii) The Administrator may award a sub4 contract under this subsection on the basis of a com5 petition restricted to program participants if the re6 quirements of clause (i)(I) are met. 

7 ‘‘(J) SOLE SOURCE AWARD.—(i) In the case of 

8 any subcontract not awarded under subparagraph 

9 (I), the Administrator shall award such contract sole 

10 source to a program participant if—

11 ‘‘(I) the program participant is determined 

12 to be a responsible contractor with respect to 

13 performance of such contract opportunity; 

14 ‘‘(II) the award of such contract would be 

15 consistent with the program participant’s busi16 ness plan; and 

17 ‘‘(III) the award of the contract would not 

18 result in the program participant exceeding the 

19 requirements established by paragraph 

20 (21)(G)(iii). 

21 ‘‘(ii) To the maximum extent practicable, the 

22 Administrator shall promote the equitable geo23 graphic distribution of sole source contracts awarded 

24 pursuant to this subsection. 
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1 ‘‘(3) SURETY BONDS.—Notwithstanding sub2 sections (a) and (c) of the first section of the Act 

3 entitled ‘‘An Act requiring contracts for the con4 struction, alteration, and repair of any public build5 ing or public work of the United States to be accom6 panied by a performance bond protecting the United 

7 States and by additional bond for the protection of 

8 persons furnishing material and labor for the con9 struction, alteration, or repair of said public build10 ings or public work,’’ approved August 24, 1935 (49 

11 Stat. 793; 40 U.S.C. 270a), no program participant 

12 shall be required to provide any amount of any bond 

13 as a condition of receiving any subcontract under 

14 this subsection if—

15 ‘‘(A) the Administrator determines that 

16 such amount is inappropriate for such program 

17 participant in performing such contract; 

18 ‘‘(B) the Administrator takes such meas19 ures as the Administrator considers appropriate 

20 for the protection of persons furnishing mate21 rials and labor to a program participant receiv22 ing any benefit pursuant to this paragraph; 

23 ‘‘(C) the Administrator assists, insofar as 

24 practicable, a program participant receiving the 

25 benefits of this paragraph to develop, within a 
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1 reasonable period of time, such financial and 

2 other capability as may be needed to obtain 

3 such bonds as the Administrator may subse4 quently require for the successful completion of 

5 any program conducted under the authority of 

6 this subsection; 

7 ‘‘(D) the Administrator finds that such 

8 program participant is unable to obtain the req9 uisite bond or bonds from a surety and that no 

10 surety is willing to issue such bond or bonds 

11 subject to the guarantee provisions of title IV 

12 of the Small Business Investment Act of 1958; 

13 and 

14 ‘‘(E) the program participant is deter15 mined to be a startup concern and such concern 

16 has not been participating in any program con17 ducted under the authority of this subsection 

18 for a period exceeding one year. 

19 ‘‘(4) SOLE SOURCE CONTRACT NEGOTIATION.—

20 (A) Any program participant selected by the Admin21 istrator to perform a contract to be let noncompeti22 tively pursuant to this subsection shall, when prac23 ticable, participate in any negotiation of the terms 

24 and conditions of such contract. 
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1 ‘‘(B) CALCULATION OF FAIR MARKET PRICE.—

2 (i) For purposes of paragraph (2)(C), a fair market 

3 price shall be determined by the agency according to 

4 clauses (ii) and (iii) and submitted along with the 

5 procurement requirement to the Administrator. The 

6 submission also shall include any data used by the 

7 agency in calculating the fair market price. 

8 ‘‘(ii) The estimate of a current fair market 

9 price for a newprocurement requirement, or a re10 quirement that does not have a satisfactory procure11 ment history, shall be derived from a price or cost 

12 analysis taking into account prevailing market condi13 tions, commercial prices for similar goods or serv14 ices, and data from other Federal agencies. Such 

15 analysis shall consider such cost or pricing data as 

16 may be timely submitted by the Administrator. 

17 ‘‘(iii) The estimate of a current fair market 

18 price for a procurement requirement that has a sat19 isfactory procurement history shall be based on re20 cent award prices adjusted to insure comparability. 

21 Such adjustments shall take into account differences 

22 in quantities, performance times, plans, specifica23 tions, transportation costs, packaging and packing 

24 costs, labor and materials costs, overhead costs, and 
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1 any other additional costs which may be deemed ap2 propriate. 

3 ‘‘(iv) The agency’s estimate of the current fair 

4 market price (and any supporting data furnished to 

5 the Administrator) shall not be disclosed to any po6 tential offeror (other than the Administrator). 

7 ‘‘(C) A program participant selected by the Ad8 ministrator to perform or negotiate a contract to be 

9 let pursuant to this subsection may request the Ad10 ministrator to protect the agency’s estimate of the 

11 fair market price for such contract pursuant to 

12 paragraph (2)(A). 

13 ‘‘(5) SOCIAL DISADVANTAGE.—(A) Socially dis14 advantaged individuals are those who have been sub15 jected to racial or ethnic prejudice or cultural bias 

16 because of their identity as a member of a group 

17 without regard to their individual qualities. 

18 ‘‘(B) Any determination made pursuant to this 

19 paragraph shall be made by the Administrator and 

20 shall not be delegated. 

21 ‘‘(6) ECONOMIC DISADVANTAGE.—(A)(i) Eco22 nomically disadvantaged individuals are those so23 cially disadvantaged individuals whose ability to 

24 compete in the free enterprise system has been im25 paired due to diminished capital and credit opportu-
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•HR 2802 IH 

1 nities as compared to others in the same business 

2 area who are not socially disadvantaged. 

3 ‘‘(ii) In determining the degree of diminished 

4 credit and capital opportunities the Administrator 

5 shall consider the assets and net worth of such so6 cially disadvantaged individual as it relates to—

7 ‘‘(I) the assets and net worth of a business 

8 owner who is not socially disadvantaged; and 

9 ‘‘(II) the capital needs of the primary in10 dustry in which the owner of the business is en11 gaged. 

12 ‘‘(iii) In determining the economic disadvantage 

13 of an Indian tribe, the Administrator shall consider, 

14 where available, information such as the following—

15 ‘‘(I) the per capita income of members of 

16 the tribe excluding judgment awards, 

17 ‘‘(II) the percentage of the local Indian 

18 population below the poverty level; and 

19 ‘‘(III) the tribe’s access to capital markets. 

20 ‘‘(B) For the purpose of this section, an indi21 vidual who has been determined by the Adminis22 trator to be economically disadvantaged at the time 

23 of program entry shall be deemed to be economically 

24 disadvantaged for the term of the program. 
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•HR 2802 IH 

1 ‘‘(C) Whenever the Administrator computes 

2 personal net worth for the purpose of program 

3 entry, it shall exclude from such computation—

4 ‘‘(i) the value of investments that dis5 advantaged owners have in their concerns, ex6 cept that such value shall be taken into account 

7 under this paragraph when comparing such 

8 concerns to other concerns in the same business 

9 area that are owned by other than socially dis10 advantaged persons; and 

11 ‘‘(ii) the equity that disadvantaged owners 

12 have in their primary personal residences. 

13 ‘‘(D) The Administrator shall not establish a 

14 maximum net worth that prohibits program entry 

15 that is less than $750,000. 

16 ‘‘(7) PROGRAM PARTICIPANT.—

17 ‘‘(A) DEFINITION.—For purposes of this 

18 section, the term ‘program participant’ means a 

19 small business concern which is certified by the 

20 Administrator that it meets the requirements of 

21 subparagraph (B) and—

22 ‘‘(i) which is at least 51 percent un23 conditionally owned by—
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•HR 2802 IH 

1 ‘‘(I) one or more socially and, at 

2 the time of program entry, economi3 cally disadvantaged individuals, 

4 ‘‘(II) an economically disadvan5 taged Indian tribe, (or a wholly owned 

6 business entity of such tribe), or 

7 ‘‘(III) an economically disadvan8 taged Native Hawaiian organization, 

9 or 

10 ‘‘(ii) in the case of any publicly owned 

11 business, at least 51 percent of the stock 

12 of which is unconditionally owned by—

13 ‘‘(I) one or more socially and, at 

14 the time of program entry, economi15 cally disadvantaged individuals, 

16 ‘‘(II) an economically disadvan17 taged Indian tribe (or a wholly owned 

18 business entity of such tribe), or 

19 ‘‘(III) an economically disadvan20 taged Native Hawaiian organization. 

21 ‘‘(B) PROGRAM PARTICIPATION ELIGI22 BILITY.—A program participant meets the re23 quirements of this subparagraph if the manage24 ment and daily business operations of such 

25 small concern are controlled by one or more—
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•HR 2802 IH 

1 ‘‘(i) socially and, at the time of pro2 gram entry, economically disadvantaged in3 dividuals described in subparagraph 

4 (A)(i)(I) or subparagraph (A)(ii)(I), 

5 ‘‘(ii) members of an economically dis6 advantaged Indian tribe described in sub7 paragraph (A)(i)(II) or subparagraph 

8 (A)(ii)(II), or 

9 ‘‘(iii) Native Hawaiian organizations 

10 described in subparagraph (A)(i)(III) or 

11 subparagraph (A)(ii)(III). 

12 ‘‘(C) NATIVE HAWAIIAN ORGANIZATION.—

13 For purposes of this subsection, the term ‘Na14 tive Hawaiian Organization’ means any commu15 nity service organization serving Native Hawai16 ians in the State of Hawaii which—

17 ‘‘(i) is a nonprofit corporation that 

18 has filed articles of incorporation with the 

19 director (or the designee thereof) of the 

20 Hawaii Department of Commerce and 

21 Consumer Affairs, or any successor agen22 cy, 

23 ‘‘(ii) is controlled by Native Hawai24 ians, and 
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•HR 2802 IH 

1 ‘‘(iii) whose business activities will 

2 principally benefit such Native Hawaiians. 

3 ‘‘(D) ANNUAL CERTIFICATION.—Each pro4 gram participant shall certify to the District 

5 Director for the district in which its principal 

6 place of business is located, on an annual basis, 

7 that it meets the requirements of this para8 graph regarding ownership and control by so9 cially disadvantaged individuals. 

10 ‘‘(E) CAPABILITY DETERMINATION.—The 

11 term ‘program participant’ shall not include any 

12 concern unless the Administrator determines 

13 that with contract, financial, technical, and 

14 management support the small business concern 

15 will be able to perform contracts which may be 

16 awarded to such concern under paragraph 

17 (2)(F) and has reasonable prospects for success 

18 in competing in the private sector. 

19 ‘‘(F) SPECIAL RULES ON ELIGIBILITY.—(i) 

20 Except as provided in clause (iii), no individual 

21 who was determined pursuant to this section to 

22 be socially and economically disadvantaged be23 fore the date of the enactment of this subpara24 graph shall be permitted to assert such dis25 advantage with respect to any other concern 
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•HR 2802 IH 

1 making application for certification after such 

2 date. 

3 ‘‘(ii) Except as provided in clause (iii), any 

4 individual upon whom eligibility is based pursu5 ant to paragraph (5) shall be permitted to as6 sert such eligibility for only one small business 

7 concern. 

8 ‘‘(iii) A socially and economically disadvan9 taged Indian tribe may own more than one 

10 small business concern eligible for assistance 

11 pursuant to this subsection and subsection 8(b) 

12 if—

13 ‘‘(I) the Indian tribe does not own an14 other firm in the same industry which has 

15 been determined to be eligible to receive 

16 contracts under this program, and 

17 ‘‘(II) the individuals responsible for 

18 the management and daily operations of 

19 the concern do not manage more than two 

20 program participants. 

21 ‘‘(iv) No program participant, previously 

22 eligible for the award of contracts pursuant to 

23 this subsection, shall be subsequently recertified 

24 for program participation if its prior participa-
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•HR 2802 IH 

1 tion in the program was concluded for any of 

2 the reasons described in paragraph (10). 

3 ‘‘(v)(I) A program participant eligible for 

4 the award of contracts pursuant to this sub5 section shall remain eligible for such contracts 

6 if there is a transfer of ownership or control of 

7 the program participant that does not alter the 

8 eligibility of the program participant as deter9 mined by paragraphs (5), (6), and (7). 

10 ‘‘(II) The program participant shall notify 

11 the Assistant Administrator for Minority Small 

12 Business and Capital Ownership of any such 

13 change in control or ownership and provide the 

14 Assistant Administrator with sufficient informa15 tion to enable the Assistant Administrator to 

16 determine that the transfer of ownership and 

17 control does not alter eligibility for participation 

18 in the program. 

19 ‘‘(III) In the event of such a alteration of 

20 ownership or control, the concern, if not termi21 nated or graduated, shall be eligible for a pe22 riod of continued participation in the program 

23 not to exceed the time limitations prescribed in 

24 paragraph (27). 
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•HR 2802 IH 

1 ‘‘(I) the Indian tribe does not own another 

2 firm in the same industry which has been deter3 mined to be eligible to receive contracts under 

4 this program, and 

5 ‘‘(II) the individuals responsible for the 

6 management and daily operations of the con7 cern do not manage more than two program 

8 participants. 

9 ‘‘(C) No program participant, previously eligible 

10 for the award of contracts pursuant to this section, 

11 shall be subsequently recertified for program partici12 pation if its prior participation in the program was 

13 concluded for any of the reasons described in para14 graph (11). 

15 ‘‘(8) MANAGEMENT RESTRICTIONS.—(A) The 

16 Administrator shall not restrict the amount of 

17 money that may be removed from the program par18 ticipants by its owners. 

19 ‘‘(B) The Administrator shall not impose any 

20 restrictions on the management of the company ex21 cept insofar as such management would violate other 

22 eligibility provisions or Federal procurement law. 

23 ‘‘(C) Notwithstanding this provision, the Ad24 ministrator may determine that a program partici25 pant is not capable of performing a specific contract 
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•HR 2802 IH 

1 and may choose not to award a contract to a pro2 gram participant. 

3 ‘‘(9) EXPANSION INTO OTHER INDUSTRIES.—

4 Limitations established by the Administrator in its 

5 regulations and procedures restricting the award of 

6 contracts pursuant to this subsection to a limited 

7 number of North American Industry Classification 

8 System codes in an approved business plan shall not 

9 be applied in a manner that inhibits the logical busi10 ness progression by a program participant into areas 

11 of industrial endeavor where such concern has the 

12 potential for success. 

13 ‘‘(10) OPPORTUNITY FOR HEARING.—(A) Sub14 ject to the provisions of subparagraph (E), the Ad15 ministrator, prior to taking any action described in 

16 subparagraph (B), shall provide the program partici17 pant that is the subject of such action, an oppor18 tunity for a hearing on the record after providing 

19 written notification of an action set forth in para20 graph (B), in accordance with chapter 5 of title 5, 

21 United States Code. 

22 ‘‘(B) The actions referred to in subparagraph 

23 (A) are—
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•HR 2802 IH 

1 ‘‘(i) denial of program admission based 

2 upon a negative determination pursuant to 

3 paragraph (5), (6), or (7); 

4 ‘‘(ii) a termination pursuant to paragraph 

5 (21)(D); 

6 ‘‘(iii) a graduation pursuant to paragraph 

7 (21)(F); and 

8 ‘‘(iv) the denial of a request to issue a 

9 waiver pursuant to paragraph (20)(B). 

10 ‘‘(C) The Administrator’s proposed action, in 

11 any proceeding conducted under the authority of this 

12 paragraph, shall be sustained unless the decision is 

13 not supported by substantial evidence in the record. 

14 ‘‘(D) A decision rendered pursuant to this para15 graph shall be considered final agency action for 

16 purposes of chapter 7 of title 5, United States Code. 

17 ‘‘(E) The hearing officer selected to preside 

18 over a proceeding conducted under the authority of 

19 this paragraph shall decline to accept jurisdiction 

20 over any matter that—

21 ‘‘(i) does not, on its face, allege facts that, 

22 if proven to be true, would warrant reversal or 

23 modification of the Administrator’s position; 

24 ‘‘(ii) is untimely filed; 
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•HR 2802 IH 

1 ‘‘(iii) is not filed in accordance with the 

2 rules of procedure governing such proceedings; 

3 or 

4 ‘‘(iv) has been decided by or is the subject 

5 of an adjudication before a court of competent 

6 jurisdiction over such matters. 

7 ‘‘(F) Proceedings conducted pursuant to the 

8 authority of this paragraph shall be completed and 

9 a decision rendered, insofar as practicable, within 90 

10 days after a written notification of the Adminis11 trator taking an action pursuant to subparagraph 

12 (B). 

13 ‘‘(11) OUTREACH EFFORT.—(A) The Adminis14 trator shall develop and implement an outreach pro15 gram to inform and recruit small business concerns 

16 to apply for eligibility for assistance under this sub17 section. 

18 ‘‘(B) Such program shall make a sustained and 

19 substantial effort to solicit applications for certifi20 cation from small business concerns located in areas 

21 of concentrated unemployment or underemployment 

22 or within labor surplus areas and within States hav23 ing relatively few program participants and from po24 tentially eligible program participants in industry 

25 categories that have not substantially participated in 
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•HR 2802 IH 

1 the award of contracts let under the authority of 

2 this subsection. 

3 ‘‘(12) CONSTRUCTION CONTRACTS.—To the 

4 maximum extent practicable, construction sub5 contracts awarded by the Administrator pursuant to 

6 this subsection shall be awarded within the county 

7 or State where the work is to be performed. 

8 ‘‘(13) CAPABILITY STATEMENT.—

9 ‘‘(A) IN GENERAL.—The Administrator 

10 shall require each concern eligible to receive 

11 subcontracts pursuant to this subsection to an12 nually prepare and submit to the Administrator 

13 a capability statement. 

14 ‘‘(B) CONTENTS.—Such statement shall 

15 briefly describe such concern’s various contract 

16 performance capabilities and shall contain the 

17 name and telephone number of the employee in 

18 the district to which the program participant is 

19 assigned. 

20 ‘‘(C) CLASSIFICATION.—The Administrator 

21 shall separate such statements by those pro22 gram participants primarily dependent upon 

23 local contract support and those primarily re24 quiring a national marketing effort. 
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•HR 2802 IH 

1 ‘‘(D) DISSEMEINATION.—Statements pri2 marily dependent upon local contract support 

3 shall be disseminated to appropriate buying ac4 tivities in the marketing area of the concern. 

5 The remaining statements shall be disseminated 

6 to the Directors of Small and Disadvantaged 

7 Business Utilization for the appropriate agen8 cies who shall further distribute such state9 ments to buying activities with such agencies 

10 that may purchase the types of items or serv11 ices described on the capability statements. 

12 ‘‘(E) CONTRACTING ACTIVITY COMMUNICA13 TION WITH ADMINISTRATION.—Contracting ac14 tivities receiving capability statements shall, 

15 within 60 days after receipt, contact the rel16 evant Business Opportunity Specialist to indi17 cate the number, type and approximate dollar 

18 value of contract opportunities that such activi19 ties may be awarding over the succeeding 12-

20 month period and which may be appropriate to 

21 consider for contracting with the Administrator 

22 and subsequent subcontracting to those con23 cerns for which it has received capability state24 ments. 
227

•HR 2802 IH 

1 ‘‘(14) CONTRACT FORECAST.—(A) Each execu2 tive agency reporting to the Federal Procurement 

3 Data System contract actions with an aggregate 

4 value in excess of $50,000,000 shall prepare a fore5 cast of expected contract opportunities or classes of 

6 contract opportunities for the next and succeeding 

7 fiscal years that small business concerns, including 

8 those owned and controlled by socially and economi9 cally disadvantaged individuals, are capable of per10 forming. Such forecast shall be periodically revised 

11 during such year. To the extent such information is 

12 available, the agency forecasts shall specify the fol13 lowing: 

14 ‘‘(i) The approximate number of individual 

15 contract opportunities (and the number of op16 portunities within a class). 

17 ‘‘(ii) The approximate dollar value, or 

18 range of dollar values, for each contract oppor19 tunity or class of contract opportunities. 

20 ‘‘(iii) The anticipated time (by fiscal year 

21 quarter) for the issuance of a procurement re22 quest. 

23 ‘‘(iv) The activity responsible for the award 

24 and administration of the contract. 
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•HR 2802 IH 

1 ‘‘(B) FORECAST DISSEMINATION.—The head of 

2 each executive agency subject to the provisions of 

3 subparagraph (A) shall within 10 days of completion 

4 furnish such forecasts to the Administrator and the 

5 Director of the Office of Small and Disadvantaged 

6 Business Utilization established pursuant to section 

7 15(k) of this Act for such agency. 

8 ‘‘(C) LIMITS ON DISSEMINATION.—The infor9 mation reported pursuant to subparagraph (B) may 

10 be limited to classes of items and services for which 

11 there are substantial annual purchases. 

12 ‘‘(D) FORECAST AVAILABILITY.—Such forecasts 

13 shall be available to program participants and all 

14 other small business concerns. 

15 ‘‘(15) PERCENTAGES PERFORMED BY PROGRAM

16 PARTICIPANTS.—

17 ‘‘(A) SERVICES AND PROCUREMENT.—A 

18 program participant may not be awarded a con19 tract under this subsection unless the program 

20 participant agrees that—

21 ‘‘(i) in the case of a contract for serv22 ices (except construction), at least 50 per23 cent of the cost of contract performance 

24 incurred for personnel shall be expended 

25 for employees of the concern; and 
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•HR 2802 IH 

1 ‘‘(ii) in the case of a contract for pro2 curement of supplies (other than procure3 ment from a regular dealer in such sup4 plies), the concern will perform work for at 

5 least 50 percent of the cost of manufac6 turing the supplies (not including the cost 

7 of materials). 

8 ‘‘(B) ALTERATION OF PERCENTAGES.—

9 The Administrator may change the percentage 

10 under clause (i) or (ii) of subparagraph (A) if 

11 the Administrator determines that such change 

12 is necessary to reflect conventional industry 

13 practices among business concerns that are 

14 below the numerical size standard established 

15 by the Administrator pursuant to section 3(a) 

16 of this Act for businesses in that industry cat17 egory. A percentage established under the pre18 ceding sentence may not differ from a percent19 age established under section 15(n) of this Act. 

20 ‘‘(C) CONSTRUCTION CONTRACT REGULA21 TIONS.—(i) The Administrator shall establish, 

22 by regulation and after the opportunity for no23 tice and comment, requirements similar to those 

24 specified in subparagraph (A) to be applicable 

25 to contracts for general and specialty construc-
230

•HR 2802 IH 

1 tion and to contracts for any other industry 

2 category not otherwise subject to the require3 ments of such subparagraph. 

4 ‘‘(ii) The percentage applicable to any such 

5 requirement shall be determined in accordance 

6 with subparagraph (B), except that such a per7 centage may not differ from a percentage estab8 lished under section 15(n) of this Act for the 

9 same industry category. 

10 ‘‘(16) PERFORMANCE EXCEPTION FOR WHOLE11 SALERS AND RETAILERS.—(A) An otherwise respon12 sible program participant that is in compliance with 

13 the requirements of subparagraph (B) shall not be 

14 denied the opportunity to submit and have consid15 ered its offer for any procurement contract for the 

16 supply of a product to be let pursuant to this sub17 section or section 15(a) solely because such concern 

18 is other than the actual manufacturer or processor 

19 of the product to be supplied under the contract. 

20 ‘‘(B) To be in compliance with the requirements 

21 referred to in subparagraph (A), the program partic22 ipant shall—

23 ‘‘(i) be primarily engaged in the wholesale 

24 or retail trade; 
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•HR 2802 IH 

1 ‘‘(ii) be a small business concern under the 

2 size standard for the North American Industrial 

3 Classification System Code assigned to the con4 tract solicitation on which the offer is being 

5 made; 

6 ‘‘(iii) be a regular dealer, as defined pursu7 ant to section 1(a) of the Act entitled ‘An Act 

8 to provide conditions for the purchase of sup9 plies and the making of contracts by the United 

10 States, and for other purposes’, approved June 

11 30, 1936 (popularly known as the ‘Walsh12 Healey Act’; 41 U.S.C. 35(a)), in the product 

13 to be offered the Government or be specifically 

14 exempted from such section by paragraph 

15 (24)(C) of this subsection; and 

16 ‘‘(iv) represent that it will supply the prod17 uct of a small manufacturer as defined in sec18 tion 3 of this Act, unless a waiver of such re19 quirement is granted—

20 ‘‘(I) by the Administrator, after re21 viewing a determination by the contracting 

22 officer that no small manufacturer can rea23 sonably be expected to offer a product 

24 meeting the specifications (including period 
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•HR 2802 IH 

1 for performance) required of an offeror by 

2 the solicitation; or 

3 ‘‘(II) by the Administrator for a prod4 uct (or class of products), after deter5 mining that no small manufacturer is 

6 available to participate in the Federal pro7 curement market. 

8 ‘‘(17) RESTRICTION ON ADMINISTRATION EM9 PLOYEES.—

10 ‘‘(A) IN GENERAL.—No person within the 

11 employ of the Administration shall, during the 

12 term of such employment and for a period of 

13 two years after such employment has been ter14 minated, engage in any activity or transaction 

15 specified in subparagraph (B) with respect to 

16 any program participant if such person partici17 pated personally (either directly or indirectly) in 

18 decision-making responsibilities relating to such 

19 program participant or with respect to the ad20 ministration of any assistance provided to pro21 gram participants generally under this sub22 section, section 8(b), or section 7(a)(20). 

23 ‘‘(B) PROHIBITED TRANSACTIONS.—The 

24 activities and transactions prohibited by sub25 paragraph (A) include—
233

•HR 2802 IH 

1 ‘‘(i) the buying, selling, or receiving 

2 (except by inheritance) of any legal or ben3 eficial ownership of stock or any other 

4 ownership interest or the right to acquire 

5 any such interest; 

6 ‘‘(ii) the entering into or execution of 

7 any written or oral agreement (whether or 

8 not legally enforceable) to purchase or oth9 erwise obtain any right or interest de10 scribed in clause (i); or 

11 ‘‘(iii) the receipt of any other benefit 

12 or right that may be an incident of owner13 ship. 

14 ‘‘(C) EMPLOYEE CERTIFICATION AND

15 PENALITIES.—(i) The employees designated in 

16 clause (ii) shall annually submit a written cer17 tification to the Administrator regarding com18 pliance with the requirements of this para19 graph. 

20 ‘‘(ii) The employees referred to in clause 

21 (i) are— 

22 ‘‘(I) regional administrators; 

23 ‘‘(II) district directors; 
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•HR 2802 IH 

1 ‘‘(III) the Assistant Administrator for 

2 Minority Small Business and Capital Own3 ership Development; 

4 ‘‘(IV) employees whose principal du5 ties relate to the award of contracts or the 

6 provision of other assistance pursuant to 

7 this subsection or section 8(b); and 

8 ‘‘(V) such other employees as the Ad9 ministrator may designate. 

10 ‘‘(iii) Any present or former employee of 

11 the Administration who violates this paragraph 

12 shall be subject to a civil penalty, assessed by 

13 the Attorney General, that shall not exceed 300 

14 percent of the maximum amount of gain such 

15 employee realized or could have realized as a re16 sult of engaging in those activities and trans17 actions prescribed by subparagraph (B). 

18 ‘‘(iv) In addition to any other remedy or 

19 sanction provided for under law or regulation, 

20 any person who falsely certifies pursuant to 

21 clause (i) shall be subject to a civil penalty 

22 under the Program Fraud Civil Remedies Act 

23 of 1986 (31 U.S.C. 3801–3812). 

24 ‘‘(18) PROHIBITION ON POLITICAL ACTIVITY.—
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•HR 2802 IH 

1 ‘‘(A) IN GENERAL.—Any employee of the 

2 Administration who has authority to take, di3 rect others to take, recommend, or approve any 

4 action with respect to any program or activity 

5 conducted pursuant to this subsection or section 

6 8(b), shall not, with respect to any such action, 

7 exercise or threaten to exercise such authority 

8 on the basis of the political activity or affili9 ation of any party. Employees of the Adminis10 tration shall expeditiously report to the Inspec11 tor General of the Administration any such ac12 tion for which such employee’s participation has 

13 been solicited or directed. 

14 ‘‘(B) PENALTIES.—Any employee who will15 fully and knowingly violates subparagraph (A) 

16 shall be subject to disciplinary action which 

17 may consist of separation from service, reduc18 tion in grade, suspension, or reprimand. 

