IB 

Union Calendar No. 249

108TH CONGRESS 

2D SESSION H.R. 2802

[Report No. 108–325, Part I] 

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 

OCTOBER 21, 2003

Reported with an amendment and referred to the Committee on Government 

Reform for a period ending not later than October 31, 2003, for consideration of such provisions of the bill and amendment as fall within the jurisdiction of that committee pursuant to clause 1(h), rule X 

[Strike out all after the enacting clause and insert the part printed in italic] 

OCTOBER 31, 2003

Referral to the Committee on Government Reform extended for a period 

ending not later than November 7, 2003

NOVEMBER 7, 2003

Referral to the Committee on Government Reform extended for a period 

ending not later than November 21, 2003

NOVEMBER 21, 2003

Referral to the Committee on Government Reform extended for a period 

ending not later than January 31, 2004

JANUARY 31, 2004

Referral to the Committee on Government Reform extended for a period 

ending not later than March 2, 2004
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MARCH 2, 2004

Referral to the Committee on Government Reform extended for a period 

ending not later than March 8, 2004

MARCH 8, 2004

Additional sponsor: Mr. BEREUTER

MARCH 8, 2004

Committee on Government Reform discharged; committed to the Committee 

of the Whole House on the State of the Union and ordered to be printed 

[For text of introduced bill, see copy of bill as introduced on July 21, 2003] 

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 Revi6 talization 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 

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. 
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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. 

Sec. 130. Conforming amendments. 

Sec. 131. Development company affiliates. 

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. 

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. 
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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. 

Sec. 313. Data collection capabilities. 

Sec. 314. Resubmission of disaster loan applications for businesses affected by 

September 11, 2001, terrorist attacks. 

Sec. 315. National small business incubator program. 

Sec. 316. Report regarding effects of sale of disaster loans on borrowers. 

Sec. 317. Suspension and extension of certain disaster loans related to the terrorist attacks of September 11, 2001. 

Sec. 318. Definitions.

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 read 

8 as follows: 

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

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

11 SEC. 102. SMALL MANUFACTURER DEFINED. 

12 Section 103 of the Small Business Investment Act of 

13 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 para4 graph: 

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 ‘‘1.7 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 new 

16 subparagraphs: 

17 ‘‘(A) IN GENERAL.—The outstanding lever18 age made available to a licensee under section 

19 301(c) shall not exceed 300 percent of private 

20 capital, up to a maximum of $115,000,000, ex21 cept that the maximum shall be $150,000,000 if 

22 the licensee certifies in writing that more than 

23 50 percent of its aggregate dollar amount of 

24 financings are in small manufacturers. 
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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 certify 

10 in writing that more than 50 percent of 

11 their aggregate dollar amount of financings 

12 are in small manufacturers. The Adminis13 trator shall have 10 business days to ap14 prove or disapprove an application under 

15 the preceding sentence. Approval or dis16 approval is final agency action for purposes 

17 of chapter 7 of title 5, United States Code. 

18 ‘‘(ii) Not later than 120 days after the 

19 enactment of this subparagraph, the Admin20 istrator shall prescribe regulations pro21 viding standards and conditions for in22 creases in leverage, including the standards 

23 for determining common control of licensees. 

24 ‘‘(iii) Until regulations are prescribed 

25 under clause (ii), the Administrator shall 
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1 approve the application of each commonly 

2 controlled licensee under the definition of 

3 common control in section 107.50 of title 

4 13, Code of Federal Regulations, as in effect 

5 on January 1, 2003.’’. 

6 SEC. 105. MAXIMUM AGGREGATE AMOUNT OF LEVERAGE. 

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

8 of 1958 (15 U.S.C. 683(b)) is amended by striking para9 graph (4). 

10 SEC. 106. INVESTMENTS IN SMALLER ENTERPRISES. 

11 Sections 303(d) of the Small Business Investment Act 

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

13 ‘‘(d) INVESTMENTS IN SMALLER ENTERPRISES.—As a 

14 condition of approval of an application for leverage, the Ad15 ministrator shall require a licensee to certify in writing 

16 that not less than 25 percent of the licensee’s aggregate dol17 lar amount of financings will be provided to smaller enter18 prises.’’. 

19 SEC. 107. ACTIONS OF ADMINISTRATOR WITH RESPECT TO 

20 CAPITAL IMPAIRMENT. 

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

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

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

24 (1); 
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1 (2) by striking the period at the end of para2 graph (2) and inserting ‘‘; and’’; and 

3 (3) by adding at the end the following new para4 graphs: 

5 ‘‘(3) shall not, for reasons of capital impairment, 

6 restrict the operations of the licensee or direct the use 

7 of the licensee’s capital to any purpose other than the 

8 purposes for which the license was granted; and 

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

10 action to restrict the operations of, or liquidate a li11 censee for failure to comply with any other provision 

12 of the law or regulation promulgated pursuant to this 

13 Act.’’. 

14 SEC. 108. CONDITIONS FOR DISTRIBUTION. 

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

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

17 follows: 

18 ‘‘(9)(A) Subject to subparagraphs (B), (C), and 

19 (D), after making distributions under paragraph (8), 

20 a company with outstanding participating securities 

21 may distribute the balance of income to its investors, 

22 if there are no accumulated and unpaid prioritized 

23 payments. 

24 ‘‘(B) Amounts received by the Administration 

25 under this paragraph and paragraph 8 shall be ap-
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1 plied first as prepayment of the principal amount of 

2 the outstanding participating securities or debentures 

3 of the company at the time of such distribution and 

4 then to the allocation under paragraph (11). 

5 ‘‘(C) Distributions under this paragraph shall be 

6 made to private investors and to the Administration 

7 in the ratio of private capital to leverage as of the 

8 day before the distribution until the outstanding par9 ticipating securities or debentures of the company are 

10 paid in full, after which any remaining distributions 

11 under this paragraph shall be made to private inves12 tors and to the Administration in the ratio that is 

13 provided for the allocation of profits in paragraph 

14 (11). 

15 ‘‘(D) The Administrator shall prescribe such reg16 ulations as are required to assure that management 

17 fees for the company are not unreasonably reduced 

18 due to a reduction in combined capital as a result of 

19 distributions made under this paragraph.’’. 

20 SEC. 109. MODIFICATION OF AGGREGATE LIMITATION. 

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

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

23 not including any obligations or securities issued under sec24 tion 7(a) of the Small Business Act or title V of this Act)’’ 

25 after ‘‘under the provisions of this title’’. 
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1 SEC. 110. NOTICE AND COMMENT RULEMAKING. 

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

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

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

5 Act, other than those relating to agency management or per6 sonnel, shall be issued pursuant to section 553(b) of title 

7 5, United States Code.’’.

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

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

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

11 689(3)(A)(ii)(I)) is amended by striking ‘‘50 percent’’ and

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

13 family income in that tract does not exceed 80 percent of 

14 the greater of statewide median family income or the metro15 politan area median family income; or’’. 

16 (b) APPLICATION OF AMENDED DEFINITION.—The def17 inition of low-income geographic area in section 351(3) of 

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

19 689(3)), as amended by subsection (a), shall apply to pri20 vate capital raised under section 354(d)(1) of the Small 

21 Business Investment Act of 1958 (15 U.S.C. 689c(d)(1)) be22 fore, on, or after the effective date of the amendment made 

23 by subsection (a). 
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1 SEC. 112. UNMET EQUITY INVESTMENT NEEDS OF CERTAIN 

2 SMALL MANUFACTURERS. 

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

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

5 ‘‘small enterprises’’ the following: ‘‘and small manufactur6 ers’’. 

7 SEC. 113. PARTICIPATION AGREEMENT REQUIREMENT. 

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

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

10 ‘‘section 352’’ the following: ‘‘(with at least one such agree11 ment to be with a company engaged primarily in develop12 ment of and investment in small manufacturers)’’. 

13 SEC. 114. FINAL APPROVAL REQUIREMENT. 

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

15 of 1958 (15 U.S.C. 689c(d)) is amended, in the matter be16 fore paragraph (1), by striking ‘‘a period of time, not to 

17 exceed 2 years,’’ and inserting ‘‘2 years’’. 

18 SEC. 115. CONDITIONALLY APPROVED COMPANIES. 

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

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

21 end the following new paragraphs: 

22 ‘‘(6) GRANTS TO CONDITIONALLY APPROVED COM23 PANIES.—Upon the request of a company condi24 tionally-approved under section 354(c), the Adminis25 trator shall provide up to $50,000 in grant assistance 
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1 for establishment of an operational assistance pro2 gram under this title. 

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

4 grant under paragraph (6) and does not enter into a 

5 participation agreement for final approval, the com6 pany shall repay the amount of the grant to the Ad7 ministrator. 

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

9 grant under paragraph (6) and receives final ap10 proval under section 354(e), the Administrator shall 

11 deduct the amount of the grant under that paragraph 

12 from the total grant amount that the company re13 ceives for operational assistance.’’. 

14 SEC. 116. APPLICATIONS FOR NEW MARKETS VENTURE CAP15 ITAL COMPANIES. 

16 Not later than 60 days after the date of the enactment 

17 of this section, the Administrator shall prescribe standard 

18 documents for final New Markets Venture Capital Company 

19 approval application under section 354(e) of the Small 

20 Business Investment Act of 1958 (15 U.S.C. 689c(e)). The 

21 Administrator shall assure that the standard documents 

22 shall be designed to substantially reduce the cost burden of 

23 the application process on the companies involved. 
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1 SEC. 117. AUTHORIZATION OF APPROPRIATIONS. 

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

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

4 (1) in the matter before paragraph (1) by strik5 ing ‘‘fiscal years 2001 through 2006’’ and inserting 

6 ‘‘fiscal years 2004 and 2005’’; 

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

8 ‘‘$150,000,000’’ and inserting ‘‘$75,000,000’’; and 

9 (3) in paragraph (2), by striking ‘‘$30,000,000’’ 

10 and inserting ‘‘$15,000,000’’. 

11 SEC. 118. REPEAL OF LEASE GUARANTEE AUTHORITY. 

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

13 Business Investment Act of 1958 (15 U.S.C. 692, 693, and 

14 694-1) are hereby repealed. 

15 (b) APPLICATION TO OUTSTANDING GUARANTEES.—

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

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

18 or any other person with respect to any guarantee made 

19 under section 401 or 404 of the Small Business Investment 

20 Act of 1958 on or before the date of the enactment of this 

21 Act. 

22 SEC. 119. AMENDMENT OF CONGRESSIONAL FINDINGS RE23 LATING TO STATE DEVELOPMENT COMPA24 NIES. 

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

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

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

3 development and create or preserve job opportunities in both 

4 urban and rural areas, and to enhance the ability of Amer5 ica’s small manufacturers to expand’’. 

6 SEC. 120. QUALIFICATION OF STATE DEVELOPMENT COM7 PANIES. 

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

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

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

11 the following: ‘‘increasing the productive capacity of 

12 small manufacturers,’’; 

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

14 (D) and inserting the following:

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

16 population of less than 50,000 that is not located 

17 within a standard metropolitan statistical 

18 area,’’; and 

19 (3) by striking the sentence beginning ‘‘If eligi20 bility’’ after subparagraph (H) of paragraph (3). 

21 SEC. 121. JOB REQUIREMENTS; DEFINITION. 

22 Section 501 of the Small Business Investment Act of 

23 1958 (15 U.S.C. 695) is amended by adding at the end the 

24 following new subsection: 
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1 ‘‘(e)(1) A project meets the objective set forth in sub2 section (d)(1) if the project creates or retains one job for 

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

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

5 small manufacturer. 

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

7 which eligibility is based on the objectives set forth in para8 graph (2) or (3) of subsection (d), if the development com9 pany’s portfolio of outstanding debentures creates or retains 

10 one job for every $50,000 guaranteed by the Administration. 

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

12 enterprise zones, empowerment zones and enterprise com13 munities, labor surplus areas, as determined by the Sec14 retary of Labor, and for other areas designated by the Ad15 ministrator, the development company’s portfolio may aver16 age not more than $75,000 per job created or retained. 

17 ‘‘(4) Loans for projects of small manufacturers shall 

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

19 ‘‘(5) Under regulations prescribed by the Adminis20 trator, the Administrator may waive any requirement of 

21 this subsection (other than paragraph (4)).’’. 

22 SEC. 122. SMALL BUSINESS CONCERN LOAN LIMITATIONS. 

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

24 of 1958 (15 U.S.C. 696(2)) is amended—
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1 (1) by striking ‘‘$1,000,000’’ and inserting 

2 ‘‘$2,000,000’’; 

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

4 ‘‘$2,500,000’’; and 

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

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

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

8 and loans under this section shall not be limited by 

9 reason of any loan guaranteed by the Administration 

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

11 U.S.C. 636(a))’’. 

12 SEC. 123. APPROVAL REQUIREMENT. 

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

14 of 1958 (15 U.S.C. 697(b)) is amended by striking para15 graph (6) and inserting the following: 

16 ‘‘(6) except as provided in section 508, the Ad17 ministration approves each loan to be made from 

18 such proceeds in accordance with section 512, (but 

19 such approval shall not require a small business in20 vestment company licensed under title III of this Act 

21 to guarantee a loan without regard to its ownership 

22 percentage of the borrower); and’’. 
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1 SEC. 124. EFFECTIVE DATE FOR TERMINATION OF CERTAIN 

2 FEES. 

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

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

5 and inserting ‘‘2005’’. 

6 SEC. 125. ACCREDITED LENDERS PROGRAM. 

7 Section 507 of the Small Business Investment Act of 

8 1958 (15 U.S.C. 697d) is amended—

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

10 the semicolon at the end; 

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

12 through (6) and inserting the following: 

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

14 the Bureau of Premier Certified Lenders Program 

15 Oversight, that is—

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

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

18 average, if at least 20 percent of the development 

19 company’s portfolio is for projects in areas re20 ferred to in section 501(e)(3); or 

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

22 average, if at least 30 percent of the development 

23 company’s portfolio is for projects of small man24 ufacturers.’’; 

25 (3) by striking subsection (c); and 
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1 (4) in subsection (d)(1), by striking ‘‘that—’’ 

2 and all that follows through the end and inserting: 

3 ‘‘that the development company has not continued to 

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

5 SEC. 126. PREMIER CERTIFIED LENDERS PROGRAM. 

6 Section 508 of the Small Business Investment Act of 

7 1958 (15 U.S.C. 697e) is amended to read as follows: 

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

9 ‘‘(a) ESTABLISHMENT.—The Administrator may es10 tablish a Premier Certified Lenders Program for qualified 

11 State and local development companies that meet the re12 quirements of subsection (b). 

13 ‘‘(b) REQUIREMENTS.—

14 ‘‘(1) APPLICATION.—To be eligible to participate 

15 in the Premier Certified Lenders Program established 

16 under subsection (a), a qualified State and local de17 velopment company shall prepare and submit to the 

18 Administrator an application at such time, in such

19 manner, and containing such information as the Ad20 ministrator may require. 

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

22 designate a qualified State and local development 

23 company as a premier certified lender—

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

25 State and local development company in good 
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1 standing and has been an active participant in 

2 the accredited lenders program during the entire 

3 12-month period preceding the date on which the 

4 company submits an application under para5 graph (1), except that the Administrator may 

6 waive this requirement if the company is quali7 fied to participate in the accredited lenders pro8 gram; 

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

10 ‘‘(i) submitting to the Administrator 

11 adequately analyzed debenture guarantee 

12 application packages; and 

13 ‘‘(ii) of properly closing section 504 

14 loans and servicing its loan portfolio; 

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

16 to reimburse the Administration for 10 percent 

17 of any loss sustained by the Administration as 

18 a result of default by the company in the pay19 ment of principal or interest on a debenture 

20 issued by such company and guaranteed by the 

21 Administrator under this section (15 percent in 

22 the case of any such loss attributable to a deben23 ture issued by the company during any period 

24 for which an election is in effect under subsection 

25 (c)(7) for such company); and 
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1 ‘‘(D) the Administrator determines, with re2 spect to the company, that the loss reserve estab3 lished in accordance with subsection (c) is suffi4 cient for the company to meet its obligations to 

5 protect the Federal Government from risk of loss. 

6 ‘‘(3) APPLICABILITY OF CRITERIA AFTER DES7 IGNATION.—The Administrator may revoke the des8 ignation of a qualified State and local development 

9 company as a premier certified lender under this sec10 tion at any time, if the Administrator determines 

11 that the qualified State and local development com12 pany does not meet any requirement described in sub13 paragraphs (A) through (D) of paragraph (2). 

14 ‘‘(c) LOSS RESERVE.—

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

16 as a premier certified lender shall establish a loss re17 serve for financing approved pursuant to this section. 

18 ‘‘(2) AMOUNT.—The amount of each loss reserve 

19 established under paragraph (1) shall be 10 percent of 

20 the amount of the company’s exposure, as determined 

21 under subsection (b)(2)(C). 

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

23 under paragraph (1) shall be comprised of—

24 ‘‘(A) segregated funds on deposit in an ac25 count or accounts with a federally insured depos-
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1 itory institution or institutions selected by the 

2 company, subject to a collateral assignment in 

3 favor of, and in a format acceptable to, the Ad4 ministrator; 

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

6 with a collateral assignment in favor of, and a 

7 commercially reasonable format acceptable to, 

8 the Administrator; or 

9 ‘‘(C) any combination of the assets described 

10 in subparagraphs (A) and (B). 

11 ‘‘(4) CONTRIBUTIONS.—The company shall make 

12 contributions to the loss reserve, either cash or letters 

13 of credit as provided above, in the following amounts 

14 and at the following intervals: 

15 ‘‘(A) 50 percent when a debenture is closed. 

16 ‘‘(B) 25 percent additional not later than 1 

17 year after a debenture is closed. 

18 ‘‘(C) 25 percent additional not later than 2 

19 years after a debenture is closed. 

20 ‘‘(5) REPLENISHMENT.—If a loss has been sus21 tained by the Administration, any portion of the loss 

22 reserve, and other funds provided by the premier com23 pany as necessary, may be used to reimburse the Ad24 ministrator for the premier company’s 10 percent 

25 share of the loss as provided in subsection (b)(2)(C). 
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1 If the company utilizes the reserve, within 30 days it 

2 shall replace an equivalent amount of funds. 

3 ‘‘(6) DISBURSEMENTS.—The Administrator shall 

4 allow the qualified State and local development com5 pany to withdraw from the loss reserve such amounts 

6 as are in excess of 1 percent of the aggregate out7 standing balances of debentures to which such loss re8 serve relates. The preceding sentence shall not apply 

9 with respect to any debenture before 100 percent of 

10 the contribution described in paragraph (4) with re11 spect to such debenture has been made. 

12 ‘‘(7) ALTERNATIVE LOSS RESERVE.—

13 ‘‘(A) ELECTION.—With respect to any eligi14 ble calendar quarter, a qualified high loss reserve 

15 premier certified lender may elect to have the re16 quirements of this paragraph apply in lieu of the 

17 requirements of paragraphs (2) and (4) for that 

18 quarter. 

19 ‘‘(B) CONTRIBUTIONS.—

20 ‘‘(i) ORDINARY RULES INAPPLI21 CABLE.—Except as provided under clause 

22 (ii) and paragraph (5), a qualified high loss 

23 reserve premier certified lender that makes 

24 the election described in subparagraph (A) 

25 with respect to a calendar quarter shall not 
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1 be required to make contributions to its loss 

2 reserve during that quarter. 

3 ‘‘(ii) BASED ON LOSS.—A qualified 

4 high loss reserve premier certified lender 

5 that makes the election described in sub6 paragraph (A) with respect to a calendar 

7 quarter shall, before the last day of that 

8 quarter, make such contributions to its loss 

9 reserve as are necessary to ensure that the 

10 amount of the loss reserve of the lender—

11 ‘‘(I) is not less than $100,000; 

12 and 

13 ‘‘(II) is sufficient, as determined 

14 by a qualified independent auditor, for 

15 the lender to meet its obligations to

16 protect the Government from risk of 

17 loss. 