19 ‘‘(C) EXCEPTION.—Subparagraph (A) 

20 shall not apply to any action taken as a penalty 

21 or other enforcement of a violation of any law, 

22 rule, or regulation prohibiting or restricting po23 litical activity. 

24 ‘‘(D) OTHER LAWS NOT AFFECTED.—The 

25 prohibitions of subparagraph (A), and remedial 
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•HR 2802 IH 

1 measures provided for under subparagraphs (B) 

2 and (C) with regard to such prohibitions, shall 

3 be in addition to, and not in lieu of, any other 

4 prohibitions, measures or liabilities that may 

5 arise under any other provision of law. 

6 ‘‘(19) ANNUAL REPORT TO BUSINESS OPPOR7 TUNITY SPECIALIST.—

8 ‘‘(A) IN GENERAL.—Program participants 

9 shall semiannually report to their assigned 

10 Business Opportunity Specialist the following: 

11 ‘‘(i) A listing of any agents, represent12 atives, attorneys, accountants, consultants, 

13 and other parties (other than employees) 

14 receiving compensation to assist in obtain15 ing a Federal contract for such program 

16 participant. 

17 ‘‘(ii) The amount of compensation re18 ceived by any person listed under clause (i) 

19 during the relevant reporting period and a 

20 description of the activities performed in 

21 return for such compensation. 

22 ‘‘(B) SUBMISSIONS TO HEADQUARTERS.—

23 The Business Opportunity Specialist shall 

24 promptly review and forward such report to the 

25 Assistant Administrator for Minority Small 
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•HR 2802 IH 

1 Business and Capital Ownership Development. 

2 Any report that raises a suspicion of improper 

3 activity shall be reported immediately to the In4 spector General of the Administration. 

5 ‘‘(C) CAUSE FOR TERMINATION.—The fail6 ure to submit a report pursuant to the require7 ments of this subsection and applicable regula8 tions shall be considered good cause for the ini9 tiation of a termination proceeding pursuant to 

10 paragraph (21)(D) of this section. 

11 ‘‘(20) EFFECT OF CHANGE OF OWNERSHIP AND

12 CONTROL.—

13 ‘‘(A) IN GENERAL.—

14 ‘‘(i) Subject to the provisions of sub15 paragraph (B), a contract (including op16 tions) awarded pursuant to this subsection 

17 shall be performed (as performance is de18 fined in paragraphs (15) and (16)) by the 

19 program participant that initially received 

20 such contract. 

21 ‘‘(ii) Notwithstanding the provisions 

22 of clause (i), if the owner or owners upon 

23 whom eligibility was based relinquish own24 ership or control of such concern, or enter 

25 into any agreement to relinquish such own-
238

•HR 2802 IH 

1 ership or control, such contract or option 

2 shall be terminated for the convenience of 

3 the Government, except that no repurchase 

4 costs or other damages may be assessed 

5 against such concerns due solely to the 

6 provisions of this subparagraph. 

7 ‘‘(B) WAIVER.—The Administrator may, 

8 on a nondelegable basis, waive the requirements 

9 of subparagraph (A) only if one of the following 

10 conditions exist: 

11 ‘‘(i) When it is necessary for the own12 ers of the concern to surrender partial con13 trol of such concern on a temporary basis 

14 in order to obtain equity financing. 

15 ‘‘(ii) The head of the contracting 

16 agency for which the contract is being per17 formed certifies that termination of the 

18 contract would severely impair attainment 

19 of the agency’s program objectives or mis20 sions. 

21 ‘‘(iii) Ownership and control of the 

22 concern that is performing the contract 

23 will pass to another small business concern 

24 that is a program participant, but only if 

25 the acquiring firm would otherwise be eligi-
239

•HR 2802 IH 

1 ble to receive the award pursuant to this 

2 subsection. 

3 ‘‘(iv) The individuals upon whom eligi4 bility was based are no longer able to exer5 cise control of the concern due to inca6 pacity or death. 

7 ‘‘(v) When, in order to raise equity 

8 capital, it is necessary for the disadvan9 taged owners of the concern to relinquish 

10 ownership of a majority of the voting stock 

11 of such concern, but only if—

12 ‘‘(I) such concern has exited the 

13 Capital Ownership Development Pro14 gram; 

15 ‘‘(II) the disadvantaged owners 

16 will maintain ownership of the largest 

17 single outstanding block of voting 

18 stock (including stock held by affili19 ated parties); and 

20 ‘‘(III) the disadvantaged owners 

21 will maintain control of daily business 

22 operations. 

23 ‘‘(C) TIMING OF WAIVER REQUEST.—The 

24 Administrator may waive the requirements of 

25 subparagraph (A) if—
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•HR 2802 IH 

1 ‘‘(i) in the case of subparagraph 

2 (B)(i), (ii) and (iv), he is requested to do 

3 so prior to the actual relinquishment of 

4 ownership or control; and 

5 ‘‘(ii) in the case of subparagraph 

6 (B)(iii), he is requested to do so as soon as 

7 possible after the incapacity or death oc8 curs. 

9 ‘‘(D) NOTIFICATION TO ADMINIS10 TRATOR.—Concerns performing contracts 

11 awarded pursuant to this subsection shall be re12 quired to notify the Administration immediately 

13 upon entering an agreement (either oral or in 

14 writing) to transfer all or part of its stock or 

15 other ownership interest to any other party. 

16 ‘‘(E) TREATMENT OF SMALL BUSINESS IN17 VESTMENT COMPANY INTEREST.—Notwith18 standing any other provision of law, for the 

19 purposes of determining ownership and control 

20 of a concern under this section, any potential 

21 ownership interests held by investment compa22 nies licensed under the Small Business Invest23 ment Act of 1958 shall be treated in the same 

24 manner as interests held by the individuals 

25 upon whom eligibility is based. 
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•HR 2802 IH 

1 ‘‘(21) CONDITIONS OF PARTICIPATION.—

2 ‘‘(A) DURATION.—A program participant 

3 shall be permitted to continue participation in 

4 such program for a period of time which is 9 

5 years. Nothing contained in this subparagraph 

6 shall be deemed to prevent the Administrator 

7 from instituting a termination or graduation 

8 pursuant to subparagraph (F) or (H) for issues 

9 unrelated to the expiration of any time period 

10 limitation. 

11 ‘‘(B) BUSINESS PLAN SUBMISSION.—(i) 

12 Promptly after certification as a participant in 

13 the program established by this section, a pro14 gram participant shall submit a business plan 

15 (hereinafter referred to as the ‘plan’) as de16 scribed in clause (ii) of this subparagraph for 

17 review by the Business Opportunity Specialist 

18 assigned to assist such program participant. 

19 ‘‘(ii) The plan may be a revision of a pre20 liminary business plan submitted by the pro21 gram participant or required by the Adminis22 trator as a part of the application for certifi23 cation under this subsection and shall be de24 signed to result in the program participant 

25 eliminating the conditions or circumstances 
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1 upon which the Administrator determined eligi2 bility pursuant to paragraph (7) of this section. 

3 ‘‘(iii) Such plan, and subsequent modifica4 tions submitted under clause (v), shall be ap5 proved by the Business Opportunity Specialist 

6 prior to the program participant being eligible 

7 for award of a contract pursuant to this sub8 section. 

9 ‘‘(iv) The plans submitted under this sub10 paragraph shall include the following: 

11 ‘‘(I) An analysis of market potential, 

12 competitive environment, and other busi13 ness analyses estimating the program par14 ticipant’s prospects for profitable oper15 ations during the term of program partici16 pation and after graduation. 

17 ‘‘(II) An analysis of the program par18 ticipant’s strengths and weaknesses with 

19 particular attention to correcting any fi20 nancial, managerial, technical, or personnel 

21 conditions which are likely to impede the 

22 program participant from receiving con23 tracts other than those awarded under this 

24 section. 
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1 ‘‘(III) Specific targets, objectives, and 

2 goals, for the business development of the 

3 program participant during the next and 

4 succeeding years utilizing the results of the 

5 analyses conducted pursuant to subclauses 

6 (I) and (II). 

7 ‘‘(IV) A transition management plan 

8 outlining specific steps to assure profitable 

9 business operations after graduation (to be 

10 incorporated into the program participant’s 

11 plan during the first year of the transi12 tional stage of program participation). 

13 ‘‘(V) Estimates of contract awards 

14 pursuant to this subsection and from other 

15 sources, which the program participant will 

16 require to meet the specific targets, objec17 tives, and goals for the years covered by its 

18 plan. 

19 ‘‘(v) Each program participant shall annu20 ally review its currently approved plan with its 

21 Business Opportunity Specialist and modify 

22 such plan as may be appropriate. Any modified 

23 plan shall be submitted to the District Director 

24 for approval. The currently approved plan shall 

25 be considered valid until such time as a modi-
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1 fied plan is reviewed by the Business Oppor2 tunity Specialist and approved by the District 

3 Director. 

4 ‘‘(vi) Annual reviews pertaining to years in 

5 the transitional stage of program participation 

6 shall require, as appropriate, a written 

7 verification that such program participant has 

8 complied with the requirements of paragraph 

9 (21)(G) of this section relating to attaining 

10 business activity from sources other than con11 tracts awarded pursuant to this section. 

12 ‘‘(vii) Each program participant shall an13 nually forecast its needs for contract awards 

14 under this section for the next program year 

15 and the succeeding program year during the re16 view of its business plan, conducted pursuant to 

17 clause (v). Such forecast shall be known as the 

18 ‘section 8(a) contract support level’ and shall be 

19 included in the program participant’s business 

20 plan. Such forecast shall include—

21 ‘‘(I) the aggregate dollar value of con22 tract support to be sought on a non23 competitive basis under this section, re24 flecting compliance with the requirements 

25 of paragraph (21)(G) relating to attaining 
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1 business activity from sources other than 

2 contracts awarded pursuant to this section, 

3 ‘‘(II) the types of contract opportuni4 ties being sought, identified by North 

5 American Industrial Classification System 

6 Code or otherwise, 

7 ‘‘(III) an estimate of the dollar value 

8 of the section 8(a) contract support level to 

9 be sought on a competitive basis, and 

10 ‘‘(IV) such other information as may 

11 be requested by the Business Opportunity 

12 Specialist to provide effective business de13 velopment assistance to the program par14 ticipant. 

15 ‘‘(C) CONDITIONS FOR DENIAL OF ASSIST16 ANCE.—A program participant shall be denied 

17 all such assistance if such concern—

18 ‘‘(i) voluntarily elects not to continue 

19 participation; 

20 ‘‘(ii) completes the period of Program 

21 participation as prescribed by paragraph 

22 (27); 

23 ‘‘(iii) is terminated or graduated pur24 suant to proceedings conducted in accord25 ance with paragraph (10). 
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1 ‘‘(D) TERMINATION DEFINED.—For pur2 poses of this subsection, the term ‘terminated’ 

3 and the term ‘termination’ means the total de4 nial or suspension of assistance under this 

5 paragraph or under this section prior to the 

6 graduation of the program participant or prior 

7 to the expiration of the maximum program par8 ticipation term. An action for termination shall 

9 be based upon good cause, including—

10 ‘‘(i) the failure by such concern to 

11 maintain its eligibility for program partici12 pation; 

13 ‘‘(ii) the failure of the concern to en14 gage in business practices that will pro15 mote its competitiveness within a reason16 able period of time as evidenced by, among 

17 other indicators, a pattern of unjustified 

18 delinquent performance or terminations for 

19 default with respect to contracts awarded 

20 under the authority of this subsection; 

21 ‘‘(iii) a demonstrated pattern of fail22 ing to make required submissions or re23 sponses to Administration officials or em24 ployees in a timely manner; 
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•HR 2802 IH 

1 ‘‘(iv) the willful violation of any rule 

2 or regulation of the Administrator per3 taining to material issues; 

4 ‘‘(v) the debarment of the concern or 

5 its disadvantaged owners by any agency 

6 pursuant to subpart 9.4 of title 48, Code 

7 of Federal Regulations (or any successor 

8 regulation); or 

9 ‘‘(vi) the conviction of the disadvan10 taged owner or an officer of the concern 

11 for any offense indicating a lack of busi12 ness integrity including any conviction for 

13 embezzlement, theft, forgery, bribery, fal14 sification or violation of section 16. For 

15 purposes of this clause, no termination ac16 tion shall be taken with respect to a dis17 advantaged owner solely because of the 

18 conviction of an officer of the concern (who 

19 is other than a disadvantaged owner) un20 less such owner conspired with, abetted, or 

21 otherwise knowingly acquiesced in the ac22 tivity or omission that was the basis of 

23 such officer’s conviction. 

24 ‘‘(E) INITIATION OF TERMINATION PRO25 CEEDING.—(i) The District Director may ini-
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•HR 2802 IH 

1 tiate a termination proceeding by recom2 mending such action to the Assistant Adminis3 trator for Minority Small Business and Capital 

4 Ownership Development. 

5 ‘‘(ii) Whenever the Assistant Administrator 

6 determines such termination is appropriate, 

7 within 15 days after making such a determina8 tion the program participant shall be provided 

9 a written notice of intent to terminate, speci10 fying the reasons for such action. 

11 ‘‘(iii) No program participant shall be ter12 minated from the program pursuant to sub13 paragraph (D) without first being afforded an 

14 opportunity for a hearing in accordance with 

15 paragraph (10). 

16 ‘‘(iv) If a termination proceeding is initi17 ated against a program participant, such partic18 ipant shall be ineligible from receiving assist19 ance pursuant to this section until the final dis20 position of the termination action. 

21 ‘‘(v) If the program participant is rein22 stated upon final decision by the Administrator 

23 pursuant to paragraph (10), the time during 

24 which the program participant did not receive 
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1 assistance shall be added on to the original pro2 gram term end date. 

3 ‘‘(F) GRADUATION DEFINED.—For the 

4 purposes of this subsection and subsection 8(b) 

5 the term ‘graduated’ or ‘graduation’ means that 

6 the program participant is recognized as suc7 cessfully completing the program by substan8 tially achieving the targets, objectives, and goals 

9 contained in the concern’s business plan thereby 

10 demonstrating its ability to compete in the mar11 ketplace without assistance under this section. 

12 ‘‘(G) BUSINESS ACTIVITY TARGETS.—(i) 

13 During the developmental stage of its participa14 tion in the program, a program participant 

15 shall take all reasonable efforts within its con16 trol to attain the targets contained in its busi17 ness plan for contracts awarded other than pur18 suant to this subsection (hereinafter referred to 

19 as ‘business activity targets.’). 

20 ‘‘(ii) Such efforts shall be made a part of 

21 the business plan and shall be sufficient in 

22 scope and duration to satisfy the Administrator 

23 that the program participant will engage in a 

24 reasonable marketing strategy that will maxi-
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1 mize its potential to achieve its business activity 

2 targets. 

3 ‘‘(iii) During the transitional stage of the 

4 program a program participant shall be subject 

5 to regulations regarding business activity tar6 gets that are promulgated by the Administrator 

7 such regulations shall: 

8 ‘‘(I) Establish business activity tar9 gets applicable to program participants 

10 during the fifth year and each succeeding 

11 year of program participation. 

12 ‘‘(aa) Such activity targets shall, 

13 for such period of time, reflect a rea14 sonably consistent increase in con15 tracts awarded other than pursuant to 

16 this subsection, expressed as a per17 centage of total sales. 

18 ‘‘(bb) The Administrator may es19 tablish modified business activity tar20 gets for program participants that 

21 have participated in the program for a 

22 period of longer than four years on 

23 the date of the enactment of this Act. 

24 ‘‘(II) Require the program participant 

25 to certify that it has met its business activ-
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1 ity targets or that it is in compliance with 

2 such remedial measures as may have been 

3 ordered pursuant to regulations issued 

4 under subclause (III) prior to the receipt 

5 of any contract awarded pursuant to this 

6 subsection. 

7 ‘‘(III) Authorize the Administrator to 

8 take appropriate remedial measures with 

9 respect to a program participant that has 

10 failed to attain a required business activity 

11 target for the purpose of reducing such 

12 participant’s dependence on contracts 

13 awarded pursuant to this section. 

14 ‘‘(aa) Such remedial actions may 

15 include assisting the program partici16 pant to expand the dollar volume of 

17 its competitive business activity or 

18 limiting the dollar volume of contracts 

19 awarded to the program participant 

20 pursuant to this subsection. 

21 ‘‘(bb) Unless the remedial meas22 ures taken pursuant to subclause (aa) 

23 bar the award of contracts to program 

24 participants, no remedial measures 
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1 shall be reviewable pursuant to para2 graph (10). 

3 ‘‘(H) ELIGIBILITY REVIEW.—(i) The Ad4 ministrator shall conduct an evaluation of a 

5 program participant’s eligibility for continued 

6 participation in the program whenever it re7 ceives specific and credible information alleging 

8 that such program participant no longer meets 

9 the requirements for program eligibility. 

10 ‘‘(ii) Upon making a finding that a pro11 gram participant is no longer eligible, the Ad12 ministrator shall initiate a termination pro13 ceeding in accordance with subparagraphs (D) 

14 and (E). 

15 ‘‘(iii) A program participant’s eligibility for 

16 award of any contract under the authority of 

17 this section may be suspended pursuant to sub18 part 9.4 of title 48, Code of Federal Regula19 tions (or any successor regulation). 

20 ‘‘(22) CERTIFICATION AND REVIEW BY ADMIN21 ISTRATOR.—

22 ‘‘(A) ASSISTANT ADMINISTRATOR COORDI23 NATION.—The Assistant Administrator for Mi24 nority Small Business and Capital Ownership 

25 Development shall be responsible for coordi-
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•HR 2802 IH 

1 nating and formulating policies relating to Fed2 eral assistance to small business concerns eligi3 ble for assistance under section 7(i) of this Act 

4 and program participants. 

5 ‘‘(B) DIVISION OF PROGRAM CERTIFI6 CATION AND ELIGIBILITY.—(i) There is estab7 lished a Division of Program Certification and 

8 Eligibility (hereinafter referred to in this para9 graph as the ‘Division’) in the Office of Minor10 ity Small Business and Capital Ownership De11 velopment. The Division shall be headed by a 

12 Director who shall report directly to the Assist13 ant Administrator for Minority Small Business 

14 and Capital Ownership Development. The Divi15 sion shall establish field offices within such re16 gional offices of the Administration as may be 

17 necessary to perform efficiently its functions 

18 and responsibilities. 

19 ‘‘(ii) Subject to the provisions of paragraph 

20 (5)(B), the functions and responsibility of the 

21 Division of Program Certification and Eligi22 bility are to—

23 ‘‘(I) receive, review and evaluate ap24 plications for certification pursuant to 

25 paragraphs (5), (6), and (7); 
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•HR 2802 IH 

1 ‘‘(II) advise each program applicant 

2 within 15 days after the receipt of an ap3 plication as to whether such application is 

4 complete and suitable for evaluation and, if 

5 not, what matters must be rectified; 

6 ‘‘(III) render recommendations on 

7 such applications to the Assistant Adminis8 trator for Minority Small Business and 

9 Capital Ownership Development; 

10 ‘‘(IV) review and evaluate financial 

11 statements and other submissions from 

12 concerns participating in the program es13 tablished by this subsection to ascertain 

14 continued eligibility to receive subcontracts 

15 pursuant to this section; 

16 ‘‘(V) make a request for the initiation 

17 of termination or graduation proceedings, 

18 as appropriate, to the Assistant Adminis19 trator for Minority Small Business and 

20 Capital Ownership Development; 

21 ‘‘(VI) make recommendations to the 

22 Assistant Administrator for Minority Small 

23 Business and Capital Ownership Develop24 ment concerning protests from applicants 

25 that have been denied program admission; 
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•HR 2802 IH 

1 ‘‘(VII) decide protests regarding the 

2 status of a concern as a disadvantaged 

3 concern for purposes of any program or ac4 tivity conducted under the authority of 

5 subsection (d), or any other provision of 

6 Federal law that references such sub7 section for a definition of program eligi8 bility; and 

9 ‘‘(VIII) implement such policy direc10 tives as may be issued by the Assistant 

11 Administrator for Minority Small Business 

12 and Capital Ownership Development pur13 suant to subparagraph (E) regarding, 

14 among other things, the geographic dis15 tribution of concerns to be admitted to the 

16 program and the industrial make-up of 

17 such concerns. 

18 ‘‘(C) PROGRAM ADMISSION AND CONTRACT

19 OPPORTUNITIES.—An applicant shall not be de20 nied admission into the program established by 

21 this subsection due solely to a determination by 

22 the Division of Program Certification and Eligi23 bility that specific contract opportunities are 

24 unavailable to assist in the development of such 

25 concern unless—
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•HR 2802 IH 

1 ‘‘(i) the Government has not pre2 viously procured and is unlikely to procure 

3 the types of products or services offered by 

4 the concern on a prime contract basis; or 

5 ‘‘(ii) the purchases of such products 

6 or services by the Federal Government will 

7 not be in quantities sufficient to support 

8 the developmental needs of the applicant 

9 and other program participants providing 

10 the same or similar items or services. 

11 ‘‘(D) CERTIFICATION DECISION.—Except 

12 as provided in paragraph 5(B), not later than 

13 90 days after receipt of a completed application 

14 for program certification, the Assistant Admin15 istrator for Minority Small Business and Cap16 ital Ownership Development shall certify a 

17 small business concern as a program partici18 pant or shall deny such application. 

19 ‘‘(E) DIVISION REVIEW.—

20 ‘‘(i) Thirty days before the conclusion 

21 of each fiscal year, the Director of the Di22 vision of Program Certification and Eligi23 bility shall review all concerns that have 

24 been admitted into the program during the 

25 preceding 12-month period. 
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1 ‘‘(ii) The review shall ascertain the 

2 number of entrants, their geographic dis3 tribution, and their industrial classifica4 tion. The Director shall also estimate the 

5 expected growth of the program during the 

6 next fiscal year and the number of addi7 tional Business Opportunity Specialists, if 

8 any, that will be needed to meet the antici9 pated demand for the program. 

10 ‘‘(iii) The findings and conclusions of 

11 the Director shall be reported to the As12 sistant Administrator for Minority Small 

13 Business and Capital Ownership Develop14 ment by September 30 of each year. 

15 ‘‘(iv) Based on such report and such 

16 additional data as may be relevant, the As17 sistant Administrator shall, by October 31 

18 of each year, issue rules as that term is de19 fined in section 551(4) of title 5, United 

20 States Code, applicable to such fiscal year 

21 that—

22 ‘‘(I) establish priorities for the 

23 solicitation of program applications 

24 from underrepresented regions and in25 dustry categories; 
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•HR 2802 IH 

1 ‘‘(II) assign staffing levels and 

2 allocate other program resources as 

3 necessary to meet program needs; and 

4 ‘‘(III) establish priorities in the 

5 processing and admission of new pro6 gram participants as may be nec7 essary to achieve an equitable geo8 graphic distribution of concerns and a 

9 distribution of concerns across all in10 dustry categories in proportions need11 ed to increase significantly contract 

12 awards to small business concerns 

13 owned and controlled by socially and 

14 economically disadvantaged individ15 uals. When considering such increase 

16 the Administrator shall give due con17 sideration to those industrial cat18 egories where Federal purchases have 

19 been substantial but where the partici20 pation rate of such concerns has been 

21 limited. 

22 ‘‘(23) STAGES OF PROGRAM PARTICIPATION.—

23 ‘‘(A) IN GENERAL.—The Capital ownership 

24 Development Program established by this sub-
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•HR 2802 IH 

1 section shall have a developmental stage and 

2 transitional stage. 

3 ‘‘(B) DEVELOPMENTAL STAGE.—The de4 velopmental stage of program participation 

5 shall be designed to assist the concern in its ef6 fort to overcome its economic disadvantage by 

7 providing such assistance as may be necessary 

8 and appropriate to access its markets and to 

9 strengthen its financial and managerial skills. 

10 ‘‘(C) TRANSITIONAL STAGE.—The transi11 tional stage of program participation shall be 

12 designed to overcome, insofar as practicable, 

13 the remaining elements of economic disadvan14 tage and to prepare such concern for gradua15 tion from the program. 

16 ‘‘(24) TYPES OF ASSISTANCE PROVIDED BY

17 THE ADMINISTRATOR.—The Administrator shall 

18 make available during the developmental and transi19 tional stages the following assistance: 

20 ‘‘(A) Contract support pursuant to this 

21 section. 

22 ‘‘(B) Financial assistance pursuant to sec23 tion 7(a)(20).

24 ‘‘(C) A maximum of two exemptions from 

25 the requirements of section 1(a) of the Walsh-
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•HR 2802 IH 

1 Healey Act, which exemptions shall apply only 

2 to contracts awarded pursuant to this section 

3 and shall only be used to allow for contingent 

4 agreements by a small business concern to ac5 quire the machinery, equipment, facilities, or 

6 labor needed to perform such contracts. No ex7 emption shall be made pursuant to this sub8 paragraph if the contract to which it pertains 

9 has an anticipated value in excess of 

10 $10,000,000. 

11 ‘‘(D)(i) Financial assistance whereby the 

12 Administrator may purchase in whole or in 

13 part, and on behalf of such concerns, skills 

14 training or upgrading for employees or potential 

15 employees of such concerns. 

16 ‘‘(ii) For purposes of this subparagraph 

17 the term ‘training provider’ shall mean an insti18 tution of higher education, a community or vo19 cational college, or an institution eligible to pro20 vide skills training or upgrading under the Job 

21 Training Partnership Act or title I of the Work22 force Investment Act of 1998. 

23 ‘‘(iii) Assistance may be made by direct 

24 payment to the training provider or by reim25 bursing the program participant or the partici-
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•HR 2802 IH 

1 pant’s employee, if such reimbursement is 

2 found to be reasonable and appropriate. 

3 ‘‘(iv) The Administrator shall, in consulta4 tion with the Secretary of Labor, promulgate 

5 rules and regulations to implement this sub6 paragraph that establish acceptable training 

7 and upgrading performance standards and pro8 vide for such monitoring or audit requirements 

9 as may be necessary to ensure the integrity of 

10 the training effort. 

11 ‘‘(v) No financial assistance shall be grant12 ed under this subparagraph unless the Adminis13 trator determines each of the following: 

14 ‘‘(I) The program participant has doc15 umented that it has first explored the use 

16 of existing cost-free or cost-subsidized 

17 training programs offered by public and 

18 private sector agencies working with pro19 grams of employment and training and 

20 economic development. 

21 ‘‘(II) No more than 5 employees or 

22 potential employees of the program partici23 pant are recipients of any benefits under 

24 this subparagraph at any one time. 
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•HR 2802 IH 

1 ‘‘(III) No more than $2,500 shall be 

2 made available for any one employee or po3 tential employee. 

4 ‘‘(IV) The length of training or up5 grading financed by this subparagraph 

6 shall be no less than 1 month nor more 

7 than 6 months. 

8 ‘‘(V) The program participant has 

9 given adequate assurance it will employ the 

10 trainee or upgraded employee for at least 

11 6 months after the training or upgrading 

12 financed by this subparagraph has been 

13 completed and each trainee or upgraded 

14 employee has provided a similar assurance 

15 to remain within the employ of such con16 cern for such period. 

17 ‘‘(aa) If such concern, trainee, or 

18 upgraded employee breaches this 

19 agreement, the Administrator shall be 

20 entitled to obtain from the violating 

21 party the repayment of all funds ex22 pended on behalf of the violating 

23 party. 

24 ‘‘(bb) Such repayment shall be 

25 made to the Administrator together 
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•HR 2802 IH 

1 with such interest and costs of collec2 tion as may be reasonable. 

3 ‘‘(cc) The violating party shall be 

4 barred from receiving any further as5 sistance under this subparagraph. 

6 ‘‘(VI) The training to be financed may 

7 take place either at such concern’s facili8 ties or at those of the training provider. 

9 ‘‘(VII) The program participant will 

10 maintain such records as the Adminis11 trator deems appropriate to ensure that 

12 the provisions of this paragraph and any 

13 other applicable law have not been violated. 

14 ‘‘(E)(i) The transfer of technology or sur15 plus property owned by the United States to 

16 such a concern. 

17 ‘‘(ii) Activities designed to effect such 

18 transfer shall be developed in cooperation with 

19 the heads of Federal agencies and shall include 

20 the transfer by grant, license, or sale of such 

21 technology or property to such a concern. Such 

22 property may be transferred to program partici23 pants on a priority basis. 