18 ‘‘(iii) CERTIFICATION.—Before the end 

19 of a calendar quarter for which an election 

20 is in effect under subparagraph (A), the 

21 head of the premier certified lender shall 

22 submit to the Administrator a certification 

23 that the loss reserve of the lender is suffi24 cient to meet the lender’s obligation to pro25 tect the Government from risk of loss. The 
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1 certification shall be submitted in such form 

2 and manner as the Administrator may re3 quire and shall be signed by the head of the 

4 lender and by the auditor making the deter5 mination under clause (ii)(II). 

6 ‘‘(C) DISBURSEMENTS.—

7 ‘‘(i) ORDINARY RULE INAPPLICABLE.—

8 Paragraph (6) shall not apply with respect 

9 to any qualified high loss reserve premier 

10 certified lender for any calendar quarter for 

11 which an election is in effect under sub12 paragraph (A). 

13 ‘‘(ii) EXCESS FUNDS.—At the end of 

14 each calendar quarter for which an election 

15 is in effect under subparagraph (A), the Ad16 ministrator shall allow the qualified high 

17 loss reserve premier certified lender to with18 draw from its loss reserve the excess of—

19 ‘‘(I) the amount of the loss reserve, 

20 over 

21 ‘‘(II) the greater of $100,000 or 

22 the amount which is determined under 

23 subparagraph (B)(ii) to be sufficient to 

24 meet the lender’s obligation to protect 

25 the Government from risk of loss. 
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1 ‘‘(D) RECONTRIBUTION.—If the require2 ments of this paragraph apply to a qualified 

3 high loss reserve premier certified lender for a 

4 calendar quarter and cease to apply to that lend5 er for any subsequent calendar quarter, the lend6 er shall make a contribution to its loss reserve in 

7 such amount as the Administrator may require, 

8 except that the amount shall not exceed the 

9 amount which would result in the total amount 

10 in the loss reserve being equal to the amount 

11 which would have been in the loss reserve had 

12 this paragraph never applied to the lender. The 

13 Administrator may require that the contribution 

14 be made as a single payment or as a series of 

15 payments. 

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

17 high loss reserve premier certified lender fails to 

18 meet the requirement of subparagraph (F)(iii) 

19 during any period for which an election is in ef20 fect under subparagraph (A) and the failure con21 tinues for 180 days, the requirements of para22 graphs (2), (4), and (6) shall apply to the lender 

23 as of the end of the 180-day period and the lend24 er shall make the contribution described in sub-
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1 paragraph (D). The Administrator may waive 

2 the requirements of this subparagraph. 

3 ‘‘(F) QUALIFIED HIGH LOSS RESERVE PRE4 MIER CERTIFIED LENDER.—The term ‘qualified 

5 high loss reserve premier certified lender’ means, 

6 with respect to a calendar year, a premier cer7 tified lender so designated by the Administrator 

8 for that year. The Administrator shall not des9 ignate a company under the preceding sentence 

10 unless the Administrator determines that—

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

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

13 ‘‘(ii) the company has established and 

14 is utilizing an appropriate and effective 

15 process for analyzing the risk of loss associ16 ated with its portfolio of Premier Certified 

17 Lenders Program loans and for grading 

18 each Premier Certified Lenders Program 

19 loan made by the company on the basis of 

20 the risk of loss associated with such loan; 

21 and 

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

23 or more of the specified risk management 

24 benchmarks as of the most recent assessment 

25 by the Administration or the Administrator 
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1 has issued a waiver with respect to the re2 quirement of this clause. 

3 ‘‘(G) SPECIFIED RISK MANAGEMENT BENCH4 MARKS.—For purposes of this paragraph, the 

5 term ‘specified risk management benchmarks’ 

6 means the following rates, as determined by the 

7 Administrator: 

8 ‘‘(i) Currency rate. 

9 ‘‘(ii) Delinquency rate. 

10 ‘‘(iii) Default rate. 

11 ‘‘(iv) Liquidation rate. 

12 ‘‘(v) Loss rate. 

13 ‘‘(H) QUALIFIED INDEPENDENT AUDITOR.—

14 For purpose of this paragraph, the term ‘quali15 fied independent auditor’ means an auditor 

16 who—

17 ‘‘(i) is compensated by the qualified 

18 high loss reserve premier certified lender; 

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

20 ‘‘(iii) has been approved by the Ad21 ministrator during the preceding year. 

22 ‘‘(I) PREMIER CERTIFIED LENDERS PRO23 GRAM LOAN.—For purposes of this paragraph, 

24 the term ‘Premier Certified Lenders Program 
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1 loan’ means a loan guaranteed under this sec2 tion. 

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

4 purposes of this paragraph, the term ‘eligible cal5 endar quarter’ means—

6 ‘‘(i) the first calendar quarter that be7 gins after the end of the 90-day period be8 ginning with the date of the enactment of 

9 this paragraph; and 

10 ‘‘(ii) the 7 succeeding calendar quar11 ters. 

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

13 days after the date of the enactment of this para14 graph, the Administrator shall publish in the 

15 Federal Register and transmit to the Congress 

16 regulations to carry out this paragraph. Such 

17 regulations shall include provisions relating to—

18 ‘‘(i) the approval of auditors under 

19 subparagraph (H); and 

20 ‘‘(ii) the designation of qualified high 

21 loss reserve premier certified lenders under 

22 subparagraph (F), including the determina23 tion of whether a process for analyzing risk 

24 of loss is appropriate and effective for pur25 poses of subparagraph (F)(ii). 
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1 ‘‘(8) BUREAU OF PREMIER CERTIFIED LENDERS

2 PROGRAM OVERSIGHT.—

3 ‘‘(A) ESTABLISHMENT.—There is hereby es4 tablished in the Administration a bureau to be 

5 known as the Bureau of Premier Certified Lend6 ers Program Oversight, within the Office of 

7 Lender Oversight established pursuant to section 

8 6 of the Small Business Act. 

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

10 out such functions under this subsection as the 

11 Administrator may designate. The functions of 

12 the Bureau under the preceding sentence may 

13 not be delegated to a district director or any 

14 other employee assigned to a district office or re15 gional office established by the Administrator 

16 under section 4 of the Small Business Act (15 

17 U.S.C. 633). 

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

19 after the date of the enactment of this para20 graph—

21 ‘‘(i) the Administrator shall ensure 

22 that the Bureau is prepared to carry out the 

23 functions designated under subparagraph 

24 (B), and 
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1 ‘‘(ii) the Inspector General of the Ad2 ministration shall report to the Congress on 

3 the preparedness of the Bureau to carry out 

4 such functions. 

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

6 with subparagraph (C)(i), the certifications re7 quired under this section shall be deemed ap8 proved until the date of compliance. Certifi9 cations so deemed approved shall continue in ef10 fect notwithstanding any later compliance with 

11 that subparagraph.

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

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

14 the Administrator acquires a loan guaranteed under 

15 this section and identifies such loan for inclusion in 

16 a bulk asset sale of defaulted or repurchased loans or 

17 other financings, it shall give prior notice thereof to 

18 any qualified State and local development company 

19 which has a contingent liability under this section. 

20 The notice shall be given to the company as soon as 

21 possible after the financing is identified, but not less 

22 than 90 days before the date the Administrator first 

23 makes any records on such financing available for ex24 amination by prospective purchasers prior to its of25 fering in a package of loans for bulk sale. 
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1 ‘‘(2) LIMITATIONS.—The Administrator shall not 

2 offer any loan described in paragraph (1) as part of 

3 a bulk sale unless it—

4 ‘‘(A) provides prospective purchasers with 

5 the opportunity to examine the Administrator’s 

6 records with respect to such loan; and 

7 ‘‘(B) provides the notice required by para8 graph (1). 

9 ‘‘(e) LOAN APPROVAL AUTHORITY.—

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

11 503(b)(6), and subject to such terms and conditions as 

12 the Administrator may establish, the Administrator 

13 may permit a company designated as a premier cer14 tified lender under this section to approve, authorize, 

15 close, service, foreclose, litigate (except that the Ad16 ministrator may monitor the conduct of any such liti17 gation to which a premier certified lender is a party), 

18 and liquidate loans that are funded with the proceeds 

19 of a debenture issued by such company and may au20 thorize the guarantee of such debenture. 

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

22 by a premier certified lender shall be subject to final 

23 approval as to eligibility of any guarantee by the Ad24 ministrator pursuant to section 503(a), but such final 

25 approval shall not include review of decisions by the 
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1 lender involving creditworthiness, loan closing, or 

2 compliance with legal requirements imposed by law 

3 or regulation. 

4 ‘‘(f) REVIEW.—After the issuance and sale of deben5 tures under this section, the Administrator, at intervals not 

6 greater than 12 months, shall review the financings made 

7 by each premier certified lender. The review shall include 

8 the lender’s credit decisions and general compliance with 

9 the eligibility requirements for each financing approved 

10 under the program authorized under this section. The Ad11 ministrator shall consider the findings of the review in car12 rying out its responsibilities under subsection (g), but such 

13 review shall not affect any outstanding debenture guar14 antee. 

15 ‘‘(g) SUSPENSION OR REVOCATION.—The designation 

16 of a qualified State and local development company as a 

17 premier certified lender may be suspended or revoked if the 

18 Administrator determines that the company—

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

20 eligibility under subsection (b); 

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

22 reserve required under subsection (c); 

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

24 rules and regulations; or 
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1 ‘‘(4) is violating any other applicable provision 

2 of law. 

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

4 suspension or revocation under subsection (g) shall not af5 fect any outstanding debenture guarantee. 

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

7 local development company participating in the program 

8 under this section shall establish a goal of processing a min9 imum of not less than 50 percent of the loan applications 

10 for assistance under section 504 pursuant to the program 

11 authorized under this section. 

12 ‘‘(j) REPORT.—The Administrator shall annually re13 port to the Committee on Small Business of the House of 

14 Representatives and the Committee on Small Business and 

15 Entrepreneurship of the Senate on the implementation of 

16 this section. Each report shall include—

17 ‘‘(1) the number of qualified State and local de18 velopment companies designated as premier certified 

19 lenders;

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

21 companies; 

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

23 certified lenders to the loss rate for accredited and 

24 other lenders, specifically comparing default rates and 

25 recovery rates on liquidations; and 
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1 ‘‘(4) such other information as the Administrator 

2 deems appropriate.’’. 

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

4 Business Investment Act of 1958 (as amended by subsection 

5 (a)) shall apply to withdrawals after the end of the 90-day 

6 period beginning on the date of the enactment of this Act. 

7 SEC. 127. FORECLOSURE AND LIQUIDATION OF LOANS. 

8 Section 510 of the Small Business Investment Act of 

9 1958 (15 U.S.C. 697g) is amended—

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

11 eligibility requirements of subsection (b)(1)’’; and 

12 (2) by striking subsection (b) and all that follows 

13 through the end of such section and inserting the fol14 lowing new subsections: 

15 ‘‘(b) ELECTION BY QUALIFIED STATE OR LOCAL DE16 VELOPMENT COMPANY.—

17 ‘‘(1) A qualified State or local development com18 pany shall be eligible for the delegation of authority 

19 under subsection (a) if such company elects to accept 

20 such delegation during the 90-day period beginning 

21 on the date of the enactment of this subsection. 

22 ‘‘(2) One year after the date of the initial elec23 tion, and annually thereafter by a date specified by 

24 the Administrator, a qualified State or local develop-
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1 ment company may make a new election to accept the 

2 delegation under subsection (a). 

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

4 apply to all loans in the portfolio involved. An elec5 tion made in a subsequent year does not terminate 

6 any foreclosure or liquidation under a previous elec7 tion. 

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

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

10 company that makes an election under subsection (b) 

11 shall perform all functions related to liquidation and 

12 foreclosure without obtaining prior approval of the 

13 Administrator. 

14 ‘‘(2) Not later than 5 calendar days after exer15 cising delegated authority with respect to a specific 

16 loan, the qualified State or local development com17 pany shall report to the Administrator the actions 

18 that the company proposes to take with respect to the 

19 loan. 

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

21 proposed under paragraph (2) by so notifying the 

22 company in writing. The notification shall state the 

23 reasons for the prohibition, including a detailed ex24 planation of how the proposed actions—
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1 ‘‘(A) will have a serious adverse effect on 

2 management of the Administration’s activities 

3 under this title; or 

4 ‘‘(B) will affect the legal rights of the Ad5 ministration or other agencies or instrumental6 ities of the United States. 

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

8 apply only to the loan involved and shall not affect 

9 any other delegation. 

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

11 State or local development company may not commit the 

12 Administration to the purchase of additional indebtedness 

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

14 without the written approval of the Administrator. The Ad15 ministrator shall have 7 calendar days in which to act on 

16 a request for approval for such an additional purchase. Ac17 tion by the Administrator under this subsection shall have 

18 no other effect on the delegation of authority exercised by 

19 the qualified State or local development company. 

20 ‘‘(e) FORECLOSURE AND LIQUIDATION BY ADMINIS21 TRATOR.—

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

23 foreclose or liquidate loans made during any year for 

24 which a qualified State or local development company 

25 did not make an election under subsection (b). 
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1 ‘‘(2) In awarding contracts under this sub2 section, the Administrator shall not consolidate con3 tract requirements that relate to more than one quali4 fied State or local development company unless the 

5 Administrator determines that such consolidation will 

6 achieve—

7 ‘‘(A) a reduction in cost of not less than 10 

8 percent; or 

9 ‘‘(B) an increase in the recovered amount of 

10 not less than 10 percent. 

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

12 the Administrator shall consider the experience and 

13 expertise of the offeror regarding the conduct of simi14 lar foreclosure and liquidation of indebtedness, the 

15 bankruptcy laws of the United States, valuation of 

16 property, and successful litigation. 

17 ‘‘(4) Reimbursement to contractors under this 

18 subsection shall be based on recovery of their costs (in19 cluding salaries, expenses, and overhead) and a con20 tingent fee, with respect to each loan which is subject 

21 to the contract, as follows: 

22 ‘‘(A) In the case of recovery of at least 50 

23 percent of outstanding amount of such loan, a 

24 contingent fee equal to 5 percent of the recovery. 
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1 ‘‘(B) In the case of recovery of at least 75 

2 percent of such amount, a contingent fee equal to 

3 10 percent of the recovery.’’. 

4 SEC. 128. ADDITIONS TO TITLE V. 

5 Title V of the Small Business Investment Act of 1958 

6 (15 U.S.C. 695 et seq.) is amended by adding at the end 

7 the following new sections: 

8 ‘‘SEC. 511. SHORT FORM APPLICATION. 

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

10 date of the enactment of this section, the Administrator 

11 shall prescribe—

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

13 for use in making loans under section 502 for guar14 antees of not more than $500,000; and 

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

16 a short form application form that reduces the 

17 amount of information needed to process the loan by 

18 30 percent from the size of the loan application in ef19 fect on January 1, 2003.

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

21 Administrator does not comply with paragraph (1) or (2) 

22 of subsection (a), a qualified State or local development 

23 company may use its own forms until the Administrator 

24 prescribes the form involved. 
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1 ‘‘SEC. 512. CENTRALIZED DEVELOPMENT COMPANY LOAN 

2 PROCESSING. 

3 ‘‘(a) ESTABLISHMENT.—

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

5 enactment of this section, the Administrator shall, 

6 using already appropriated funds and fees paid by 

7 qualified State and local development companies, es8 tablish two centers for approving loans under section 

9 502, except as otherwise provided in section 508. 

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

11 same Federal Region. One center shall be located in 

12 Region 1, 2, 3, 4, or 5, and one center shall be located 

13 in Region 6, 7, 8, 9, or 10. 

14 ‘‘(3) The Administrator is authorized to locate 

15 the centers with its existing LowDoc Loan Applica16 tion Centers in Hazard, KY and Sacramento, CA, but 

17 employees who review applications for loans under 

18 section 502 shall not review applications for loan 

19 guarantees under section 7 of the Small Business Act 

20 (15 U.S.C. 636).

21 ‘‘(4) If the Administrator does not establish the 

22 centers required by paragraph (1), the qualified State 

23 and local development companies shall have the au24 thority to approve or deny applications without the 

25 consent of the Administrator. 

26 ‘‘(b) TIMING.—
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1 ‘‘(1)(A) From the date on which a loan applica2 tion is received at a center established under sub3 section (a), the Administration shall have 5 business 

4 days to approve or deny the application. 

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

6 date on which an application is received, the Admin7 istration shall notify the applicant and the qualified 

8 State or local development company in writing that 

9 the application was received and was either complete 

10 or incomplete. The notification shall specify the date 

11 and time at which the application was received. If the 

12 application is incomplete, the notification shall speci13 fy the material needed to make the application com14 plete. 

15 ‘‘(C) The Administration may return an appli16 cation for incompleteness not more than 3 times after 

17 which the applicant may use forms developed by the 

18 qualified State or local development company. 

19 ‘‘(2) An accredited lender designated under sec20 tion 507 shall have the authority to approve or deny 

21 a loan application if the Administration does not act 

22 within 5 business days from the date a complete ap23 plication is received by the center. Notwithstanding 

24 any other law, a qualified State or local development 

25 company that is not designated as an accredited or 
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1 premier certified lender shall have the authority to 

2 approve or deny a loan if the Administration does 

3 not make a decision within 20 business days. 

4 ‘‘(c) APPEAL OF DENIAL.—

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

6 a denial to the Regional Administrator for the region 

7 in which the qualified State or local development 

8 company is headquartered. Not later than 3 business 

9 days after receipt, the Regional Administrator shall 

10 either concur with the denial or approve the loan. 

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

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

13 the Deputy Administrator. Not later than 3 business 

14 days after receipt, the Deputy Administrator shall ei15 ther concur with the denial by the Regional Adminis16 trator or approve the loan. 

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

18 shall constitute final agency action for purposes of 

19 chapter 7 of title 5, United States Code. 

20 ‘‘SEC. 513. REPORTS. 

21 ‘‘The Administrator shall report on the performance 

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

23 to the Committee on Small Business of the House of Rep24 resentatives and the Committee on Small Business and En-
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1 trepreneurship of the Senate. Such report shall include the 

2 currency and default rates.’’. 

3 SEC. 129. REGULATIONS TO CARRY OUT AMENDMENTS TO 

4 LOAN PROGRAM. 

5 (a) ISSUANCE.—Except as otherwise provided in title 

6 I, the Administrator shall, not later than 90 days after the 

7 date of the enactment of this Act, prescribe such regulations 

8 as are necessary to carry out the provisions of this Act that 

9 relate to title V of the Small Business Investment Act of 

10 1958 and shall provide a minimum of 30 days notice and 

11 comment with respect to such regulations. 

12 (b) TEMPORARY PROHIBITION ON OTHER RULE13 MAKING.—During the period beginning on the date of the 

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

15 after the date on which the centralized loan processing cen16 ters described in section 512 of the Small Business Invest17 ment Act of 1958 begin operations, the Administration shall

18 not begin or conclude any rulemaking to modify the pro19 gram established by title V of such Act unless such rule20 making is necessary to carry out the provisions of this Act 

21 described in subsection (a). 

22 SEC. 130. CONFORMING AMENDMENTS. 

23 Section 503(c)(1) and section 503(e)(2) of the Small 

24 Business Investment Act of 1958 (15 U.S.C. 697(c)(1) and 
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1 697(e)(2)) are each amended by striking ‘‘certified’’ and in2 serting ‘‘qualified State or local’’.