24 ‘‘(iii) Technology or property transferred 

25 under this subparagraph shall be used by the 
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•HR 2802 IH 

1 concern during the normal conduct of its busi2 ness operation and shall not be sold or trans3 ferred to any other party (other than the Gov4 ernment) during such concern’s term of partici5 pation in the program and for one year there6 after. 

7 ‘‘(F) Training assistance whereby the Ad8 ministrator shall conduct training sessions to 

9 assist individuals and enterprises eligible to re10 ceive contracts under this section in the devel11 opment of business principles and strategies to 

12 enhance their ability to successfully compete for 

13 contracts in the marketplace. 

14 ‘‘(G) Joint ventures, leader-follow arrange15 ments, and teaming agreements between the 

16 program participant and other program partici17 pants and other small business concerns with 

18 respect to contracting opportunities. Such ac19 tivities shall be undertaken on the basis of pro20 grams developed by the procuring agency with 

21 the assistance of the Administration. 

22 ‘‘(H) Transitional management business 

23 planning training and technical assistance. 

24 ‘‘(25) TRANSITIONAL STAGE ASSISTANCE.—

25 Program participants in the developmental stage of 
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•HR 2802 IH 

1 program participation shall be eligible for the assist2 ance provided by subparagraphs (A), (B), (C), (D), 

3 (E), (F), and (G) of paragraph (24). 

4 ‘‘(26) DEVELOPMENTAL STAGE ASSISTANCE.—

5 Program Participants in the transitional stage of 

6 Program participation shall be eligible for the assist7 ance provided by subparagraphs (A), (B), (F), (G), 

8 and (H) of paragraph (24). 

9 ‘‘(27) DURATION OF STAGES.—Subject to the 

10 provisions of paragraph (21)(A), a program partici11 pant may receive developmental assistance under 

12 this subsection and contracts under this subsection 

13 for a total period of not longer than 9 years, meas14 ured from the date of its certification under this 

15 subsection, of which—

16 ‘‘(A) no more than 5 years may be spent 

17 in the developmental stage of program partici18 pation; and 

19 ‘‘(B) no more than 4 years may be spent 

20 in the transitional stage of program participa21 tion. 

22 ‘‘(28) DATA COLLECTION.—

23 ‘‘(A) IN GENERAL.—The Administrator 

24 shall develop and implement a process for the 

25 systematic collection of data on the operations 
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•HR 2802 IH 

1 of the program established pursuant to this sec2 tion. 

3 ‘‘(B) REPORT.—Not later than April 30 of 

4 each year, the Administrator shall submit a re5 port to the Committee on Small Business and 

6 Entrepreneurship of the Senate and the Com7 mittee on Small Business of the House of Rep8 resentatives on the program that shall include 

9 the following: 

10 ‘‘(i) A description and estimate of the 

11 benefits and costs that have accrued to the 

12 economy and the Government in the imme13 diately preceding fiscal year due to the op14 erations of those business concerns that 

15 were performing contracts awarded pursu16 ant to this section. 

17 ‘‘(ii) A compilation and evaluation of 

18 those business concerns that have exited 

19 the program during the immediately pre20 ceding three fiscal years. Such compilation 

21 and evaluation shall detail the number of 

22 concerns actively engaged in business oper23 ations, those that have ceased or substan24 tially curtailed such operations, including 

25 the reasons for such actions, and those 
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1 concerns that have been acquired by other 

2 firms or organizations owned and con3 trolled by other than socially and economi4 cally disadvantaged individuals. 

5 ‘‘(iii) For those businesses that have 

6 continued operations after they exited from 

7 the program, the Administrator shall also 

8 separately detail the benefits and costs 

9 that have accrued to the economy during 

10 the immediately preceding fiscal year due 

11 to the operations of such concerns. 

12 ‘‘(iv) A listing of all participants in 

13 the program during the preceding fiscal 

14 year identifying, by State and by region, 

15 for each firm: the name of the concern, the 

16 race or ethnicity, and gender of the dis17 advantaged owners, the dollar value of all 

18 contracts received in the preceding year, 

19 the dollar amount of advance payments re20 ceived by each concern pursuant to con21 tracts awarded under this section, and a 

22 description including (if appropriate) an 

23 estimate of the dollar value of all benefits 

24 received pursuant to paragraphs (25) and 
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•HR 2802 IH 

1 (26) and section 7(a)(20) during such 

2 year. 

3 ‘‘(v) The total dollar value of con4 tracts and options awarded during the pre5 ceding fiscal year pursuant to this section 

6 and such amount expressed as a percent7 age of total sales of—

8 ‘‘(I) all firms participating in the 

9 program during such year; and 

10 ‘‘(II) firms in each of the nine 

11 years of program participation. 

12 ‘‘(vi) A description of such additional 

13 resources or program authorities as may 

14 be required to provide the types of services 

15 needed over the next 2-year period to serv16 ice the expected portfolio of firms certified 

17 pursuant to this section. 

18 ‘‘(vii) The total dollar value of con19 tracts and options awarded pursuant to 

20 this section, at such dollar increments as 

21 the Administrator deems appropriate, for 

22 each 6 digit North American Industrial 

23 Classification System code under which 

24 such contracts and options were classified. 

25 ‘‘(b) MANAGEMENT AND TECHNICAL ASSISTANCE.—
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1 ‘‘(1) CONTRACTS FOR ASSISTANCE.—The Ad2 ministrator shall be required to enter into contracts 

3 with business concerns, not-for-profit entities, and 

4 other persons capable of providing management and 

5 technical assistance, as may be necessary, to partici6 pants in the program established in section 8(a) and 

7 to small business concerns which have loans guaran8 teed pursuant to section 7(i). 

9 ‘‘(2) SELECTION OF CONTRACTORS.—The Ad10 ministrator shall select contractors based on the ex11 perience in advising small business concerns on fi12 nancial and business operations, including but not 

13 limited to comprehensive business plans, and other 

14 functions needed to preserve and expand small busi15 nesses eligible for assistance under paragraph (1). 

16 To the extent practical, the Administrator shall se17 lect, as contractors, small business concerns but the 

18 primary evaluation criteria shall be the technical 

19 ability of the contractor to provide the services set 

20 forth in this subsection. 

21 ‘‘(3) AUTHORIZATION OF APPROPRIATIONS.—

22 There are authorized to be appropriated to carry out 

23 this subsection $6,000,000 for each of fiscal years 

24 2004 and 2005. Such sums shall remain available 

25 until expended. 
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1 ‘‘(c) COORDINATION WITH OTHER AGENCIES.—The 

2 Administrator shall take such steps as may be necessary 

3 and appropriate, in coordination and cooperation with the 

4 heads of Federal agencies to insure that contracts, sub5 contracts, and deposits made by the Federal Government 

6 or with programs aided with Federal funds are placed in 

7 such way as to further the purposes of subsection (a) of 

8 this section and section 7(i).’’. 

9 (b) COMMERCIAL MARKETING.—Section 8(d)(10) of 

10 the Small Business Act (15 U.S.C. 637(d)(10)) is amend11 ed to read as follows: 

12 ‘‘(10) In the case of contracts within the provi13 sions of paragraphs (4), (5), and (6), the Adminis14 trator is authorized to—

15 ‘‘(A) assign at least one commercial mar16 keting representative per state whose primary 

17 responsibilities shall be to—

18 ‘‘(i) assist Federal agencies and busi19 nesses in complying with their responsibil20 ities under the provisions of this sub21 section, including the formulation of sub22 contracting plans pursuant to paragraph 

23 (4); 

24 ‘‘(ii) review any solicitation for any 

25 contract to be let pursuant to paragraphs 
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•HR 2802 IH 

1 (4) and (5) to determine the maximum 

2 practicable opportunity for small business 

3 concerns, small manufacturers, small busi4 ness concerns owned and controlled by vet5 erans, small business concerns owned and 

6 controlled by service-disabled veterans, 

7 qualified HUBZone small business con8 cerns, small business concerns owned and 

9 controlled by socially and economically dis10 advantaged individuals, small business eli11 gible for participation under section 8(a), 

12 and small business concerns owned and 

13 controlled by women to participate as sub14 contractors in the performance of any con15 tract resulting from any solicitation, and to 

16 submit its findings, which shall be advisory 

17 in nature, to the appropriate Federal agen18 cy; 

19 ‘‘(iii) evaluate compliance with sub20 contracting plans, either on a contract-by21 contract basis, or in the case of contractors 

22 having multiple contracts, on an aggregate 

23 basis including recommendations to the 

24 contracting officer for an assessment of 

25 liquidated damages; 
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1 ‘‘(iv) work directly with small busi2 nesses to counsel them on marketing and 

3 subcontracting to large business prime con4 tractors that have contracts with the Fed5 eral Government; 

6 ‘‘(v) identify large business buyers of 

7 small business products and services; 

8 ‘‘(vi) assist small businesses in receiv9 ing timely payment from large business 

10 prime contractors that have contracts with 

11 the Federal Government; and 

12 ‘‘(vii) perform program reviews of the 

13 small business outreach programs and sub14 contracting programs of large businesses. 

15 ‘‘(B) Not later than September 30, 2004, 

16 each state shall be assigned at least one com17 mercial marketing representative, authorized by 

18 paragraph 10(A) of this section, who must be 

19 physically located in each state. 

20 ‘‘(C) Not later than 120 days after enact21 ment of this Act, the Administrator shall, after 

22 the opportunity for notice and comment, pro23 mulgate regulations governing the Administra24 tor’s review of subcontracting plans including 
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1 the standards for determining good faith effort 

2 of compliance with the subcontracting plans.’’. 

3 (c) WOMEN-OWNED SMALL BUSINESS CONCERNS; 

4 AUTHORITIES OF ADMINISTRATOR.—Subsections (m) and 

5 (n) of section 8 of the Small Business Act (15 U.S.C. 637 

6 (m) and (n)) are amended to read as follows: 

7 ‘‘(m) PROCUREMENT PROGRAM FOR WOMEN-OWNED

8 SMALL BUSINESS CONCERNS.—

9 ‘‘(1) DEFINITIONS.—In this subsection, the fol10 lowing definitions apply: 

11 ‘‘(A) SMALL BUSINESS CONCERN OWNED

12 AND CONTROLLED BY WOMEN.—The term 

13 ‘small business concern owned and controlled by 

14 women’ has the meaning given such term in 

15 section 3(n), except that ownership shall be de16 termined without regard to any community 

17 property law. 

18 ‘‘(2) AUTHORITY TO RESTRICT COMPETITION.—

19 In accordance with this subsection, a contracting of20 ficer may restrict competition for any contract for 

21 the procurement of goods or services by the Federal 

22 Government to small business concerns owned and 

23 controlled by women, if—

24 ‘‘(A) each of the concerns is not less than 

25 51 percent owned by 1 or more women who are 
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1 economically disadvantaged (and such owner2 ship is determined without regard to any com3 munity property law); 

4 ‘‘(B) the contracting officer has a reason5 able expectation that 2 or more small business 

6 concerns owned and controlled by women will 

7 submit offers for the contract; 

8 ‘‘(C) the contract is for the procurement of 

9 goods or services with respect to an industry 

10 identified by the Administrator pursuant to 

11 paragraph (4); 

12 ‘‘(D) the anticipated award price of the 

13 contract (including options) does not exceed—

14 ‘‘(i) $5,000,000, in the case of a con15 tract assigned an industrial classification 

16 code for manufacturing; or 

17 ‘‘(ii) $3,000,000, in the case of all 

18 other contracts; 

19 ‘‘(E) in the estimation of the contracting 

20 officer, the contract award can be made at a 

21 fair and reasonable price; and 

22 ‘‘(F) each of the concerns—

23 ‘‘(i) is certified by a Federal agency 

24 or a State government as a small business 

25 concern owned and controlled by women; 
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1 ‘‘(ii) is certified by a national certi2 fying entity approved by the Administrator 

3 as a small business concern owned and 

4 controlled by women; or 

5 ‘‘(iii) certifies to the contracting offi6 cer that it is a small business concern 

7 owned and controlled by women and pro8 vides adequate documentation in accord9 ance with standards established by the Ad10 ministration to support such certification. 

11 ‘‘(3) WAIVER.—With respect to a small busi12 ness concern owned and controlled by women, the 

13 Administrator may waive subparagraph (2)(A) if the 

14 Administrator determines that the concern is in an 

15 industry in which small business concerns owned 

16 and controlled by women are substantially underrep17 resented. 

18 ‘‘(4) IDENTIFICATION OF INDUSTRIES.—

19 ‘‘(A) IN GENERAL.—The Administrator 

20 shall conduct a study to identify industries in 

21 which small business concerns owned and con22 trolled by women are underrepresented with re23 spect to Federal procurement contracting. 

24 ‘‘(B) DETERMINATION BY CONTRACTING

25 OFFICER.—Until such time as the Adminis-
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1 trator conducts such study, the determination 

2 as to whether an industry is under-represented 

3 by small business concerns owned and con4 trolled by women shall be made by the con5 tracting officer. 

6 ‘‘(C) DEADLINE.—Not later than 90 days 

7 after the date of the enactment of this subpara8 graph the Administrator shall—

9 ‘‘(i) ensure the completion of the 

10 study described in this paragraph; 

11 ‘‘(ii) approve national certifying enti12 ties for the purposes of paragraph 

13 (2)(F)(ii); and 

14 ‘‘(iii) make determinations in accord15 ance with paragraph (3). 

16 ‘‘(5) ENFORCEMENT; PENALTIES.—

17 ‘‘(A) VERIFICATION OF ELIGIBILITY.—In 

18 carrying out this subsection, the Administrator 

19 shall use existing procedures established by the 

20 Office of Hearings and Appeals relating to—

21 ‘‘(i) the filing, investigation, and dis22 position by the Administration of any chal23 lenge to the eligibility of a small business 

24 concern to receive assistance under this 

25 subsection (including a challenge, filed by 
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1 an interested party, relating to the veracity 

2 of a certification made or information pro3 vided to the Administration by a small 

4 business concern under paragraph (2)(F)); 

5 and 

6 ‘‘(ii) verification by the Administrator 

7 of the accuracy of any certification made 

8 or information provided to the Administra9 tion by a small business concern under 

10 paragraph (2)(F). 

11 ‘‘(B) EXAMINATIONS.—The procedures es12 tablished under subparagraph (A) may provide 

13 for program examinations (including random 

14 program examinations) by the Administrator of 

15 any small business concern making a certifi16 cation or providing information to the Adminis17 trator under paragraph (2)(F). 

18 ‘‘(C) PENALTIES.—In addition to the pen19 alties described in section 16(d), any small busi20 ness concern that is determined by the Admin21 istrator to have misrepresented the status of 

22 that concern as a small business concern owned 

23 and controlled by women for purposes of this 

24 subsection, shall be subject to—
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1 ‘‘(i) section 1001 of title 18, United 

2 States Code; and 

3 ‘‘(ii) sections 3729 through 3733 of 

4 title 31, United States Code. 

5 ‘‘(6) PROVISION OF DATA.—Upon the request 

6 of the Administrator, the head of any Federal de7 partment or agency shall promptly provide to the 

8 Administrator such information as the Adminis9 trator determines to be necessary to carry out this 

10 subsection. 

11 ‘‘(n) AUTHORITIES OF ADMINISTRATOR.—In car12 rying out its functions under subsections 7(i), 8(a), and 

13 8(b) of this Act the Administrator may do the following: 

14 ‘‘(1) Utilize, with their consent, the services and 

15 facilities of Federal agencies without reimbursement, 

16 and, with the consent of any State or political sub17 division of a State, accept and utilize the services 

18 and facilities of such State or subdivision without re19 imbursement. 

20 ‘‘(2) Accept voluntary and uncompensated serv21 ices, notwithstanding section 1342 of title 31, 

22 United States Code. 

23 ‘‘(3) Employ experts and consultants or organi24 zations thereof as authorized by section 3109 of title 

25 5, United States Code. No individual may be em-
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1 ployed under the authority of this paragraph for 

2 more than 100 days in any fiscal year. No individual 

3 employed under this paragraph may be compensated 

4 at rates in excess of the daily equivalent of the high5 est rate payable under section 5332 of title 5, 

6 United States Code, including traveltime. Individuals 

7 employed under this paragraph may be allowed, 

8 while away from their homes or regular places of 

9 business, travel expenses (including per diem in lieu 

10 of subsistence) as authorized by section 5703 of title 

11 5, United States Code for persons in the Govern12 ment service employed intermittently. Contracts for 

13 employment under this paragraph may be renewed 

14 annually.’’. 

15 (d) CLERICAL AMENDMENT.—Section 8 of the Small 

16 Business Act (15 U.S.C. 637) is amended by inserting the 

17 following section heading: 

18 ‘‘SEC. 8. GOVERNMENT CONTRACT AND BUSINESS DEVEL19 OPMENT ASSISTANCE FOR SMALL BUSINESS 

20 CONCERNS, ETC.’’. 

21 SEC. 209. TRAINING AND ASSISTANCE. 

22 Section 12 of the Small Business Act (15 U.S.C. 641) 

23 is amended to read as follows:
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1 ‘‘SEC. 12. TRAINING AND ASSISTANCE. 

2 ‘‘(a) ASSISTANCE.—The Administrator shall 

3 (through co-sponsorships, small business development cen4 ters, women’s business centers, the Office of Veterans Af5 fairs, and other programs as the Administrator determines 

6 appropriate) provide technical and managerial assistance, 

7 advice and guidance on matters of government procure8 ment (at the Federal, State, and local levels) and informa9 tion on the policies, practices, and principles of good man10 agement, and, when appropriate, distribute publications 

11 and other material on Administration programs to small 

12 business concerns, including all categories of such con13 cerns defined in section 3 of this Act. 

14 ‘‘(b) VOLUNTEERS.—

15 ‘‘(1) The Administrator shall recruit executive 

16 volunteers to assist the Administrator in carrying 

17 out this section. 

18 ‘‘(2) The Administrator shall recruit retired 

19 and active executives to form the Service Corps of 

20 Retired Executives and the Active Corps of Execu21 tives. Such executives will be responsible for pro22 viding technical and managerial assistance and ad23 vice to small business concerns. 

24 ‘‘(3) The Administrator shall recruit retired 

25 and active executives from large and small manufac26 turers to form the Service Corps of Retired Manu-
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1 facturing Executives and the Active Corps of Manu2 facturing Executives. Such executives will advise, as3 sist, and train small manufacturers. 

4 ‘‘(4) The Administrator may enter into appro5 priate contracts, grants, or cooperative agreements 

6 with the volunteers or corps referred to in this sub7 section in order to provide the services set forth in 

8 this section. 

9 ‘‘(5) The Administrator may maintain the head10 quarters of the corps referred to in this subsection 

11 and assign, at his discretion, Administration per12 sonnel to assist the volunteers. 

13 ‘‘(6) The volunteers may solicit cash, other per14 sonal property, and in-kind contributions from the 

15 private sector to be used to carry out their functions 

16 under this section. The volunteers may use payments 

17 from the Administrator made pursuant to this sub18 section to assist in such solicitations. 

19 ‘‘(7) The Administrator may permit any indi20 vidual or group of persons participating in the pro21 grams established pursuant to this subsection to use 

22 any facilities of the Administration, including re23 gional and district offices, as well as clerical and 

24 computer services. 
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1 ‘‘(8) The volunteers, while carrying out the pur2 poses of this section, shall be deemed Federal em3 ployees for the purposes of the Federal tort claims 

4 provisions in title 28, United States Code; and for 

5 the purposes of subchapter I of chapter 81 of title 

6 5, United States Code (relative to compensation to 

7 Federal employees for work injuries) shall be 

8 deemed civil employees of the United States within 

9 the meaning of the term ‘employee’ as defined in 

10 section 8101 of title 5, United States Code, and the 

11 provisions of that subchapter shall apply except that 

12 in computing compensation benefits for disability or 

13 death, the monthly pay of a volunteer shall be 

14 deemed that received under the entrance salary for 

15 a grade GS–11 employee. 

16 ‘‘(9) The Administrator may reimburse the vol17 unteers for all necessary out-of-pocket expenses inci18 dent to their provision of services under this section, 

19 or in connection with attendance at meetings spon20 sored by the Administrator, or for the cost of mal21 practice insurance, as the Administrator shall deter22 mine, in accordance with regulations which he or she 

23 shall prescribe, and, while they are carrying out such 

24 activities away from their homes or regular places of 

25 business, for travel expenses (including per diem in 
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1 lieu of subsistence) as authorized by section 5703 of 

2 title 5, United States Code, for individuals serving 

3 without pay. 

4 ‘‘(10) None of the services made available by 

5 volunteers pursuant to this subsection shall be made 

6 available to any person or small business concern 

7 who is delinquent on a loan made pursuant to sec8 tion 7 of this Act or Title V of the Small Business 

9 Investment Act of 1958 unless such assistance re10 lates solely to addressing the matter of the delin11 quency and a specific request is made in writing to 

12 the volunteer (and a record of such communication 

13 is maintained by the volunteer). 

14 ‘‘(11) No payment for supportive services or re15 imbursement of out-of-pocket expenses made to per16 sons serving pursuant to this subsection shall be 

17 subject to any tax or charge or be treated as wages 

18 or compensation for the purposes of unemployment, 

19 disability, retirement, public assistance, or similar 

20 benefit payments, or minimum wage laws. 

21 ‘‘(12) Under regulations which the Adminis22 trator shall prescribe, counsel may be employed and 

23 counsel fees, court costs, bail, and other expenses in24 cidental to the defense of volunteers may be paid in 

25 judicial or administrative proceedings arising directly 
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1 out of the performance of activities pursuant to this 

2 subsection to which volunteers have been made par3 ties. 

4 ‘‘(c) SMALL BUSINESS INSTITUTES.—In carrying out 

5 its functions under this section, the Administrator may 

6 make grants (including contracts or cooperative agree7 ments) to any public or private institution of higher edu8 cation for the establishment and operation of a small busi9 ness institute, which shall be used to provide business 

10 counseling and assistance to small business concerns 

11 through the activities of students enrolled at the institu12 tion, which students shall be entitled to receive educational 

13 credits for their activities. To the extent practicable, the 

14 Administrator shall select applicants that demonstrate the 

15 best capability of serving small manufacturers. 

16 ‘‘(d) BUSINESS GRANTS AND COOPERATIVE AGREE17 MENTS.—

18 ‘‘(1) IN GENERAL.—In accordance with this 

19 subsection, the Administrator may make grants to 

20 and enter into cooperative agreements with any coa21 lition of private entities, public entities, or any com22 bination of private and public entities—

23 ‘‘(A) to expand business-to-business rela24 tionships between large and small businesses 

25 by—
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1 ‘‘(i) identifying opportunities for small 

2 business concerns located in areas of high 

3 unemployment or low income; 

4 ‘‘(ii) assisting small business concerns 

5 and small manufacturers in finding oppor6 tunities to supply goods and services to 

7 other businesses, particularly large busi8 nesses that have previously obtained such 

9 goods and services from businesses located 

10 outside of the United States; and 

11 ‘‘(iii) providing such other assistance 

12 as the Administrator may identify; 

13 ‘‘(B) to maintain a database, to the extent 

14 practicable, of supply chain management oppor15 tunities for small business concerns and small 

16 manufacturers; 

17 ‘‘(C) to provide businesses, directly or indi18 rectly, with online information and a database 

19 of companies that are interested in mentor-pro20 tege programs or community-based, statewide, 

21 or local business development programs; and 

22 ‘‘(D) by providing businesses with informa23 tion on the best practices used by other busi24 ness concerns in establishing mentor-protege or 

25 other business development programs. 
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1 ‘‘(2) MATCHING REQUIREMENT.—The Adminis2 trator may make a grant to a coalition under para3 graph (1) only if the coalition provides for activities 

4 described in paragraph (1) an amount, either in 

5 kind or in cash, equal to the grant amount. 

6 ‘‘(3) DEFINITIONS.—For purposes of this sub7 section, the term ‘supply chain’ means a network of 

8 facilities and distribution options that performs the 

9 functions of procurement of materials, trans10 formation of these materials into intermediate and 

11 furnished products, and distribution of the finished 

12 products to customers. 

13 ‘‘(4) AUTHORIZATION OF APPROPRIATIONS.—

14 There is authorized to be appropriated to carry out 

15 this subsection $10,000,000, to remain available 

16 until expended, for each of fiscal years 2004 through 

17 2005.’’.

18 SEC. 210. CONTRACTING ASSISTANCE; ETC. 

19 (a) CERTAIN DISAGREEMENTS SUBMITTED TO

20 OMB.—Section 15(a) of the Small Business Act (15 

21 U.S.C. 644(a)) is amended by striking the sentence begin22 ning ‘‘Whenever the Administrator and the contracting 

23 procurement agency fail to agree,’’ and inserting the fol24 lowing: ‘‘Whenever the Administration and the contracting 

25 procurement agency fail to agree, the Administrator shall 
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1 submit the matter to the Director of the Office of Manage2 ment and Budget, who shall render his decision regarding 

3 the matter not later than 10 days after receiving the mat4 ter. The Director may not delegate his duties under the 

5 preceding sentence except to a subordinate official within 

6 the Office of Management and Budget appointed by the 

7 President, by and with the advice and consent of the Sen8 ate.’’. 

9 (b) PROGRAMS FOR BLIND AND HANDICAPPED INDI10 VIDUALS.—Section 15(c) of the Small Business Act (15 

11 U.S.C. 644(c)) is amended to read as follows: 

12 ‘‘(c) PROGRAMS FOR BLIND AND HANDICAPPED IN13 DIVIDUALS.—

14 ‘‘(1) As used in this subsection: 

15 ‘‘(A) The term ‘Committee’ means the 

16 Committee for Purchase From People Who Are 

17 Blind or Severely Disabled established under 

18 the first section of the Act entitled ‘An Act to 

19 create a Committee on Purchases of Blind20 made Products, and for other purposes’, ap21 proved June 25, 1938 (41 U.S.C. 46). 

22 ‘‘(B) The term ‘public or private organiza23 tion for the disabled’ means any organization—

24 ‘‘(i) which is organized under the laws 

25 of the United States or of any State, oper-
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1 ated in the interest of disabled individuals, 

2 the net income of which does not inure in 

3 whole or in part to the benefit of any 

4 shareholder or other individual; 

5 ‘‘(ii) which complies with any applica6 ble occupational health and safety pre7 scribed by the Secretary of Labor; and 

8 ‘‘(iii) which in the production of com9 modities and in the provision of services 

10 during any fiscal year employs disabled in11 dividuals for not less than 75 percent of 

12 the man-hours required for the production 

13 or provision of the commodities or services. 

14 ‘‘(C) The term ‘disabled person’ means any 

15 individual who—

16 ‘‘(i) is a service-disabled veteran; or 

17 ‘‘(ii) has a disability (as defined in 

18 section 3 of the Americans with Disabil19 ities Act of 1990) which limits such indi20 vidual’s selection of any type of employ21 ment for which such individual would oth22 erwise be qualified or qualifiable. 

23 ‘‘(2) The Administrator shall evaluate the 

24 placement of products on the procurement list main25 tained by the Committee pursuant to section 2 of 
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1 the Act entitled ‘An Act to create a Committee on 

2 Purchases of Blind made Products, and for other 

3 purposes’, approved June 25, 1938 (41 U.S.C. 47) 

4 to determine the impact of such placement on for5 profit small business concerns. 

6 ‘‘(3) The Administrator shall monitor and 

7 evaluate the participation of public or private organi8 zations for the disabled in Federal procurement con9 tracts and shall annually report the results of such 

10 monitoring and evaluation to the Committee on 

11 Small Business of the House of Representatives and 

12 the Committee on Small Business and Entrepre13 neurship of the Senate not later than March 31st of 

14 each year. This report shall include the impact of 

15 such participation on for-profit small business con16 cerns. 

17 ‘‘(4)(A) Not later than 10 days after the an18 nouncement of a proposed award of a contract by an 

19 agency or department to a public or private organi20 zation for the disabled, a for-profit small business 

21 concern that has experienced or is likely to experi22 ence severe economic injury as the result of the pro23 posed award may file an appeal of the proposed 

24 award with the Administrator. 
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1 ‘‘(B) If such a concern files an appeal of a pro2 posed award under subparagraph (A) and the Ad3 ministrator, after consultation with the Executive 

4 Director of the Committee, finds that the concern 

5 has experienced or is likely to experience severe eco6 nomic injury as the result of the proposed award, 

7 not later than 30 days after the filing of the appeal, 

8 the Administrator shall require each agency and de9 partment having procurement powers to take such 

10 action as may be appropriate to alleviate economic 

11 injury sustained or likely to be sustained by the con12 cern. 

13 ‘‘(5) Each agency and department having pro14 curement powers shall report to the Office of Fed15 eral Procurement Policy each time a contract subject 

16 to paragraph (2)(A) is entered into, and shall in17 clude in its report the amount of the next highest 

18 bid submitted by a for-profit small business concern. 

19 The Office of Federal Procurement Policy shall col20 lect data reported under the preceding sentence 

21 through the Federal procurement data system and 

22 shall report to the Administrator who shall notify all 

23 such agencies and departments when the maximum 

24 amount of awards authorized under paragraph 

25 (2)(A) has been made during any fiscal year. 
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1 ‘‘(6) For the purposes of this subsection, a con2 tract may be awarded only if at least 75 percent of 

3 the direct labor performed on each item being pro4 duced under the contract in the sheltered workshop 

5 or performed in providing each type of service under 

6 the contract by the sheltered workshop is performed 

7 by disabled individuals. 

8 ‘‘(7) Agencies awarding one or more contracts 

9 to such an organization pursuant to the provisions 

10 of this subsection may use multiyear contracts, if 

11 appropriate.’’. 

12 (c) MINIMUM SOLICITATION PERIOD.—Section 15(e) 

13 of the Small Business Act (15 U.S.C. 644(e)) is amended 

14 by adding at the end the following new paragraph: 

15 ‘‘(5) MINIMUM SOLICITATION PERIOD.—In the 

16 case of a solicitation of offers for a bundled contract 

17 that is issued by the head of an agency, small busi18 ness concerns shall be allowed to submit offers for 

19 a period of not less than 60 days beginning on the 

20 date the solicitation is issued.’’. 

21 (d) PROCUREMENT GOALS.—Section 15(g) of the 

22 Small Business Act (15 U.S.C. 644(g)) is amended to read 

23 as follows: 

24 ‘‘(g)(1) The President shall before the close of 

25 each fiscal year establish new Government-wide pro-
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1 curement goals for the following fiscal year for pro2 curement contracts awarded to small business con3 cerns, small business concerns owned and controlled 

4 by service-disabled veterans, qualified HUBZone 

5 small business concerns, small business concerns 

6 owned and controlled by socially and economically 

7 disadvantaged individuals, and small business con8 cerns owned and controlled by women. The Presi9 dent shall not simply readopt the preceding years 

10 procurement goals. The Government-wide goal for 

11 participation by small business concerns shall be es12 tablished at not less than 23 percent of the total 

13 value of all prime contract awards for each fiscal 

14 year. The Government-wide goal for participation by 

15 small business concerns owned and controlled by 

16 service-disabled veterans shall be established at not 

17 less than 3 percent of the total value of all prime 

18 contract and subcontract awards for each fiscal year. 

19 The Government-wide goal for participation by 

20 qualified HUBZone small business concerns shall be 

21 established at not less than 3 percent of the total 

22 value of all prime contract awards. The Government23 wide goal for participation by small business con24 cerns owned and controlled by socially and economi25 cally disadvantaged individuals shall be established 
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1 at not less than 5 percent of the total value of all 

2 prime contract awards and not less than 5 percent 

3 of the total value of all subcontract awards for each 

4 fiscal year. The Government-wide goal for participa5 tion by small business concerns owned and con6 trolled by women shall be established at not less 

7 than 5 percent of the total value of all prime con8 tract awards and not less than 5 percent of the total 

9 value of all subcontract awards for each fiscal year. 

10 Notwithstanding the Government-wide goal, each 

11 agency shall have an annual goal that presents, for 

12 that agency, the maximum practicable opportunity 

13 for small business concerns, small manufacturers, 

14 small business concerns owned and controlled by 

15 service-disabled veterans, qualified HUBZone small 

16 business concerns, small business concerns owned 

17 and controlled by socially and economically disadvan18 taged individuals, small business concerns partici19 pating in the program established by section 8(a) of 

20 this Act, and small business concerns owned and 

21 controlled by women to participate in the perform22 ance of contracts let by such agency. For the pur23 poses of the preceding sentence, each agency is pro24 hibited from counting towards its procurement goal 

25 for small business concerns owned and controlled by 
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1 socially and economically disadvantaged individuals 

2 any contract awarded to small business concerns 

3 participating in the program established pursuant to 

4 section 8(a) of this Act. The Administrator and the 

5 Administrator of the Office of Federal Procurement 

6 Policy shall, when exercising their authority pursu7 ant to paragraph (2), insure that the cumulative an8 nual prime contract goals for all agencies meet or 

9 exceed the annual Government-wide prime contract 

10 goal established by the President pursuant to this 

11 paragraph. 

12 ‘‘(2) The head of each Federal agency shall, 

13 after consultation with the Administrator, establish 

14 goals for the participation by small business con15 cerns, small manufacturers, small business concerns 

16 owned and controlled by service-disabled veterans, 

17 qualified HUBZone small business concerns, small 

18 business concerns owned and controlled by socially 

19 and economically disadvantaged individuals, small 

20 business concerns participating in the program es21 tablished pursuant to section 8(a) of this Act, and 

22 small business concerns owned and controlled by 

23 women in procurement contracts of such agency hav24 ing a value of $25,000 or more. For the purposes 

25 of the preceding sentence, each agency is prohibited 
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1 from counting towards its procurement goal for 

2 small business concerns owned and controlled by so3 cially and economically disadvantaged individuals 

4 any contract awarded to small business concerns 

5 participating in the program established pursuant to 

6 section 8(a) of this Act. Goals established under this 

7 subsection shall be jointly established by the Admin8 istrator and the head of each Federal agency and 

9 shall realistically reflect the potential of small busi10 ness concerns, small manufacturers, small business 

11 concerns owned and controlled by service-disabled 

12 veterans, qualified HUBZone small business con13 cerns, small business concerns owned and controlled 

14 by socially and economically disadvantaged individ15 uals, small business concerns participating in the 

16 program established pursuant to section 8(a) of this 

17 Act, and small business concerns owned and con18 trolled by women to perform subcontracts under 

19 such contracts. For the purposes of the preceding 

20 sentence, each agency is prohibited from counting 

21 towards its procurement goal for small business con22 cerns owned and controlled by socially and economi23 cally disadvantaged individuals any contract awarded 

24 to small business concerns participating in the pro25 gram established pursuant to section 8(a) of this 
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1 Act. Whenever the Administrator and the head of 

2 any Federal agency fail to agree on established 

3 goals, the disagreement shall be submitted to the 

4 Administrator of the Office of Federal Procurement 

5 Policy for final determination. For the purpose of 

6 establishing goals under this subsection, the head of 

7 each Federal agency shall make consistent efforts to 

8 annually expand participation by small business con9 cerns from each industry category in procurement 

10 contracts of the agency, including participation by 

11 small business concerns owned and controlled by 

12 service-disabled veterans, qualified HUBZone small 

13 business concerns, small business concerns owned 

14 and controlled by socially and economically disadvan15 taged individuals, small business concerns partici16 pating in the program established pursuant to sec17 tion 8(a), small business concerns owned and con18 trolled by women, and small manufacturers. For the 

19 purposes of the preceding sentence, each agency is 

20 prohibited from counting towards its procurement 

21 goal for small business concerns owned and con22 trolled by socially and economically disadvantaged 

23 individuals any contract awarded to small business 

24 concerns participating in the program established 

25 pursuant to section 8(a) of this Act. The head of 
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1 each Federal agency, in attempting to attain such 

2 participation, shall consider—

3 ‘‘(A) contracts awarded as the result of 

4 unrestricted competition; and 

5 ‘‘(B) contracts awarded after competition 

6 restricted to eligible small business concerns 

7 under this section and under the program es8 tablished under section 8(a).’’. 

9 (e) REPORTS.—Section 15(h) of the Small Business 

10 Act (15 U.S.C. 644(h)) is amended to read as follows: 

11 ‘‘(h)(1) At the conclusion of each fiscal year, the head 

12 of each Federal agency shall report to the Administrator 

13 on the extent of participation by small business concerns, 

14 small manufacturers, small business concerns owned and 

15 controlled by veterans (including service-disabled vet16 erans), qualified HUBZone small business concerns, small 

17 business concerns owned and controlled by socially and 

18 economically disadvantaged individuals, small business 

19 concerns participating in the program established pursu20 ant to section 8(a) of this Act, and small business con21 cerns owned and controlled by women in procurement con22 tracts of such agency. Such reports shall contain appro23 priate justifications for failure to meet the goals estab24 lished under subsection (g) of this section. Additionally, 

25 such reports shall contain sufficient justification if goals 
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1 established for the most recent fiscal year end were estab2 lished lower than the same goals for the previous fiscal 

3 year. 

4 ‘‘(2) The Administrator shall annually compile and 

5 analyze the reports submitted by the individual agencies 

6 pursuant to paragraph (1) and shall submit them to the 

7 President and the Congress. The Administrator’s submis8 sion to the President shall include the following: 

9 ‘‘(A) The Government-wide goals for participa10 tion by small business concerns, small business con11 cerns owned and controlled by service-disabled vet12 erans, qualified HUBZone small business concerns, 

13 small business concerns owned and controlled by so14 cially and economically disadvantaged individuals, 

15 small business concerns participating in the program 

16 established pursuant to section 8(a) of this Act, and 

17 small business concerns owned and controlled by 

18 women and the performance in attaining such goals. 

19 ‘‘(B) The goals in effect for each agency and 

20 the agency’s performance in attaining such goals. 

21 ‘‘(C) An analysis of any failure to achieve the 

22 Government-wide goals or any individual agency 

23 goals and the actions planned by such agency (and 

24 approved by the Administrator) to achieve the goals 

25 in the succeeding fiscal year. 
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1 ‘‘(D) The number and dollar value of prime 

2 contracts awarded to small business concerns, small 

3 manufacturers small business concerns owned and 

4 controlled by service-disabled veterans, qualified 

5 HUBZone small business concerns, small business 

6 concerns owned and controlled by socially and eco7 nomically disadvantaged individuals, small business 

8 concerns participating in the program established 

9 pursuant to section 8(a) of this Act and small busi10 ness concerns owned and controlled by women. For 

11 each agency and on a government-wide basis, num12 ber and dollar value of contracts issued through—

13 ‘‘(i) noncompetitive negotiation, 

14 ‘‘(ii) competition restricted to small busi15 ness concerns owned and controlled by socially 

16 and economically disadvantaged individuals 

17 ‘‘(iii) competition restricted to small busi18 ness concerns participating in the program es19 tablished by section 8(a) of this Act, 

20 ‘‘(iv) competition restricted to small busi21 ness concerns, and 

22 ‘‘(v) unrestricted competitions. 

23 ‘‘(E) The number and dollar value of sub24 contracts awarded to small business concerns, small 

25 manufacturers, small business concerns owned and 
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1 controlled by service-disabled veterans, qualified 

2 HUBZone small business concerns, small business 

3 concerns owned and controlled by socially and eco4 nomically disadvantaged individuals, small business 

5 concerns participating in the program established 

6 pursuant to section 8(a) of this Act, and small busi7 ness concerns owned and controlled by women. 

8 ‘‘(3) The President shall include the information re9 quired by paragraph (2) in each annual report to the Con10 gress on the state of small business prepared pursuant to 

11 section 303(a) of the Small Business Economic Policy Act 

12 of 1980 (15 U.S.C. 631b(a)). 

13 ‘‘(4) For the purpose of this subsection, the term 

14 ‘small disadvantaged business’ means any small business 

15 concern that is certified as a ‘small disadvantaged busi16 ness’ by the Administrator.’’. 

17 (f) RESTRICTED COMPETITION.—Section 15(j) of the 

18 Small Business Act (15 U.S.C. 644(j)) is amended to read 

19 as follows: 

20 ‘‘(j)(1) Each contract for the purchase of goods and 

21 services that has an anticipated value greater than $2,500 

22 but not greater than $1,000,000 shall be reserved exclu23 sively for small business concerns unless the contracting 

24 officer is unable to obtain offers from two or more small 

25 business concerns that are competitive with market prices 
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1 and are competitive with regard to the quality and delivery 

2 of the goods or services being purchased. 

3 ‘‘(2) In carrying out paragraph (1), a contracting of4 ficer shall consider a responsive offer timely received from 

5 an eligible small business offeror. 

6 ‘‘(3) Nothing in paragraph (1) shall be construed as 

7 precluding an award of a contract with a value not greater 

8 than $1,000,000 under the authority of section 8(a) of 

9 this Act, section 2323 of title 10, United States Code, sec10 tion 712 of the Business Opportunity Development Re11 form Act of 1988 (Public Law 100-656; 15 U.S.C. 644 

12 note), or section 7102 of the Federal Acquisition Stream13 lining Act of 1994.’’. 

14 (g) ASSIGNMENT OF PROCUREMENT CENTER REP15 RESENTATIVES.—Section 15(l) of the Small Business Act 

16 (15 U.S.C. 644(l)) is amended to read as follows: 

17 ‘‘(l)(1) The Administrator shall assign to each major 

18 procurement center a procurement center representative 

19 with such assistance as may be appropriate. The procure20 ment center representative shall carry out the activities 

21 described in paragraph (2), and shall be an advocate for 

22 the breakout of items for procurement through full and 

23 open competition, whenever appropriate, while maintain24 ing the integrity of the system in which such items are 

25 used, and an advocate for the use of full and open competi-
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1 tion, whenever appropriate, for the procurement of sup2 plies and services by such center. Any procurement center 

3 representative assigned under this subsection shall be in 

4 addition to the representative referred to in subsection 

5 (k)(6). 

6 ‘‘(2) A procurement center representative is author7 ized to—

8 ‘‘(A) work directly with small businesses to 

9 counsel them on the Federal market and contracting 

10 with the Federal Government; 

11 ‘‘(B) identify Federal agency buyers of small 

12 business products and services; 

13 ‘‘(C) attend any provisioning conference or 

14 similar evaluation session during which determina15 tions are made as to whether requirements are to be 

16 procured through other than full and open competi17 tion and make recommendations with respect to 

18 such requirements to the members of such con19 ference or session; 

20 ‘‘(D) review, at any time, restrictions on com21 petition previously imposed on items through acqui22 sition method coding or similar procedures, and rec23 ommend to personnel of the appropriate activity the 

24 prompt reevaluation of such limitations; 
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1 ‘‘(E) review restrictions on competition arising 

2 out of restrictions on the rights of the United States 

3 in technical data, and, when appropriate, recommend 

4 that personnel of the appropriate activity initiate a 

5 review of the validity of such an asserted restriction; 

6 ‘‘(F) obtain from any governmental source, and 

7 make available to personnel of the appropriate activ8 ity, technical data necessary for the preparation of 

9 a competitive solicitation package for any item of 

10 supply or service previously procured noncompeti11 tively due to the unavailability of such technical 

12 data; 

13 ‘‘(G) have access to procurement records and 

14 other data of the procurement center commensurate 

15 with the level of such representative’s approved secu16 rity clearance classification; 

17 ‘‘(H) receive unsolicited engineering proposals 

18 and, when appropriate—

19 ‘‘(i) conduct a value analysis of such pro20 posal to determine whether such proposal, if 

21 adopted, will result in lower costs to the United 

22 States without substantially impeding legitimate 

23 acquisition objectives and forward to personnel 

24 of the appropriate activity recommendations 

25 with respect to such proposal, or 
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1 ‘‘(ii) forward such proposals without anal2 ysis to personnel of the activity responsible for 

3 reviewing such proposals and who shall furnish 

4 the breakout procurement center representative 

5 with information regarding the disposition of 

6 any such proposal; and 

7 ‘‘(iii) review the systems that account for 

8 the acquisition and management of technical 

9 data within the procurement center to assure 

10 that such systems provide the maximum avail11 ability and access to data needed for the prepa12 ration of offers to sell to the United States 

13 those supplies to which such data pertain which 

14 potential offerors are entitled to receive. 

15 ‘‘(3) A procurement center representative is author16 ized to appeal the failure to act favorably on any rec17 ommendation made pursuant to paragraph (2). Such ap18 peal shall be filed and processed in the same manner and 

19 subject to the same conditions and limitations as an ap20 peal filed by the Administrator pursuant to subsection (a). 

21 ‘‘(4) The Administrator shall assign and co-locate at 

22 least two small business technical advisers to each major 

23 procurement center in addition to such other advisers as 

24 may be authorized from time to time. The sole duties of 

25 such advisers shall be to assist the procurement center 
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1 representative for the center to which such advisers are 

2 assigned in carrying out the functions described in para3 graph (2) and the representatives referred to in subsection 

4 (k)(6). 

5 ‘‘(5)(A) The procurement center representatives and 

6 technical advisers assigned pursuant to this subsection 

7 shall be—

8 ‘‘(i) full-time employees of the Administration; 

9 and 

10 ‘‘(ii) fully qualified, technically trained, and fa11 miliar with the supplies and services procured by the 

12 major procurement center to which they are as13 signed. 

14 ‘‘(B) In addition to the requirements of subparagraph 

15 (A), each procurement center representative, and at least 

16 one technical adviser assigned to such representative, shall 

17 be an accredited engineer. 

18 ‘‘(C) The Administrator shall establish personnel po19 sitions for procurement representatives and advisers as20 signed pursuant to this subsection which are classified at 

21 a grade level of the General Schedule sufficient to attract 

22 and retain highly qualified personnel. 

23 ‘‘(6) For purposes of this subsection, the term ‘major 

24 procurement center’ means a procurement center that, in 

25 the opinion of the Administrator, purchases substantial 
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1 dollar amounts of other than commercial items and which 

2 has the potential to incur significant savings as the result 

3 of the placement of a procurement center representative. 

4 ‘‘(7)(A) At such times as the Administrator deems 

5 appropriate, the procurement center representative shall 

6 conduct familiarization sessions for contracting officers 

7 and other appropriate personnel of the procurement center 

8 to which such representative is assigned. Such sessions 

9 shall acquaint the participants with the provisions of this 

10 subsection and shall instruct them in methods designed 

11 to further the purposes of such subsection. 

12 ‘‘(B) The procurement center representative shall 

13 prepare and personally deliver an annual briefing and re14 port to the head of the procurement center to which such 

15 representative is assigned. Such briefing and report shall 

16 detail the past and planned activities of the representative 

17 and shall contain such recommendations for improvement 

18 in the operation of the center as may be appropriate. The 

19 head of such center shall personally receive such briefing 

20 and report and shall, within sixty calendar days after re21 ceipt, respond, in writing, to each recommendation made 

22 by such representative.’’. 

23 (h) OTHER DUTIES OF ADMINISTRATOR.—Section 

24 15 of the Small Business Act (15 U.S.C. 644) is amended 

25 by adding at the end the following new subsection: 
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1 ‘‘(q)(1) The Administrator shall obtain information 

2 as to methods and practices which Government prime con3 tractors utilize in letting subcontracts and to take action 

4 to encourage the letting of subcontracts by prime contrac5 tors to small business concerns and small manufacturers 

6 at prices and on conditions and terms which are fair and 

7 equitable. 

8 ‘‘(2) The Administrator shall determine within any 

9 industry the concerns, firms, persons, corporations, part10 nerships, cooperatives, or other business enterprises which 

11 are to be designated as small business concerns or small 

12 manufacturers for the purpose of effectuating the provi13 sions of this Act. To carry out this purpose the Adminis14 trator, when requested to do so, shall issue in response 

15 to each such request an appropriate certificate certifying 

16 an individual concern as a small business concern or small 

17 manufacturer in accordance with criteria expressed in this 

18 Act. Any such certificate shall be subject to revocation 

19 when the concern covered thereby ceases to be a small 

20 business concern or small manufacturer. Offices of the 

21 Government having procurement or lending powers, or en22 gaging in the disposal of Federal property or allocating 

23 materials or supplies, or promulgating regulations affect24 ing the distribution of materials or supplies, shall accept 

25 as conclusive the Administration’s determination as to 
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1 which enterprises are to be designated as small business 

2 concerns or small manufacturers, as authorized and di3 rected under this paragraph. 

4 ‘‘(3)(A) The Administration shall certify to Govern5 ment procurement officers, and officers engaged in the 

6 sale and disposal of Federal property, with respect to all 

7 elements of responsibility, including, but not limited to, 

8 capability, competency, capacity, credit, integrity, perse9 verance, and tenacity, of any small business concern or 

10 group of such concerns to receive and perform a specific 

11 Government contract. A Government procurement officer 

12 or an officer engaged in the sale and disposal of Federal 

13 property may not, for any reason specified in the pre14 ceding sentence, preclude any small business concern or 

15 group of such concerns from being awarded such contract 

16 without referring the matter for a final disposition to the 

17 Administration. 

18 ‘‘(B) If a Government procurement officer finds that 

19 an otherwise qualified small business concern may be ineli20 gible due to the provisions of section 35(a) of title 41, 

21 United States Code (the Walsh-Healey Public Contracts 

22 Act), he shall notify the Administration in writing of such 

23 finding. The Administration shall review such finding and 

24 shall either dismiss it and certify the small business con25 cern to be an eligible Government contractor for a specific 
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1 Government contract or if it concurs in the finding, for2 ward the matter to the Secretary of Labor for final dis3 position, in which case the Administration may certify the 

4 small business concern only if the Secretary of Labor finds 

5 the small business concern not to be in violation. 

6 ‘‘(C) In any case in which a small business concern 

7 or group of such concerns has been certified by the Admin8 istration pursuant to (A) or (B) to be a responsible or 

9 eligible Government contractor as to a specific Govern10 ment contract, the officers of the Government having pro11 curement or property disposal powers are directed to ac12 cept such certification as conclusive, and shall let such 

13 Government contract to such concern or group of concerns 

14 without requiring it to meet any other requirement of re15 sponsibility or eligibility. Notwithstanding the first sen16 tence of this subparagraph, the Administration may not 

17 establish an exemption from referral or notification or 

18 refuse to accept a referral or notification from a Govern19 ment procurement officer made pursuant to subparagraph 

20 (A) or (B) of this paragraph, but nothing in this para21 graph shall require the processing of an application for 

22 certification if the small business concern to which the re23 ferral pertains declines to have the application processed. 

24 ‘‘(4) The Administrator shall obtain from any Fed25 eral department, establishment, or agency engaged in pro-
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1 curement or in the financing of procurement or production 

2 such reports concerning the letting of contracts and sub3 contracts and the making of loans to business concerns 

4 as it may deem pertinent in carrying out its functions 

5 under this Act. 

6 ‘‘(5) The Administrator shall obtain from any Fed7 eral department, establishment, or agency engaged in the 

8 disposal of Federal property such reports concerning the 

9 solicitation of bids, time of sale, or otherwise as it may 

10 deem pertinent in carrying out its functions under this 

11 Act. 

12 ‘‘(6) The Administrator shall obtain from suppliers 

13 of materials information pertaining to the method of fill14 ing orders and the bases for allocating their supply, when15 ever it appears that any small business is unable to obtain 

16 materials from its normal sources. 

17 ‘‘(7) The Administrator shall make studies and rec18 ommendations to the appropriate Federal agencies to in19 sure that a fair proportion of the total purchases and con20 tracts for property and services for the Government be 

21 placed with small-business enterprises, to insure that a 

22 fair proportion of Government contracts for research and 

23 development be placed with small-business concerns, to in24 sure that a fair proportion of the total sales of Govern25 ment property be made to small-business concerns, and 
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1 to insure a fair and equitable share of materials, supplies, 

2 and equipment to small-business concerns. 

3 ‘‘(8) The Administrator shall consult and cooperate 

4 with all Government agencies for the purpose of insuring 

5 that small-business concerns shall receive fair and reason6 able treatment from such agencies.’’

7 (i) FEDERAL PROCUREMENT DATA SYSTEM.—Sec8 tion 15 of the Small Business Act (15 U.S.C. 644) is fur9 ther amended by adding at the end the following new sub10 section: 

11 ‘‘(r) The Administrator shall work with the Adminis12 trator of the General Services Administration to establish 

13 within the data collection capabilities of the Federal Pro14 curement Data System a data element capable of identi15 fying contract awards made as a result of Section 7102(c) 

16 of the Federal Acquisition Streamlining Act of 1994 (Pub17 lic Law 103–355; 15 U.S.C. 644 note) and Section 

18 31(B)(3) of this Act. Such data element shall be estab19 lished and populated by Federal agencies awarding con20 tracts as a result of Section 7102(c) of the Federal Acqui21 sition Streamlining Act of 1994 (Public Law 103-355; 15 

22 U.S.C. 644 note) and Section 31(B)(3) of this Act within 

23 90 days of the enactment of this Act.’’. 

24 (j) PRIORITY OF SMALL BUSINESS PROCUREMENT

25 PREFERENCES.—Section 15 of the Small Business Act 
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1 (15 U.S.C. 644) is further amended by adding at the end 

2 the following new subsection: 

3 ‘‘(s) PRIORITY OF SMALL BUSINESS PROCUREMENT

4 PREFERENCES.—

5 ‘‘(1) IN GENERAL.—A contracting officer may 

6 not make a procurement from a source on the basis 

7 of a preference provided under any provision of this 

8 Act referred to in paragraph (2) unless the con9 tracting officer has determined that such procure10 ment cannot be made on the basis of a preference 

11 provided under another provision of this Act with a 

12 higher priority under such subsection. 

13 ‘‘(2) ORDER OF PRIORITY.—For purposes of 

14 this subsection, the following provisions of this Act 

15 are listed in order of priority from highest to lowest: 

16 ‘‘(A) Section 8(a). 

17 ‘‘(B) Section 31(b)(2)(B). 

18 ‘‘(C) Section 31(b)(2)(A). 

19 ‘‘(D) Section 8(m). 

20 ‘‘(3) PRIORITY OF CERTAIN OTHER PROCURE21 MENT PREFERENCES.—A procurement may not be 

22 made from a source on the basis of a preference pro23 vided under any provision of this Act referred to in 

24 paragraph (2) if the procurement would otherwise by 

25 made from a different source under section 4124 or 
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1 4125 of title 18, United States Code, or the Act en2 titled ‘An Act to create a Committee on Purchases 

3 of Blind made Products, and for other purposes’, 

4 approved June 25, 1938 (41 U.S.C. 47).’’. 

5 (k) PROCUREMENT PROGRAM FOR VERY SMALL

6 BUSINESS CONCERNS.—Section 15 of the Small Business 

7 Act (15 U.S.C. 644) is further amended by adding at the 

8 end the following new subsection: 

9 ‘‘(t) PROCUREMENT PROGRAM FOR VERY SMALL

10 BUSINESS CONCERNS.—

11 ‘‘(1) ESTABLISHMENT.—The Administrator 

12 shall establish and carry out a program in accord13 ance with the requirements of this subsection to pro14 vide improved access to Federal contract opportuni15 ties for very small business concerns. 

16 ‘‘(2) PROCUREMENT CONTRACTS.—

17 ‘‘(A) IDENTIFICATION OF CONTRACTS.—

18 The Administrator shall identify procurement 

19 contracts of Federal agencies for award under 

20 the program. 

21 ‘‘(B) CONTRACT AWARDS.—Under the pro22 gram established pursuant to this subsection, 

23 the award of a procurement contract of a Fed24 eral agency identified by the Administrator pur25 suant to subparagraph (A) shall be made by the 
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1 agency to a very small business concern se2 lected, and determined to be responsible, by the 

3 agency. 

4 ‘‘(C) COMPETITION.—All contract opportu5 nities offered for award under the program 

6 shall be awarded on the basis of competition 

7 among very small business concerns. A con8 tracting officer may rely in good faith on a 

9 written certification that a small business con10 cern is a very small business concern. 

11 ‘‘(3) FINANCIAL ASSISTANCE.—In order to as12 sist very small business concerns receiving contract 

13 awards under the program, the Administrator shall 

14 establish a preauthorization program for such con15 cerns for the purpose of receiving financial assist16 ance under section 7(a). 

17 ‘‘(4) VERY SMALL BUSINESS CONCERN.—For 

18 purposes of this subsection, the term ‘very small 

19 business concern’ means a small business concern 

20 that has not more than 15 employees and—

21 ‘‘(A) in the case of a small manufacturer, 

22 annual gross receipts of not more than 

23 $2,000,000; or 

24 ‘‘(B) in any other case, annual gross re25 ceipts of not more than $500,000. 
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1 ‘‘(5) REGULATIONS.—The Administrator 

2 shall—

3 ‘‘(A) issue proposed regulations to carry 

4 out this subsection not later than 180 days 

5 after the date of enactment of this subsection; 

6 and 

7 ‘‘(B) issue final regulations to carry out 

8 this subsection not later than 270 days after 

9 the date of enactment of this subsection.’’. 