3 SEC. 131. DEVELOPMENT COMPANY AFFILIATES. 

4 Section 501 of the Small Business Investment Act of 

5 1958 (15 U.S.C. 695(e)), as amended by section 121, is fur6 ther amended by adding at the end the following new sub7 section: 

8 ‘‘(f) DEVELOPMENT COMPANY AFFILIATES.—

9 ‘‘(1) IN GENERAL.—The Administrator shall per10 mit a qualified State development company under 

11 this section and section 502 to affiliate with a lender 

12 authorized to make loans under section 7(a) of the 

13 Small Business Act (15 U.S.C. 636(a)) if—

14 ‘‘(A) the affiliate is a qualified State devel15 opment company under this section or section 

16 502; 

17 ‘‘(B) the affiliate is chartered by a special 

18 Act of the State legislature for purposes of eco19 nomic development and job creation through in20 vestment of public and private capital, without 

21 regard to any return on the expected capital; or 

22 ‘‘(C) the affiliate is a business development 

23 company chartered by the State with the pri24 mary purpose of economic development through 

25 small business financing programs. 
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1 ‘‘(2) SPECIAL RULE.—An affiliate that meets a 

2 criterion under subparagraph (A), (B), or (C) of 

3 paragraph (1) is not required to have a full-time 

4 manager if the qualified State development company 

5 has management in common with the affiliate.’’.

6 TITLE II—SMALL BUSINESS ACT 

7 AMENDMENTS AND RELATED 

8 PROVISIONS. 

9 SEC. 201. SHORT TITLE. 

10 This title may be cited as the ‘‘Small Business Amend11 ments Act of 2003’’. 

12 SEC. 202. FINDINGS; STATEMENTS OF POLICY. 

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

14 is amended to read as follows: 

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

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

17 BUSINESS CONCERNS.—The essence of the American eco18 nomic system of private enterprise is free competition. The 

19 preservation and expansion of such competition is basic not 

20 only to the economic well-being but to the security of this 

21 Nation. Such security and well-being cannot be realized un22 less the actual and potential capacity of small business, in23 cluding small manufacturers, is encouraged and developed. 

24 It is the declared policy of the Congress that the Government 

25 should aid, counsel, assist, and protect, insofar as is pos-
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1 sible, the interests of small business concerns, including 

2 small manufacturers, in order to preserve free competitive 

3 enterprise, to insure that a fair proportion of the total pur4 chases and contracts or subcontracts for manufactured 

5 goods, and property and services for the Government (in6 cluding but not limited to contracts or subcontracts for 

7 maintenance, repair, and construction) be placed with 

8 small business concerns, to insure that a fair proportion 

9 of the total sales of Government property be made to such 

10 concerns, and to maintain and strengthen the overall econ11 omy of the Nation. 

12 ‘‘(b) ASSISTANCE TO COMPETE IN INTERNATIONAL

13 MARKETS.—

14 ‘‘(1) It is the declared policy of the Congress that 

15 the Federal Government, through the Small Business 

16 Administration, acting in cooperation with the De17 partment of Commerce and other relevant State and 

18 Federal agencies, should aid and assist small business 

19 concerns and small manufacturers to increase their 

20 ability to compete in international markets by—

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

22 ‘‘(B) facilitating technology transfers; 

23 ‘‘(C) enhancing their ability to compete ef24 fectively and efficiently against imports; 
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1 ‘‘(D) increasing the access of small business 

2 concerns to long-term capital for the purchase of 

3 new plant and equipment used in the production 

4 of goods and services involved in international 

5 trade; 

6 ‘‘(E) disseminating information concerning 

7 State, Federal, and private programs and initia8 tives to enhance the ability of small business con9 cerns to compete in international markets; 

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

11 business concerns are adequately represented in 

12 bilateral and multilateral trade negotiations; 

13 and 

14 ‘‘(G) improving the economic health of 

15 small manufacturers through reduction in unnec16 essary regulation and improvements in the pro17 curement process that will enhance the ability of 

18 small manufacturers to compete against foreign 

19 manufacturers. 

20 ‘‘(2) The Congress recognizes that the Depart21 ment of Commerce is the principal Federal agency for 

22 trade development, export promotion, and manufac23 turing assistance, and that the Department of Com24 merce and the Small Business Administration work 
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1 together to advance joint interests. It is the purpose 

2 of this Act to enhance, not alter, their respective roles. 

3 ‘‘(c) AID FOR AGRICULTURALLY RELATED INDUS4 TRIES; FINANCIAL ASSISTANCE.—It is the declared policy 

5 of the Congress that the Government, through the Small 

6 Business Administration, should provide aid and assist7 ance, including the financial assistance authorized by this 

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

9 production of food and fiber, ranching, and raising of live10 stock, aquaculture, and all other farming and agricultural 

11 related industries. 

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

13 PRESERVE, AND STRENGTHEN SMALL BUSINESS CON14 CERNS.—

15 ‘‘(1) The assistance programs authorized by sec16 tions 7(i), 8(a), and 8(b) should be utilized to assist 

17 in the establishment, preservation, and strengthening 

18 of small business concerns and the improvement of the 

19 managerial skills employed in such concerns, with 

20 special attention to small business concerns—

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

22 high proportions of unemployed or low-income 

23 individuals; and 

24 ‘‘(B) owned by low-income individuals. 
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1 ‘‘(2) With respect to the programs authorized by 

2 section 8(a), the Congress finds—

3 ‘‘(A) that ownership and control of produc4 tive capital is concentrated in the economy of the 

5 United States and certain groups, therefore, own 

6 and control little productive capital; 

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

8 States own and control little productive capital 

9 because they have limited opportunities for small 

10 business ownership; 

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

12 ownership among groups that presently own and 

13 control little productive capital is essential to 

14 provide for the well-being of this Nation by pro15 moting their increased participation in the free 

16 enterprise system of the United States; 

17 ‘‘(D) that such development of business own18 ership among groups that presently own and 

19 control little productive capital will be greatly 

20 facilitated through the creation of a small busi21 ness ownership development program, which 

22 shall provide services, including, but not limited 

23 to, financial, management, and technical assist24 ance; 
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1 ‘‘(E) that the power to let Federal contracts 

2 pursuant to section 8(a) can be an effective pro3 curement assistance tool for development of busi4 ness ownership, including ownership of small 

5 manufacturers, among groups that own and con6 trol little productive capital; and 

7 ‘‘(F) that the procurement authority under 

8 section 8(a) shall be used only as a tool for devel9 oping business ownership among groups that 

10 own and control little productive capital. 

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

12 authorized by section 8(a) to—

13 ‘‘(A) foster business ownership and develop14 ment by individuals in groups that own and 

15 control little productive capital; and 

16 ‘‘(B) promote the competitive viability of 

17 such firms in the marketplace by creating a 

18 small business and capital ownership develop19 ment program to provide such available finan20 cial, technical, and management assistance as 

21 may be necessary. 

22 ‘‘(e) PARTICIPATION IN FREE ENTERPRISE SYSTEM BY

23 SOCIALLY AND ECONOMICALLY DISADVANTAGED PER24 SONS.—
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1 ‘‘(1) With respect to the business development 

2 programs carried out by the Administrator, the Con3 gress finds—

4 ‘‘(A) that the opportunity for full participa5 tion in our free enterprise system by socially and 

6 economically disadvantaged individuals is essen7 tial if we are to obtain social and economic 

8 equality for such individuals and improve the 

9 functioning of our national economy; 

10 ‘‘(B) that many such individuals are so11 cially disadvantaged because of their identifica12 tion as members of certain groups that have suf13 fered the effects of discriminatory practices or 

14 similar invidious circumstances over which they 

15 have no control; 

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

17 limited to, Black Americans, Hispanic Ameri18 cans, Native Americans, Asian Pacific Ameri19 cans, Native Hawaiian Organizations, and other 

20 minorities; 

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

22 expeditiously ameliorate the conditions of so23 cially and economically disadvantaged groups; 

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

25 by providing the maximum practicable oppor-
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1 tunity for the development of small business con2 cerns and small manufacturers owned by mem3 bers of socially and economically disadvantaged 

4 groups; 

5 ‘‘(F) that such development can be materi6 ally advanced through the procurement by the 

7 United States of articles, equipment, supplies, 

8 services, materials, and construction work from 

9 small business concerns and small manufactur10 ers; and 

11 ‘‘(G) that such procurements also benefit the 

12 United States by encouraging the expansion of 

13 suppliers for such procurements, thereby encour14 aging competition among such suppliers and 

15 promoting economy in such procurements. 

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

17 to—

18 ‘‘(A) promote the business development of 

19 small business concerns and small manufacturers 

20 owned and controlled by socially and economi21 cally disadvantaged individuals so that such 

22 concerns can compete on an equal basis in the 

23 American economy; 

24 ‘‘(B) promote the competitive viability of 

25 such concerns in the marketplace by providing 
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1 such available contract, financial, technical, and 

2 management assistance as may be necessary; and 

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

4 the procurement by the United States of articles, 

5 supplies, services, materials, and construction 

6 work from small business concerns and small 

7 manufacturers owned by socially and economi8 cally disadvantaged individuals. 

9 ‘‘(f) ASSISTANCE TO DISASTER VICTIMS UNDER DIS10 ASTER LOAN PROGRAM.—In administering the disaster 

11 loan program authorized by section 7, the Administrator 

12 should—

13 ‘‘(1) provide assistance and counseling to dis14 aster victims in filing applications; 

15 ‘‘(2) provide information relevant to loan proc16 essing and loan closing; 

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

18 ‘‘(4) give the disaster program a high priority in 

19 allocating funds for administrative expenses. 

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

21 ‘‘(1) With respect to the programs and activities 

22 authorized by this Act, the Congress finds that—

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

24 major contributor to the American economy by 

25 providing goods and services, revenues, and jobs; 
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1 ‘‘(B) over the past two decades there have 

2 been substantial gains in the social and economic 

3 status of women as they have sought economic 

4 equality and independence; 

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

6 group, are subjected to discrimination in entre7 preneurial endeavors due to their gender; 

8 ‘‘(D) such discrimination takes many overt 

9 and subtle forms adversely affecting the ability 

10 to raise or secure capital, to acquire managerial 

11 talents, and to capture market opportunities; 

12 ‘‘(E) it is in the national interest to expedi13 tiously remove discriminatory barriers to the 

14 creation and development of small business con15 cerns owned and controlled by women; 

16 ‘‘(F) the removal of such barriers is essen17 tial to provide a fair opportunity for full par18 ticipation in the free enterprise system by 

19 women and to further increase the economic vi20 tality of the Nation; 

21 ‘‘(G) increased numbers of small business 

22 concerns owned and controlled by women who 

23 will directly benefit the United States Govern24 ment by expanding the potential number of sup-
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1 pliers of goods and services to the Government; 

2 and 

3 ‘‘(H) programs and activities designed to 

4 assist small business concerns owned and con5 trolled by women must be implemented in such 

6 a way as to remove such discriminatory barriers 

7 while not adversely affecting the rights of socially 

8 and economically disadvantaged individuals. 

9 ‘‘(2) It is, therefore, the purpose of those pro10 grams and activities conducted under the authority of 

11 this Act that assist women entrepreneurs to—

12 ‘‘(A) vigorously promote the legitimate in13 terests of small business concerns owned and con14 trolled by women; 

15 ‘‘(B) remove, insofar as possible, the dis16 criminatory barriers that are encountered by 

17 women in accessing capital and other factors of 

18 production; and 

19 ‘‘(C) require that the Government engage in 

20 a systematic and sustained effort to identify, de21 fine and analyze those discriminatory barriers 

22 facing women and that such effort directly in23 volve the participation of women business owners 

24 in the partnership of the public and private sec25 tors. 
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1 ‘‘(h) CONTRACT BUNDLING.—It is the declared policy 

2 of the Congress that each Federal agency should—

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

4 the participation of small business concerns, in the 

5 following order, as prime contractors, subcontractors, 

6 and suppliers; 

7 ‘‘(2) structure its contracting requirements to fa8 cilitate competition by and among small business 

9 concerns, taking all reasonable steps to eliminate ob10 stacles to their participation; and 

11 ‘‘(3) avoid unnecessary and unjustified bundling 

12 of contract requirements that precludes small business 

13 participation in procurements as prime contractors. 

14 ‘‘(i) SMALL MANUFACTURERS.—

15 ‘‘(1) With respect to the programs and activities 

16 authorized by this Act, the Congress finds that—

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

18 element of the Nation’s economic security because 

19 it provides high-paying jobs that support other 

20 sectors of the economy dominated by small busi21 ness; 

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

23 substantial competition from large manufactur24 ers that source components and equipment from 

25 business concerns located in other countries with 
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1 lower wage rates, fewer regulatory restrictions, 

2 and beneficial currency policies; 

3 ‘‘(C) it is in the national interest to expedi4 tiously grow America’s small manufacturers; 

5 and 

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

7 better access to capital, improved technical as8 sistance, and increased procurement of manufac9 tured goods by the United States, America’s uni10 versities, and large businesses that would other11 wise source goods overseas. 

12 ‘‘(2) It is therefore, the purpose of those pro13 grams and activities conducted under the authority of 

14 this Act that assist small manufacturers to—

15 ‘‘(A) vigorously promote the legitimate in16 terests of small manufacturers; 

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

18 that are encountered by small manufacturers in 

19 accessing capital, obtaining necessary technical 

20 assistance, and selling goods to the United 

21 States, America’s universities, and large busi22 nesses that would otherwise source goods over23 seas; 

24 ‘‘(C) require the Administrator to engage in 

25 a systematic and sustained effort to identify, de-
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1 fine, and analyze the barriers to growth facing 

2 America’s small manufacturers, recommend 

3 changes in policy that will reduce those barriers, 

4 and promote the involvement of America’s small 

5 manufacturers in the partnership of the public 

6 and private sectors.’’. 

7 SEC. 203. DEFINITIONS. 

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

9 is amended to read as follows: 

10 ‘‘SEC. 3. DEFINITIONS. 

11 ‘‘(a) SMALL BUSINESS CONCERNS.—

12 ‘‘(1) IN GENERAL.—For the purposes of this Act, 

13 a small-business concern, including but not limited to 

14 enterprises that are engaged in the business of produc15 tion of food and fiber, ranching and raising of live16 stock, aquaculture, and all other farming and agricul17 tural related industries, shall be deemed to be one 

18 which is independently owned and operated and 

19 which is not dominant in its field of operation. 

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

21 ‘‘(A) IN GENERAL.—In addition to the cri22 teria specified in paragraph (1), the Adminis23 trator may specify detailed definitions or stand24 ards by which a business concern may be deter-
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1 mined to be a small business concern for the pur2 poses of this Act or any other Act. 

3 ‘‘(B) ADDITIONAL CRITERIA.—The stand4 ards described in paragraph (1) may utilize 

5 number of employees, dollar volume of business, 

6 net worth, net income, a combination thereof, or 

7 other appropriate factors. 

8 ‘‘(C) REQUIREMENTS.—Unless specifically 

9 authorized by statute, no Federal department or 

10 agency may prescribe a size standard for catego11 rizing a business concern as a small business 

12 concern, unless such proposed size standard—

13 ‘‘(i) is proposed after an opportunity 

14 for public notice and comment; 

15 ‘‘(ii) provides for determining—

16 ‘‘(I) the size of a manufacturing 

17 concern as measured by the manufac18 turing concern’s average employment 

19 based upon employment during each of 

20 the manufacturing concern’s pay peri21 ods for the preceding 12 months; 

22 ‘‘(II) the size of a business concern 

23 providing services on the basis of the 

24 annual average gross receipts of the 
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1 business concern over a period of not 

2 less than 3 years; 

3 ‘‘(III) the size of other business 

4 concerns on the basis of data over a pe5 riod of not less than 3 years; or 

6 ‘‘(IV) other appropriate factors; 

7 and 

8 ‘‘(iii) is approved by the Adminis9 trator. 

10 ‘‘(D) INDUSTRY VARIATION.—When estab11 lishing or approving any size standard pursuant 

12 to this paragraph, the Administrator shall en13 sure that the size standard varies from industry 

14 to industry to the extent necessary to reflect the 

15 differing characteristics of the various industries 

16 and consider other factors deemed to be relevant 

17 by the Administrator. 

18 ‘‘(3) AGRICULTURAL ENTERPRISES.—Notwith19 standing paragraphs (1) and (2), an agricultural en20 terprise shall be deemed to be a small business con21 cern if it (including its affiliates) has annual receipts 

22 not in excess of $750,000. 

23 ‘‘(4) RECERTIFICATIONS.—

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

25 of determining if a business concern that has 
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1 been awarded a contracting opportunity as a 

2 small business concern is still a small business 

3 concern, the Administrator shall not require such 

4 concern to be recertified as a small business con5 cern more frequently than each 5 years, unless 

6 there has been a change in ownership, control, or 

7 affiliation, in which case the small business con8 cern shall recertify its status at that time. 

9 ‘‘(B) GROWTH THRESHOLD.—In the case of 

10 any recertification described in subparagraph 

11 (A) of a business concern, such concern shall not 

12 fail to be treated as a small business concern for 

13 purposes of contracting opportunities awarded 

14 before the date of such recertification solely be15 cause such concern exceeds—

16 ‘‘(i) the annual receipts standard ap17 plicable to such concern by 20 percent or 

18 less of such standard; or 

19 ‘‘(ii) the number of employees standard 

20 applicable to such concern by 5 percent or 

21 less of such standard. 

22 ‘‘(b) AGENCY.—For purposes of this Act, any reference 

23 to an agency or department of the United States, and the 

24 term ‘Federal agency’, shall have the meaning given the 

25 term ‘agency’ by section 551(1) of title 5, United States 
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1 Code, but does not include the United States Postal Service 

2 or the General Accounting Office. 

3 ‘‘(c) QUALIFIED EMPLOYEE TRUSTS.—For purposes of 

4 this Act: 

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

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

7 ‘‘(A) which forms part of an employee stock 

8 ownership plan (as defined in section 4975(e)(7) 

9 of the Internal Revenue Code of 1986)—

10 ‘‘(i) which is maintained by such con11 cern; and 

12 ‘‘(ii) which provides that each partici13 pant in the plan is entitled to direct the 

14 plan as to the manner in which voting 

15 rights under qualifying employer securities 

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

17 Code) which are allocated to the account of 

18 such participant are to be exercised with re19 spect to a corporate matter which (by law 

20 or charter) must be decided by a majority 

21 vote of outstanding common shares voted; 

22 and 

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

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

25 into an agreement with the Administrator which 
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1 is binding on the trust and on such small busi2 ness concern and which provides that—

3 ‘‘(i) the loan guaranteed under section 

4 7(a) shall be used solely for the purchase of 

5 qualifying employer securities of such con6 cern; 

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

8 in such purchase shall be used by such con9 cern solely for the purposes for which such 

10 loan was guaranteed; 

11 ‘‘(iii) such concern will provide such 

12 funds as may be necessary for the timely re13 payment of such loan, and the property of 

14 such concern shall be available as security 

15 for repayment of such loan; and 

16 ‘‘(iv) all qualifying employer securities 

17 acquired by such trust in such purchase 

18 shall be allocated to the accounts of partici19 pants in such plan who are entitled to share 

20 in such allocation, and each participant has

21 a nonforfeitable right, not later than the 

22 date such loan is repaid, to all such quali23 fying employer securities which are so allo24 cated to the participant’s account. 
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1 ‘‘(2) Under regulations which may be prescribed 

2 by the Administrator, a trust may be treated as a 

3 qualified employee trust with respect to a small busi4 ness concern if—

5 ‘‘(A) the trust is maintained by an em6 ployee organization which represents at least 51 

7 percent of the employees of such concern; and 

8 ‘‘(B) such concern maintains a plan—

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

10 which is designed to invest primarily in 

11 qualifying employer securities (as defined 

12 in section 4975(e)(8) of the Internal Rev13 enue Code of 1986); 

14 ‘‘(ii) which provides that each partici15 pant in the plan is entitled to direct the 

16 plan as to the manner in which voting 

17 rights under qualifying employer securities 

18 which are allocated to the account of such 

19 participant are to be exercised with respect 

20 to a corporate matter which (by law or 

21 charter) must be decided by a majority vote 

22 of the outstanding common shares voted; 

23 ‘‘(iii) which provides that each partici24 pant who is entitled to distribution from the 

25 plan has a right, in the case of qualifying 
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1 employer securities which are not readily 

2 tradable on an established market, to re3 quire that the concern repurchase such secu4 rities under a fair valuation formula; and 

5 ‘‘(iv) which meets such other require6 ments (similar to requirements applicable 

7 to employee stock ownership plans as de8 fined in section 4975(e)(7) of such Code) as 

9 the Administrator may prescribe; and 

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

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

12 agreement with the Administration which is de13 scribed in paragraph (2)(B). 