10 (l) OTHER AMENDMENTS TO SECTION 15.—

11 (1) Section 15(e)(1) of the Small Business Act 

12 (15 U.S.C. 644(e)(1)) is amended by inserting ‘‘in 

13 the following order’’ after ‘‘concerns’’. 

14 (2) Section 15(e)(4) of the Small Business Act 

15 (15 U.S.C. 644(e)(4)) is amended by striking ‘‘bun16 dled’’. 

17 (3) Section 15(k)(9) of the Small Business Act 

18 (15 U.S.C. 644(k)(9)) is amended by striking ‘‘Ad19 ministration’’ and inserting ‘‘Administrator’’. 

20 (4) Section 15(p)(4)(A) of the Small Business 

21 Act (15 U.S.C. 644(p)(4)(A)) is amended by strik22 ing ‘‘Administration’’ and inserting ‘‘Adminis23 trator’’. 
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1 SEC. 211. AUTHORIZATION OF APPROPRIATIONS; ETC. 

2 Section 20 of the Small Business Act (15 U.S.C. 631 

3 note) is amended to read as follows: 

4 ‘‘SEC. 20. AUTHORIZATION OF APPROPRIATIONS; ETC. 

5 ‘‘(a)(1) For fiscal year 2004 and each fiscal year 

6 thereafter, there are authorized to be appropriated such 

7 sums as may be necessary and appropriate, to remain 

8 available until expended, and to be available solely—

9 ‘‘(A) to carry out the Small Business Develop10 ment Center Program under section 21, but not to 

11 exceed the annual funding level, as specified in sec12 tion 21(j)(7); 

13 ‘‘(B) to pay the expenses of the National Small 

14 Business Development Center Advisory Board, as 

15 provided in section 21(m)(1); 

16 ‘‘(C) to pay the expenses of the information 

17 sharing system, as provided in section 21(o); 

18 ‘‘(D) to pay the expenses of the association re19 ferred to in section 21(k) for conducting the certifi20 cation program, as provided in section 21(l); and 

21 ‘‘(E) to pay the expenses of the Administration, 

22 including salaries of examiners, for conducting ex23 aminations as part of the accreditation program con24 ducted by the association referred to in section 21(l). 

25 ‘‘(2)(A) Notwithstanding any other provision of law, 

26 the Administrator shall enter into commitments for direct 
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1 loans and to guarantee loans, debentures, payment of 

2 rentals, or other amounts due under qualified contracts 

3 and other types of financial assistance and enter into com4 mitments to purchase debentures and preferred securities 

5 and to guarantee sureties against loss pursuant to pro6 grams under this Act and the Small Business Investment 

7 Act of 1958, in the full amounts provided by law subject 

8 only to—

9 ‘‘(i) the availability of qualified applications; 

10 and 

11 ‘‘(ii) limitations contained in appropriations 

12 Acts. 

13 ‘‘(B) Nothing in this paragraph authorizes the Ad14 ministrator to reduce or limit its authority to enter into 

15 such commitments. 

16 ‘‘(3) Subject to approval in appropriations Acts, 

17 amounts authorized for preferred securities, debentures or 

18 participating securities under title III of the Small Busi19 ness Investment Act of 1958 may be obligated in one fiscal 

20 year and disbursed or guaranteed in any 1 or more of the 

21 4 subsequent fiscal years. 

22 ‘‘(4) The amount of deferred participation loans au23 thorized in this section—

24 ‘‘(A) shall mean the net amount of the loan 

25 principal guaranteed by the Administrator (and does 
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1 not include any amount which is not guaranteed); 

2 and 

3 ‘‘(B) shall be available for a national program, 

4 except as otherwise provided in section 7(a). 

5 ‘‘(b) There are authorized to be appropriated to the 

6 Administration for each fiscal year such sums as may be 

7 necessary to carry out the provisions of this Act and the 

8 Small Business Investment Act of 1958. There also are 

9 hereby authorized to be appropriated such sums as may 

10 be necessary and appropriate for the carrying out of the 

11 provisions and purposes, including administrative ex12 penses, of sections 7(b) of this Act; and there are author13 ized to be transferred from such sums as may be necessary 

14 and appropriate for such administrative expenses. 

15 ‘‘(c) FISCAL YEAR 2004.—

16 ‘‘(1) PROGRAM LEVELS.—The following pro17 gram levels are authorized for fiscal year 2004: 

18 ‘‘(A) For the programs authorized by this 

19 Act, the Administrator is authorized to make—

20 ‘‘(i) $70,000,000 in technical assist21 ance grants, as provided in section 7(m); 

22 and 

23 ‘‘(ii) $100,000,000 in direct loans, as 

24 provided in section 7(m). 
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1 ‘‘(B) For the programs authorized by this 

2 Act, the Administrator is authorized to make 

3 $22,000,000,000 in deferred participation loans 

4 and other financings. Of such sum, the Admin5 istration is authorized to make—

6 ‘‘(i) $16,000,000,000 in general busi7 ness loans as provided in section 7(a); 

8 ‘‘(ii) $5,500,000 in financings as pro9 vided in section 7(a)(13) of this Act and 

10 section 504 of the Small Business Invest11 ment Act of 1958; and 

12 ‘‘(iii) $500,000,000 in loans as pro13 vided in section 7(a)(21). 

14 ‘‘(C) For the programs authorized by title 

15 III of the Small Business Investment Act of 

16 1958, the Administrator is authorized to 

17 make—

18 ‘‘(i) $5,000,000,000 in purchases of 

19 participating securities; and 

20 ‘‘(ii) $4,000,000,000 in guarantees of 

21 debentures. 

22 ‘‘(D) For the programs authorized by part 

23 B of title IV of the Small Business Investment 

24 Act of 1958, the Administration is authorized 

25 to enter into guarantees not to exceed 
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1 $6,000,000,000, of which not more than 50 

2 percent may be in bonds approved pursuant to 

3 section 411(a)(3) of that Act. 

4 ‘‘(E) There is authorized to be appro5 priated $7,000,000 to carry out section 12(b). 

6 ‘‘(2) ADDITIONAL AUTHORIZATIONS.—

7 ‘‘(A) There are authorized to be appro8 priated to the Administration for fiscal year 

9 2004 such sums as may be necessary to carry 

10 out this Act not elsewhere provided for, includ11 ing administrative expenses and necessary loan 

12 capital for disaster loans pursuant to section 

13 7(b), and to carry out the Small Business In14 vestment Act of 1958, including salaries and 

15 expenses of the Administration. 

16 ‘‘(B) Notwithstanding any other provision 

17 of this paragraph, for fiscal year 2004—

18 ‘‘(i) no funds are authorized to be 

19 provided to carry out the loan program au20 thorized by section 7(a)(21) except by 

21 transfer from another Federal department 

22 or agency to the Administration, unless the 

23 program level authorized for general busi24 ness loans under paragraph (1)(B)(i) is 

25 fully funded; and 
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1 ‘‘(ii) the Administrator may not ap2 prove loans on behalf of the Administra3 tion or on behalf of any other department 

4 or agency, by contract or otherwise, under 

5 terms and conditions other than those spe6 cifically authorized under this Act or the 

7 Small Business Investment Act of 1958, 

8 except that he may approve loans under 

9 section 7(a)(21) of this Act in gross 

10 amounts of not more than $1,250,000. 

11 ‘‘(d) FISCAL YEAR 2005.—

12 ‘‘(1) PROGRAM LEVELS.—The following pro13 gram levels are authorized for fiscal year 2005: 

14 ‘‘(A) For the programs authorized by this 

15 Act, the Administrator is authorized to make—

16 ‘‘(i) $75,000,000 in technical assist17 ance grants as provided in section 7(m); 

18 and 

19 ‘‘(ii) $105,000,000 in direct loans, as 

20 provided in section 7(m). 

21 ‘‘(B) For the programs authorized by this 

22 Act, the Administrator is authorized to make 

23 $23,000,000,000 in deferred participation loans 

24 and other financings. Of such sum, the Admin25 istration is authorized to make—
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1 ‘‘(i) $16,500,000,000 in general busi2 ness loans as provided in section 7(a); 

3 ‘‘(ii) $6,000,000,000 in financings as 

4 provided in section 7(a)(13) of this Act 

5 and section 504 of the Small Business In6 vestment Act of 1958; and 

7 ‘‘(iii) $500,000,000 in loans as pro8 vided in section 7(a)(21). 

9 ‘‘(C) For the programs authorized by title 

10 III of the Small Business Investment Act of 

11 1958, the Administration is authorized to 

12 make—

13 ‘‘(i) $5,500,000,000 in purchases of 

14 participating securities; and 

15 ‘‘(ii) $4,500,000,000 in guarantees of 

16 debentures. 

17 ‘‘(D) For the programs authorized by part 

18 B of title IV of the Small Business Investment 

19 Act of 1958, the Administration is authorized 

20 to enter into guarantees not to exceed 

21 $6,000,000,000, of which not more than 50 

22 percent may be in bonds approved pursuant to 

23 section 411(a)(3) of that Act. 

24 ‘‘(E) There is authorized to be appro25 priated $7,000,000 to carry out section 12(b). 
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1 ‘‘(2) ADDITIONAL AUTHORIZATIONS.—

2 ‘‘(A) There are authorized to be appro3 priated to the Administration for fiscal year 

4 2005 such sums as may be necessary to carry 

5 out this Act not elsewhere provided for, includ6 ing administrative expenses and necessary loan 

7 capital for disaster loans pursuant to section 

8 7(b), and to carry out the Small Business In9 vestment Act of 1958, including salaries and 

10 expenses of the Administration. 

11 ‘‘(B) Notwithstanding any other provision 

12 of this paragraph, for fiscal year 2005—

13 ‘‘(i) no funds are authorized to be 

14 provided to carry out the loan program au15 thorized by section 7(a)(21) except by 

16 transfer from another Federal department 

17 or agency to the Administration, unless the 

18 program level authorized for general busi19 ness loans under paragraph (1)(B)(i) is 

20 fully funded; and 

21 ‘‘(ii) the Administrator may not ap22 prove loans on behalf of the Administra23 tion or on behalf of any other department 

24 or agency, by contract or otherwise, under 

25 terms and conditions other than those spe-
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1 cifically authorized under this Act or the 

2 Small Business Investment Act of 1958, 

3 except that he may approve loans under 

4 section 7(a)(21) of this Act in gross 

5 amounts of not more than $1,250,000.’’. 

6 SEC. 212. SMALL BUSINESS DEVELOPMENT CENTERS. 

7 (a) IN GENERAL.—Section 21 of the Small Business 

8 Act (15 U.S.C. 648) is amended to read as follows: 

9 ‘‘SEC. 21. SMALL BUSINESS DEVELOPMENT CENTER PRO10 GRAM. 

11 ‘‘(a) ESTABLISHMENT OF PROGRAM.—The Adminis12 trator is authorized to make grants to any eligible appli13 cant to establish the network of small business develop14 ment centers proposed in the plan submitted by such ap15 plicant under subsection (b). 

16 ‘‘(b) SELECTION OF GRANTEES.—

17 ‘‘(1) APPLICATION.—An eligible applicant may 

18 apply for a grant under subsection (a) by submitting 

19 to the Administrator for approval a plan for estab20 lishing a network of small business development cen21 ters. 

22 ‘‘(2) SELECTION.—The Administrator shall se23 lect the applicant that demonstrates it has the budg24 etary and other resources to ensure that it will pro25 vide the most comprehensive and coordinated assist-
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1 ance throughout the State. The Administrator shall 

2 require the grantee to have a separate budget for 

3 the purpose of operating its network of small busi4 ness development centers and to primarily utilize in5 stitutions of higher education and women’s business 

6 centers operating pursuant to section 29 to provide 

7 for the operation of the small business development 

8 centers. The Administrator may approve, condi9 tionally approve, or reject, a plan or combination of 

10 plans submitted under this section. The Adminis11 trator may not delegate the authority to select 

12 grantees under this section except to the Deputy Ad13 ministrator. 

14 ‘‘(3) LIMITATION BY STATE.—

15 ‘‘(A) IN GENERAL.—Except as otherwise 

16 provided in this paragraph, the Administrator 

17 shall select one grantee from each State to 

18 serve the entire State. 

19 ‘‘(B) UNAVAILABILITY EXCEPTION.—The 

20 Administrator may select 2 grantees to serve a 

21 State if no eligible applicant submits an appli22 cation to serve the entire State. With respect to 

23 any such State, the Administrator, at the end 

24 of the 2-year period beginning on the date of 

25 the selection of such grantees, shall seek appli-
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•HR 2802 IH 

1 cations under this subsection for the purpose of 

2 replacing such grantees with a single grantee to 

3 serve the entire State. 

4 ‘‘(C) HISTORICAL EXCEPTION.—Subpara5 graph (A) shall not apply with respect to any 

6 State if multiple grantees served such State 

7 during calendar year 2000 or 2001. 

8 ‘‘(D) CERTAIN TERRITORIES.—In the case 

9 that no eligible applicant from a qualified terri10 tory applies for a grant under this section, the 

11 Administrator may select a grantee from any 

12 State to serve such qualified territory. For pur13 poses of the preceding sentence, the term ‘quali14 fied territory’ means Guam, the United States 

15 Virgin Islands, American Samoa, and the Com16 monwealth of the Northern Mariana Islands. 

17 ‘‘(4) ELIGIBLE APPLICANT.—For purposes of 

18 this section, the term ‘eligible applicant’ means—

19 ‘‘(A) any institution of higher education; 

20 ‘‘(B) any women’s business center oper21 ating pursuant to section 29; or 

22 ‘‘(C) in the case of an entity that was re23 ceiving a grant under this section on December 

24 31, 1990, any of the following: 
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•HR 2802 IH 

1 ‘‘(i) Any State government or any 

2 agency thereof. 

3 ‘‘(ii) Any regional entity. 

4 ‘‘(iii) Any State-chartered develop5 ment, credit or finance corporation. 

6 ‘‘(iv) Any entity formed by two or 

7 more of the entities described in this para8 graph. 

9 ‘‘(5) REQUIREMENT TO SEEK APPLICATIONS.—

10 If for any reason a grant under this section is termi11 nated or not renewed, the Administrator shall seek 

12 applications from eligible applicants with respect to 

13 such grant. 

14 ‘‘(c) GRANT PROVISIONS.—

15 ‘‘(1) AGREEMENT BETWEEN GRANTEE AND AD16 MINISTRATOR.—The Administrator and the grantee 

17 shall jointly develop, negotiate, and agree upon the 

18 terms and conditions of the grant. The grantee shall 

19 also consult with the district office or offices within 

20 the State to determine the special services and as21 sistance that are needed by the community or com22 munities served by the grantee’s small business de23 velopment centers. 

24 ‘‘(2) REQUIREMENTS.—Each grant shall—
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•HR 2802 IH 

1 ‘‘(A) allow the grantee to serve portions of 

2 the State by subcontracting the operation of a 

3 small business development center to another 

4 entity, provided that such small business devel5 opment centers shall, to the extent feasible, be 

6 located at institutions of higher education or 

7 Women’s Business Centers established pursuant 

8 to section 29 of this Act; 

9 ‘‘(B) ensure that the grantee provides serv10 ices as close as possible to small business con11 cerns by providing extension services and uti12 lizing satellite facilities, including those of any 

13 subcontractor; 

14 ‘‘(C) ensure that the grantee provides fa15 cilities and staff for each small business devel16 opment center to provide maximum accessibility 

17 and benefit to small business concerns; 

18 ‘‘(D) ensure that the grantee is utilizing 

19 the resources of other Federal agencies in pro20 viding the services and assistance set forth in 

21 subsection (f); 

22 ‘‘(E) allow the grantee to enter into a con23 tract described in subsection (g)(2). 

24 ‘‘(3) PROHIBITION ON DELEGATION TO DIS25 TRICT OFFICES.—The Administrator shall not dele-
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•HR 2802 IH 

1 gate any authority under paragraph (1) to any em2 ployee of the Administration located in a regional or 

3 district office. 

4 ‘‘(4) FORM OF GRANT AGREEMENTS.—For pur5 poses of this section, the term ‘grant’ includes any 

6 contract or cooperative agreement. 

7 ‘‘(5) PROHIBITION ON CERTAIN GRANT RE8 QUIREMENTS.—The Administrator shall not require, 

9 and a grant agreement shall not include a require10 ment, that the grantee serve a particular number of 

11 small business concerns with respect to loans under 

12 section 7 of this Act or title V of the Small Business 

13 Investment Act of 1958. 

14 ‘‘(d) TERM, RENEWAL, AND TERMINATION OF

15 GRANTS.—

16 ‘‘(1) TERM OF GRANTS.—Each grant made 

17 under this section shall be made on the basis of a 

18 calendar year or the Federal fiscal year, as deter19 mined by the Administrator. 

20 ‘‘(2) AUTOMATIC RENEWAL.—Unless the Ad21 ministrator for cause terminates the grant or the 

22 grantee decides not to seek renewal of the grant, the 

23 Administrator and the grantee shall renew the 

24 agreement and may make mutually satisfactory 

25 modifications to the agreement. The renewal shall 
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•HR 2802 IH 

1 take effect on the date of termination of the old 

2 agreement. 

3 ‘‘(3) STANDARDS FOR TERMINATION.—After 

4 the opportunity for notice and comment and con5 sultation with the association authorized by sub6 section (k), the Administrator shall promulgate 

7 standards for determining when cause exists to ter8 minate a grantee. Such standards shall be codified 

9 in the Code of Federal Regulations and shall take 

10 into account the grantee’s compliance with the 

11 standards set forth in the grant agreement, any 

12 budgetary restrictions faced by the grantee, the 

13 overall economic climate in the State served by the 

14 grantee, and the accreditation of the grantee’s small 

15 business development centers (whether operated by 

16 the grantee or through a subcontractor) under the 

17 program established pursuant to subsection (l). 

18 ‘‘(4) NOTICE OF TERMINATION.—If the Admin19 istrator determines that cause exists to terminate a 

20 grant agreement under this section, the Adminis21 trator shall provide the grantee with written notifi22 cation setting forth the reasons therefore and afford23 ing the applicant an opportunity for a hearing pur24 suant to section 554 of title 5, United States Code. 
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•HR 2802 IH 

1 ‘‘(e) MANAGEMENT OF SMALL BUSINESS DEVELOP2 MENT CENTERS BY GRANTEES.—

3 ‘‘(1) APPOINTMENT OF GRANTEE DIRECTOR.—

4 Each Grantee shall appoint a full-time director to 

5 oversee the operations of the grant, the subcontrac6 tors to the grantee, and the small business develop7 ment centers operated by the grantee. The grantee’s 

8 director shall be responsible for accounting for any 

9 Federal funds used by the grantee to carry out the 

10 requirements of this section. The grantee shall have 

11 the sole discretion of selecting the director without 

12 requiring the approval of the Administrator, except 

13 that the Administrator may terminate the employ14 ment of the grantee’s director if the Administrator 

15 determines that the grantee’s director is unfit for 

16 the position because of a prior conviction for a fel17 ony. 

18 ‘‘(2) SMALL BUSINESS DEVELOPMENT CENTER

19 STAFF.—Each small business development center 

20 shall have a staff, which shall be full-time, part-time, 

21 or on a contract basis, as the grantee may deter22 mine. 

23 ‘‘(3) EXPENDITURES.—Expenditures of funds 

24 by the grantee shall not require the approval of the 

25 Administrator except that the Administrator may 
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•HR 2802 IH 

1 prohibit an expenditure using Federal funds if, after 

2 consultation with the General Counsel of the Admin3 istration, the Administrator determines that such ex4 penditure violates Federal law. 

5 ‘‘(f) SERVICES PROVIDED BY THE GRANTEE

6 THROUGH SMALL BUSINESS DEVELOPMENT CENTERS.—

7 ‘‘(1) IN GENERAL.—Each grantee and its sub8 contractors shall assist small business concerns in 

9 solving problems concerning operations, manufac10 turing, engineering, technology exchange and devel11 opment, personnel administration, marketing, sales, 

12 merchandising, finance, accounting, business strat13 egy development, and other disciplines required for 

14 small business growth and expansion, innovation, in15 creased productivity, and management improvement, 

16 and for decreasing industry economic concentrations. 

17 Small Business Development Centers shall, in pro18 viding assistance to small manufacturers, coordinate 

19 such assistance and utilize the resources of the Man20 ufacturing Extension Partnership of the National 

21 Institutes of Standards and Technology. 

22 ‘‘(2) PERIODIC MODIFICATION.—Each grantee 

23 or its subcontractors shall continue to upgrade and 

24 modify its services, as needed, in order to meet the 

25 changing and evolving needs of the small business 
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•HR 2802 IH 

1 community and those of small manufacturers in par2 ticular. 

3 ‘‘(3) ACCESS TO PROFESSIONALS.—Each grant4 ee shall ensure that small business development cen5 ters provide access to: 

6 ‘‘(A) Business analysts to counsel, assist, 

7 and inform small business clients. 

8 ‘‘(B) Technology transfer agents to provide 

9 state of art technology to small business con10 cerns through coupling with national and re11 gional technology data sources. 

12 ‘‘(C) Information specialists to assist in 

13 providing information searches and referrals to 

14 small business. 

15 ‘‘(D) Part-time professional specialists to 

16 conduct research or to provide counseling as17 sistance whenever the need arises. 

18 ‘‘(E) Laboratory and adaptive engineering 

19 facilities. 

20 ‘‘(4) SERVICES.—Each grantee shall ensure 

21 that the services provided by its network of small 

22 business development centers include—

23 ‘‘(A) furnishing one-to-one individual coun24 seling to small business concerns, including—
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•HR 2802 IH 

1 ‘‘(i) working with individuals to in2 crease awareness of basic credit practices 

3 and credit requirements; 

4 ‘‘(ii) working with individuals to de5 velop business plans, financial packages, 

6 credit applications, and contract proposals; 

7 ‘‘(iii) working with the Administration 

8 to develop and provide informational tools 

9 for use in working with individuals on pre10 business startup planning, existing busi11 ness expansion, and export planning; and 

12 ‘‘(iv) working with individuals referred 

13 by the district offices of the Administration 

14 and Administration participating lenders; 

15 ‘‘(B) assisting in technology transfer, re16 search and development, including applied re17 search, and coupling from existing sources to 

18 small business concerns, including—

19 ‘‘(i) working to increase the access of 

20 small business concerns to the capabilities 

21 of automated flexible manufacturing sys22 tems; 

23 ‘‘(ii) working through existing net24 works and developing new networks for 

25 technology transfer that encourage part-
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•HR 2802 IH 

1 nership between the small business and 

2 academic communities to help commer3 cialize university-based research and devel4 opment and introduce university-based en5 gineers and scientists to their counterparts 

6 in small technology-based firms; 

7 ‘‘(iii) exploring the viability of devel8 oping shared production facilities, under 

9 appropriate circumstances; and 

10 ‘‘(iv) assisting small manufacturers in 

11 developing more efficient operations, in12 cluding coordination of assistance with the 

13 Manufacturing Extension Partnership of 

14 the National Institutes of Standards and 

15 Technology; 

16 ‘‘(C) in cooperation with the Department 

17 of Commerce, the entities providing services 

18 pursuant to section 8(n) of this Act, and other 

19 relevant Federal agencies, actively assisting 

20 small business concerns in exporting by identi21 fying and developing potential export markets, 

22 facilitating export transactions, developing link23 ages between United States small business 

24 firms and prescreened foreign buyers, assisting 

25 small business concerns to participate in inter-
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•HR 2802 IH 

1 national trade shows, assisting small business 

2 concerns in obtaining export financing, assisting 

3 small manufacturers in identifying supply chain 

4 management opportunities, and facilitating the 

5 development or reorientation of marketing and 

6 production strategies; where appropriate, the 

7 grantee and the Administrator may work in co8 operation with the State to establish a State 

9 international trade center for these purposes; 

10 ‘‘(D) developing a program in conjunction 

11 with the Export-Import Bank and local and re12 gional Administration offices that will enable 

13 Small Business Development Centers to serve 

14 as an information network and to assist small 

15 business applicants for Export-Import Bank fi16 nancing programs, and otherwise identify and 

17 help to make available export financing pro18 grams to small business concerns; 

19 ‘‘(E) working closely with the small busi20 ness community, small business consultants, 

21 State agencies, universities and other appro22 priate groups to make translation services more 

23 readily available to small business firms doing 

24 business, or attempting to develop business, in 

25 foreign markets; 
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•HR 2802 IH 

1 ‘‘(F) in providing assistance under this 

2 subsection, grantees shall cooperate with the 

3 Department of Commerce and other relevant 

4 Federal agencies to increase access to available 

5 export market information systems such as the 

6 CIMS system; 

7 ‘‘(G) assisting small business concerns to 

8 develop and implement strategic business plans 

9 to timely and effectively respond to the planned 

10 closure (or reduction) of a Department of De11 fense facility within the community, or actual or 

12 projected reductions in such firms’ business 

13 base due to the actual or projected termination 

14 (or reduction) of a Department of Defense pro15 gram or a contract in support of such pro16 gram—

17 ‘‘(i) by developing broad economic as18 sessments of the adverse impacts of—

19 ‘‘(I) the closure (or reduction) of 

20 the Department of Defense facility on 

21 the small business concerns providing 

22 goods or services to such facility or to 

23 the military and civilian personnel 

24 currently stationed or working at such 

25 facility; and 
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•HR 2802 IH 

1 ‘‘(II) the termination (or reduc2 tion) of a Department of Defense pro3 gram (or contracts under such pro4 gram) on the small business concerns 

5 participating in such program as a 

6 prime contractor, subcontractor or 

7 supplier at any tier; 

8 ‘‘(ii) by developing, in conjunction 

9 with appropriate Federal, State, and local 

10 governmental entities and other private 

11 sector organizations, the parameters of a 

12 transition adjustment program adaptable 

13 to the needs of individual small business 

14 concerns; 

15 ‘‘(iii) by conducting appropriate pro16 grams to inform the affected small busi17 ness community regarding the anticipated 

18 adverse impacts identified under clause (i) 

19 and the economic adjustment assistance 

20 available to such firms; and 

21 ‘‘(iv) by assisting small business con22 cerns to develop and implement an individ23 ualized transition business plan; 

24 ‘‘(H) maintaining current information con25 cerning Federal, State, and local regulations 
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•HR 2802 IH 

1 that affect small business concerns and counsel 

2 small business concerns on methods of compli3 ance. Counseling and technology development 

4 shall be provided when necessary to help small 

5 business concerns find solutions for complying 

6 with environmental, energy, health, safety, and 

7 other Federal, State, and local regulations; 

8 ‘‘(I) coordinating and conducting research 

9 into technical and general small business prob10 lems for which there are no ready solutions; 

11 ‘‘(J) providing and maintaining a com12 prehensive library that contains current infor13 mation and statistical data needed by small 

14 business concerns; 

15 ‘‘(K) maintaining a working relationship 

16 and open communications with the financial 

17 and investment communities, legal associations, 

18 local and regional private consultants, and local 

19 and regional small business groups and associa20 tions in order to help address the various needs 

21 of the small business community; 

22 ‘‘(L) conducting in-depth surveys for local 

23 small business groups in order to develop gen24 eral information regarding the local economy 
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•HR 2802 IH 

1 and general small business strengths and weak2 nesses in the locality; 

3 ‘‘(M) in cooperation with the Department 

4 of Commerce, the Administration and other rel5 evant Federal agencies, actively assisting rural 

6 small business concerns in exporting by identi7 fying and developing potential export markets 

8 for rural small business concerns, facilitating 

9 export transactions for rural small business 

10 concerns, developing linkages between United 

11 States’ rural small business concerns and 

12 prescreened foreign buyers, assisting rural 

13 small business concerns to participate in inter14 national trade shows, assisting rural small busi15 ness concerns in obtaining export financing and 

16 developing marketing and production strategies; 

17 ‘‘(N) assisting rural small business con18 cerns—

19 ‘‘(i) in developing marketing and pro20 duction strategies that will enable them to 

21 better compete in the domestic market—

22 ‘‘(ii) by providing technical assistance 

23 needed by rural small business concerns; 
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•HR 2802 IH 

1 ‘‘(iii) by making available managerial 

2 assistance to rural small business concerns; 

3 and 

4 ‘‘(iv) by providing information and as5 sistance in obtaining financing for business 

6 startups and expansion; 

7 ‘‘(O) in conjunction with the United States 

8 Travel and Tourism Administration, assist 

9 rural small business in developing the tourism 

10 potential of rural communities by—

11 ‘‘(i) identifying the cultural, historic, 

12 recreational, and scenic resources of such 

13 communities; 

14 ‘‘(ii) providing assistance to small 

15 business concerns in developing tourism 

16 marketing and promotion plans relating to 

17 tourism in rural areas; and 

18 ‘‘(iii) assisting small business concerns 

19 to obtain capital for starting or expanding 

20 businesses primarily serving tourists; 

21 ‘‘(P) maintaining lists of local and regional 

22 private consultants to whom small business con23 cerns can be referred; 
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•HR 2802 IH 

1 ‘‘(Q) providing information to small busi2 ness concerns regarding compliance with regu3 latory requirements; 

4 ‘‘(R) developing informational publications, 

5 establishing resource centers of reference mate6 rials, and distributing compliance guides pub7 lished under section 312(a) of the Small Busi8 ness Regulatory Enforcement Fairness Act of 

9 1996; 

10 ‘‘(S) providing small business owners with 

11 access to a wide variety of export-related infor12 mation by establishing on-line computer link13 ages between small business development cen14 ters and an international trade data informa15 tion network with ties to the Export Assistance 

16 Center program; and 

17 ‘‘(T) providing information and assistance 

18 to small business concerns with respect to es19 tablishing drug-free workplace programs; 

20 ‘‘(U) in the case of a small business devel21 opment center located at an institution of high22 er learning, hosting semi-annually a procure23 ment conference to which the grantee (or its 

24 subcontractors) invites small business concerns, 
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•HR 2802 IH 

1 including small manufacturers, to meet with the 

2 procurement officials of such institution; and 

3 ‘‘(V) providing comprehensive plans (devel4 oped in cooperation with relevant State and 

5 Federal agencies) relating to the export poten6 tial of small business concerns, including small 

7 manufacturers. 