14 ‘‘(d) DEFINITIONS RELATING TO INDIAN TRIBES.—

15 For purposes of this Act: 

16 ‘‘(1) INDIAN TRIBE.—The term ‘Indian tribe’ has 

17 the meaning given such term in section 4(e) of the In18 dian Self-Determination and Education Assistance 

19 Act. 

20 ‘‘(2) QUALIFIED INDIAN TRIBE.—The term 

21 ‘qualified Indian tribe’ means any Indian tribe that 

22 owns and controls 100 percent of a small business 

23 concern, except as otherwise provided in section 8. 

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

25 Act, the terms ‘State’ and ‘United States’ include each of 
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1 the several States, the District of Columbia, the Common2 wealth of Puerto Rico, the United States Virgin Islands, 

3 Guam, American Samoa, and the Commonwealth of the 

4 Northern Mariana Islands. 

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

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

7 such term in section 27(f)(5) of the Office of Federal Pro8 curement Policy Act (41 U.S.C. 423(f)(5)). 

9 ‘‘(g) SMALL BUSINESS DEVELOPMENT CENTER.—For 

10 purposes of this Act, the term ‘small business development 

11 center’ means any office that provides any portion of the 

12 services described in section 21 under such section. 

13 ‘‘(h) CREDIT ELSEWHERE.—For purposes of this Act, 

14 the term ‘credit elsewhere’ means the availability of credit 

15 from non-Federal sources on reasonable terms and condi16 tions taking into consideration the prevailing rates and 

17 terms in the community in or near where the concern trans18 acts business, or the homeowner resides, for similar pur19 poses and periods of time. 

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

21 term ‘homeowners’ includes owners and lessees of residential 

22 property and also includes personal property. 

23 ‘‘(j) SMALL AGRICULTURAL COOPERATIVE.—For pur24 poses of this Act, the term ‘small agricultural cooperative’ 

25 means an association (corporate or otherwise) acting pursu-
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1 ant to the provisions of the Agricultural Marketing Act (12 

2 U.S.C. 1141j), whose size does not exceed the size standard 

3 established by the Administrator for other similar agricul4 tural small business concerns. In determining such size, the 

5 Administrator shall regard the association as a business 

6 concern and shall not include the income or employees of 

7 any member shareholder of such cooperative. 

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

9 ‘disaster’ means a sudden event which causes severe damage 

10 including floods, hurricanes, tornadoes, earthquakes, fires, 

11 explosions, volcanoes, windstorms, landslides or mudslides, 

12 tidal waves, riots, civil disorders, acts of terrorism, or other 

13 catastrophes. 

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

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

16 businesses engaged in the production of food and fiber, 

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

18 other farming and agricultural related industries. 

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

20 purposes of this Act, the term ‘simplified acquisition thresh21 old’ has the meaning given such term in section 4(11) of 

22 the Office of Federal Procurement Policy Act (41 U.S.C. 

23 403(11)). 

24 ‘‘(n) SMALL BUSINESS CONCERN OWNED AND CON25 TROLLED BY WOMEN.—For purposes of this Act, the term 
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1 ‘small business concern owned and controlled by women’ 

2 means any small business concern if—

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

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

5 case of any publicly owned business, at least 51 per6 cent of the stock of which is owned by one or more 

7 women; and 

8 ‘‘(2) the management and daily business oper9 ations of the business are controlled by one or more 

10 women. 

11 ‘‘(o) DEFINITIONS OF BUNDLING OF CONTRACT RE12 QUIREMENTS AND RELATED TERMS.—For purposes of this 

13 Act: 

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

15 contract’ means a contract that is entered into to 

16 meet requirements that are consolidated in a bundling 

17 of contract requirements without regard to its des18 ignation by the procuring agency or whether a study

19 of the effects of the solicitation on civilian or military 

20 personnel has been made. 

21 ‘‘(2) BUNDLING OF CONTRACT REQUIREMENTS.—

22 The term ‘bundling of contract requirements’ means 

23 the use of any bundling methodology to satisfy 2 or 

24 more requirements for goods or services, including 

25 construction services, that have previously been pro-
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1 vided to, or performed for, the Federal agency under 

2 2 or more separate contracts lower in cost than the 

3 total cost of the contract or order for which the offers 

4 are solicited that is likely to be unsuitable for award 

5 to a small business concern due to—

6 ‘‘(A) the diversity, size, or specialized na7 ture of the elements of the performance specified; 

8 ‘‘(B) the aggregate dollar value of the an9 ticipated award; 

10 ‘‘(C) the geographical dispersion of the con11 tract performance sites; or 

12 ‘‘(D) any combination of the factors de13 scribed in subparagraphs (A), (B), and (C). 

14 ‘‘(3) BUNDLING METHODOLOGY.—The term ‘bun15 dling methodology’ means—

16 ‘‘(A) a solicitation to obtain offers for a sin17 gle contract or a multiple award contract; 

18 ‘‘(B) a solicitation of offers for the issuance 

19 of a task or a delivery order under an existing 

20 single or multiple award contract; or 

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

22 requirement that permits a consolidation of con23 tract requirements. 

24 ‘‘(4) SEPARATE SMALLER CONTRACT.—The term 

25 ‘separate smaller contract’, with respect to a bundling 
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1 of contract requirements, means a contract that has 

2 been performed by 1 or more small business concerns 

3 or was suitable for award to 1 or more small business 

4 concerns. 

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

6 purposes of this Act: 

7 ‘‘(1) HISTORICALLY UNDERUTILIZED BUSINESS

8 ZONE.—The term ‘historically underutilized business 

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

10 ‘‘(A) qualified census tracts; 

11 ‘‘(B) qualified nonmetropolitan counties; 

12 ‘‘(C) lands within the external boundaries of 

13 an Indian reservation; or 

14 ‘‘(D) redesignated areas. 

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

16 historically underutilized business zone. 

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

18 The term ‘HUBZone small business concern’ means—

19 ‘‘(A) a small business concern that is owned 

20 and controlled by one or more persons, each of 

21 whom is a United States citizen; 

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

23 ‘‘(i) an Alaska Native Corporation 

24 owned and controlled by Natives (as deter25 mined pursuant to section 29(e)(1) of the 
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1 Alaska Native Claims Settlement Act (43 

2 U.S.C. 1626(e)(1))); or 

3 ‘‘(ii) a direct or indirect subsidiary 

4 corporation, joint venture, or partnership of 

5 an Alaska Native Corporation qualifying 

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

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

8 1626(e)(1)), if that subsidiary, joint ven9 ture, or partnership is owned and controlled 

10 by Natives (as determined pursuant to sec11 tion 29(e)(2)) of the Alaska Native Claims 

12 Settlement Act (43 U.S.C. 1626(e)(2))); 

13 ‘‘(C) a small business concern—

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

15 more Indian tribal organizations, or by a 

16 corporation that is wholly owned by one or 

17 more Indian tribal organizations; or 

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

19 more Indian tribal organizations, or by a 

20 corporation that is wholly owned by one or 

21 more Indian tribal organizations, if all 

22 other owners are either United States citi23 zens or small business concerns; or 

24 ‘‘(D) a small business concern that is—
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1 ‘‘(i) wholly owned by a community de2 velopment corporation that has received fi3 nancial assistance under part 1 of sub4 chapter A of the Community Economic De5 velopment Act of 1981 (42 U.S.C. 9805 et 

6 seq.); or 

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

8 community development corporations, if all 

9 other owners are either United States citi10 zens or small business concerns. 

11 ‘‘(4) QUALIFIED AREAS.—

12 ‘‘(A) QUALIFIED CENSUS TRACT.—The term 

13 ‘qualified census tract’ has the meaning given 

14 that term in section 42(d)(5)(C)(ii) of the Inter15 nal Revenue Code of 1986. 

16 ‘‘(B) QUALIFIED NONMETROPOLITAN COUN17 TY.—The term ‘qualified nonmetropolitan coun18 ty’ means any county—

19 ‘‘(i) that was not located in a metro20 politan statistical area (as defined in sec21 tion 143(k)(2)(B) of the Internal Revenue 

22 Code of 1986) at the time of the most recent 

23 census taken for purposes of selecting quali24 fied census tracts under section 

25 42(d)(5)(C)(ii) of such Code; and 
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1 ‘‘(ii) in which—

2 ‘‘(I) the median household income 

3 is less than 80 percent of the nonmetro4 politan State median household in5 come, based on the most recent data 

6 available from the Bureau of the Cen7 sus of the Department of Commerce; or 

8 ‘‘(II) the unemployment rate is 

9 not less than 140 percent of the State10 wide average unemployment rate for 

11 the State in which the county is lo12 cated, based on the most recent data 

13 available from the Secretary of Labor. 

14 ‘‘(C) REDESIGNATED AREA.—The term ‘re15 designated 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 that 

19 a census tract or a nonmetropolitan county may 

20 be a ‘redesignated area’ only for the 3-year pe21 riod following the date on which the census tract 

22 or nonmetropolitan county ceased to be so quali23 fied. 

24 ‘‘(5) QUALIFIED HUBZONE SMALL BUSINESS

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

2 HUBZone small business concern’ means any 

3 small business concern if the small business con4 cern 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 regulation) that—

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

11 concern—

12 ‘‘(I) pursuant to subparagraph 

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

14 that its principal office is located in a 

15 HUBZone and not fewer than 35 per16 cent of its employees reside in a 

17 HUBZone; or 

18 ‘‘(II) pursuant to paragraph 

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

20 of its employees engaged in performing 

21 a contract awarded to the small busi22 ness concern on the basis of a pref23 erence provided under section 31(b) re24 side within any Indian reservation 

25 governed by one or more of the Indian 
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1 tribal organization owners, or reside 

2 within any HUBZone adjoining any 

3 such Indian reservation; 

4 ‘‘(ii) the small business concern will 

5 attempt to maintain the applicable employ6 ment percentage under clause (i) during the 

7 performance of any contract awarded to the 

8 small business concern on the basis of a 

9 preference provided under section 31(b); and 

10 ‘‘(iii) with respect to any subcontract 

11 entered into by the small business concern 

12 pursuant to a contract awarded to the small 

13 business concern under section 31, the small 

14 business concern will ensure that—

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

16 services (except construction), not less 

17 than 50 percent of the cost of contract 

18 performance incurred for personnel 

19 will be expended for its employees or 

20 for employees of other HUBZone small 

21 business concerns; 

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

23 procurement of supplies (other than 

24 procurement from a regular dealer in 

25 such supplies), not less than 50 percent 
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1 of the cost of manufacturing the sup2 plies (not including the cost of mate3 rials) will be incurred in connection 

4 with the performance of the contract in 

5 a HUBZone by 1 or more HUBZone 

6 small business concerns; 

7 ‘‘(III) it is a small business con8 cern, the majority of which is owned 

9 and controlled by one or more individ10 uals determined by the Administrator 

11 to be economically disadvantaged; and 

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

13 from a district counsel to verify its eli14 gibility before first responding to a so15 licitation from a Federal agency for 

16 goods or services under section 31 and 

17 again before first responding to a solic18 itation from a Federal agency for 

19 goods or services under section 31 after 

20 any change in the primary location of 

21 the concern. 

22 ‘‘(B) SITE VISITS BY DISTRICT COUNSEL.—

23 A district counsel, not later than 5 days after 

24 conducting any site visit described in subpara25 graph (A)(iii)(IV), shall make a written certifi-
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1 cation to the district director and general counsel 

2 regarding the status of the concern as a qualified 

3 HUBZone small business concern. 

4 ‘‘(C) PROVISION OF FALSE INFORMATION.—

5 Such term shall not include any small business 

6 concern if any certification made or information 

7 provided by such concern under subparagraph 

8 (A) has been, in accordance with the procedures 

9 established under section 31(c)(1)—

10 ‘‘(i) successfully challenged by an in11 terested party; or 

12 ‘‘(ii) otherwise determined by the Ad13 ministrator to be materially false. 

14 ‘‘(D) PERCENTAGE ADJUSTMENTS.—The 

15 Administrator may utilize a percentage other 

16 than the percentage specified in subclause (I) or 

17 (II) of subparagraph (A)(iii), if the Adminis18 trator determines that such action is necessary to 

19 reflect conventional industry practices among 

20 small business concerns that are below the nu21 merical size standard for businesses in that in22 dustry category, but under no circumstance shall 

23 such adjustment reduce the percentage below 33 

24 percent. 
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1 ‘‘(E) CONSTRUCTION AND OTHER CON2 TRACTS.—The Administrator shall promulgate 

3 final regulations imposing requirements that are 

4 similar to those specified in subclauses (I) and 

5 (II) of subparagraph (A)(iii) on contracts for 

6 general and specialty construction, and on con7 tracts for any other industry category that would 

8 not otherwise be subject to those requirements. 

9 The percentage applicable to any such require10 ment shall be determined in accordance with 

11 subparagraph (D). 

12 ‘‘(6) NATIVE AMERICAN SMALL BUSINESS CON13 CERNS.—

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

15 term ‘Alaska Native Corporation’ has the same 

16 meaning as the term ‘Native Corporation’ in sec17 tion 3 of the Alaska Native Claims Settlement 

18 Act (43 U.S.C. 1602). 

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

20 ‘Alaska Native Village’ has the same meaning as 

21 the term ‘Native village’ in section 3 of the Alas22 ka Native Claims Settlement Act (43 U.S.C. 

23 1602). 

24 ‘‘(C) INDIAN RESERVATION.—The term ‘In25 dian reservation’—
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1 ‘‘(i) has the same meaning as the term 

2 ‘Indian country’ in section 1151 of title 18, 

3 United States Code, except that such term 

4 does not include—

5 ‘‘(I) any lands that are located 

6 within a State in which a tribe did 

7 not exercise governmental jurisdiction 

8 on December 21, 2000, unless that tribe 

9 is recognized after that date by either 

10 an Act of Congress or pursuant to reg11 ulations of the Secretary of the Inte12 rior; and 

13 ‘‘(II) lands taken into trust or ac14 quired by an Indian tribe after Decem15 ber 21, 2000, if such lands are not lo16 cated within the external boundaries of 

17 an Indian reservation or former res18 ervation or are not contiguous to the 

19 lands held in trust or restricted status 

20 on that date of the enactment; and 

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

22 lands that—

23 ‘‘(I) are within the jurisdictional 

24 areas of an Oklahoma Indian tribe (as 
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1 determined by the Secretary of the In2 terior); and 

3 ‘‘(II) are recognized by the Sec4 retary of the Interior as eligible for 

5 trust land status under part 151 of 

6 title 25, Code of Federal Regulations 

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

8 ‘‘(D) INDIAN TRIBAL ORGANIZATION.—The 

9 term ‘Indian tribal organization’ has the mean10 ing given that term in section 4(l) of the Indian 

11 Self-Determination and Education Assistance 

12 Act (25 U.S.C. 4506(l)). 

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

14 purposes of this Act: 

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

16 ‘service-disabled veteran’ means a veteran with a dis17 ability that is service-connected (as defined in section 

18 101(16) of title 38, United States Code). 

19 ‘‘(2) SMALL BUSINESS CONCERN OWNED AND

20 CONTROLLED BY SERVICE-DISABLED VETERANS.—The 

21 term ‘small business concern owned and controlled by 

22 service-disabled veterans’ means a small business con23 cern—

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

25 owned by one or more service-disabled veterans 
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1 or, in the case of any publicly owned business, 

2 not less than 51 percent of the stock of which is 

3 owned by one or more service-disabled veterans; 

4 and 

5 ‘‘(B) the management and daily business 

6 operations of which are controlled by one or 

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

8 a veteran with permanent and severe disability, 

9 the spouse or permanent caregiver of such vet10 eran. 

11 ‘‘(3) SMALL BUSINESS CONCERN OWNED AND

12 CONTROLLED BY VETERANS.—The term ‘small busi13 ness concern owned and controlled by veterans’ means 

14 a small business concern—

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

16 owned by one or more veterans or, in the case of 

17 any publicly owned business, not less than 51 

18 percent of the stock of which is owned by one or 

19 more veterans; and 

20 ‘‘(B) the management and daily business 

21 operations of which are controlled by one or 

22 more veterans. 

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

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

25 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 clas5 sified in sector 31, 32, or 33 of the North American 

6 Industrial Classification System; and 

7 ‘‘(2) all of its facilities that are used for produc8 tion are located in the United States. 

9 ‘‘(s) SMALL BUSINESS LENDING COMPANY.—For pur10 poses of this Act, the term ‘small business lending company’ 

11 means a business concern that is authorized by the Admin12 istrator to make loans pursuant to section 7(a) and whose 

13 lending activities are not subject to regulation by any Fed14 eral or State regulatory agency. 

15 ‘‘(t) NON-FEDERALLY REGULATED SBA LENDERS.—

16 For purposes of this Act, the term ‘Non-federally regulated 

17 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.—For 

25 purposes of this Act, the term ‘procurement center represent-
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1 ative’ means an employee of the Administration whose sole 

2 responsibility is to perform the functions referred to in sec3 tion 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 referred 

8 to in section 8(d). 

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

10 means two or more small business concerns who respond 

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

12 of providing goods or services to a Federal agency. A team

13 shall be considered a small business concern provided that 

14 each member of the team is a small business concern.’’. 

15 SEC. 204. SMALL BUSINESS ADMINISTRATION. 

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

17 (15 U.S.C. 633) is amended to read as follows: 

18 ‘‘SEC. 4. SMALL BUSINESS ADMINISTRATION. 

19 ‘‘(a) ESTABLISHMENT.—In order to carry out the poli20 cies of this Act and the Small Business Investment Act of 

21 1958, there is an agency known as the ‘Small Business Ad22 ministration’ (also referred to in this Act as the Adminis23 tration), which Administration shall be under the general 

24 direction and supervision of the President and shall not be 

25 affiliated with or be within any other agency or department 
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1 of the Federal Government. The principal office of the Ad2 ministration shall be located in the District of Columbia. 

3 ‘‘(b) APPOINTMENT OF ADMINISTRATOR AND DEPUTY

4 ADMINISTRATOR.—

5 ‘‘(1) ADMINISTRATOR.—The management of the 

6 Administration shall be vested in an Administrator 

7 who shall be appointed from civilian life by the Presi8 dent, by and with the advice and consent of the Sen9 ate, and who shall be a person of outstanding quali10 fications known to be familiar and sympathetic with 

11 the needs and problems of small business concerns. 

12 The Administrator shall not engage in any other 

13 business, vocation, or employment other than that of 

14 serving as Administrator. 

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

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

17 the Senate, a Deputy Administrator, whose principal 

18 function shall be to assist the Administrator in the 

19 daily management of the Administration. 

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

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

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

23 noticed. 

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

25 may sue and be sued in any court of record of a State 
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1 having general jurisdiction, or in any United States 

2 district court, and jurisdiction is conferred upon such 

3 district court to determine such controversies without 

4 regard to the amount in controversy; but no attach5 ment, garnishment, or other similar process, mesne or 

6 final, shall be issued against the Administrator or his 

7 property. 

8 ‘‘(3) RULES AND REGULATIONS.—The Adminis9 trator may make such rules and regulations as he 

10 deems necessary to carry out this Act and the Small 

11 Business Investment Act of 1958 (15 U.S.C. 661 et 

12 seq.). Any such rules or regulations, other than those 

13 relating to agency management or personnel, shall be 

14 issued pursuant to section 553(b) of title 5, United 

15 States Code. 

16 ‘‘(4) FACILITIES AND STAFF OF FEDERAL AGEN17 CIES.—Upon request of the Administrator, the head of 

18 any Federal department or agency may provide, on 

19 a reimbursable or nonreimbursable basis, informa20 tion, services, facilities (including any field service 

21 thereof), or any of the personnel of that department 

22 or agency to the Administrator to assist in carrying 

23 out this Act and the Small Business Investment Act 

24 of 1958. 