8 ‘‘(g) SPECIAL RULES RELATING TO SMALL BUSI9 NESS DEVELOPMENT CENTERS.—

10 ‘‘(1) SERVICES TO OUT-OF-STATE SMALL BUSI11 NESS CONCERNS.—The Administrator may allow a 

12 small business development center to serve small 

13 business concerns located outside the State in which 

14 such center is located (or, in the case of a State with 

15 more than one grantee, outside the area served by 

16 the grantee) to the extent such businesses are lo17 cated within close geographical proximity to the 

18 small business development center as determined by 

19 the Administrator. 

20 ‘‘(2) CONTRACTS WITH OTHER AGENCIES.—

21 Subject to the restrictions set forth in this para22 graph, a grantee (or its subcontractors, with the 

23 grantee’s approval) may contract with a Federal De24 partment or agency to provide specific assistance to 

25 small business concerns through its network of small 
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•HR 2802 IH 

1 business development centers. Before bidding on a 

2 contract described in this paragraph, a grantee shall 

3 receive approval from the Administrator. Before 

4 granting approval, the Administrator shall consider 

5 the subject and scope of the contract and the extent 

6 to which performance of the contract would provide 

7 assistance to small business and not impair the per8 formance of the grantee’s obligations under this sec9 tion. A contract for assistance under this paragraph 

10 shall not count toward the achievement of any con11 tracting goal under section 15(g). 

12 ‘‘(3) SMALL BUSINESS VENDORS.—Each grant13 ee shall ensure, to the extent practicable, that its 

14 network of small business development centers uti15 lize and compensate qualified small business ven16 dors, including private management consultants, pri17 vate consulting engineers, and private testing labora18 tories, to provide services under this section to small 

19 business concerns. To the extent appropriate for the 

20 community served by the small business development 

21 center, such qualified small business vendors should 

22 include at least one such vendor with expertise in 

23 manufacturing and assisting small manufacturers. 

24 ‘‘(4) COORDINATION WITH DISTRICT OFFICES, 

25 ETC.—The grantees shall ensure that the small busi-
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1 ness development centers shall work in close co2 operation with the Administration’s regional and dis3 trict offices, the local small business community, and 

4 appropriate State and local agencies. No action by 

5 a grantee or its subcontractors or staff shall require 

6 the approval of any employee in a regional or dis7 trict office of the Administration. Any such employee 

8 shall, after consultation with district counsel, notify 

9 the Assistant Administrator for Small Business De10 velopment Centers if such employee believes that the 

11 grantee or its subcontractors or staff has taken ac12 tion that violates the law or jeopardizes the legal po13 sition of the United States. 

14 ‘‘(5) ASSISTANCE FROM STATE INTERNATIONAL

15 TRADE OFFICES.—The grantee may use funds pro16 vided by State international trade offices and co-lo17 cate employees of such offices at small business de18 velopment centers. 

19 ‘‘(6) COORDINATION WITH ADMINISTRATION.—

20 On an annual basis, the grantee, after consultation 

21 with the district director, shall review and coordinate 

22 public and private partnerships and cosponsorships 

23 with the Administrator for the purpose of more effi24 ciently leveraging available resources on a national 

25 and a State basis. Should the grantee be unable to 
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•HR 2802 IH 

1 consult with the district director, the grantee shall 

2 consult with the Assistant Administrator for Small 

3 Business Development Centers. 

4 ‘‘(7) PROHIBITION ON CERTAIN FEES.—Each 

5 grantee shall ensure that small business development 

6 centers shall not impose or otherwise collect a fee or 

7 other compensation in connection with the provision 

8 of counseling services under this section. 

9 ‘‘(8) PRIVACY REQUIREMENTS.—

10 ‘‘(A) IN GENERAL.—Each grantee shall en11 sure that small business development centers 

12 shall not disclose the name or address of any 

13 individual or small business concern receiving 

14 assistance under this section without the con15 sent of such individual or small business con16 cern, except that—

17 ‘‘(i) the Administrator shall require 

18 such disclosure if ordered to do so by a 

19 court in any civil or criminal action; and 

20 ‘‘(ii) if the Administrator considers it 

21 necessary while undertaking a financial 

22 audit of a Small Business Development 

23 Center, the Administrator shall require 

24 such disclosure for the sole purpose of un25 dertaking such audit. 
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•HR 2802 IH 

1 ‘‘(B) REGULATIONS.—After notice and 

2 comment and not later than 180 days after the 

3 date of the enactment of this subparagraph, the 

4 Administrator shall issue regulations to estab5 lish standards for requiring disclosures during a 

6 financial audit under subparagraph (A)(ii). 

7 ‘‘(h) ADDITIONAL GRANTS.—

8 ‘‘(1) IN GENERAL.—Any grantee may apply to 

9 the Administrator for an additional grant to be used 

10 solely to assist—

11 ‘‘(A) with the development and enhance12 ment of exports by small business concerns; 

13 ‘‘(B) in technology transfer; 

14 ‘‘(C) with outreach, development, and en15 hancement of minority-owned small business 

16 startups or expansions, HUBZone small busi17 ness concerns, veteran-owned small business 

18 startups or expansions, and women-owned small 

19 business startups or expansions, in communities 

20 impacted by base closings or military or cor21 porate downsizing, or in rural or underserved 

22 communities; and 

23 ‘‘(D) small manufacturers. 

24 ‘‘(2) CERTAIN RULES TO APPLY.—Except as 

25 otherwise provided in this subsection, any additional 
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•HR 2802 IH 

1 grant under this subsection shall be subject to rules 

2 similar to the rules that apply to grants made under 

3 subsection (a). 

4 ‘‘(3) GRANT AMOUNT.—A grant shall not be 

5 made under this subsection if such grant which 

6 would exceed the grantee’s pro rata share of a 

7 $15,000,000 program based upon the populations to 

8 be served by the grantee as compared to the total 

9 population of the United States. The minimum 

10 amount of eligibility for any State shall be 

11 $100,000. Any additional grant made under this sec12 tion shall not be taken into account for purposes of 

13 the dollar program limitations specified in subsection 

14 (j). 

15 ‘‘(4) REALLOCATION OF UNUSED FUNDS.—If 

16 the Administrator has not received an application 

17 for an additional grant from a grantee pursuant to 

18 this subsection within 90 days after the Adminis19 trator and the grantee have signed an agreement 

20 pursuant to subsection (c) or within 60 days after 

21 the grantee and Administrator has renewed an 

22 agreement pursuant to subsection (c), the Adminis23 trator may make such grant to any eligible applicant 

24 (determined without regard to so much of subsection 

25 (b)(4)(C) as precedes ‘1990,’) in that State to carry 
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•HR 2802 IH 

1 out the activities specified in this subsection subject 

2 to the requirements of paragraphs (2) and (3). 

3 ‘‘(i) MATCHING FUNDS.—

4 ‘‘(1) IN GENERAL.—The Administrator shall re5 quire as a condition of any grant (or amendment or 

6 modification thereof) made to a grantee under this 

7 section, that a matching amount equal to the 

8 amount of such grant be provided from sources 

9 other than the Federal Government, to be comprised 

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

11 50 percent of indirect costs and in-kind contribu12 tions. 

13 ‘‘(2) RESTRICTION.—The matching amount de14 scribed in paragraph (1) shall not include—

15 ‘‘(A) any indirect costs or in-kind contribu16 tions derived from any Federal program; and 

17 ‘‘(B) any amount received under a contract 

18 described in subsection (g)(2). 

19 ‘‘(j) FUNDING FORMULA.—

20 ‘‘(1) IN GENERAL.—Subject to paragraph (3), 

21 the amount of funds to be made available to the 

22 grantee or grantees within a State under this sub23 section shall be equal to an amount determined in 

24 accordance with the following formula: 
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•HR 2802 IH 

1 ‘‘(A) The annual amount made available 

2 for the Small Business Development Center 

3 Program under section 20(a), less any reduc4 tions made for expenses authorized by para5 graph (5), shall be divided on a pro rata basis, 

6 based on the percentage of the population of 

7 each State, as compared to the population of 

8 the United States. 

9 ‘‘(B) If the pro rata amount calculated 

10 under subparagraph (A) for any State is less 

11 than the minimum funding level under para12 graph (3), the Administrator shall determine 

13 the aggregate amount necessary to achieve that 

14 minimum funding level for each such State. 

15 ‘‘(C) The aggregate amount calculated 

16 under subparagraph (B) shall be deducted from 

17 the amount calculated under subparagraph (A) 

18 for States eligible to receive more than the min19 imum funding level. The deductions shall be 

20 made on a pro rata basis, based on the popu21 lation of each such State, as compared to the 

22 total population of all such States. 

23 ‘‘(D) The aggregate amount deducted 

24 under subparagraph (C) shall be added to the 

25 funds of those States that are not eligible to re-
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1 ceive more than the minimum funding level in 

2 order to achieve the minimum funding level for 

3 each such State, except that the eligible amount 

4 of funds made available to any State under this 

5 subsection shall not be reduced to an amount 

6 below the minimum funding level. 

7 ‘‘(2) FUNDS AVAILABILITY DETERMINATION.—

8 The amount of funds that one or more grantees 

9 within a State are eligible to receive under this sub10 section shall be the amount determined under para11 graph (1), subject to any modifications required 

12 under paragraph (3), and shall be based on the 

13 amount available for the fiscal year in which per14 formance of the grant commences, but not including 

15 amounts distributed in accordance with paragraph 

16 (4). The amount of funds received by a grant or 

17 grantees in a State under any provision of this sub18 section shall not exceed the amount of matching 

19 funds from sources other than the Federal Govern20 ment, as required under subsection (i). 

21 ‘‘(3) MINIMUM FUNDING LEVEL.—The amount 

22 of the minimum funding level for each State shall be 

23 determined for each fiscal year based on the amount 

24 made available for that fiscal year to carry out this 

25 section, as follows: 
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1 ‘‘(A) If the amount made available is not 

2 less than $81,500,000 and not more than 

3 $90,000,000, the minimum funding level shall 

4 be $500,000. 

5 ‘‘(B) If the amount made available is less 

6 than $81,500,000, the minimum funding level 

7 shall be the remainder of $500,000 minus a 

8 percentage of $500,000 equal to the percentage 

9 amount by which the amount made available is 

10 less than $81,500,000. 

11 ‘‘(C) If the amount made available is more 

12 than $90,000,000, the minimum funding level 

13 shall be the sum of $500,000 plus a percentage 

14 of $500,000 equal to the percentage amount by 

15 which the amount made available exceeds 

16 $90,000,000. 

17 ‘‘(4) DISTRIBUTIONS.—Subject to paragraph 

18 (3), if one or more grantees within a State do not 

19 apply for, or use, their full funding eligibility for a 

20 fiscal year, the Administration shall distribute the 

21 remaining funds as follows: 

22 ‘‘(A) If the grant to any State is less than 

23 the amount received by that State in fiscal year 

24 2000, the Administrator shall distribute such 

25 remaining funds, on a pro rata basis, based on 
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1 the percentage of shortage of each such State, 

2 as compared to the total amount of such re3 maining funds available, to the extent necessary 

4 in order to increase the amount of the grant to 

5 the amount received by that State in fiscal year 

6 2000, or until such funds are exhausted, which7 ever first occurs. 

8 ‘‘(B) If any funds remain after the applica9 tion of subparagraph (A), the remaining 

10 amount may be distributed as supplemental 

11 funds to a grantee or grantees in any State, as 

12 the Administrator determines, in its discretion, 

13 to be appropriate, after consultation with the 

14 association referred to in subsection (k). 

15 ‘‘(5) USE OF AMOUNTS.—Of the amounts made 

16 available in any fiscal year to carry out this section 

17 not more than $500,000 may be used by the Admin18 istrator to pay expenses enumerated in subpara19 graphs (B) through (D) of section 20(a)(1). 

20 ‘‘(6) EXCLUSIONS.—Funds made available to 

21 one or more grantees within a State provided by the 

22 Administrator or another Federal agency to carry 

23 out subsection (f)(4), (g)(2), (h), or (o) or for sup24 plemental grants set forth in paragraph (4)(B), shall 

25 not be included in the calculation of maximum fund-
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1 ing to be made available to one or more grantees 

2 within the State under paragraph (2). 

3 ‘‘(7) AUTHORIZATION OF APPROPRIATIONS.—

4 There is authorized to be appropriated to carry out 

5 this section $135,000,000 for fiscal year 2004 and 

6 $145,000,000 for fiscal year 2005. The authority to 

7 award grants under this section shall be in effect for 

8 each fiscal year only to the extent and in the 

9 amounts as are provided in advance in appropria10 tions Acts. 

11 ‘‘(k) FORMATION OF ASSOCIATION.—The grantees’ 

12 directors are authorized to form an association to pursue 

13 matters of common concern. If more than a majority of 

14 the grantees’ directors are members of such an associa15 tion, the Administrator is authorized and directed to rec16 ognize the existence and activities of such an association 

17 and to consult with it and develop documents—

18 ‘‘(1) announcing the annual scope of activities 

19 pursuant to this section; 

20 ‘‘(2) requesting proposals to deliver assistance 

21 as provided in this section; and 

22 ‘‘(3) governing the general operations and ad23 ministration of the Small Business Development 

24 Center Program, specifically including the develop25 ment of regulations and a uniform negotiated grant 
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1 agreement for use on an annual basis when entering 

2 into agreements with grantees. 

3 ‘‘(l) PROGRAM EXAMINATION AND ACCREDITA4 TION.—

5 ‘‘(1) EXAMINATION.—The Administrator shall 

6 develop and implement a biennial programmatic and 

7 financial examination of each network of small busi8 ness development centers established pursuant to 

9 this section. The biennial examination shall be con10 ducted by the Assistant Administrator for Small 

11 Business Development Centers. 

12 ‘‘(2) ACCREDITATION.—The Administrator 

13 shall provide financial support, by contract or other14 wise, to the association authorized by subsection (k) 

15 for the purpose of developing and implementing a 

16 small business development center accreditation pro17 gram. 

18 ‘‘(3) EXTENSION OR RENEWAL OF COOPERA19 TIVE AGREEMENTS.—

20 ‘‘(A) IN GENERAL.—In renewing a grant 

21 or cooperative agreement or contract of a 

22 grantee, the Administrator shall consider the 

23 results of the examination and accreditation 

24 program conducted pursuant to paragraphs (1) 

25 and (2). 
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1 ‘‘(B) ACCREDITATION REQUIREMENT.—

2 The Administrator may not renew any grant 

3 under this section unless the grantee’s small 

4 business development centers have been accred5 ited under the program conducted pursuant to 

6 this subsection, except that the Assistant Ad7 ministrator for Small Business Development 

8 Centers may waive such accreditation require9 ment if the Assistant Administrator determines 

10 that the grantee is making a good faith effort 

11 to obtain accreditation for each of the grantee’s 

12 small business development centers. 

13 ‘‘(m) SMALL BUSINESS DEVELOPMENT CENTER AD14 VISORY BOARDS.—

15 ‘‘(1) NATIONAL SMALL BUSINESS DEVELOP16 MENT CENTER ADVISORY BOARD.—

17 ‘‘(A) ESTABLISHMENT.—There is estab18 lished a National Small Business Development 

19 Center Advisory Board (herein referred to as 

20 ‘Board’) which shall consist of nine members 

21 appointed from civilian life by the Adminis22 trator and who shall be persons of outstanding 

23 qualifications known to be familiar and sympa24 thetic with small business needs and problems. 

25 No more than three members shall be from uni-
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1 versities or their affiliates and six shall be from 

2 small business concerns or associations rep3 resenting small business concerns. At the time 

4 of the appointment of the Board, the Adminis5 trator shall designate one-third of the members 

6 and at least one from each category whose term 

7 shall end in two years from the date of appoint8 ment, a second third whose term shall end in 

9 three years from the date of appointment, and 

10 the final third whose term shall end in four 

11 years from the date of appointment. Succeeding 

12 Boards shall have three-year terms, with one13 third of the Board changing each year. 

14 ‘‘(B) OPERATION.—The Board shall elect 

15 a Chairman and advise, counsel, and confer 

16 with the Assistant Administrator for Small 

17 Business Development Centers in carrying out 

18 the duties described in this section. The Board 

19 shall meet at least semiannually and at the call 

20 of the Chairman of the Board. Each member of 

21 the Board shall be entitled to be compensated 

22 at the rate not in excess of the per diem equiva23 lent of the highest rate of pay for individuals 

24 occupying the position under GS–18 of the 

25 General Schedule for each day engaged in ac-
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1 tivities of the Board and shall be entitled to be 

2 reimbursed for expenses as a member of the 

3 Board. 

4 ‘‘(2) LOCAL SMALL BUSINESS DEVELOPMENT

5 CENTER ADVISORY BOARDS.—Each grantee’s direc6 tor shall establish an advisory board for the grant7 ee’s network of small business development centers. 

8 The district director shall have no authority to ap9 prove or disapprove the members of the advisory 

10 board selected by the grantee’s director. 

11 ‘‘(n) ADMINISTRATION OF PROGRAM.—

12 ‘‘(1) IN GENERAL.—Except as otherwise pro13 vided in this section, the program established by this 

14 section shall be administered by the Administrator, 

15 acting through the Assistant Administrator for 

16 Small Business Development Centers with such 

17 oversight by the Associate Administrator for Enter18 prise Outreach and Training as the Administrator 

19 determines to be appropriate. 

20 ‘‘(2) DUTIES OF ASSISTANT ADMINISTRATOR

21 FOR SMALL BUSINESS DEVELOPMENT CENTERS.—

22 The duties of the Assistant Administrator for Small 

23 Business Development Centers shall include recom24 mending the annual program budget, reviewing the 

25 annual budgets submitted by each grantee, estab-
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1 lishing appropriate funding levels therefore, advising 

2 the Administrator on the selection of grantees to 

3 participate in the program, implementing the provi4 sions of this section, maintaining a clearinghouse to 

5 provide for the dissemination and exchange of infor6 mation between grantees and their subcontractors 

7 and conducting audits of recipients of grantees 

8 under this section. 

9 ‘‘(3) CONSULTATION REQUIREMENTS.—In car10 rying out the duties described in paragraph (2), the 

11 Assistant Administrator shall confer with and seek 

12 the advice of the advisory boards established pursu13 ant to subsection (m) and the heads of the regional 

14 and district offices of the Administration. 

15 ‘‘(o) ESTABLISHMENT OF INFORMATION SHARING

16 SYSTEM.—

17 ‘‘(1) IN GENERAL.—The Administrator, in con18 sultation with the grantees, their subcontractors, 

19 and the association authorized by this section shall 

20 develop and implement an information sharing sys21 tem. Such system shall—

22 ‘‘(A) allow small business development cen23 ters to exchange information about their pro24 grams; 
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1 ‘‘(B) provide information central to tech2 nology transfer; and 

3 ‘‘(C) provide information central to in4 creased utilization by United States businesses 

5 of sourcing their procurement requirements 

6 with small manufacturers. 

7 ‘‘(2) GRANT AUTHORITY.—The Administrator 

8 may make grants to one or more grantees to carry 

9 out the provisions of this subsection. Such grants 

10 shall be awarded for a period of not to exceed 5 

11 years. The matching funds requirements of sub12 section (i) shall not be applicable to grants made 

13 under this subsection. 

14 ‘‘(p) COOPERATION WITH FEDERAL SCIENCE RE15 SEARCH FACILITIES AND AGENCIES.—

16 ‘‘(1) IN GENERAL.—Laboratories operated and 

17 funded by the Federal Government are authorized 

18 and directed to cooperate with the Administrator in 

19 developing and establishing programs to support 

20 small business development centers by making facili21 ties and equipment available; providing experiment 

22 station capabilities in adaptive engineering; pro23 viding library and technical information processing 

24 capabilities; and providing professional staff for con-
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1 sulting. The Administrator is authorized to reim2 burse the laboratories for such services. 

3 ‘‘(2) NATIONAL SCIENCE FOUNDATION.—The 

4 National Science Foundation is authorized and di5 rected to cooperate with the Administrator in devel6 oping and establishing programs to support small 

7 business development centers. 

8 ‘‘(3) NATIONAL AERONAUTICS AND SPACE AD9 MINISTRATION.—The National Aeronautics and 

10 Space Administration and regional technology trans11 fer centers supported by the National Aeronautics 

12 and Space Administration are authorized and di13 rected to cooperate with grantees and their small 

14 business development centers. 

15 ‘‘(q) REGULATIONS.—In promulgating regulations to 

16 carry out this section, the Administration shall identify, 

17 and require grantee compliance with, the provisions in18 cluded in uniform requirements of Office of Management 

19 and Budget (OMB) Circulars which govern audits, cost 

20 principles and administrative requirements for Federal 

21 grants, and contracts and cooperative agreements.’’. 

22 (b) CONFORMING AMENDMENT.—Paragraph (2) of 

23 section 27(g) of the Small Business Act (15 U.S.C. 

24 654(g)) is amended by striking ‘‘section 21(c)(3)(T)’’ and 

25 inserting ‘‘section 21(f)(4)(T)’’. 
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1 (c) EFFECTIVE DATE.—

2 (1) IN GENERAL.—Except as provided in para3 graph (2), the amendments made by this section 

4 shall take effect on the date of the enactment of this 

5 Act. 

6 (2) GRANTS.—To the extent that the amend7 ment made by subsection (a) applies with respect to 

8 grants, such amendment shall apply to grants made, 

9 renewed, or terminated after the date of the enact10 ment of this Act. 

11 (d) TRANSITION RULES.—

12 (1) MULTIPLE GRANTEES REPLACED WITH SIN13 GLE GRANTEE.—In the case of a State which is 

14 served by two or more grantees under section 21 of 

15 the Small Business Act on the date of the enactment 

16 of this Act, the Administrator shall be required to 

17 select a new grantee for such State following the se18 lection process set forth in such section (as in effect 

19 on the day after the date of the enactment of this 

20 Act) if the grantees serving such State on the date 

21 of the enactment of this Act were selected after Jan22 uary 1, 2002. 

23 (2) SMALL BUSINESS DEVELOPMENT CENTER

24 ADVISORY BOARDS.—Each member of the National 

25 Small Business Development Center Advisory Board 
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1 and each member serving on a local small business 

2 development center advisory board on the day before 

3 the date of the enactment of this Act shall continue 

4 to so serve until the end of such member’s term. 

5 SEC. 213. ASSIGNMENT OF EMPLOYEES OF THE OFFICE OF 

6 INTERNATIONAL TRADE. 

7 Section 22 of the Small Business Act (15 U.S.C. 649) 

8 is amended by adding at the end the following new sub9 section: 

10 ‘‘(h) In carrying out this section, the Administrator 

11 shall ensure that the number of full-time equivalent em12 ployees of the Office assigned to the one-stop shops re13 ferred to in section 2301(b) of the Omnibus Trade and 

14 Competitiveness Act of 1988 (15 U.S.C. 4721(b)) is not 

15 less than the number of such employees so assigned on 

16 January 1, 2003.’’. 

17 SEC. 214. SUPERVISORY AND ENFORCEMENT AUTHORITY 

18 FOR SMALL BUSINESS LENDING COMPANIES. 

19 Section 23 of the Small Business Act (15 U.S.C. 650) 

20 is amended to read as follows:

21 ‘‘SEC. 23. SUPERVISORY AND ENFORCEMENT AUTHORITY 

22 FOR SMALL BUSINESS LENDING COMPANIES. 

23 ‘‘(a) IN GENERAL.—The Administrator is author24 ized—
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1 ‘‘(1) to supervise the safety and soundness of 

2 small business lending companies and non-Federally 

3 regulated lenders; 

4 ‘‘(2) with respect to small business lending 

5 companies to set capital standards to regulate, to ex6 amine, and to enforce laws governing such compa7 nies, in accordance with the purposes of this Act; 

8 and 

9 ‘‘(3) with respect to non-Federally regulated 

10 lenders to regulate, to examine, and to enforce laws 

11 governing the lending activities of such lenders 

12 under section 7(a) in accordance with the purposes 

13 of this Act. 

14 ‘‘(b) CAPITAL DIRECTIVE.—The Administrator may 

15 determine that failure of a small business lending com16 pany to maintain capital at the minimum level established 

17 by the Administrator is an unsafe and unsound practice. 

18 In addition to any other action authorized by law, the Ad19 ministrator may issue a directive to a small business lend20 ing company that does not comply with the minimum cap21 ital requirement requiring the small business lending com22 pany to increase capital to level established by the Admin23 istrator. 

24 ‘‘(c) CIVIL ACTION.—If a small business lending com25 pany violates this Act, the Administrator may institute a 
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1 civil action in an appropriate district court to terminate 

2 the rights, privileges, and franchises of the company under 

3 this Act. 

4 ‘‘(d) REVOCATION OR SUSPENSION OF LOAN AU5 THORITY.—

6 ‘‘(1) The Administrator may revoke or suspend 

7 the authority of a small business lending company or 

8 a non-Federally regulated lender to make, service or 

9 liquidate business loans authorized by section 7(a) of 

10 this Act—

11 ‘‘(A) for false statements knowingly made 

12 in any written submission required under this 

13 Act; 

14 ‘‘(B) for omission of a material fact from 

15 any written submission required under this Act; 

16 ‘‘(C) for willful or repeated violation of this 

17 Act; 

18 ‘‘(D) for willful or repeated violation of 

19 any condition imposed by the Administrator 

20 with respect to any application, request, or 

21 agreement under this Act; or 

22 ‘‘(E) for violation of any cease and desist 

23 order of the Administrator under this section. 

24 ‘‘(2) The Administrator may revoke or suspend 

25 authority under paragraph (1) only after a hearing 
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1 under subsection (f). The Administrator may dele2 gate power to revoke or suspend authority under 

3 paragraph (1) only to the Deputy Administrator and 

4 only if the Administrator is unavailable to take such 

5 action. 

6 ‘‘(A) The Administrator, after finding ex7 traordinary circumstances and in order to pro8 tect the financial or legal position of the United 

9 States, may issue a suspension order without 

10 conducting a hearing pursuant to subsection 

11 (f). If the Administrator issues a suspension 

12 under the preceding sentence, the Adminis13 trator shall within two business days follow the 

14 procedures set forth in subsection (f). 

15 ‘‘(B) Any suspension under paragraph (1) 

16 shall remain in effect until the Administrator 

17 makes a decision pursuant to subparagraph (4) 

18 to permanently revoke the authority of the 

19 small business lending company or non-Feder20 ally regulated lender, suspend the authority for 

21 a time certain, or terminate the suspension. 