25 ‘‘(5) INVESTIGATIONS; SUBPOENAS.—
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1 ‘‘(A) INVESTIGATIONS.—The Administrator 

2 may make such investigations as the Adminis3 trator deems necessary to determine whether a 

4 recipient of or participant in any assistance 

5 under this Act or any other person has engaged, 

6 or is about to engage, in any acts or practices 

7 which constitute, or will constitute, a violation of 

8 any provision of this Act, or of any rule or regu9 lation under this Act, or of any order issued 

10 under this Act. 

11 ‘‘(B) STATEMENTS.—The Administrator 

12 shall permit any person to file with it a state13 ment in writing, under oath or otherwise as the 

14 Administrator shall determine, as to all the facts 

15 and circumstances concerning the matter to be 

16 investigated. 

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

18 investigation, the Administrator may administer 

19 oaths and affirmations, subpoena witnesses, com20 pel their attendance, take evidence, and require 

21 the production of any books, papers, and docu22 ments which are relevant to the inquiry. Such 

23 attendance of witnesses and the production of 

24 any such records may be required from any 

25 place in the United States. 
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1 ‘‘(D) CONTEMPT PROCEEDINGS.—In case of 

2 contumacy by, or refusal to obey a subpoena 

3 issued to, any person, including a recipient or 

4 participant, the Administrator may invoke the 

5 aid of any court of the United States within the 

6 jurisdiction of which such investigation or pro7 ceeding is carried on, or where such person re8 sides or carries on business, in requiring the at9 tendance and testimony of witnesses and the pro10 duction of books, papers, and documents; and 

11 such court may issue an order requiring such 

12 person to appear before the Administrator, there

13 to produce records, if so ordered, or to give testi14 mony touching the matter under investigation. 

15 Any failure to obey such order of the court may 

16 be punished by such court as a contempt thereof. 

17 All process in any such case may be served in 

18 the judicial district whereof such person is an 

19 inhabitant or wherever he may be found. 

20 ‘‘(6) GIFTS.—

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

22 may solicit, accept, hold, administer, and utilize 

23 gifts, devises, bequests, cash, and temporary use 

24 of property, both real and personal, and dona25 tions of personal services for the purpose of aid-
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1 ing or facilitating the Administrator in pro2 viding training to persons, employees, small 

3 business concerns and small manufacturers, and 

4 technical assistance to small business concerns 

5 and small manufacturers. 

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

7 bequests of property shall be held in a separate 

8 account and shall be subject to quarterly audits 

9 by the Inspector General of the Administration 

10 who shall report quarterly to the Congress on the 

11 Administrator’s use of such gifts, bequests, de12 vises, and donations of personal services includ13 ing an assessment of whether such gifts, bequests, 

14 devises, and personal services have advanced the 

15 purposes of this Act. 

16 ‘‘(C) AUTHORITY TO CHARGE FEES.—Not17 withstanding any other provision of this Act, the 

18 Administrator is authorized to charge nominal 

19 fees to attendees in order to cover costs for any 

20 event or publication produced pursuant to sub21 paragraph (A). 

22 ‘‘(D) CONFLICTS OF INTEREST.—No em23 ployee of the Administration may accept or so24 licit any gift, bequest, devise, or donation of per25 sonal services if such acceptance or solicitation 
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1 would, in the opinion of the General Counsel, 

2 create a conflict of interest. 

3 ‘‘(E) ACCEPTANCE OF SERVICES AND FA4 CILITIES FOR DISASTER LOAN PROGRAM.—The 

5 Administrator may accept the services and fa6 cilities of Federal, State, and local agencies and 

7 groups, both public and private, and utilize such 

8 gratuitous services and facilities as may, from 

9 time to time, be necessary, to further the objec10 tives of section 7(b). Subparagraph (B) shall not 

11 apply to any services or facilities accepted under 

12 this subparagraph. 

13 ‘‘(7) CO-SPONSORSHIP OF EVENTS.—

14 ‘‘(A) AUTHORIZATION.—The Administrator, 

15 after consultation with the General Counsel, may 

16 permit any eligible donor of any gift, bequest, 

17 devise, or donation of personal services to be a 

18 named cosponsor of any event conducted by the 

19 Administrator or any publication of the Admin20 istrator. 

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

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

23 with respect to any event or publication, any 

24 donor if such donor provides, directly or in-kind, 

25 at least 50 percent of the cost of such event or 
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1 publication, provided further that any such co2 sponsorship must be approved by an Associate 

3 Administrator, after consultation with the Gen4 eral Counsel. 

5 ‘‘(C) LIMITED DELEGATION.—The Adminis6 trator may not delegate the authority described 

7 in subparagraph (A) except to the Deputy Ad8 ministrator or any Associate Administrator. 

9 ‘‘(D) REPORT TO CONGRESS.—The Inspec10 tor General of the Administration shall report 

11 semi-annually to Congress on the Administra12 tor’s use of co-sponsorship. Such report shall in13 clude the Inspector General’s assessment of 

14 whether such co-sponsorships have advanced the 

15 purposes of this Act. 

16 ‘‘(d) OTHER PROVISIONS.—

17 ‘‘(1) REQUIREMENTS FOR ASSISTANCE.—No loan 

18 shall be made or equipment, facilities, or services fur19 nished by the Administrator under this Act to any 

20 business concern unless the owners, partners, or offi21 cers of such business concern—

22 ‘‘(A) certify to the Administrator the names 

23 of any attorneys, agents, or other persons en24 gaged by or on behalf of such business concern 

25 for the purpose of expediting applications made 
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1 to the Administrator for assistance of any sort, 

2 and the fees paid or to be paid to any such per3 sons; 

4 ‘‘(B) execute an agreement binding any 

5 such business concern for a period of two years 

6 after any assistance is rendered by the Adminis7 trator to such business concern, to refrain from 

8 employing, tendering any office or employment 

9 to, or retaining for professional services, any 

10 person who, on the date such assistance or any 

11 part thereof was rendered, or within one year 

12 prior thereto, shall have served as an officer, at13 torney, agent, or employee of the Administration 

14 occupying a position or engaging in activities 

15 which the Administrator shall have determined 

16 involve discretion with respect to the granting of 

17 assistance under this Act; and 

18 ‘‘(C) furnish the names of lending institu19 tions to which such business concern has applied 

20 for loans together with dates, amounts, terms, 

21 and proof of refusal. 

22 ‘‘(2) AUTHORITY RELATING TO TRANSFER OF

23 FUNCTIONS.—The President may transfer to the Ad24 ministrator any functions, powers, and duties of any 

25 department or agency which relate primarily to small 
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1 business problems. In connection with any such trans2 fer, the President may provide for appropriate trans3 fers of records, property, necessary personnel, and un4 expended balances of appropriations and other funds 

5 available to the department or agency from which the 

6 transfer is made. 

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

8 Administrator deems practicable, he shall make a fair 

9 charge for the use of Government-owned property and 

10 make and let contracts on a basis that will result in 

11 a recovery of the direct costs incurred by the Adminis12 trator.

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

14 shall not duplicate the work or activity of any other 

15 department or agency of the Federal Government. 

16 Nothing contained in this Act shall be construed to 

17 authorize any such duplication unless such work or 

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

19 applications are being refused or loans denied by such 

20 other department or agency responsible for such work 

21 or activity due to administrative withholding from 

22 obligation or withholding from apportionment, or due 

23 to administratively declared moratorium, then, for 

24 purposes of this section, no duplication shall be 

25 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 made 

4 by the Administration on safety deposit boxes used by 

5 the Administration for the safeguarding of instru6 ments held as security for loans or for the safe7 guarding of other documents. 

8 ‘‘(6) NONDISCRIMINATION.—In carrying out this 

9 Act and the Small Business Investment Act of 1958, 

10 the Administrator shall not discriminate on the basis 

11 of sex or marital status against any person or small 

12 business concern applying for or receiving assistance 

13 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 dependents; 

20 and 

21 ‘‘(B) small manufacturers. 

22 ‘‘(8) UNLAWFUL RESIDENTS.—None of the funds 

23 made available pursuant to this Act may be used to 

24 provide any direct benefit or assistance to any indi25 vidual in the United States if the Administrator or 
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1 the official to which the funds are made available re2 ceives notification that the individual is not lawfully 

3 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 or 

7 other person engaged in the production or distribu8 tion of any product or service that has been deter9 mined to be obscene by a court of competent jurisdic10 tion. 

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 President 

16 information on the economic condition and the 

17 expansion or contraction of the small business 

18 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 establishments 

2 and the types of such establishments such as 

3 sole proprietorships, corporations, and part4 nerships; 

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 Counsel 

23 for Advocacy, publish annually a report giving 

24 a comparative analysis and interpretation of the 

25 historical trends of the small business sector as 
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1 reflected by the data acquired pursuant to sub2 paragraph (A).’’. 

3 (b) RELATED REPEALS.—

4 (1) Section 13 of the Small Business Act (15 

5 U.S.C. 642) is amended to read as follows: 

6 ‘‘SEC. 13. [RESERVED].’’. 

7 (2) Section 14 of the Small Business Act (15 

8 U.S.C. 643) is amended to read as follows: 

9 ‘‘SEC. 14. [RESERVED].’’. 

10 (3) Section 18 of the Small Business Act (15 

11 U.S.C. 647) is amended to read as follows: 

12 ‘‘SEC. 18. [RESERVED].’’. 

13 SEC. 205. FINANCIAL MANAGEMENT. 

14 (a) IN GENERAL.—Section 5 of the Small Business Act 

15 (15 U.S.C. 634) is amended to read as follows: 

16 ‘‘SEC. 5. FINANCIAL MANAGEMENT. 

17 ‘‘(a) ACCOUNTS.—

18 ‘‘(1) IN GENERAL.—All repayments of loans, de19 bentures, payments of interest and other receipts aris20 ing out of transactions heretofore or hereafter entered 

21 into by the Administrator shall be deposited into ap22 propriate accounts and funds as determined by the 

23 Administrator. 

24 ‘‘(2) REPORT AND BUDGET.—The Administrator 

25 shall submit to the Committees on Appropriations, the 
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1 Committee on Small Business and Entrepreneurship 

2 of the Senate, and the Committee on Small Business 

3 of the House of Representatives, as soon as possible 

4 after the beginning of each calendar quarter a full 

5 and complete report on the status of each of the ac6 counts and funds referred to in paragraph (1). Busi7 ness-type budgets for each of the accounts and funds 

8 referred to in paragraph (1) shall be prepared, trans9 mitted to the Committees on Appropriations, the

10 Committee on Small Business and Entrepreneurship 

11 of the Senate, and the Committee on Small Business 

12 of the House of Representatives, and considered, and 

13 enacted in the manner prescribed for wholly owned 

14 Government corporations under sections 9103 and 

15 9104 of title 31, United States Code. 

16 ‘‘(3) ISSUANCE OF NOTES.—

17 ‘‘(A) ISSUANCE.—The Administrator may 

18 issue notes to the Secretary of the Treasury for 

19 the purpose of obtaining funds necessary for dis20 charging obligations under the accounts and 

21 funds referred to in paragraph (1) and for au22 thorized expenditures out of the accounts and 

23 funds. 

24 ‘‘(B) FORM.—The notes authorized by this 

25 paragraph shall be in such form and denomina-
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1 tions and have such maturities and be subject to 

2 such terms and conditions as may be prescribed 

3 by the Administrator with the approval of the 

4 Secretary of the Treasury. 

5 ‘‘(C) INTEREST RATE.—Such notes shall 

6 bear interest at a rate fixed by the Secretary of 

7 the Treasury, taking into consideration the cur8 rent average market yield of outstanding market9 able obligations of the United States having ma10 turities comparable to the notes issued by the Ad11 ministrator under this paragraph. 

12 ‘‘(D) PURCHASE BY TREASURY.—The Sec13 retary of the Treasury shall purchase any notes 

14 of the Administration issued under subpara15 graph (A). For purposes of purchasing such 

16 notes, the Secretary of the Treasury may use as 

17 a public debt transaction the proceeds from the 

18 sale of any securities issued under chapter 31 of 

19 title 31, United States Code. The purposes for 

20 which such securities may be issued under such 

21 chapter are extended to include the purchase of 

22 notes issued by the Administrator under sub23 paragraph (A). All redemptions, purchases, and 

24 sales by the Secretary of the Treasury of such 
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1 notes shall be treated as public debt transactions 

2 of the United States. 

3 ‘‘(4) PAYMENTS TO TREASURY.—

4 ‘‘(A) EXCESS FUNDS.—Moneys in any ac5 count or fund referred to in paragraph (1) which 

6 are not needed for current operations shall re7 main in such account or fund and shall be avail8 able solely to carry out the provisions and pur9 poses of programs operated from such account or 

10 fund pursuant to law as provided in appropria11 tions Acts. 

12 ‘‘(B) ACTUAL INTEREST.—Following the 

13 close of each fiscal year, the Administrator shall 

14 pay into the miscellaneous receipts of the United 

15 States Treasury the actual interest that the Ad16 ministrator collects during that fiscal year on all 

17 financings made under this Act. 

18 ‘‘(C) OTHER INTEREST.—Except on those 

19 loan disbursements on which interest is paid 

20 under subparagraph (B), the Administrator shall 

21 pay into miscellaneous receipts of the Treasury, 

22 following the close of each fiscal year, interest re23 ceived by the Administration on financing func24 tions performed under this Act and titles III and 

25 V of the Small Business Investment Act of 1958 
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1 if the capital used to perform such functions 

2 originated from appropriated funds. Such pay3 ments shall be treated by the Department of the 

4 Treasury as interest income, not as retirement of 

5 indebtedness. 

6 ‘‘(5) CONTRIBUTIONS TO EMPLOYEES COMPENSA7 TION FUND.—The Administrator shall contribute to 

8 the employee’s compensation fund, on the basis of an9 nual billings as determined by the Secretary of Labor, 

10 for the benefit payments made from such fund on ac11 count of employees engaged in carrying out functions 

12 financed by the accounts and funds referred to in 

13 paragraph (1). The annual billings shall also include 

14 a statement of the fair portion of the cost of the ad15 ministration of such funds, which shall be paid by the 

16 Administrator into the Treasury as miscellaneous re17 ceipts. 

18 ‘‘(6) AUTHORIZATION OF APPROPRIATIONS.—

19 There are authorized to be appropriated, in any fiscal 

20 year, such sums as may be necessary for losses and 

21 interest subsidies incurred by the accounts and funds 

22 referred to in paragraph (1) and not previously reim23 bursed. All borrowing authority contained in this sub24 section shall be effective only to such extent or in such 
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1 amounts as are provided in advance in appropriation 

2 Acts. 

3 ‘‘(b) FINANCIAL MANAGEMENT POWERS.—

4 ‘‘(1) SALE OF FINANCINGS, ETC.—

5 ‘‘(A) IN GENERAL.—The Administrator, 

6 under regulations prescribed by him and codified 

7 in the Code of Federal Regulations, may assign 

8 or sell at public or private sale, or otherwise dis9 pose of for cash or credit, in his discretion and 

10 upon such terms and conditions and for such 

11 consideration as he shall determine to be reason12 able, any evidence of debt, contract, claim, per13 sonal property, or security assigned to or held by 

14 him in connection with the payment of loans 

15 granted under this Act, and to collect or com16 promise all obligations assigned to or held by 

17 him and all legal or equitable rights accruing to 

18 him in connection with the payment of such 

19 loans until such time as such obligations may be 

20 referred to the Attorney General for suit or col21 lection. 

22 ‘‘(B) LIMITATION.—Notwithstanding sub23 paragraph (A), the Administrator shall not sell 

24 any portion of the Administration’s interest in, 

25 or the rights of the Administration with respect 
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1 to, any loan made directly or through immediate 

2 participation under section 7(b), including by 

3 direct sale, through the sale of loan participa4 tions, or by including such loan in a pool of as5 sets for the purpose of selling asset-backed securi6 ties during—

7 ‘‘(i) the 3-year period beginning on the 

8 date that such loan was originated; and 

9 ‘‘(ii) the 3-month period beginning at 

10 the end of such 3-year period if, at any

11 time during the 3-month period ending at 

12 the end of such 3-year period, the Adminis13 trator was engaged in negotiations with the 

14 borrower for the purpose of substantially al15 tering the terms of such loan. 

16 ‘‘(2) USE OF FEDERAL RESERVE DEPOSI17 TORIES.—All moneys of the Administrator not other18 wise employed may be deposited with the Treasury of 

19 the United States subject to check by authority of the 

20 Administrator. The Federal Reserve banks are author21 ized and directed to act as depositaries, custodians, 

22 and fiscal agents for the Administrator in the general 

23 performance of its powers conferred by this Act. Any 

24 banks insured by the Federal Deposit Insurance Cor25 poration, when designated by the Secretary of the 
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1 Treasury, shall act as custodians and financial agents 

2 for the Administrator. Each Federal Reserve bank, 

3 when designated by the Administrator as fiscal agent 

4 for the Administrator, shall be entitled to be reim5 bursed for all expenses incurred as such fiscal agent. 

6 ‘‘(3) REAL PROPERTY.—

7 ‘‘(A) CONVEYANCE.—The Administrator 

8 may convey and execute in the name of the Ad9 ministration deeds of conveyance, deeds of re10 lease, assignments and satisfactions of mortgages, 

11 and any other written instrument relating to 

12 real property or any interest therein acquired by 

13 the Administrator pursuant to the provisions of 

14 this Act. Such authority may be exercised by the 

15 Administrator or by any officer or agent ap16 pointed by him without the execution of any ex17 press delegation of power or power of attorney. 

18 ‘‘(B) OTHER AUTHORITY.—The Adminis19 trator may deal with, complete, renovate, im20 prove, modernize, insure, or rent, or sell for cash 

21 or credit upon such terms and conditions and for 

22 such consideration as the Administrator shall de23 termine to be reasonable, any real property con24 veyed to or otherwise acquired by him in connec-
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1 tion with the payment of loans granted under 

2 this Act. 

3 ‘‘(4) COLLECTIONS.—The Administrator may 

4 pursue to final collection, by way of compromise or 

5 otherwise, all claims against third parties assigned to 

6 the Administrator in connection with loans made by 

7 him, including by obtaining deficiency judgments or 

8 otherwise in the case of mortgages assigned to the Ad9 ministrator. 

10 ‘‘(5) ACQUISITION OF PROPERTY.—The Adminis11 trator may acquire, in any lawful manner, any prop12 erty (real, personal, or mixed, tangible or intangible), 

13 whenever deemed necessary or appropriate to the con14 duct of the activities authorized in subsection (a) or 

15 (b) of section 7. 

16 ‘‘(6) POWER OF ATTORNEY.—Nothing in this sec17 tion shall prevent the Administrator from delegating 

18 any authority provided under this section by power 

19 of attorney to any officer or agent he may appoint. 

20 ‘‘(c) SALE OF GUARANTEED LOANS BY LENDERS.—

21 ‘‘(1) IN GENERAL.—The guaranteed portion of 

22 any loan made pursuant to this Act may be sold by 

23 the lender, and by any subsequent holder, consistent 

24 with regulations on such sales as the Administrator 

25 shall establish, subject to the following limitations: 
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1 ‘‘(A) Prior to the approval of the sale, or 

2 upon any subsequent sale, of any loan guaran3 teed by the Administrator, if the lender certifies 

4 that such loan has been properly closed and that 

5 the lender has substantially complied with the 

6 provisions of the guarantee agreement and the 

7 regulations of the Administrator, the Adminis8 trator shall review and approve only materials 

9 not previously approved. 

10 ‘‘(B) All fees due the Administrator on a 

11 guaranteed loan shall have been paid in full 

12 prior to any sale. 

13 ‘‘(C) Each loan, except each loan made 

14 under section 7(a)(14), shall have been fully dis15 bursed to the borrower prior to any sale. 

16 ‘‘(2) TREATMENT IN SECONDARY MARKET.—After 

17 a loan is sold in the secondary market, the lender 

18 shall remain obligated under its guarantee agreement 

19 with the Administrator, and shall continue to service 

20 the loan in a manner consistent with the terms and 

21 conditions of such agreement. 

22 ‘‘(3) PROCEDURES.—The Administrator shall de23 velop such procedures as are necessary for: 

24 ‘‘(A) The facilitation, administration, and 

25 promotion of secondary market operations. 
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1 ‘‘(B) Assessing the increase of small busi2 ness access to capital at reasonable rates and 

3 terms as a result of secondary market operations. 

4 ‘‘(4) CERTAIN REGULATIONS REQUIRED.—The 

5 unguaranteed portion of any loan made under section 

6 7(a) shall not be sold unless a final regulation pro7 mulgated by the Administrator is in effect that ap8 plies uniformly to both depository institutions and 

9 other lenders and sets forth the terms and conditions 

10 under which such sales can be permitted, including 

11 maintenance of appropriate reserve requirements and 

12 other safeguards to protect the safety and soundness 

13 of the program. 

14 ‘‘(5) PREPAYMENTS.—Nothing in this subsection 

15 or subsection (d) shall be interpreted to impede or ex16 tinguish the right of the borrower or the successor in 

17 interest to such borrower to prepay (in whole or in 

18 part) any loan made pursuant to section 7(a), the 

19 guaranteed portion of which may be included in such 

20 trust or pool, or to impede or extinguish the rights of 

21 any party pursuant to subsection (f)(3). 

22 ‘‘(d) ISSUANCE OF TRUST CERTIFICATES.—

23 ‘‘(1) IN GENERAL.—The Administrator may 

24 issue trust certificates representing ownership of all or 

25 a fractional part of the guaranteed portion of one or 
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1 more loans which have been guaranteed by the Ad2 ministration under this Act, or under section 502 of 

3 the Small Business Investment Act of 1958. Such 

4 trust certificates shall be based on and backed by a 

5 trust or pool approved by the Administrator and com6 posed solely of the entire guaranteed portion of such 

7 loans. 

8 ‘‘(2) GUARANTEE.—

9 ‘‘(A) AUTHORIZATION.—The Administrator 

10 is authorized, upon such terms and conditions as 

11 are deemed appropriate, to guarantee the timely 

12 payment of the principal of and interest on trust 

13 certificates issued by the Administrator or its 

14 agent for purposes of this subsection. Such guar15 antee shall be limited to the extent of principal 

16 and interest on the guaranteed portions of loans 

17 which compose the trust or pool. The full faith 

18 and credit of the United States is pledged to the 

19 payment of all amounts which may be required 

20 to be paid under any guarantee of such trust cer21 tificates issued by the Administrator or its agent 

22 pursuant to this subsection. 

23 ‘‘(B) PREPAYMENT.—In the event that a 

24 loan in such trust or pool is prepaid, either vol25 untarily or in the event of default, the guarantee 
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1 of timely payment of principal and interest on 

2 the trust certificates shall be reduced in propor3 tion to the amount of principal and interest such 

4 prepaid loan represents in the trust or pool. 

5 ‘‘(C) INTEREST; REDEMPTION.—Interest on 

6 prepaid or defaulted loans shall accrue and be 

7 guaranteed by the Administrator only through 

8 the date of payment on the guarantee. During 

9 the term of the trust certificate, it may be called 

10 for redemption due to prepayment or default of 

11 all loans constituting the pool. 

12 ‘‘(3) FEES.—

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

14 may collect a fee for any loan guarantee sold 

15 into the secondary market under subsection (c) 

16 in an amount equal to not more than 50 percent 

17 of the portion of the sale price that exceeds 110 

18 percent of the outstanding principal amount of 

19 the portion of the loan guaranteed by the Admin20 istrator. 

21 ‘‘(B) COLLECTION.—Any such fee imposed 

22 by the Administrator shall be collected by the 

23 Administrator or by the agent which carries out 

24 on behalf of the Administrator the central reg25 istration functions required by subsection (e) 
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1 and shall be paid to the Administrator and used 

2 solely to reduce the subsidy on loans guaranteed 

3 under section 7(a). Any such fee shall not be 

4 charged to the borrower whose loan is guaran5 teed. Nothing in this paragraph shall preclude 

6 any agent of the Administrator from collecting a 

7 fee approved by the Administrator for the func8 tions described in subsection (e). 

9 ‘‘(C) LATE FEES.—The Administrator is 

10 authorized to impose and collect, either directly 

11 or through a fiscal and transfer agent, a reason12 able penalty on late payments of the fee author13 ized under subparagraph (A) in an amount not 

14 to exceed 5 percent of such fee per month plus in15 terest. 

16 ‘‘(4) SUBROGATION.—In the event the Adminis17 trator pays a claim under a guarantee issued under 

18 this subsection, it shall be subrogated fully to the 

19 rights satisfied by such payment. 

20 ‘‘(5) LAWS SUPERSEDED.—No federal, state, or 

21 local law, shall preclude or limit the exercise by the 

22 Administrator of its ownership rights in the portions 

23 of loans constituting the trust or pool against which 

24 the trust certificates are issued. 
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1 ‘‘(e) CENTRAL REGISTRY OF LOANS AND TRUST CER2 TIFICATES.—

3 ‘‘(1) ESTABLISHMENT.—Upon the adoption of 

4 final rules and regulations, the Administrator shall—

5 ‘‘(A) provide for a central registration of all 

6 loans and trust certificates sold pursuant to sub7 sections (c) and (d); 

8 ‘‘(B) contract with an agent to carry out on 

9 behalf of the Administrator the central registra10 tion functions of this subsection and the issuance 

11 of trust certificates to facilitate pooling; 

12 ‘‘(C) prior to any sale, require the seller to 

13 disclose to a purchaser of the guaranteed portion 

14 of a loan guaranteed under this Act, and to the 

15 purchaser of a trust certificate issued pursuant 

16 to subsection (d), information on the terms, con17 ditions, and yield of such instrument; and 

18 ‘‘(D) have the authority to regulate brokers 

19 and dealers in guaranteed loans and trust cer20 tificates sold pursuant to subsections (c) and (d). 

21 ‘‘(2) BONDING REQUIREMENT.—The agent re22 ferred to in paragraph (1)(B) shall provide a fidelity 

23 bond or insurance in such amounts as the Adminis24 trator determines to be necessary to fully protect the 

25 interest of the Government. 
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1 ‘‘(3) SELLER.—For purposes of this subsection, 

2 the term ‘seller’, with respect to the sale of any loan, 

3 does not include the entity which made the loan or 

4 any individual or entity which sells three or fewer 

5 guaranteed loans per year. 

6 ‘‘(4) BOOK-ENTRY SYSTEM.—Nothing in this sub7 section shall prohibit the utilization of a book-entry 

8 or other electronic form of registration for trust cer9 tificates. The Administrator may, with the consent of 

10 the Secretary of the Treasury, use the book-entry sys11 tem of the Federal Reserve System. 

12 ‘‘(5) AGENT FEES.—The Administrator may 

13 compensate an agent described in paragraph (1)(B) 

14 through transaction and servicing fees charged to pro15 gram users and through interest earnings on pay16 ments under the agent’s control. 

17 ‘‘(f) OTHER SPECIAL RULES AND AUTHORITIES RE18 LATED TO LOAN PROGRAMS.—

19 ‘‘(1) IN GENERAL.—The Administrator may take 

20 any and all actions (including the procurement of the 

21 services of attorneys by contract in any office where 

22 an attorney or attorneys are not or cannot be eco23 nomically employed full time to render such services) 

24 when he determines such actions are necessary or de25 sirable in making, servicing, compromising, modi-
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1 fying, liquidating, or otherwise dealing with or real2 izing on loans made under the provisions of this Act. 

3 With respect to deferred participation loans, the Ad4 ministrator may, in the discretion of and pursuant to 

5 regulations promulgated by the Administrator, au6 thorize participating lending institutions to take ac7 tions relating to loan servicing on behalf of the Ad8 ministrator, including determining eligibility and

9 creditworthiness and loan monitoring, collection, and 

10 liquidation. 

11 ‘‘(2) FEES.—The Administrator may impose, re12 tain, and use only those fees which are specifically 

13 authorized by law or which are in effect on September 

14 30, 1994, and in the amounts and at the rates in ef15 fect on such date, except that the Administrator may, 

16 subject to approval in appropriations Acts, impose, 

17 retain, and utilize, additional fees—

18 ‘‘(A) not to exceed $100 for each loan serv19 icing action (other than a loan assumption) re20 quested after disbursement of the loan, including 

21 any substitution of collateral, release or substi22 tution of a guarantor, reamortization, or similar 

23 action; 

24 ‘‘(B) not to exceed $300 for loan assump25 tions; 
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1 ‘‘(C) not to exceed 1 percent of the amount 

2 of requested financings under title III of the 

3 Small Business Investment Act of 1958 for which 

4 the applicant requests a commitment from the 

5 Administrator for funding during the following 

6 year; 

7 ‘‘(D) to recover the direct, incremental cost 

8 involved in the production and dissemination of 

9 compilations of information produced by the Ad10 ministrator under the authority of this Act and 

11 the Small Business Investment Act of 1958; and 

12 ‘‘(E) collect, retain and utilize, subject to 

13 approval in appropriations Acts, any amounts 

14 collected by fiscal transfer agents and not used 

15 by such agent as payment of the cost of loan 

16 pooling or debenture servicing operations, except 

17 that amounts collected under this subsection shall 

18 be utilized solely to facilitate the administration 

19 of the program that generated the excess 

20 amounts. 

21 ‘‘(3) POWER TO UNDERTAKE AND SUSPEND

22 LOANS.—

23 ‘‘(A) IN GENERAL.—Subject to the require24 ments and conditions contained in this para25 graph, upon application by a small business 
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1 concern which is the recipient of a loan made 

2 under this Act, the Administrator may under3 take the small business concern’s obligation to 

4 make the required payments under such loan or 

5 may suspend such obligation if the loan was a 

6 direct loan made by the Administrator. While 

7 such payments are being made by the Adminis8 trator pursuant to the undertaking of such obli9 gation or while such obligation is suspended, no 

10 such payment with respect to the loan may be re11 quired from the small business concern. 

12 ‘‘(B) REQUIREMENTS.—The Administrator 

13 may undertake or suspend for a period of not to 

14 exceed 5 years any small business concern’s obli15 gation under this paragraph only if—

16 ‘‘(i) without such undertaking or sus17 pension of the obligation, the small business 

18 concern would, in the sole discretion of the 

19 Administrator, become insolvent or remain 

20 insolvent; 

21 ‘‘(ii) with the undertaking or suspen22 sion of the obligation, the small business 

23 concern would, in the sole discretion of the 

24 Administrator, become or remain a viable 

25 small business concern; and 
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1 ‘‘(iii) the small business concern exe2 cutes an agreement in writing satisfactory 

3 to the Administrator as provided by sub4 paragraph (D) and takes such actions as 

5 are required under subparagraph (E). 

6 ‘‘(C) EXTENSION OF MATURITY.—Notwith7 standing the provisions of sections 7(a)(10) and 

8 7(i)(1), the Administrator may extend the matu9 rity of any loan on which the Administrator un10 dertakes or suspends the obligation pursuant to 

11 this paragraph for a corresponding period of 

12 time. 

13 ‘‘(D) AGREEMENT.—Prior to the under14 taking or suspension by the Administrator of 

15 any small business concern’s obligation under 

16 this subsection, the Administrator, consistent 

17 with the purposes sought to be achieved under 

18 this paragraph, shall require the small business 

19 concern to agree in writing to repay to it the ag20 gregate amount of the payments which were re21 quired under the loan during the period for 

22 which such obligation was undertaken or sus23 pended, either—

24 ‘‘(i) by periodic payments not less in 

25 amount or less frequently falling due than 
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1 those which were due under the loan during 

2 such period; 

3 ‘‘(ii) pursuant to a repayment schedule 

4 agreed upon by the Administrator and the 

5 small business concern; or 

6 ‘‘(iii) by a combination of the pay7 ments described in clauses (i) and (ii). 

8 ‘‘(E) SECURITY; OTHER ACTIONS.—The Ad9 ministrator shall, prior to the undertaking or 

10 suspension of the obligation, take such action, 

11 and require the small business concern to take 

12 such action as the Administrator deems appro13 priate in the circumstances, including the provi14 sion of such security as the Administrator deems 

15 necessary or appropriate to insure that the 

16 rights and interests of the lender (Administra17 tion or participant) will be safeguarded ade18 quately during and after the period in which 

19 such obligation is so undertaken or suspended. 

20 ‘‘(F) REQUIRED PAYMENTS.—For purposes 

21 of this paragraph, the term ‘required payments’ 

22 means, with respect to any loan, payments of 

23 principal and interest under the loan. 

24 ‘‘(4) INTEREST RATE ON DEFERRED PARTICIPA25 TION SHARE.—Upon purchase by the Administrator 
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1 of any deferred participation entered into under sec2 tion 7, the Administrator may continue to charge a 

3 rate of interest not to exceed that initially charged by 

4 the participating institution on the amount so pur5 chased for the remaining term of the indebtedness. 

6 ‘‘(5) SUBORDINATION TO CERTAIN STATE TAX

7 LIENS.—Any interest held by the Administrator in

8 property, as security for a loan, shall be subordinate 

9 to any lien on such property for taxes due on the 

10 property to a State, or political subdivision thereof, 

11 in any case where such lien would, under applicable 

12 State law, be superior to such interest if such interest 

13 were held by any party other than the United States. 

14 ‘‘(g) RISK MANAGEMENT DATABASE.—

15 ‘‘(1) ESTABLISHMENT.—The Administrator shall 

16 maintain, within the management system for the loan 

17 programs authorized by subsections (a) and (b) of sec18 tion 7 and title V of the Small Business Investment 

19 Act of 1958, a management information system that 

20 will generate a database capable of providing timely 

21 and accurate information in order to identify loan 

22 underwriting, collections, recovery, and liquidation 

23 problems. 

24 ‘‘(2) CONTENTS.—In addition to such other in25 formation as the Administrator considers appro-
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1 priate, the database established under this subsection 

2 shall, with respect to each loan program described in 

3 paragraph (1), include information relating to—

4 ‘‘(A) the identity of the institution making 

5 the guaranteed loan or issuing the debenture; 

6 ‘‘(B) the identity of the borrower; 

7 ‘‘(C) the total dollar amount of the loan or 

8 debenture; 

9 ‘‘(D) the total dollar amount of government 

10 exposure in each loan; 

11 ‘‘(E) the district of the Administration in 

12 which the borrower has its principal office; 

13 ‘‘(F) the principal line of business of the 

14 borrower, as identified by North American In15 dustrial Classification System Code; 

16 ‘‘(G) the delinquency rate for each program 

17 (including number of instances and days over18 due); 

19 ‘‘(H) the number and amount of repur20 chases, losses, and recoveries in each program; 

21 ‘‘(I) the number of deferrals or forbearances 

22 in each program (including days and number of 

23 instances); 
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1 ‘‘(J) comparisons on the basis of loan pro2 gram, lender, Administration district and re3 gion, for all the data elements maintained; and 

4 ‘‘(K) underwriting characteristics of each 

5 loan that has entered into default, including 

6 term, amount and type of collateral, loan-to7 value and other actual and projected ratios, line 

8 of business, credit history, and type of loan.’’. 

9 (b) RELATED REPEAL.—Section 17 of the Small Busi10 ness Act (15 U.S.C. 646) is amended to read as follows: 

11 ‘‘SEC. 17. [RESERVED].’’. 

12 SEC. 206. ORGANIZATION AND STAFF. 

13 (a) IN GENERAL.—Section 6 of the Small Business Act 

14 (15 U.S.C. 635) is amended to read as follows: 

15 ‘‘SEC. 6. ORGANIZATION AND STAFF. 

16 ‘‘(a) GENERAL ORGANIZATIONAL AUTHORITY.—

17 ‘‘(1) OFFICES.—Except as otherwise provided in 

18 this Act, the Administrator may create subsidiary of19 fices in the Administration to carry out this Act and 

20 the Small Business Investment Act of 1958. 

21 ‘‘(2) EMPLOYEES.—The Administrator may, in 

22 accordance with applicable provisions of title 5, 

23 United States Code, select, employ, appoint, and fix 

24 the compensation of such officers, employees, attor25 neys, and agents as shall be necessary to carry out 
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1 this Act and the Small Business Investment Act of 

2 1958. 

3 ‘‘(b) ASSOCIATE ADMINISTRATORS.—The Adminis4 trator shall only appoint the following Associate Adminis5 trators: 

6 ‘‘(1) The Associate Administrator for Capital Ac7 cess, who shall be appointed from civilian life and 

8 have a minimum of five years experience in pro9 viding investment or banking services to businesses. 

10 ‘‘(2) The Associate Administrator for Govern11 ment Contracting and Minority Small Business Op12 portunities, who shall have a minimum of five years 

13 of experience in Federal procurement. 

14 ‘‘(3) The Associate Administrator for Enterprise 

15 Outreach and Training, who shall have a minimum 

16 of five years experience in community-based outreach 

17 programs. 

18 ‘‘(4) The Associate Administrator for Adminis19 tration and Management, who shall act as the Chief 

20 Operating Officer for the Administration and who 

21 shall oversee the activities of the regional administra22 tors. 

23 ‘‘(c) ESTABLISHMENT OF CERTAIN OFFICES.—There 

24 are in the Administration the following offices: 
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1 ‘‘(1) The Office of Minority Small Business and 

2 Capital Ownership Development, which shall be ad3 ministered by the assistant administrator appointed 

4 under subsection (d)(1). 

5 ‘‘(2) The Office of Veterans Business, which shall 

6 be administered by the assistant administrator ap7 pointed under subsection (d)(2). 

8 ‘‘(3) The Office of Small Business Development 

9 Centers, which shall be administered by the assistant 

10 administrator appointed under subsection (d)(3). 

11 ‘‘(4) The Office of Investment, which shall be ad12 ministered by the assistant administrator appointed 

13 under subsection (d)(4). 

14 ‘‘(5) The Office of Lender Oversight, which shall 

15 be administered by the assistant administrator ap16 pointed under subsection (d)(5). 

17 ‘‘(6) The Office of Congressional and Legislative 

18 Affairs, which shall be administered by the assistant 

19 administrator appointed under subsection (d)(6). 

20 ‘‘(7) The Office of International Trade, which 

21 shall be administered by the assistant administrator 

22 appointed under subsection (d)(7). 

23 ‘‘(8) The Office of Women’s Business Ownership, 

24 which shall be administered by the assistant adminis25 trator appointed under subsection (d)(8). 
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1 ‘‘(d) ASSISTANT ADMINISTRATORS.—The Adminis2 trator shall appoint the following Assistant Administrators: 

3 ‘‘(1) The Assistant Administrator for Minority 

4 Small Business and Capital Ownership Development, 

5 who—

6 ‘‘(A) shall have a minimum of 5 years expe7 rience within the Administration in assisting

8 minority small businesses before being appointed 

9 under this paragraph; 

10 ‘‘(B) shall be responsible for carrying out 

11 subsections (a), (b), and (c) of section 8; 

12 ‘‘(C) shall be a career employee in the Sen13 ior Executive Service; and 

14 ‘‘(D) shall report to the Associate Adminis15 trator for Government Contracting and Minority 

16 Small Business Opportunities. 

17 ‘‘(2) The Assistant Administrator for Veterans 

18 Business, who—

19 ‘‘(A) shall have a minimum of 5 years expe20 rience within the Administration or the Depart21 ment of Veterans Affairs (or in combination) in 

22 providing entrepreneurial outreach to veterans 

23 before being appointed under this paragraph; 

24 ‘‘(B) shall be responsible for the formula25 tion, execution, and promotion of the policies 
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1 and programs of the Administration that provide 

2 assistance to small business concerns owned and 

3 controlled by veterans and small business con4 cerns owned and controlled by service-disabled 

5 veterans; 

6 ‘‘(C) shall act as an ombudsman for full 

7 consideration of veterans in all programs of the 

8 Administration; 

9 ‘‘(D) shall be a career employee and may be 

10 an appointee in the Senior Executive Service; 

11 and 

12 ‘‘(E) shall report to the Associate Adminis13 trator for Enterprise Outreach and Training. 