22 ‘‘(3) The small business lending company or 

23 non-Federally regulated lender must notify bor24 rowers of a revocation and that a new entity has 

25 been appointed to service their loans. The Adminis-
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1 trator or an employee of the Administration des2 ignated by the Administrator may provide such no3 tice to the borrower. 

4 ‘‘(4) Any revocation or suspension under para5 graph (1) shall be made by the Administrator except 

6 that the Administrator shall delegate to an adminis7 trative law judge as that term is used in section 

8 3105 of title 5, United States Code the authority to 

9 conduct any hearing required under subsection (f). 

10 The Administrator shall base the decision to revoke 

11 on the record of the hearing. 

12 ‘‘(e) CEASE AND DESIST ORDER.—

13 ‘‘(1) Where a small business lending company, 

14 a non-Federally regulated lender, or other person 

15 violates this Act or is engaging or is about to engage 

16 in any acts or practices which constitute or will con17 stitute a violation of this Act, the Administrator may 

18 order, after the opportunity for hearing pursuant to 

19 subsection (f), the company, lender, or other person 

20 to cease and desist from such action or failure to 

21 act. The Administrator may delegate the authority 

22 under the preceding sentence only to the Deputy Ad23 ministrator and only if the Administrator is unavail24 able to take such action. 
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1 ‘‘(2) The Administrator, after finding extraor2 dinary circumstances and in order to protect the fi3 nancial or legal position of the United States, may 

4 issue a cease and desist order without conducting a 

5 hearing pursuant to subsection (f). If the Adminis6 trator issues a cease and desist order under the pre7 ceding sentence, the Administrator shall within two 

8 business days follow the procedures set forth in sub9 section (f). 

10 ‘‘(3) The Administrator may further order such 

11 small business lending company or non-Federally 

12 regulated lender or other person to take such action 

13 or to refrain from such action as the Administrator 

14 deems necessary to insure compliance with this Act. 

15 ‘‘(4) A cease and desist order under this sub16 section may also provide for the suspension of au17 thority to lend in subsection (d). 

18 ‘‘(f) PROCEDURE FOR REVOCATION OR SUSPENSION

19 OF LOAN AUTHORITY AND FOR CEASE AND DESIST

20 ORDER.—

21 ‘‘(1) Before revoking or suspending authority 

22 under subsection (d) or issuing a cease and desist 

23 order under subsection (e), the Administrator shall 

24 serve an order to show cause upon the small busi25 ness lending company, non-Federally regulated lend-
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1 er, or other person why an order revoking or sus2 pending the authority or a cease and desist order 

3 should not be issued. The order to show cause shall 

4 contain a statement of the matters of fact and law 

5 asserted by the Administrator and the legal author6 ity and jurisdiction under which a hearing is to be 

7 held, and shall set forth that a hearing will be held 

8 before an administrative law judge at a time and 

9 place stated in the order. Such hearing shall be con10 ducted pursuant to the provisions of sections 554, 

11 556, and 557 of title 5, United States Code. If after 

12 hearing, or a waiver thereof, the Administrator de13 termines that an order revoking or suspending the 

14 authority or a cease and desist order should be 

15 issued, the Administrator shall promptly issue such 

16 order, which shall include a statement of the find17 ings of the Administrator and the grounds and rea18 sons therefor and specify the effective date of the 

19 order, and shall cause the order to be served on the 

20 small business lending company, non-Federally regu21 lated lender, or other person involved.

22 ‘‘(2) Witnesses summoned before the Adminis23 trator shall be paid by the party at whose instance 

24 they were called the same fees and mileage that are 

25 paid witnesses in the courts of the United States. 
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1 ‘‘(3) A cease and desist order, suspension or 

2 revocation issued by the Administrator, after the 

3 hearing under this subsection is final agency action 

4 for purposes of chapter 7 of title 5, United States 

5 Code. An adversely aggrieved party shall have 20 

6 days from the date of issuance of the cease and de7 sist order, suspension or revocation, to seek judicial 

8 review in an appropriate district court. 

9 ‘‘(g) REMOVAL OR SUSPENSION OF MANAGEMENT

10 OFFICIAL.—

11 ‘‘(1) DEFINITION.—In this section, the term 

12 ‘management official’ means, with respect to a small 

13 business lending company or a non-Federally regu14 lated lender, an officer, director, general partner, 

15 manager, employee, agent, or other participant in 

16 the management of the affairs of the company’s or 

17 lender’s activities under section 7(a) of this Act. 

18 ‘‘(2) REMOVAL OF MANAGEMENT OFFICIAL.—

19 ‘‘(A) NOTICE.—The Administrator may 

20 serve upon any management official a written 

21 notice of its intention to remove that manage22 ment official if, in the opinion of the Adminis23 trator—

24 ‘‘(i) the management official—
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1 ‘‘(I) willfully and knowingly com2 mits a substantial violation of—

3 ‘‘(aa) this Act; 

4 ‘‘(bb) any regulation issued 

5 under this Act; or 

6 ‘‘(cc) a final cease-and-desist 

7 order under this Act; or 

8 ‘‘(dd) any agreement by the 

9 management official, the small 

10 business lending company or non11 Federally regulated lender under 

12 this Act; or 

13 ‘‘(II) willfully and knowingly 

14 commits a substantial breach of a fi15 duciary duty of that person as a man16 agement official; and 

17 ‘‘(III) the violation or breach of 

18 fiduciary duty is one involving per19 sonal dishonesty on the part of such 

20 management official. 

21 ‘‘(B) CONTENTS OF NOTICE.—A notice 

22 under subparagraph (A) shall contain a state23 ment of the facts constituting grounds therefor 

24 and shall fix a time and place at which a hear25 ing, conducted pursuant to section 554, 556, 
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1 and 557 of title 5, United States Code, will be 

2 held thereon. 

3 ‘‘(C) HEARING.—

4 ‘‘(i) TIMING.—A hearing under sub5 paragraph (B) shall be held not earlier 

6 than 30 days and later than 60 days after 

7 the date of service of notice of the hearing, 

8 unless an earlier or a later date is set by 

9 the Administrator at the request of—

10 ‘‘(I) the management official, and 

11 for good cause shown; or 

12 ‘‘(II) the Attorney General. 

13 ‘‘(ii) CONSENT.—Unless the manage14 ment official appears at a hearing under 

15 this paragraph in person or by a duly au16 thorized representative, the management 

17 official shall be deemed to have consented 

18 to the issuance of an order of removal 

19 under subparagraph (A). 

20 ‘‘(D) ORDER OF REMOVAL.—

21 ‘‘(i) IN GENERAL.—In the event of 

22 consent under subparagraph (C)(ii), or if 

23 upon the record made at a hearing under 

24 this subsection, the Administrator finds 

25 that any of the grounds specified in the 
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1 notice of removal has been established, the 

2 Administrator may issue such orders of re3 moval from office as the Administrator 

4 deems appropriate. 

5 ‘‘(ii) EFFECTIVENESS.—An order 

6 under clause (i) shall—

7 ‘‘(I) take effect 30 days after the 

8 date of service upon the subject small 

9 business lending company or non-Fed10 erally regulated lender and the man11 agement official concerned (except in 

12 the case of an order issued upon con13 sent as described in subparagraph 

14 (C)(ii), which shall become effective at 

15 the time specified in such order); and 

16 ‘‘(II) remain effective and en17 forceable, except to such extent as it 

18 is stayed, modified, terminated, or set 

19 aside by action of the Administrator 

20 or a reviewing court in accordance 

21 with this section. 

22 ‘‘(3) AUTHORITY TO SUSPEND OR PROHIBIT

23 PARTICIPATION.—

24 ‘‘(A) IN GENERAL.—In order to protect a 

25 small business lending company, a non-Feder-
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1 ally regulated lender or the interests of the Ad2 ministration or the United States, the Adminis3 trator may suspend from office or prohibit from 

4 further participation in any manner in the man5 agement or conduct of the affairs of a small 

6 business lending company or a non-Federally 

7 regulated lender a management official by writ8 ten notice to such effect served upon the man9 agement official. Such suspension or prohibition 

10 may prohibit the management official from 

11 making, servicing, reviewing, approving, or liq12 uidating any loan under section 7(a) of this 

13 Act. 

14 ‘‘(B) EFFECTIVENESS.—A suspension or 

15 prohibition under subparagraph (A)—

16 ‘‘(i) shall take effect upon service of 

17 notice under paragraph (2); and 

18 ‘‘(ii) unless stayed by a court in pro19 ceedings authorized by subparagraph (C), 

20 shall remain in effect—

21 ‘‘(I) pending the completion of 

22 the administrative proceedings pursu23 ant to a notice of intention to remove 

24 served under paragraph (2); and 
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1 ‘‘(II) until such time as the Ad2 ministrator dismisses the charges 

3 specified in the notice, or, if an order 

4 of removal or prohibition is issued 

5 against the management official, until 

6 the effective date of any such order. 

7 ‘‘(C) JUDICIAL REVIEW OF SUSPENSION

8 PRIOR TO HEARING.—Not later than 10 days 

9 after a management official is suspended or 

10 prohibited from participation under subpara11 graph (A), the management official may apply 

12 to an appropriate district court for a stay of the 

13 suspension or prohibition pending the comple14 tion of the administrative proceedings pursuant 

15 to a notice of intent to remove served upon the 

16 management official under paragraph (2). 

17 ‘‘(4) AUTHORITY TO SUSPEND ON CRIMINAL

18 CHARGES.—

19 ‘‘(A) IN GENERAL.—If a management offi20 cial is charged in any information, indictment, 

21 or complaint authorized by a United States at22 torney, with a felony involving dishonesty or 

23 breach of trust, the Administrator may, by writ24 ten notice served upon the management official, 

25 suspend the management official from office or 
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1 prohibit the management official from further 

2 participation in any manner in the management 

3 or conduct of the affairs of the small business 

4 lending company or non-Federally regulated 

5 lender. 

6 ‘‘(B) EFFECTIVENESS.—A suspension or 

7 prohibition under subparagraph (A) shall re8 main in effect until the information, indictment, 

9 or complaint is finally disposed of, or until ter10 minated by the Administrator or upon an order 

11 of a district court. 

12 ‘‘(C) AUTHORITY UPON CONVICTION.—If a 

13 judgment of conviction with respect to an of14 fense described in subparagraph (A) is entered 

15 against a management official, then at such 

16 time as the judgment is not subject to further 

17 judicial review (and for purposes of this sub18 paragraph shall not include any petition for a 

19 writ of habeas corpus), the Administrator may 

20 issue and serve upon the management official 

21 an order removing the management official, ef22 fective upon service of a copy of the order upon 

23 the small business lending company or non-Fed24 erally regulated lender. 
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1 ‘‘(D) AUTHORITY UPON DISMISSAL OR

2 OTHER DISPOSITION.—A finding of not guilty 

3 or other disposition of charges described in sub4 paragraph (A) shall not preclude the Adminis5 trator from instituting proceedings under sub6 section (e) or (f). 

7 ‘‘(5) NOTIFICATION TO SMALL BUSINESS LEND8 ING COMPANY OR A NON-FEDERALLY REGULATED

9 LENDER.—Copies of each notice required to be 

10 served on a management official under this section 

11 shall also be served upon the small business lending 

12 company or non-Federally regulated lender involved. 

13 ‘‘(6) FINAL AGENCY ACTION AND JUDICIAL RE14 VIEW.—

15 ‘‘(A) ISSUANCE OF ORDERS.—After a 

16 hearing under this subsection, and not later 

17 than 30 days after the Administrator notifies 

18 the parties that the case has been submitted for 

19 final decision, the Administrator shall render a 

20 decision in the matter (which shall include find21 ings of fact upon which its decision is predi22 cated), and shall issue and cause to be served 

23 upon each party to the proceeding an order or 

24 orders consistent with this section. The decision 

25 of the Administrator shall constitute final agen-
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1 cy action for purposes of chapter 7 of title 5, 

2 United States Code. 

3 ‘‘(B) JUDICIAL REVIEW.—An adversely ag4 grieved party shall have 20 days from the date 

5 of issuance of the order to seek judicial review 

6 in an appropriate district court. 

7 ‘‘(h) APPOINTMENT OF RECEIVER.—

8 ‘‘(1) In any proceeding under subsection (f)(4) 

9 or subsection (g)(6)(C), the court may take exclusive 

10 jurisdiction of a small business lending company or 

11 a non-Federally regulated lender and appoint a re12 ceiver for assets of the company or lender. 

13 ‘‘(2) Upon request of the Administrator, the 

14 court may appoint the Administrator as a receiver 

15 under paragraph (1). 

16 ‘‘(i) POSSESSION OF ASSETS.—

17 ‘‘(1) If a small business lending company or a 

18 non-Federally regulated lender is not in compliance 

19 with capital requirements or is insolvent, the Admin20 istrator may take possession of the portfolio of loans 

21 guaranteed by the Administrator and sell such loans 

22 to a third party by means of a receiver appointed 

23 under subsection (h). 

24 ‘‘(2) If a small business lending company or a 

25 non-Federally regulated lender is not in compliance 
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1 with capital requirements or is insolvent or otherwise 

2 operating in an unsafe and unsound condition, the 

3 Administrator may take possession of servicing ac4 tivities of loans that are guaranteed by the Adminis5 trator and sell such servicing rights to a third party 

6 by means of a receiver appointed under subsection 

7 (h). 

8 ‘‘(j) PENALTIES AND FORFEITURES.—

9 ‘‘(1) Except as provided in paragraph (2), a 

10 small business lending company or a non-Federally 

11 regulated lender which violates any regulation or 

12 written directive issued by the Administrator regard13 ing the filing of any regular or special report shall 

14 pay to the United States a civil penalty of not more 

15 than $100 for each day of the continuance of the 

16 failure to file such report, unless it is shown that 

17 such failure is due to reasonable cause and not due 

18 to willful neglect. The civil penalties under this sub19 section may be enforced in a civil action brought by 

20 the Administrator. The penalties under this sub21 section shall not apply to any affiliate of a small 

22 business lending company that procures at least 10 

23 percent of its annual purchasing requirements from 

24 small manufacturers. 
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1 ‘‘(2) The Administration may by rules and reg2 ulations that shall be codified in the Code of Federal 

3 Regulations, after an opportunity for notice and 

4 comment, or upon application of an interested party, 

5 at any time previous to such failure, by order, after 

6 notice and opportunity for hearing which shall be 

7 conducted pursuant to sections 554, 556, and 557 of 

8 title 5, United States Code, exempt in whole or in 

9 part, any small business lending company or non10 Federally regulated lender from paragraph (1), upon 

11 such terms and conditions and for such period of 

12 time as it deems necessary and appropriate, if the 

13 Administration finds that such action is not incon14 sistent with the public interest or the protection of 

15 the Administration. The Administration may for the 

16 purposes of this section make any alternative re17 quirements appropriate to the situation.’’. 

18 SEC. 215. REAUTHORIZATION OF PAUL D. COVERDELL 

19 DRUG-FREE WORKPLACE PROGRAM. 

20 Paragraph (1) of section 27(g) of the Small Business 

21 Act (15 U.S.C. 654(g)) is amended by striking 

22 ‘‘$5,000,000 for each of fiscal years 2001 through 2003’’ 

23 and inserting ‘‘$2,000,000 for each of fiscal years 2003 

24 through 2005’’. 
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1 SEC. 216. WOMEN’S BUSINESS CENTER PROGRAM. 

2 Section 29 of the Small Business Act (15 U.S.C. 656) 

3 is amended to read as follows:

4 ‘‘SEC. 29. WOMEN’S BUSINESS CENTER PROGRAM. 

5 ‘‘(a) DEFINITIONS.—For purposes of this section: 

6 ‘‘(1) The term ‘private nonprofit organization’ 

7 means an entity that is described in section 501(c) 

8 of the Internal Revenue Code of 1986 and exempt 

9 from taxation under section 501(a) of such Code. 

10 ‘‘(2) The term ‘women’s business center site’ 

11 means the location of—

12 ‘‘(A) a women’s business center; or 

13 ‘‘(B) 1 or more women’s business centers, 

14 established in conjunction with another wom15 en’s business center in another location within 

16 a State or region—

17 ‘‘(i) that reach a distinct population 

18 that would otherwise not be served; 

19 ‘‘(ii) whose services are targeted to 

20 women; and 

21 ‘‘(iii) whose scope, function, and ac22 tivities are similar to those of the primary 

23 women’s business center or centers in con24 junction with which it was established. 

25 ‘‘(b) AUTHORITY.—The Administrator may provide 

26 financial assistance to private nonprofit organizations to 
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1 conduct projects which will receive Federal funding for 5 

2 years and those that receive extensions for funding under 

3 the conditions set forth in this section for the benefit of 

4 small business concerns owned and controlled by women. 

5 The projects shall provide—

6 ‘‘(1) financial assistance, including training and 

7 counseling in how to apply for and secure business 

8 credit and investment capital, preparing and pre9 senting financial statements, and managing cash 

10 flow and other financial operations of a business 

11 concern; 

12 ‘‘(2) management assistance, including training 

13 and counseling in how to plan, organize, staff, di14 rect, and control each major activity and function of 

15 a small business concern; and 

16 ‘‘(3) marketing assistance, including training 

17 and counseling in identifying and segmenting domes18 tic and international market opportunities, preparing 

19 and executing marketing plans, developing pricing 

20 strategies, locating contract opportunities, negoti21 ating contracts, and utilizing varying public relations 

22 and advertising techniques. 

23 ‘‘(c) SUBMISSION OF 5-YEAR PLANS.—

24 ‘‘(1) In response to solicitations made by the 

25 Administrator requesting applications for grants to 
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1 operate women’s business centers, each applicant or2 ganization initially shall submit a 5-year plan to the 

3 Administrator detailing the budget required to pro4 vide the services set forth in subsection (b), the serv5 ices that will be provided, the target population, and 

6 the proposed fundraising activities to meet the non7 Federal contributions mandated by this section. 

8 ‘‘(2)(A) Notwithstanding any other provision of 

9 law, the Administrator may use such expedited 

10 methods of solicitation and award as the Adminis11 trator determines to be appropriate to carry out this 

12 section. 

13 ‘‘(B) Any expedited procedures utilized by the 

14 Administrator shall ensure that all small business 

15 sources are provided a reasonable opportunity to 

16 submit applications. 

17 ‘‘(d) CRITERIA.—The Administrator shall evaluate 

18 and rank applicants in accordance with predetermined se19 lection criteria that shall be stated in terms of relative im20 portance. Such criteria and their relative importance shall 

21 be made publicly available and stated in each solicitation 

22 for applications made by the Administrator. The criteria 

23 shall include—

24 ‘‘(1) the experience of the applicant in con25 ducting programs or ongoing efforts designed to im-
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1 part or upgrade the business skills of women busi2 ness owners or potential owners; 

3 ‘‘(2) the present ability of the applicant to com4 mence a project within a minimum amount of time; 

5 ‘‘(3) the ability of the applicant to provide 

6 training and services to a representative number of 

7 women who are both socially and economically dis8 advantaged; and 

9 ‘‘(4) the location for the women’s business cen10 ter site proposed by the applicant. 

11 ‘‘(e) SELECTION OF GRANTEES.—Assuming other 

12 ranking factors to be equal, the Administrator shall make 

13 selection of grantees in the following order of preference: 

14 ‘‘(1) The Administrator shall select from the 

15 applications those that demonstrate the greatest 

16 ability to serve women who are socially and economi17 cally disadvantaged whether located in standard 

18 metropolitan statistical areas or rural areas and 

19 without regard to the location of an existing center. 

20 ‘‘(2) If, in the opinion of the Administrator, 2 

21 or more applicants have the same rank with respect 

22 to service of socially and economically disadvantaged 

23 women, the Administrator shall prefer the applicant 

24 that proposes to serve part of a State in a State that 

25 has not had a center in the past 5 years. 
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1 ‘‘(3) If no application has been received under 

2 which an award can be made pursuant to paragraph 

3 (2), the Administrator then shall select an applicant 

4 that proposes to serve a standard metropolitan sta5 tistical area that has not been served by a women’s 

6 business center during the past 5 years. 

7 ‘‘(f) ADMINISTRATOR FUNDING OF GRANTEES.—The 

8 Administrator, except as otherwise provided by subsection 

9 (m), shall provide funding according to the following for10 mula: 

11 ‘‘(1) During the first and second years of oper12 ation, two dollars in Federal funds for each dollar in 

13 matching funds as required by subsection (g). 

14 ‘‘(2) During the third, fourth, and fifth years, 

15 one dollar in Federal funds for each dollar in match16 ing funds as required by subsection (g). 

17 ‘‘(3) The grant agreement shall provide for the 

18 mechanism of disbursement of Federal funds by the 

19 Administrator including payment in lump sum or in20 stallments, in advance, or by way of reimbursement. 

21 The Administrator may disburse up to 25 percent of 

22 each year’s Federal share to a grantee before the 

23 non-Federal sector matching funds are obtained. 

24 ‘‘(4) If a grantee fails to obtain the required 

25 non-Federal contribution at any time during the life 
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1 of the grant, such grantee shall not be eligible there2 after for advance disbursements pursuant to para3 graph (3) during the remainder of the term of the 

4 grant, or for any other women’s business center 

5 which it operates or for which it has applied to es6 tablish. 

7 ‘‘(5) Prior to approving assistance to a grantee 

8 for any other projects, the Administrator shall spe9 cifically determine whether the Administrator be10 lieves that the grantee will be able to obtain the req11 uisite non-Federal funding and enter a written find12 ing setting forth the reasons for making such deter13 mination. 

14 ‘‘(6) The authority of the Administrator to pro15 vide funding pursuant to this section shall only be 

16 in effect for each fiscal year and only to the extent 

17 and in amounts as are provided for in advance of 

18 appropriations Acts. 

19 ‘‘(g) MATCHING FUNDS.—

20 ‘‘(1) Except as provided by subsection (n), each 

21 grantee, shall be required to obtain matching con22 tributions according to the formula set forth in sub23 section (f). 

24 ‘‘(2) No more than one-half of such contribu25 tions may be in the form of in-kind contributions 
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1 that are budget line items only, including office 

2 equipment and office space. 

3 ‘‘(3) The restriction in paragraph (2) shall 

4 apply to all grantees under this section. 

5 ‘‘(h) CONTRACT AUTHORITY.—A women’s business 

6 center may enter into a contract with a Federal depart7 ment or agency to provide specific assistance to women 

8 and other underserved small business concerns. Perform9 ance of such contract should not hinder the women’s busi10 ness centers in carrying out the terms of the grant re11 ceived by the women’s business centers from the Adminis12 trator. 

13 ‘‘(i) ANNUAL PROGRAM EXAMINATION.—

14 ‘‘(1) The Administrator shall—

15 ‘‘(A) develop and implement an annual 

16 programmatic and financial examination of 

17 each women’s business center established pur18 suant to this section, pursuant to which each 

19 such center shall provide to the Adminis20 trator—

21 ‘‘(i) an itemized cost breakdown of ac22 tual expenditures for costs incurred during 

23 the preceding year; and 

24 ‘‘(ii) documentation regarding the 

25 amount of matching assistance from non-
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1 Federal sources obtained and expended by 

2 the center during the preceding year in 

3 order to meet the requirements of sub4 section (g) and, with respect to any in-kind 

5 contributions described in that subsection 

6 that were used to satisfy the matching re7 quirements, verification of the existence 

8 and valuation of those contributions; and 

9 ‘‘(iii) a review of the grantee’s success 

10 in fundraising plan and whether that needs 

11 revision to ensure that the grantee can 

12 sustain operations after five years; and 

13 ‘‘(B) analyze the results of each such ex14 amination and, based on that analysis, make a 

15 determination regarding the programmatic and 

16 financial viability of each women’s business cen17 ter. 

18 ‘‘(2) In conducting such annual examination, 

19 the Administrator shall limit the total number of site 

20 visits to a particular women’s business center to no 

21 more than 2 per year, unless the Administrator de22 termines that extraordinary circumstances, as de23 fined in regulations promulgated by the Adminis24 trator, requires more than 2 such visits. 

25 ‘‘(j) RENEWAL OF FUNDING AND TERMINATION.—
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1 ‘‘(1) On an annual basis, commencing with the 

2 end of the grantee’s second year of operation of a 

3 women’s business center, the Administrator, based 

4 on the program review made pursuant to subsection 

5 (i), shall determine whether to continue funding the 

6 grantee according to the formula set forth in sub7 section (f). In determining whether to renew funding 

8 during any year of the life of the project operated 

9 by the grantee, the Administrator—

10 ‘‘(A) shall consider the results of each an11 nual examination of the center under subsection 

12 (i); and 

13 ‘‘(B) may withhold funding for the fol14 lowing year or years, if the Administrator deter15 mines that—

16 ‘‘(i) the grantee has failed to provide 

17 for any women’s business center which it 

18 operates any information required to by 

19 the Administrator to perform the annual 

20 program examination required under sub21 section (i), or the information is deemed to 

22 be inadequate to conduct the annual exam23 ination under subsection (i); 

24 ‘‘(ii) the center has failed to provide 

25 any information required to be provided by 
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1 the center for purposes of the report of the 

2 Administrator under subsection (l), or the 

3 information provided by the center is inad4 equate; or 

5 ‘‘(iii) the Administrator determines, 

6 pursuant to regulations adopted by the Ad7 ministrator and codified in the Code of 

8 Federal Regulations, that the grantee has 

9 failed to deliver the services required by 

10 subsection (b) taking into account current 

11 economic conditions and the target popu12 lation served by the grantee. 

13 ‘‘(2) The Administrator shall not require, as a 

14 condition of initial or continued funding, and a 

15 grant agreement shall not include a requirement 

16 that a women’s business center operated by the 

17 grantee serve a particular number of women with re18 spect to loans under section 7 of this Act or title V 

19 of the Small Business Investment Act of 1958. 

20 ‘‘(3) The Administrator shall not fund a grant21 ee for the operation of a women’s business center 

22 that has been in operation for 5 years unless it ap23 plies for and receives an extension of Federal fund24 ing pursuant to subsection (m) or the grantee re25 applies as a new applicant pursuant to subsection 
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1 (c) and the Administrator selects the grantee pursu2 ant to subsections (d) and (e). 

3 ‘‘(4) If the Administrator makes a determina4 tion pursuant to subparagraph (1)(B)(iii), prior to 

5 the withholding of any funds, the Administrator 

6 shall provide the grantee with a written notification 

7 of the reasons and shall provide the grantee with the 

8 opportunity for a hearing pursuant to section 554 of 

9 title 5, United States Code. 

10 ‘‘(5) The Administrator shall make a final deci11 sion based on the record of the hearing and such de12 cision shall be made within 60 days of the notifica13 tion provided in paragraph (4). 

14 ‘‘(k) MANAGEMENT REPORT.—

15 ‘‘(1) The Administrator shall prepare and sub16 mit to the Committee on Small Business of the 

17 House of Representatives and the Committee on 

18 Small Business and Entrepreneurship of the Senate 

19 a report on the effectiveness of all projects, including 

20 those operated pursuant to extensions of Federal 

21 funding, conducted under this section. 

22 ‘‘(2) Each report submitted under paragraph 

23 (1) shall include information concerning, with re24 spect to each women’s business center established 

25 pursuant to this section—
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1 ‘‘(A) the number of individuals receiving 

2 assistance; 

3 ‘‘(B) the number of startup business con4 cerns formed; 

5 ‘‘(C) the gross receipts of assisted con6 cerns; 

7 ‘‘(D) the employment increases or de8 creases of assisted concerns; 

9 ‘‘(E) to the maximum extent practicable, 

10 increases or decreases in profits of assisted con11 cerns; 

12 ‘‘(F) the number of hours of counseling 

13 and training provided and workshops con14 ducted; and 

15 ‘‘(G) the most recent analysis, as required 

16 under subsection (i)(1)(B), and the subsequent 

17 determination made by the Administrator under 

18 that subsection. 

19 ‘‘(l) AUTHORIZATION OF APPROPRIATIONS.—

20 ‘‘(1) There is authorized to be appropriated—

21 ‘‘(A) $ 16,000,000 for fiscal year 2004; 

22 and 

23 ‘‘(B) $ 17,500,000 for fiscal year 2005. 

24 ‘‘(2)(A) Except as provided in subparagraph 

25 (B), amounts made available under this subsection 
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1 for each fiscal year, may only be used for grant 

2 awards and may not be used for costs incurred by 

3 the Administrator in connection with the manage4 ment and administration of the program under this 

5 section. 

6 ‘‘(B) Of the amount made available under this 

7 subsection for a fiscal year, 1.75 percent shall be 

8 available for costs associated with selection, moni9 toring, and oversight. 

10 ‘‘(3)(A) Subject to subparagraph (B), 30.2 per11 cent of the funds authorized pursuant to this sub12 section shall be reserved to provide extensions of 

13 Federal funding to grantees that meet the standards 

14 set forth in subsection (m). 

15 ‘‘(B) If the Administrator does not distribute 

16 all funds reserved for extensions of Federal funding 

17 pursuant to subsection (m), the Administrator shall 

18 utilize the unawarded funds to grantees according to 

19 the priorities set forth in paragraphs (1), (2), and 

20 (3) of subsection (e). 

21 ‘‘(m) EXTENSIONS OF FEDERAL FUNDING AFTER

22 FIVE YEARS.—

23 ‘‘(1) The Administrator is authorized to extend 

24 Federal funding to any grantee for 5 years after the 

25 term of the original grant ends. 
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1 ‘‘(2) In order to receive an extension of Federal 

2 funding, the grantee shall submit an application in 

3 the fourth year of its operation of a women’s busi4 ness center and has met all of the criteria set by the 

5 Administrator for continued funding in its fifth year. 

6 ‘‘(n) SELECTION OF GRANTEES FOR EXTENSIONS OF

7 FEDERAL FUNDING.—

8 ‘‘(1) The Administrator shall review each appli9 cation submitted under paragraph (2) and select 

10 grantees for extensions of Federal funding who 

11 have—

12 ‘‘(A) a demonstrated record of serving pre13 dominantly socially and economically disadvan14 taged women; and 

15 ‘‘(B) are unable to meet their matching 

16 fund requirements due to their target popu17 lations. 

18 ‘‘(2) If the Administrator does not receive any 

19 applications that meet the standards of subpara20 graph (A), the Administrator shall select grantees 

21 under this subsection according to the following 

22 preferences: 

23 ‘‘(A) Those that meet the matching re24 quirements in subsection (f)(2). 
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1 ‘‘(B) If there are no applicants that meet 

2 that standard in subparagraph (A) then based 

3 on criteria developed by the Administrator to 

4 rank applicants for extensions of Federal fund5 ing. 

6 ‘‘(3) The Administrator shall maintain a copy 

7 of each application submitted under this subsection 

8 for not less than 10 years. 

9 ‘‘(4) In awarding an extension of Federal fund10 ing, the Administrator may condition such award on 

11 the grantee obtaining a match requirement at least 

12 equal to 2 non-Federal dollars for each dollar of 

13 Federal funding except that grantees meeting the 

14 standards of subparagraph (1)(A) shall only be re15 quired to match each Federal dollar with a non-Fed16 eral dollar.’’. 

17 SEC. 217. HUBZONE PROGRAM. 

18 Section 31 of the Small Business Act (15 U.S.C. 

19 657a) is amended to read as follows: 

20 ‘‘SEC. 31. HUBZONE PROGRAM. 

21 ‘‘(a) IN GENERAL.—There is established within the 

22 Administration a program to be carried out by the Admin23 istrator to provide for Federal contracting assistance to 

24 qualified HUBZone small business concerns in accordance 

25 with this section. 
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1 ‘‘(b) ELIGIBLE CONTRACTS.—

2 ‘‘(1) AUTHORITY OF CONTRACTING OFFICER.—

3 ‘‘(A) A contracting officer may award sole 

4 source contracts under this section to any quali5 fied HUBZone small business concern, if—

6 ‘‘(i) the qualified HUBZone small 

7 business concern is determined to be a re8 sponsible contractor with respect to per9 formance of such contract opportunity, and 

10 the contracting officer does not have a rea11 sonable expectation that 2 or more quali12 fied HUBZone small business concerns will 

13 submit offers for the contracting oppor14 tunity; 

15 ‘‘(ii) the anticipated award price of he 

16 contract (including options) will not ex17 ceed—

18 ‘‘(I) $5,000,000, in the case of a 

19 contract opportunity assigned a stand20 ard industrial classification code for 

21 manufacturing; or 

22 ‘‘(II) $3,000,000, in the case of 

23 all other contract opportunities; and 
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1 ‘‘(iii) in the estimation of the con2 tracting officer, the contract award can be 

3 made at a fair and reasonable price. 

4 ‘‘(B) A contract opportunity may be 

5 awarded pursuant to this section on the basis of 

6 competition restricted to qualified HUBZone 

7 small business concerns if the contracting offi8 cer has a reasonable expectation that not less 

9 than 2 qualified HUBZone small business con10 cerns will submit offers and that the award can 

11 be made at a fair market price. 

12 ‘‘(2) PRICE EVALUATION PREFERENCE IN FULL

13 AND OPEN COMPETITIONS.—

14 ‘‘(A) IN GENERAL.—In any case in which 

15 a contract is to be awarded on the basis of full 

16 and open competition, the price offered by a 

17 qualified HUBZone small business concern 

18 shall be deemed as being lower than the price 

19 offered by another offeror (other than another 

20 small business concern), if the price offered by 

21 the qualified HUBZone small business concern 

22 is not more than 10 percent higher than the 

23 price offered by the otherwise lowest, respon24 sive, and responsible offeror. 
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1 ‘‘(B) FULL AND OPEN COMPETITION.—For 

2 purposes of this paragraph, the term ‘full and 

3 open competition’ has the meaning given that 

4 term in section 4 of the Office of Federal Pro5 curement Policy Act (41 U.S.C. 403). 

6 ‘‘(3) RELATIONSHIP TO OTHER CONTRACTING

7 PREFERENCES.—A procurement may not be made 

8 from a source on the basis of a preference provided 

9 in paragraph (1) or (2), if the procurement would 

10 otherwise be made from a different source under 

11 section 4124 or 4125 of title 18, United States 

12 Code, or the Javits-Wagner-O’Day Act (41 U.S.C. 

13 46 et seq.). 

14 ‘‘(c) ENFORCEMENT; PENALTIES.—

15 ‘‘(1) VERIFICATION OF ELIGIBILITY.—In car16 rying out this section, the Administrator shall estab17 lish procedures relating to—

18 ‘‘(A) the filing, investigation, and disposi19 tion by the Administration of any challenge to 

20 the eligibility of a small business concern to re21 ceive assistance under this section (including a 

22 challenge, filed by an interested party, relating 

23 to the veracity of a certification made or infor24 mation provided to the Administration by a 
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1 small business concern under section 3(p)(5); 

2 and 

3 ‘‘(B) verification by the Administrator of 

4 the accuracy of any certification made or infor5 mation provided to the Administration by a 

6 small business concern under section 3(p)(5). 

7 ‘‘(2) EXAMINATIONS.—The procedures estab8 lished under paragraph (1) may provide for program 

9 examinations (including random program examina10 tions) by the Administrator of any small business 

11 concern making a certification or providing informa12 tion to the Administrator under section 3(p)(5). 

13 ‘‘(3) PROVISION OF DATA.—Upon the request 

14 of the Administrator, the Secretary of Labor, the 

15 Secretary of Housing and Urban Development, and 

16 the Secretary of the Interior (or the Assistant Sec17 retary for Indian Affairs), shall promptly provide to 

18 the Administrator such information as the Adminis19 trator determines to be necessary to carry out this 

20 subsection. 

21 ‘‘(4) PENALTIES.—In addition to the penalties 

22 described in section 16(d), any small business con23 cern that is determined by the Administrator to have 

24 misrepresented the status of that concern as a 
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1 ‘HUBZone small business concern’ for purposes of 

2 this section, shall be subject to—

3 ‘‘(A) section 1001 of title 18, United 

4 States Code; and 

5 ‘‘(B) sections 3729 through 3733 of title 

6 31, United States Code. 

7 ‘‘(d) LIST OF QUALIFIED SMALL BUSINESS CON8 CERNS.—The Administrator shall establish and maintain 

9 a list of qualified HUBZone small business concerns, 

10 which list shall, to the extent practicable—

11 ‘‘(1) once the Administrator has made the cer12 tification required by subsection 3(p)(5)(A)(i) of this 

13 Act regarding a qualified HUBZone small business 

14 concern and has determined that subsection 

15 3(p)(5)(B)does not apply to that concern, include 

16 the name, address, and type of business with respect 

17 to each such small business concern; 

18 ‘‘(2) be updated by the Administrator not less 

19 than annually; and 

20 ‘‘(3) be provided upon request to any Federal 

21 agency or other entity. 

22 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There 

23 is authorized to be appropriated to carry out the program 

24 established by this section $5,000,000 for each of fiscal 

25 years 2004 through 2005.’’. 
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1 SEC. 218. OTHER REPEALS AND REORGANIZATIONS. 

2 (a) SEVERABILITY CLAUSE MOVED TO END OF

3 SMALL BUSINESS ACT.—Section 36 of the Small Business 

4 Act is amended to read as follows: 

5 ‘‘SEC. 36. SEVERABILITY. 

6 ‘‘If any provision of this Act, or the application there7 of to any person or circumstances, is held invalid, the re8 mainder of this Act, and the application of such provision 

9 to other persons or circumstances, shall not be affected 

10 thereby.’’. 

11 (b) REPEALS.—

12 (1) Section 19 of the Small Business Act (15 

13 U.S.C. 631 note) is amended to read as follows: 

14 ‘‘SEC. 19. [ RESERVED. ].’’. 

15 (2) Section 24 of the Small Business Act (15 

16 U.S.C. 651) is amended to read as follows: 

17 ‘‘SEC. 24. [ RESERVED. ].’’. 

18 (3) Section 25 of the Small Business Act (15 

19 U.S.C. 652) is amended to read as follows: 

20 ‘‘SEC. 25. [ RESERVED. ].’’. 

21 (4) Section 26 of the Small Business Act (15 

22 U.S.C. 653) is amended to read as follows: 

23 ‘‘SEC. 26. [ RESERVED. ].’’. 

24 (5) Section 28 of the Small Business Act (15 

25 U.S.C. 655) is amended to read as follows: 
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1 ‘‘SEC. 28. [ RESERVED. ].’’. 

2 SEC. 219. RULES OF CONSTRUCTION. 

3 (a) REFERENCES.—A reference to a provision of law 

4 replaced by this title, including a reference in a regulation, 

5 rule, order, or other law, is deemed to refer to the cor6 responding provision enacted by this Act. 

7 (b) CONTINUING EFFECT.—Unless otherwise pro8 vided in this Act or in an amendment made by this Act, 

9 any regulation, rule, or order in effect under a provision 

10 of law replaced by this title shall continue in effect under 

11 the corresponding provision enacted by this title until re12 pealed, amended, or superseded. 

13 (c) INFERENCES OF REPEAL.—The repeal of a provi14 sion of law by this title shall not be construed as a legisla15 tive inference that the provision was or was not in effect 

16 before its repeal. 

17 TITLE III—OTHER PROVISIONS 

18 SEC. 301. REPORT REGARDING NATIONAL DATABASE OF 

19 SMALL MANUFACTURERS. 

20 (a) STUDY AND REPORT.—The Administrator, in 

21 consultation with the association of small business devel22 opment centers authorized by section 21(k) of the Small 

23 Business Act, shall—

24 (1) study the feasibility of creating a national 

25 database of small manufacturers that institutions of 
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1 higher education could access for purposes of meet2 ing procurement needs; and 

3 (2) not later than one year after the date of the 

4 enactment of this Act, transmit a report to the Con5 gress regarding the findings and conclusions of such 

6 study. 

7 (b) COST ESTIMATE.—The report referred to in sub8 section (a)(2) shall include an estimate of the cost of cre9 ating and maintaining the database described in sub10 section (a). 

11 SEC. 302. WORKFORCE TRANSFORMATION PLAN. 

12 (a) REORGANIZATION.—The Administrator shall, to 

13 the extent permitted by law, reorganize the structure of 

14 the Administration and reassign employees in order to—

15 (1) increase outreach to small business con16 cerns; 

17 (2) improve coordination with Federal con18 tracting officers in an effort to increase prime con19 tract awards to small business concerns; 

20 (3) enable small business concerns to obtain 

21 better access to capital; 

22 (4) expand assistance provided to small manu23 facturers; and 
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1 (5) meet goals in this section and the Small 

2 Business Act for procurement center representatives 

3 and commercial market representatives. 

4 (b) REQUIRED COST SAVINGS.—In carrying out sub5 section (a), the Administrator shall achieve a 1 percent 

6 savings in the overall cost of operating the agency. 

7 (c) INCREASED NUMBER OF PROCUREMENT CENTER

8 REPRESENTATIVES AND COMMERCIAL MARKETING REP9 RESENTATIVES.—In carrying out subsection (a), the Ad10 ministrator shall ensure—

11 (1) that the following number of procurement 

12 center representatives are employed by the Adminis13 tration: 

14 (A) 75 by September 30, 2004; and 

15 (B) 100 by September 30, 2005; and 

16 (2) that the following number of commercial 

17 marketing representatives are employed by the Ad18 ministration: 

19 (A) 25 by September 30, 2004; and 

20 (B) 50 by September 30, 2005. 

21 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

22 are authorized to be appropriated such sums as may be 

23 necessary to carry out this section. 

24 (e) REPORT TO CONGRESS.—Not later than 1 year 

25 after the date of the enactment of this Act, the Adminis-
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1 trator shall transmit a report to the Congress describing 

2 the steps taken by the Administrator to carry out this sec3 tion. Such report shall contain—

4 (1) a detailed analysis of how the trans5 formation has—

6 (A) increased contact with small business 

7 concerns; 

8 (B) expanded dollar financings to small 

9 business concerns; 

10 (C) increased the total number of prime 

11 and subcontracting dollars awarded to small 

12 business concerns, including increases in each 

13 contracting program established pursuant to 

14 sections 8 and 15 of this Act; and 

15 (D) increased assistance provided to small 

16 manufacturers; and 

17 (2) the Administrator’s assessment of further 

18 actions needed to transform the workforce to meet 

19 the objectives described in paragraph (1). 

20 SEC. 303. REPEAL OF CERTAIN PROVISIONS OF THE DIS21 ASTER RELIEF ACT OF 1970. 

22 (a) IN GENERAL.—Section 237 of the Disaster Relief 

23 Act of 1970 (15 U.S.C. 636d) is hereby repealed. 
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1 (b) NO AFFECT ON OUTSTANDING LOANS.—The re2 peal made by this section shall not affect any loan made 

3 before the date of the enactment of this Act. 

4 SEC. 304. REGULATIONS ON SIZE STANDARDS OF 

5 FRANCHISEES. 

6 (a) PROMULGATION.—Not later than 180 days after 

7 the date of the enactment of this Act, the Administrator 

8 shall repeal section 121.103(g) of title 13, Code of Federal 

9 Regulations (as in effect on the date of the enactment of 

10 this Act) and promulgate a new regulation, after the op11 portunity for notice and comment, taking into account 

12 whether the franchisee or licensee—

13 (1) retains the majority of its profits but not 

14 less than 51 percent; 

15 (2) bears the burdens of its losses; 

16 (3) shares no common ownership or manage17 ment personnel with the franchisor or licensor; 

18 (4) maintains daily control of its operations in19 cluding determining who its customers will be; 

20 (5) is subject to excessive restrictions on the 

21 sale of its business given the interest of the 

22 franchisor or licensor in protecting the goodwill of 

23 its trademarks, tradenames, or service marks. 

24 (b) FAILURE TO PROMULGATE NEW STANDARD.—If 

25 the Administrator fails to comply with subsection (a), any 
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1 franchisee or licensee shall be treated as small for pur2 poses of the Small Business Act until the Administrator 

3 has issued a final regulation as required under subsection 

4 (a). 

5 SEC. 305. TEMPORARY SMALL BUSINESS DEVELOPMENT 

6 CENTER ASSISTANCE TO INDIAN TRIBE MEM7 BERS, NATIVE ALASKANS, AND NATIVE HA8 WAIIANS. 

9 (a) IN GENERAL.—The Administrator of the Small 

10 Business Administration may award a grant under this 

11 section to any grantee under section 21 of the Small Busi12 ness Act. A grant under this section shall be used solely 

13 to provide services described in section 21(f)(4) of the 

14 Small Business Act to assist with outreach, development, 

15 and enhancement on Indian lands of small business 

16 startups and expansions owned by Indian tribe members, 

17 Native Alaskans, and Native Hawaiians. 

18 (b) LIMITATION.—A grant shall not be made to a 

19 grantee under this section unless the area served by such 

20 grantee has a combined population of Indian tribe mem21 bers, Natives Alaskans, and Native Hawaiians that com22 prises at least 1 percent of the area’s total population, 

23 as shown by the latest available census. 

24 (c) GRANT APPLICATIONS.—An applicant for a grant 

25 under this section shall submit to the Administrator of the 
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1 Small Business Administration an application that is in 

2 such form as the Administrator may require. The applica3 tion shall include information regarding the applicant’s 

4 goals and objectives for the services to be provided using 

5 the grant, including—

6 (1) the capability of the applicant to provide 

7 training and services to Indian tribe members, Na8 tive Alaskans, and Native Hawaiians; 

9 (2) the locations of the Small Business Develop10 ment Centers that would provide the assistance de11 scribed in subsection (a); 

12 (3) the required amount of grant funding need13 ed by the applicant to implement the program; and 

14 (4) the extent to which the applicant has con15 sulted with local tribal councils. 

16 (d) APPLICABILITY OF GRANT REQUIREMENTS.—An 

17 applicant for a grant under this section shall comply with 

18 all of the requirements applicable to a grantee under sec19 tion 21 of the Small Business Act, except that the match20 ing funds requirements of subsection (i) of such section 

21 shall not apply. 

22 (e) MAXIMUM AMOUNT OF GRANTS.—A grantee shall 

23 not receive more than $300,000 in grants under this sec24 tion in a fiscal year. 
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1 (f) ADVICE OF LOCAL TRIBAL COUNSELS.—A grant2 ee under this section shall request the advice of local tribal 

3 councils regarding how best to provide assistance to In4 dian tribe members, Native Alaskans, and Native Hawai5 ians and where to locate centers to provide such assist6 ance. 

7 (g) REGULATIONS.—After providing notice and an 

8 opportunity for comment and after consulting with the as9 sociation recognized by the Administrator of the Small 

10 Business Administration under section 21(k) of the Small 

11 Business Act (but not later than 180 days after the date 

12 of enactment of this Act), the Administrator shall issue 

13 final regulations to carry out this section, including regu14 lations that establish—

15 (1) standards relating to educational, technical, 

16 and support services to be provided by grantees 

17 under this section; and 

18 (2) standards relating to any work plan that 

19 the Administrator may require a grantee under this 

20 section to develop. 

21 (h) DEFINITIONS.—For purposes of this section: 

22 (1) INDIAN LANDS.—The term ‘‘Indian lands’’ 

23 has the meaning given the term ‘‘Indian country’’ in 

24 section 1151 of title 18, United States Code, the 

25 meaning given the term ‘‘Indian reservation’’ in sec-
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1 tion 151.2 of title 25, Code of Federal Regulations 

2 (as in effect on the date of enactment of this para3 graph), and the meaning given the term ‘‘reserva4 tion’’ in section 4 of the Indian Child Welfare Act 

5 of 1978 (25 U.S.C. 1903). 

6 (2) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 

7 has the meaning given such term in section 4(e) of 

8 the Indian Self-Determination and Education Assist9 ance Act. 

10 (3) INDIAN TRIBE MEMBER.—The term ‘‘Indian 

11 tribe member’’ means a member of an Indian tribe 

12 (other than a Native Alaskan). 

13 (4) NATIVE ALASKAN.—The term ‘‘Native Alas14 kan’’ has the meaning given the term ‘‘Native’’ in 

15 section 3(b) of the Alaska Native Claims Settlement 

16 Act (43 U.S.C. 1602(b)). 

17 (5) NATIVE HAWAIIAN.—The term ‘‘Native Ha18 waiian’’ means any individual who is a descendant of 

19 the aboriginal people who, prior to 1778, occupied 

20 and exercised sovereignty in the area that now con21 stitutes the State of Hawaii. 

22 (i) AUTHORIZATION OF APPROPRIATIONS.—There is 

23 authorized to be appropriated to carry out this section 

24 $7,000,000 for each of fiscal years 2004 through 2006. 
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1 (j) NONAPPLICABILITY OF CERTAIN LIMITATIONS.—

2 Funding under this section shall not be taken into account 

3 under subsections (h), (i), and (j) of section 21 of the 

4 Small Business Act. 

5 (k) LIMITATION ON USE OF FUNDS.—The Adminis6 trator may carry out this section only with amounts appro7 priated specifically to carry out this section. 

8 SEC. 306. TEMPORARY SMALL BUSINESS DEVELOPMENT 

9 CENTER ASSISTANCE FOR VOCATIONAL AND 

10 TECHNICAL ENTREPRENEURSHIP DEVELOP11 MENT. 

12 (a) IN GENERAL.—The Administrator of the Small 

13 Business Administration (hereafter in this section referred 

14 to as the Administrator) may award a grant under this 

15 section to any grantee under section 21 of the Small Busi16 ness Act. A grant under this section shall be used solely 

17 to provide, on a statewide basis, technical assistance to 

18 secondary schools, or to postsecondary vocational or tech19 nical schools, for the development and implementation of 

20 curricula designed to promote vocational and technical en21 trepreneurship. 

22 (b) MINIMUM GRANT.—The Administrator shall not 

23 make a grant under this section in an amount less than 

24 $200,000. 
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1 (c) APPLICATION.—Each applicant for a grant under 

2 this section shall submit to the Administrator an applica3 tion in such form as the Administrator may require. The 

4 application shall include information regarding the appli5 cant’s goals and objectives for the educational programs 

6 to be assisted. 

7 (d) REPORT TO ADMINISTRATOR.—The Adminis8 trator shall make a condition of each grant under the pro9 gram that not later than 18 months after the receipt of 

10 the grant the grantee shall transmit to the Administrator 

11 a report describing how the grant funds were used. 

12 (e) COOPERATIVE AGREEMENTS AND CONTRACTS.—

13 The Administrator may enter into a cooperative agree14 ment or contract with any grantee under this section to 

15 provide additional assistance that furthers the purposes 

16 of this section. 

17 (f) APPLICABILITY OF GRANT REQUIREMENTS.—An 

18 applicant for a grant under this section shall comply with 

19 all of the requirements applicable to a grantee under sec20 tion 21 of the Small Business Act, except that the match21 ing funds requirements of subsection (i) of such section 

22 shall not apply. 

23 (g) EVALUATION OF PROGRAM.—Not later than 

24 March 31, 2006, the Administrator shall transmit to the 
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1 Congress a report containing an evaluation of the grant 

2 program carried out under this section. 

3 (h) CLEARINGHOUSE.—The association recognized by 

4 the Administrator under section 21(k) of the Small Busi5 ness Act shall act as a clearinghouse of information and 

6 expertise regarding vocational and technical entrepreneur7 ship education programs. In each fiscal year in which 

8 grants are made under the program, the Administrator 

9 shall provide additional assistance to such association to 

10 carry out the functions described in this subsection. 

11 (i) AUTHORIZATION OF APPROPRIATIONS.—There is 

12 authorized to be appropriated to carry out this section 

13 $7,000,000 for each of fiscal years 2004, 2005, and 2006. 

14 (j) NONAPPLICABILITY OF CERTAIN LIMITATIONS.—

15 Funding under this section shall not be taken into account 

16 under subsections (h), (i), and (j) of section 21 of the 

17 Small Business Act. 

18 (k) LIMITATION ON USE OF FUNDS.—The Adminis19 trator may carry out this section only with amounts appro20 priated specifically to carry out this section. 

21 SEC. 307. VERY SMALL BUSINESS CONCERN CONTRACT 

22 DATA COLLECTION. 

23 The Administrator of the Small Business Administra24 tion and the Administrator of General Services, acting 

25 jointly, shall create, within the data collection capabilities 
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1 of the Federal Procurement Data System, a data element 

2 that identifies contract awards to very small business con3 cerns, under section 15(t) of the Small Business Act. In 

4 carrying out the preceding sentence, the Administrators 

5 shall ensure that the data element is in use by all Federal 

6 entities with respect to such awards not later than 90 days 

7 after the date of the enactment of this section. 

8 SEC. 308. VERY SMALL BUSINESS CONCERN PILOT PRO9 GRAM FOR COMPETITION AWARD TO HOME10 BASED BUSINESS. 

11 (a) IN GENERAL.—The Administrator of the Small 

12 Business Administration shall establish a pilot program 

13 that ensures that at least one award to a very small busi14 ness concern resulting from competition under section 

15 15(t)(2)(C) of the Small Business Act is made to a home16 based business. 

17 (b) DEFINITION.—As used in this section, the term 

18 ‘‘home-based business’’ means a small business, the head19 quarters, main office, and records of which are located at 

20 the primary residence of the majority owner. 

21 (c) TERM OF PILOT PROGRAM.—The pilot program 

22 shall begin not later than 90 days after the date of the 

23 enactment of this section and shall end on September 30, 

24 2007. 
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1 SEC. 309. SOCIALLY AND ECONOMICALLY DISADVANTAGED 

2 BUSINESS. 

3 Section 7102(c) of the Federal Acquisition Stream4 lining Act of 1994 (Public Law 103–355; 15 U.S.C. 644 

5 note) is amended by striking ‘‘September 30, 2003’’ and 

6 inserting ‘‘September 30, 2005’’. 

7 SEC. 310. STUDY AND REPORT ON EFFECTIVENESS OF AG8 GREGATE LIMITATIONS ON AMOUNT OF AS9 SISTANCE TO ANY SINGLE ENTERPRISE. 

10 (a) STUDY.—The Administrator shall conduct a 

11 study of whether the aggregate amount limitation under 

12 section 306(a) of the Small Business Investment Act of 

13 1958 (15 U.S.C. 686(a)) is an impediment to investment 

14 in small manufacturers. In conducting the study, the Ad15 ministrator shall consult licensees and small manufactur16 ers. 

17 (b) REPORT.—Not later than one year after the date 

18 of the enactment of this section, the Administrator shall 

19 report the results of the study to the Committee on Small 

20 Business of the House of Representatives and the Com21 mittee on Small Business and Entrepreneurship of the 

22 Senate. 
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1 SEC. 311. STUDY AND REPORT ON COORDINATION OF NEW 

2 MARKETS VENTURE CAPITAL PROGRAM 

3 WITH NEW MARKETS TAX CREDIT PROGRAM. 

4 (a) IN GENERAL.—The Administrator of the Small 

5 Business Administration shall conduct a study to identify 

6 an approach to better coordinate the administration of the 

7 New Markets Venture Capital Program under part B of 

8 title III of the Small Business Investment Act of 1958 

9 (15 U.S.C. 689 et seq.) with the New Markets Tax Credit 

10 under section 45D of the Internal Revenue Code of 1986. 

11 (b) REPORT.—Not later than 90 days after the date 

12 of the enactment of this Act, the Administrator shall re13 port the results of the study to the Committee on Small 

14 Business of the House of Representatives and the Com15 mittee on Small Business and Entrepreneurship of the 

16 Senate. 

17 SEC. 312. STUDY AND REPORT ON PREMIER CERTIFIED 

18 LENDERS PROGRAM. 

19 (a) IN GENERAL.—The Administrator of the Small 

20 Business Administration shall enter into a contract with 

21 a Federal agency experienced in community development 

22 lending and financial regulation or with a member of the 

23 Federal Financial Institutions Examinations Council to 

24 conduct a study and prepare a report regarding—

25 (1) the extent to which statutory requirements 

26 have caused overcapitalization in the loss reserves 
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1 maintained by certified development companies par2 ticipating in the Premier Certified Lenders Program 

3 under section 508 of the Small Business Investment 

4 Act of 1958 (15 U.S.C. 697e); and 

5 (2) alternatives for establishing and maintain6 ing loss reserves that are sufficient to protect the 

7 Government from the risk of loss associated with 

8 loans guaranteed under that Program. 

9 (b) TRANSMISSION OF REPORT.—Not later than 180 

10 days after the enactment of this section, the Administrator 

11 shall transmit the report to the Committee on Small Busi12 ness of the House of Representatives and the Committee 

13 on Small Business and Entrepreneurship of the Senate. 

14 (c) LIMITATION.—The amount of the contract under 

15 subsection (a) shall not exceed $75,000.

Æ