14 ‘‘(3) The Assistant Administrator for Small 

15 Business Development Centers who—

16 ‘‘(A) shall have a minimum of 5 years expe17 rience in entrepreneurial outreach to small busi18 nesses or as an educator in a business program 

19 in an institution of higher learning (or in com20 bination), before being appointed under this 

21 paragraph; 

22 ‘‘(B) shall carry out section 21; 

23 ‘‘(C) shall be a career employee and may be 

24 an appointee in the Senior Executive Service; 

25 and 
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1 ‘‘(D) shall report to the Associate Adminis2 trator for Enterprise Outreach and Training. 

3 ‘‘(4) The Assistant Administrator for Investment 

4 who—

5 ‘‘(A) shall carry out title III of the Small 

6 Business Investment Act of 1958; 

7 ‘‘(B) shall be a career employee and may be 

8 an appointee in the Senior Executive Service; 

9 and 

10 ‘‘(C) shall report to the Associate Adminis11 trator for Capital Access. 

12 ‘‘(5) The Assistant Administrator for Lender 

13 Oversight who—

14 ‘‘(A) shall have a minimum of 5 years expe15 rience in oversight of lending institutions before 

16 being appointed under this paragraph; 

17 ‘‘(B) shall carry out section 7(a) and assist 

18 the Administrator in carrying out section 23; 

19 ‘‘(C) shall be a career employee and may be 

20 an appointee in the Senior Executive Service; 

21 and 

22 ‘‘(D) shall report to the Associate Adminis23 trator for Capital Access. 

24 ‘‘(6) The Assistant Administrator for Congres25 sional and Legislative Affairs who—
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1 ‘‘(A) shall have a minimum of 5 years expe2 rience as an employee reimbursed pursuant to 

3 the Senators’ Clerk Hire Allowance Account es4 tablished under section 1 of Public Law 100–137 

5 (2 U.S.C. 58c) or the Members’ Representational 

6 Allowance established under section 101 of the 

7 House of Representatives Administrative Reform 

8 Technical Corrections Act (2 U.S.C. 57b) or as 

9 an employee of a committee of the House or Sen10 ate (or in combination) before being appointed 

11 under this paragraph; and 

12 ‘‘(B) shall report directly to the Adminis13 trator. 

14 ‘‘(7) The Assistant Administrator for Inter15 national Trade who—

16 ‘‘(A) shall have a minimum of 5 years expe17 rience in international trade matters; 

18 ‘‘(B) shall carry out section 22; 

19 ‘‘(C) shall be a career employee and may be 

20 an appointee in the Senior Executive Service; 

21 and 

22 ‘‘(D) shall report to the Associate Adminis23 trator for Enterprise Training and Outreach. 

24 ‘‘(8) The Assistant Administrator for Women’s 

25 Business Ownership who—
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1 ‘‘(A) shall carry out section 29; 

2 ‘‘(B) may be an appointee in the Senior 

3 Executive Service; 

4 ‘‘(C) shall report to the Associate Adminis5 trator for Enterprise Outreach and Training; 

6 ‘‘(D) shall advise the Administrator on ap7 pointments to the Women’s Business Council; 

8 ‘‘(E) serve as the vice chairperson of the 

9 Interagency Committee on Women’s Business 

10 Enterprise; 

11 ‘‘(F) serve as liaison for the National Wom12 en’s Business Council; and 

13 ‘‘(G) oversee the implementation of the pro14 gram established by section 8(m). 

15 ‘‘(e) GENERAL COUNSEL.—The Administrator shall 

16 appoint a General Counsel. 

17 ‘‘(f) REGIONAL OFFICES.—There are 10 regional of18 fices each of which shall be administered by a regional ad19 ministrator. Such offices shall have the same jurisdictions 

20 as the 10 Federal regions or such regions as are created 

21 by statute or by regulation of the Administrator of the Gen22 eral Services Administration. 

23 ‘‘(g) DISTRICT OFFICES.—

24 ‘‘(1) ESTABLISHMENT.—The Administrator may 

25 establish district offices throughout the United States 
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1 to provide services under this Act and the Small 

2 Business Investment Act of 1958.

3 ‘‘(2) CLOSURE.—Except as provided in para4 graph (3), the Administrator may close or combine 

5 district offices as the Administrator determines ap6 propriate. The Administrator shall report any such 

7 closures to Congress. 

8 ‘‘(3) MINIMUM NUMBER.—Each State shall have 

9 at least one district office, except that one district of10 fice may serve Guam, American Samoa, and the 

11 Commonwealth of the Northern Mariana Islands. 

12 ‘‘(4) DISTRICT DIRECTORS.—

13 ‘‘(A) IN GENERAL.—Each district office 

14 shall have a director appointed by the Adminis15 trator whose salary shall not exceed the rate in 

16 effect for step 10 of GS–15 of the General Sched17 ule. Each district director shall assist the Ad18 ministrator in carrying out the programs estab19 lished by this Act and the Small Business Invest20 ment Act of 1958. 

21 ‘‘(B) APPEAL OF DECISIONS.—The Admin22 istrator shall issue regulations providing proce23 dures for the appeal of any decision made by 

24 any district director. Such regulations shall be 

25 codified in the Code of Federal Regulations. 
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1 ‘‘(C) REVIEW AND REMOVAL.—The Admin2 istrator shall remove and replace any district di3 rector if such district director has failed, with re4 spect to any year, to meet goals developed by the 

5 Administrator for increasing—

6 ‘‘(i) the number of loans made pursu7 ant to section 7 (other than section 7(b)); 

8 ‘‘(ii) the number of participants in the 

9 programs established pursuant to section 8; 

10 ‘‘(iii) the amount Federal Government 

11 procurements from small business concerns 

12 or from any subcategory of small business 

13 concern referred to in section 15(g); or 

14 ‘‘(iv) the amount of dollar financings 

15 for small businesses under the Small Busi16 ness Investment Act of 1958. 

17 ‘‘(D) REASSIGNMENT.—Any district direc18 tor who is removed under subparagraph (C) 

19 shall be reassigned by the Administrator as a 

20 procurement center representative or a commer21 cial marketing representative, as determined by 

22 the Administrator in consultation with the re23 gional administrator. Any such reassignment 

24 shall, for the first year after reassignment, be at 

25 the same grade and salary. 
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1 ‘‘(5) DISTRICT COUNSEL.—Each district office 

2 shall have a district counsel. Each district counsel 

3 shall—

4 ‘‘(A) be assigned by, and report to, the Gen5 eral Counsel; 

6 ‘‘(B) provide legal assistance to the district 

7 director and employees in the district office; and 

8 ‘‘(C) carry out the required review of 

9 HUBZone firms specified in section 3. 

10 ‘‘(6) BUSINESS OPPORTUNITY SPECIALISTS.—

11 Each district office shall have a minimum number of 

12 business opportunity specialists to ensure that effec13 tive guidance and oversight are provided to partici14 pants in the program established by section 8(a). The 

15 specialists shall assist the district director and Assist16 ant Administrator for Minority Small Business and 

17 Capital Ownership Development. The majority of the 

18 hours worked by the business opportunity specialist 

19 shall be devoted to the programs established by section 

20 8(a), unless the district director demonstrates to the 

21 Assistant Administrator for Minority Small Business 

22 and Capital Ownership Development that there are 

23 an insufficient number of firms certified pursuant to 

24 section 8(a) to require the employee to devote such 

25 hours to such programs. 
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1 ‘‘(7) PROCUREMENT CENTER REPRESENTA2 TIVES.—The Associate Administrator for Government 

3 Contracting and Minority Small Business, after con4 sultation with the regional administrators and dis5 trict directors, shall assign such procurement center 

6 representatives to district offices as the Associate Ad7 ministrator determines to be appropriate. Any pro8 curement center representative assigned to a district 

9 office or procuring agency activity shall report to the 

10 district director. The Associate Administrator shall 

11 assign at least one procurement center representative 

12 in each State. 

13 ‘‘(8) COMMERCIAL MARKETING REPRESENTA14 TIVE.—The Associate Administrator for Government 

15 Contracting and Minority Small Business, after con16 sultation with the regional administrators and dis17 trict directors, shall assign commercial marketing 

18 representatives to district offices as the Associate Ad19 ministrator determines to be appropriate. Any com20 mercial marketing representative assigned to a dis21 trict office shall report to the district director. 

22 ‘‘(h) GENERAL PERSONNEL AUTHORITY.—

23 ‘‘(1) EXPERTS AND CONSULTANTS.—The Admin24 istrator may procure, for purposes of carrying out 

25 this Act and the Small Business Investment Act of 
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1 1958, temporary and intermittent services under sec2 tion 3109(b) of title 5, United States Code. 

3 ‘‘(2) TRAVEL EXPENSES.—Each employee may, 

4 at the discretion of the Administrator, receive travel 

5 expenses, including per diem in lieu of subsistence, in 

6 accordance with applicable provisions under sub7 chapter I of chapter 57 of title 5, United States Code. 

8 Notwithstanding such subchapter, the Administrator 

9 may pay the transportation expenses and per diem in 

10 lieu of subsistence expenses, for travel of any person 

11 employed by the Administration to render temporary 

12 services not in excess of 6 months in connection with 

13 any disaster referred to in section 7(b) from place of 

14 appointment to, and while at, the disaster area and 

15 any other temporary posts of duty and return upon 

16 completion of the assignment. The Administrator may 

17 extend the 6-month limitation for an additional 6 

18 months if the Administrator determines the extension 

19 is necessary to continue efficient disaster loan making 

20 activities. 

21 ‘‘(3) NOTARY PUBLIC EXPENSES.—The Adminis22 trator may pay the costs of any employee to qualify 

23 as a notary public. 

24 ‘‘(4) DELEGATIONS.—Except as otherwise pro25 vided in this Act or the Small Business Investment
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1 Act of 1958, the Administrator may delegate a func2 tion or responsibility to any employee of the Adminis3 tration. The Administrator shall provide by regula4 tion codified in the Code of Federal Regulations the 

5 procedures for determining which delegations are to 

6 be codified in the Code of Federal Regulations. With 

7 respect to any delegations not promulgated by regula8 tion, the Administrator shall collect and collate such 

9 delegations and place them in a prominent location 

10 on the website maintained for the Administration. 

11 ‘‘(5) ADMINISTRATION WEB SITE.—Not later 

12 than 30 days after the enactment of this subsection, 

13 the Administrator shall redesign the web site of the 

14 Administration so that the delegations under para15 graph (4) and the organizational chart of the Admin16 istration (including the names of the officials serving 

17 in those capacities), links to the homepage of each of18 fice, and standard operating procedures, have a 

19 prominent link on the homepage of the Administra20 tion. Any subsequent redesign after compliance with 

21 this paragraph shall ensure that the information re22 quired by this paragraph maintains a prominent 

23 place on the homepage of the Administration.’’. 

24 (b) CONFORMING AMENDMENTS.—
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1 (1) So much of section 22 of the Small Business 

2 Act (15 U.S.C. 649) as precedes subsection (b) is 

3 amended to read as follows: 

4 ‘‘SEC. 22. OFFICE OF INTERNATIONAL TRADE. 

5 ‘‘(a) Except as otherwise provided in this section, the 

6 powers, duties, and responsibilities described in this section 

7 shall be carried out by the Assistant Administrator for 

8 International Trade.’’. 

9 (2) Subsection (b) of section 22 of the Small 

10 Business Act (15 U.S.C. 649) is amended by striking 

11 ‘‘The Office’’ the first place it appears and inserting 

12 ‘‘The Office of International Trade’’. 

13 (c) RELATED REPEAL.—Section 32 of the Small Busi14 ness Act (15 U.S.C. 657b) is amended to read as follows: 

15 ‘‘SEC. 32. [RESERVED].’’. 

16 (d) TRANSITION RULES.—

17 (1) EXCEPTION TO SALARY LIMITATION OF DIS18 TRICT DIRECTORS.—The salary limitation specified 

19 in section 6(g)(4)(A) of the Small Business Act (as 

20 amended by this section) shall not apply with respect 

21 to any district director whose salary exceeds such lim22 itation on July 1, 2003. 

23 (2) REMOVAL AND REASSIGNMENT OF DEPUTY

24 DISTRICT DIRECTORS.—
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1 (A) REMOVAL.—The Administrator may 

2 not appoint any individual to serve as a deputy 

3 district director. Any individual serving as a 

4 deputy district director on the date of the enact5 ment of this Act shall be removed from such posi6 tion and reassigned as provided in this para7 graph. 

8 (B) REASSIGNMENT.—Any individual re9 moved from office under subparagraph (A) shall 

10 be reassigned by the Administrator as a procure11 ment center representative or a commercial mar12 keting representative, as determined by the Ad13 ministrator in consultation with the regional ad14 ministrator. Any such reassignment shall be at 

15 not less than the grade and salary which applied 

16 to such individual prior to reassignment. 

17 SEC. 207. LOAN PROGRAMS. 

18 (a) SMALL BUSINESS LOAN PROGRAM.—So much of 

19 section 7 of the Small Business Act (15 U.S.C. 636) as pre20 cedes subsection (b) is amended to read as follows: 

21 ‘‘SEC. 7. LOAN PROGRAMS. 

22 ‘‘(a) SMALL BUSINESS LOAN PROGRAM.—

23 ‘‘(1) LOAN AUTHORITY.—The Administrator 

24 may, to the extent and in such amounts as provided 

25 in advance in appropriation Acts, make loans for 
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1 plant acquisition, construction, conversion, or expan2 sion, including the acquisition of land, material, sup3 plies, equipment, and working capital to any small 

4 business concern, including those owned by qualified 

5 Indian tribes for purposes of this Act. 

6 ‘‘(2) METHODS OF PARTICIPATION.—The Admin7 istrator may make such loans either directly or in co8 operation with banks or other financial institutions 

9 through agreements to participate on an immediate 

10 or deferred (guaranteed) basis, except that no imme11 diate participation may be purchased unless it is 

12 shown that a deferred participation is not available 

13 and no direct financing may be made unless it is 

14 shown that a participation is not available. 

15 ‘‘(3) NO CREDIT ELSEWHERE.—The Adminis16 trator may not make a loan under this subsection if 

17 the applicant can obtain credit elsewhere. 

18 ‘‘(4) CRIMINAL BACKGROUND CHECK.—Before 

19 making any loan under this subsection or section 502 

20 or 503 of the Small Business Investment Act of 1958, 

21 the Administrator may verify the applicant’s crimi22 nal background, or lack thereof, through the best 

23 available means, including, if possible, use of the Na24 tional Crime Information Center computer system at 

25 the Federal Bureau of Investigation. 
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1 ‘‘(5) SOUND AND SECURE REQUIREMENT.—

2 ‘‘(A) IN GENERAL.—Except as otherwise 

3 provided in this paragraph, any loan made 

4 under this subsection shall be of such sound value 

5 or so secured as reasonably to assure repayment. 

6 ‘‘(B) SPECIAL RULES.—For purposes of 

7 subparagraph (A), any reasonable doubt regard8 ing the likelihood of repayment shall be resolved 

9 in favor of the applicant if the applicant is—

10 ‘‘(i) a disabled person (as defined in 

11 paragraph (8)); or 

12 ‘‘(ii) a small manufacturer. 

13 ‘‘(C) COLLATERAL.—The Administrator 

14 shall not refuse to make a loan under this sub15 section solely due to inadequate collateral, but a 

16 loan shall be secured as fully as possible with 

17 available assets. If the assets of the business are 

18 not sufficient to fully secure the loan, other assets 

19 of the owners of the small business concern may 

20 be taken as collateral to the extent the aggregate 

21 amount of collateral does not exceed the amount 

22 necessary to fully secure the loan. 

23 ‘‘(6) LEVEL OF PARTICIPATION IN GUARANTEED

24 LOANS.—
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1 ‘‘(A) IN GENERAL.—Except as provided in 

2 subparagraph (B), in an agreement to partici3 pate in a loan on a deferred basis under this 

4 subsection (including a loan made under the 

5 Preferred Lenders Program), such participation 

6 by the Administrator shall be equal to—

7 ‘‘(i) 75 percent of the balance of the fi8 nancing outstanding at the time of dis9 bursement of the loan, if such balance ex10 ceeds $150,000; or 

11 ‘‘(ii) 85 percent of the balance of the fi12 nancing outstanding at the time of dis13 bursement of the loan, if such balance is less 

14 than or equal to $150,000. 

15 ‘‘(B) REDUCED PARTICIPATION UPON RE16 QUEST.—

17 ‘‘(i) IN GENERAL.—The guarantee per18 centage specified by subparagraph (A) for 

19 any loan under this subsection may be re20 duced upon the request of the participating 

21 lender. 

22 ‘‘(ii) PROHIBITION.—The Adminis23 trator shall not use the guarantee percent24 age requested by a participating lender 

25 under clause (i) as a criterion for estab-
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1 lishing priorities in approving loan guar2 antee requests under this subsection. 

3 ‘‘(C) PARTICIPATION UNDER EXPORT WORK4 ING CAPITAL PROGRAM.—Notwithstanding sub5 paragraph (A), in an agreement to participate 

6 in a loan on a deferred basis under the Export 

7 Working Capital Program established pursuant 

8 to paragraph (14), such participation by the Ad9 ministrator shall not exceed 90 percent. 

10 ‘‘(D) CERTAIN RURAL AREAS.—

11 ‘‘(i) IN GENERAL.—In the case of a 

12 loan to a qualified rural small business con13 cern, this paragraph shall be applied by 

14 substituting ‘90 percent’ for—

15 ‘‘(I) ‘75 percent’ in subparagraph 

16 (A)(i); and 

17 ‘‘(II) ‘85 percent’ in subpara18 graph (A)(ii). 

19 ‘‘(ii) QUALIFIED RURAL SMALL BUSI20 NESS CONCERN.—For purposes of this sub21 paragraph, the term ‘qualified rural small 

22 business concern’ means a small business 

23 concern located in—

24 ‘‘(I) a rural area (as defined in 

25 section 343(a)(13) of the Consolidated 
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1 Farm and Rural Development Act (7 

2 U.S.C. 1991(a))); and 

3 ‘‘(II) a district with respect to 

4 which the dollar value and number of 

5 loans made under this subsection are 

6 both less than the average for districts 

7 in the State. 

8 ‘‘(7) MAXIMUM LOAN AMOUNTS.—No loan shall 

9 be made under this subsection—

10 ‘‘(A) if the total amount outstanding and 

11 committed (by participation or otherwise) solely 

12 for purposes of this subsection to the borrower 

13 would exceed $1,000,000 (or if the gross loan 

14 amount would exceed $2,000,000), except as pro15 vided in subparagraph (B); 

16 ‘‘(B) if the total amount outstanding and 

17 committed (on a deferred basis) solely for the 

18 purposes provided in paragraph (16) to the bor19 rower would exceed $2,000,000 of which not more 

20 than $1,200,000 may be used for working cap21 ital, supplies, or financings under paragraph 

22 (14) for export purposes; and 

23 ‘‘(C) if made either directly or in coopera24 tion with banks or other lending institutions 
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1 through agreements to participate on an imme2 diate basis if the amount would exceed $350,000. 

3 ‘‘(8) INTEREST RATES.—

4 ‘‘(A) MAXIMUM RATE SET BY ADMINIS5 TRATOR.—Notwithstanding any State limitation 

6 on the rate or amount of interest which may be 

7 charged, taken, received, or reserved, the max8 imum legal rate of interest on any financing 

9 made on a deferred basis pursuant to this sub10 section shall not exceed a rate prescribed by the 

11 Administrator. 

12 ‘‘(B) IMMEDIATE AND DIRECT LOANS.—The 

13 rate of interest for the Administrator’s share of 

14 any direct or immediate participation loan shall 

15 not exceed the current average market yield on 

16 outstanding marketable obligations of the United 

17 States with remaining periods to maturity com18 parable to the average maturities of such loans 

and adjusted to the nearest 1 19 ⁄8 of 1 percent, and 

20 an additional amount as determined by the Ad21 ministrator, but not to exceed 1 percent per year. 

22 ‘‘(C) PREFERRED LENDERS PROGRAM.—The 

23 maximum interest rate for a loan guaranteed 

24 under the Preferred Lenders Program conducted 

25 pursuant to paragraph (31) shall not exceed the 
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1 maximum interest rate, as determined by the 

2 Administrator, applicable to other loans guaran3 teed under this subsection. 

4 ‘‘(D) DISABLED PERSONS.—

5 ‘‘(i) IN GENERAL.—The maximum in6 terest rate for a loan made under this sub7 section to a disabled person for the estab8 lishment, acquisition or operation of a 

9 small business concern shall be 3 percent 

10 per year. 

11 ‘‘(ii) DISABLED PERSON.—For the 

12 purposes of this subparagraph, the term 

13 ‘disabled person’ means any individual 

14 who—

15 ‘‘(I) is a service-disabled veteran; 

16 or 

17 ‘‘(II) has a disability (as defined 

18 in section 3 of the Americans with Dis19 abilities Act of 1990) which limits such 

20 individual’s selection of any type of 

21 employment for which such individual 

22 would otherwise be qualified or 

23 qualifiable. 

24 ‘‘(9) PREPAYMENT CHARGES.—
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1 ‘‘(A) IN GENERAL.—A borrower who pre2 pays any loan guaranteed under this subsection 

3 shall remit to the Administrator a subsidy 

4 recoupment fee calculated in accordance with 

5 subparagraph (B) if—

6 ‘‘(i) the loan is for a term of not less 

7 than 15 years; 

8 ‘‘(ii) the prepayment is voluntary; 

9 ‘‘(iii) the amount of prepayment in 

10 any calendar year is more than 25 percent 

11 of the outstanding balance of the loan; and 

12 ‘‘(iv) the prepayment is made within 

13 the first 3 years after disbursement of the 

14 loan proceeds. 

15 ‘‘(B) SUBSIDY RECOUPMENT FEE.—The 

16 subsidy recoupment fee charged under subpara17 graph (A) shall be—

18 ‘‘(i) 5 percent of the amount of prepay19 ment, if the borrower prepays during the 

20 first year after disbursement; 

21 ‘‘(ii) 3 percent of the amount of pre22 payment, if the borrower prepays during 

23 the second year after disbursement; and 
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1 ‘‘(iii) 1 percent of the amount of pre2 payment, if the borrower prepays during 

3 the third year after disbursement. 

4 ‘‘(10) MAXIMUM TERM.—No loans made under 

5 this subsection, including renewals and extensions 

6 thereof, may be made for a period or periods exceed7 ing 25 years, except that such portion of a loan made 

8 for the purpose of acquiring real property or con9 structing, converting, or expanding facilities may 

10 have a maturity of 25 years plus such additional pe11 riod as is estimated may be required to complete such 

12 construction, conversion, or expansion. 

13 ‘‘(11) CONSTRUCTION AND REHABILITATION OF

14 REAL PROPERTY.—The Administrator may make a 

15 loan under this subsection to finance residential or 

16 commercial construction or rehabilitation for sale if 

17 such loan is not used primarily for the acquisition of 

18 land. 

19 ‘‘(12) UNEMPLOYED AND LOW-INCOME INDIVID20 UALS.—The Administrator may make loans under 

21 this subsection to any small business concern, or to 

22 any qualified person seeking to establish such a con23 cern, if the Administrator determines that such loan 

24 will further the policies established in section 2, with 

25 particular emphasis on the preservation or establish-
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1 ment of small business concerns located in urban or 

2 rural areas with high proportions of unemployed or 

3 low-income individuals or owned by low-income indi4 viduals. 

5 ‘‘(13) STATE AND LOCAL DEVELOPMENT COMPA6 NIES.—The Administrator may make loans under 

7 this subsection to State and local development compa8 nies for the purposes of, and subject to the restrictions 

9 in, title V of the Small Business Investment Act of 

10 1958. 

11 ‘‘(14) EXPORT WORKING CAPITAL PROGRAM.—

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

13 may provide extensions of credit, standby letters 

14 of credit, revolving lines of credit for export pur15 poses, and other financing to enable small busi16 ness concerns, including small business export 

17 trading companies and small business export 

18 management companies, to develop foreign mar19 kets. 

20 ‘‘(B) INTEREST RATES.—A bank or partici21 pating lending institution may establish the rate 

22 of interest on such financings as may be legal 

23 and reasonable. 

24 ‘‘(C) CRITERIA FOR LOANS.—When consid25 ering loan or guarantee applications, the Admin-
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1 istrator shall give weight to export-related bene2 fits, including opening new markets for United 

3 States goods and services abroad and encour4 aging the involvement of small businesses, in5 cluding small manufacturers and agricultural 

6 concerns, in the export market. 

7 ‘‘(D) MARKETING.—The Administrator 

8 shall aggressively market its export financing 

9 program to small businesses. 

10 ‘‘(15) QUALIFIED EMPLOYEE TRUSTS.—

11 ‘‘(A) LOAN GUARANTEES.—The Adminis12 trator may guarantee loans under this subsection 

13 to qualified employee trusts with respect to a 

14 small business concern for the purpose of pur15 chasing stock of the concern under a plan ap16 proved by the Administrator which, when car17 ried out, results in the qualified employee trust 

18 owning at least 51 percent of the stock of the 

19 concern. A qualified employee trust shall be eligi20 ble for any loan guarantee under this subsection 

21 with respect to a small business concern on the 

22 same basis as if such trust were the same legal 

23 entity as such concern. 

24 ‘‘(B) APPROVAL OF PLAN.—The plan re25 quiring the Administrator’s approval under sub-
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1 paragraph (A) shall be submitted to the Admin2 istrator by the trustee of such trust with its ap3 plication for the guarantee. Such plan shall in4 clude an agreement with the Administrator 

5 which is binding on such trust and on the small 

6 business concern and which provides that—

7 ‘‘(i) not later than the date the loan 

8 guaranteed under subparagraph (A) is re9 paid (or as soon thereafter as is consistent 

10 with the requirements of section 401(a) of 

11 the Internal Revenue Code of 1986, at least 

12 51 percent of the total stock of such concern 

13 shall be allocated to the accounts of at least 

14 51 percent of the employees of such concern 

15 who are entitled to share in such allocation; 

16 ‘‘(ii) there will be periodic reviews of 

17 the role in the management of such concern 

18 of employees to whose accounts stock is allo19 cated; and 

20 ‘‘(iii) there will be adequate manage21 ment to assure management expertise and 

22 continuity. 

23 ‘‘(C) CERTAIN CHARACTERISTICS OF EM24 PLOYEE-OWNERS DISREGARDED.—In deter25 mining whether to guarantee any loan under
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1 this paragraph, the individual business experi2 ence or personal assets of employee-owners shall 

3 not be used as criteria, except that the business 

4 experience of employee-owners who assume man5 agerial responsibilities may be considered. 

6 ‘‘(D) CERTAIN CORPORATIONS TREATED AS

7 SMALL BUSINESS CONCERNS.—For purposes of 

8 this paragraph, a corporation which is controlled 

9 by any other person shall be treated as a small 

10 business concern if such corporation would, after 

11 the plan described in subparagraph (B) is car12 ried out, be treated as a small business concern. 

13 ‘‘(16) INTERNATIONAL TRADE.—

14 ‘‘(A) IN GENERAL.—If the Administrator 

15 determines that a loan guaranteed under this 

16 subsection will allow an eligible small business 

17 concern in an industry engaged in or adversely 

18 affected by international trade to improve its 

19 competitive position, the Administrator may 

20 make such loan to assist such concern in—

21 ‘‘(i) the financing of the acquisition, 

22 construction, renovation, modernization, 

23 improvement or expansion of productive fa24 cilities or equipment to be used in the 

25 United States in the production of goods 
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1 and services involved in international trade; 

2 or 

3 ‘‘(ii) the refinancing of existing indebt4 edness which is not structured with reason5 able terms and conditions. 

6 ‘‘(B) SECURITY.—Each loan made under 

7 this paragraph shall be secured by a first lien 

8 position or first mortgage on the property or 

9 equipment financed by the loan or on other as10 sets of the concern. 

11 ‘‘(C) ENGAGED IN OR ADVERSELY AF12 FECTED BY INTERNATIONAL TRADE.—For pur13 poses of this paragraph, a small business concern 

14 shall be considered to be engaged in or adversely 

15 affected by international trade if such concern is 

16 determined by the Administrator (under regula17 tions prescribed by the Administrator to be—

18 ‘‘(i) in a position to significantly ex19 pand existing export markets or develop 

20 new export markets; or 

21 ‘‘(ii) adversely affected by import com22 petition in that it—

23 ‘‘(I) is confronting increased di24 rect competition with foreign firms in 

25 the relevant market; and 
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1 ‘‘(II) can demonstrate injury at2 tributable to such competition. 

3 ‘‘(D) FINDINGS BY INTERNATIONAL TRADE

4 COMMISSION.—For purposes of subparagraph 

5 (C)(ii)(II), the Administrator shall accept any 

6 finding of injury by the International Trade 

7 Commission. 

8 ‘‘(17) AUTHORIZED LENDING INSTITUTIONS.—

9 The Administrator shall authorize lending institu10 tions and other entities in addition to banks to make 

11 loans authorized under this subsection. 

12 ‘‘(18) GUARANTEE FEES.—

13 ‘‘(A) IN GENERAL.—With respect to each 

14 loan guaranteed under this subsection (other 

15 than a loan that is repayable in 1 year or less), 

16 the Administration shall collect a guarantee fee, 

17 which shall be payable by the participating lend18 er, but which may be collected in advance by the 

19 lender from the borrower, as follows: 

20 ‘‘(i) A guarantee fee equal to 1 percent 

21 of the deferred participation share of a total 

22 loan amount that is not more than 

23 $150,000. 

24 ‘‘(ii) A guarantee fee equal to 2.5 per25 cent of the deferred participation share of a 
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1 total loan amount that is more than 

2 $150,000, but not more than $700,000. 

3 ‘‘(iii) A guarantee fee equal to 3.5 per4 cent of the deferred participation share of a 

5 total loan amount that is more than 

6 $700,000. 

7 ‘‘(B) RETENTION OF CERTAIN FEES.—Lend8 ers participating in the programs established 

9 under this subsection may retain not more than 

10 25 percent of a fee collected under subparagraph 

11 (A)(i). 

12 ‘‘(19) CERTIFIED LENDERS PROGRAM.—

13 ‘‘(A) IN GENERAL.— There is a Certified 

14 Lenders Program for lenders who establish their 

15 knowledge of laws and regulations concerning the 

16 guaranteed loan program and their proficiency 

17 in program requirements as set forth in regula18 tions codified in the Code of Federal Regulations. 

19 ‘‘(B) SUSPENSION AND REVOCATION OF

20 DESIGNATION.—The designation of a lender as a 

21 certified lender shall be suspended or revoked at 

22 any time that the Administrator determines that 

23 the lender is not adhering to established rules 

24 and regulations or that the loss experience of the 

25 lender is excessive as compared to other lenders, 
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1 but such suspension or revocation shall not affect 

2 any outstanding guarantee. 

3 ‘‘(C) AUTHORITY TO LIQUIDATE LOANS.—

4 ‘‘(i) IN GENERAL.—The Administrator 

5 may permit lenders participating in the 

6 Certified Lenders Program to liquidate 

7 loans made with a guarantee from the Ad8 ministrator pursuant to a liquidation plan 

9 approved by the Administrator. 

10 ‘‘(ii) AUTOMATIC APPROVAL.—If the 

11 Administrator does not approve or deny a 

12 request for approval of a liquidation plan 

13 within 10 business days of the date on 

14 which the request is made (or with respect 

15 to any routine liquidation activity under 

16 such a plan, within 5 business days) such 

17 request shall be deemed to be approved. 

18 ‘‘(20) MINORITY BUSINESS DEVELOPMENT PRO19 GRAM PARTICIPANTS.—

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

21 may make loans either directly or in cooperation 

22 with banks or other financial institutions 

23 through agreements to participate on an imme24 diate or deferred (guaranteed) basis to small 

25 business concerns eligible for assistance under
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1 section 8(a). Such assistance may be provided 

2 only if the Administrator determines that—

3 ‘‘(i) the type and amount of such as4 sistance requested by such concern is not 

5 otherwise available on reasonable terms 

6 from other sources; 

7 ‘‘(ii) with such assistance such concern 

8 has a reasonable prospect for operating 

9 soundly and profitably within a reasonable 

10 period of time; 

11 ‘‘(iii) the proceeds of such assistance 

12 will be used within a reasonable time for 

13 plant construction, conversion, or expan14 sion, including the acquisition of equip15 ment, facilities, machinery, supplies, or ma16 terial or to supply such concern with work17 ing capital to be used in the manufacture of 

18 articles, equipment, supplies, or material 

19 for defense or civilian production or as may 

20 be necessary to insure a well-balanced na21 tional economy; and 

22 ‘‘(iv) such assistance is of such sound 

23 value as reasonably to assure that the terms 

24 under which it is provided will not be 

25 breached by the small business concern. 
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1 ‘‘(B) MAXIMUM AMOUNT OF LOANS.—No 

2 loan shall be made under this paragraph if the 

3 total amount outstanding and committed (by 

4 participation or otherwise) to the borrower 

5 would exceed $750,000. 

6 ‘‘(C) MINIMUM PARTICIPATION.—Subject to 

7 the limitation of subparagraph (B), in agree8 ments to participate in loans on a deferred 

9 (guaranteed) basis, participation by the Admin10 istrator shall be not less than 85 percent of the 

11 balance of the financing outstanding at the time 

12 of disbursement. 

13 ‘‘(D) INTEREST RATE.—The rate of interest 

14 on financings made on a deferred (guaranteed) 

15 basis shall be legal and reasonable. 

16 ‘‘(E) METHODS OF PARTICIPATION.—No 

17 immediate participation may be purchased 

18 under this paragraph unless it is shown that a 

19 deferred participation is not available. No direct 

20 financing may be made under this paragraph 

21 unless it is shown that a participation is un22 available. A direct loan or the Administrator’s 

23 share of an immediate participation loan made 

24 pursuant to this paragraph shall be any secured 

25 debt instrument—
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1 ‘‘(i) that is subordinated by its terms 

2 to all other borrowings of the issuer; 

3 ‘‘(ii) the rate of interest on which shall 

4 not exceed the current average market yield 

5 on outstanding marketable obligations of the 

6 United States with remaining periods to 

7 maturity comparable to the average matu8 rities of such loan and adjusted to the nearest 1 9 ⁄8 of 1 percent; 

10 ‘‘(iii) the term of which is not more 

11 than 25 years; 

12 ‘‘(iv) the principal on which is amor13 tized at such rate as may be deemed appro14 priate by the Administrator; and 

15 ‘‘(v) the interest on which is payable 

16 not less often than annually. 

17 ‘‘(21) CLOSURE OF DOD INSTALLATIONS.—

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

19 may make loans on a guaranteed basis under the 

20 authority of this subsection—

21 ‘‘(i) to a small business concern that 

22 has been (or can reasonably be expected to 

23 be) detrimentally affected by—
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1 ‘‘(I) the closure (or substantial re2 duction) of a Department of Defense 

3 installation; or 

4 ‘‘(II) the termination (or substan5 tial reduction) of a Department of De6 fense program on which such small 

7 business was a prime contractor or 

8 subcontractor (or supplier) at any tier; 

9 or 

10 ‘‘(ii) to a qualified individual or a vet11 eran seeking to establish (or acquire) and 

12 operate a small business concern. 

13 ‘‘(B) REASONABLE DOUBT GIVEN TO APPLI14 CANT.—Recognizing that greater risk may be as15 sociated with a loan to a small business concern 

16 described in subparagraph (A)(i), any reasonable 

17 doubts concerning the firm’s proposed business 

18 plan for transition to nondefense-related markets 

19 shall be resolved in favor of the loan applicant 

20 when making any determination regarding the 

21 sound value of the proposed loan in accordance 

22 with paragraph (5). 

23 ‘‘(C) AUTHORIZATION.—Loans pursuant to 

24 this paragraph shall be authorized in such 

25 amounts as provided in advance in appropria-
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1 tion Acts for the purposes of loans under this 

2 paragraph. 

3 ‘‘(D) QUALIFIED INDIVIDUAL.—For pur4 poses of this paragraph a qualified individual 

5 is—

6 ‘‘(i) a member of the Armed Forces of 

7 the United States, honorably discharged 

8 from active duty involuntarily or pursuant 

9 to a program providing bonuses or other in10 ducements to encourage voluntary separa11 tion or early retirement; 

12 ‘‘(ii) a civilian employee of the Depart13 ment of Defense involuntarily separated 

14 from Federal service or retired pursuant to 

15 a program offering inducements to encour16 age early retirement; or 

17 ‘‘(iii) an employee of a prime con18 tractor, subcontractor, or supplier at any 

19 tier of a Department of Defense program 

20 whose employment is involuntarily termi21 nated (or voluntarily terminated pursuant 

22 to a program offering inducements to en23 courage voluntary separation or early re24 tirement) due to the termination (or sub-
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1 stantial reduction) of a Department of De2 fense program. 

3 ‘‘(E) JOB CREATION AND COMMUNITY BEN4 EFIT.—In providing assistance under this para5 graph, the Administrator shall develop proce6 dures to ensure, to the maximum extent prac7 ticable, that such assistance is used for projects 

8 that—

9 ‘‘(i) have the greatest potential for—

10 ‘‘(I) creating new jobs for individ11 uals whose employment is involun12 tarily terminated due to reductions in 

13 Federal defense expenditures; or 

14 ‘‘(II) preventing the loss of jobs by 

15 employees of small business concerns 

16 described in subparagraph (A)(i); and 

17 ‘‘(ii) have substantial potential for 

18 stimulating new economic activity in com19 munities most affected by reductions in 

20 Federal defense expenditures. 

21 ‘‘(22) LATE FEES.—The Administrator may per22 mit participating lenders to impose and collect a rea23 sonable penalty fee on late payments of loans guaran24 teed under this subsection in an amount not to exceed 
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1 5 percent of the monthly loan payment per month 

2 plus interest. 

3 ‘‘(23) ANNUAL FEE.—

4 ‘‘(A) IN GENERAL.—With respect to each 

5 loan guaranteed under this subsection, the Ad6 ministrator shall, in accordance with such terms 

7 and procedures as the Administrator shall estab8 lish by regulation, assess and collect an annual 

9 fee in an amount equal to 0.5 percent of the out10 standing balance of the deferred participation 

11 share of the loan. With respect to loans approved 

12 during the 2-year period beginning on October 1, 

13 2002, the annual fee assessed and collected under 

14 the preceding sentence shall be in an amount 

15 equal to 0.25 percent of the outstanding balance 

16 of the deferred participation share of the loan. 

17 ‘‘(B) PAYER.—The annual fee assessed 

18 under subparagraph (A) shall be payable by the 

19 participating lender and shall not be charged to 

20 the borrower. 

21 ‘‘(C) AGENTS.—The Administrator may 

22 contract with any agent to carry out, on behalf 

23 of the Administrator, the assessment and collec24 tion of annual fees referred to in subparagraph 

25 (A). Such agent may receive as compensation for 
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1 services any interest earned on the fees while in 

2 such agent’s control and prior to the time when 

3 the agent, pursuant to contract, is required to 

4 remit the fees to the Administrator. 

5 ‘‘(24) NOTIFICATION REQUIREMENT.—The Ad6 ministrator shall notify the Committee on Small 

7 Business of the House of Representatives and the 

8 Committee on Small Business and Entrepreneurship 

9 of the Senate not later than 15 days before making 

10 any significant policy or administrative change af11 fecting the operation of the loan program under this 

12 subsection, including the establishment of any pilot 

13 project pursuant to paragraph (25). 

14 ‘‘(25) LIMITATION ON CONDUCTING PILOT

15 PROJECTS.—

16 ‘‘(A) LIMITATION ON NUMBER.—Not more 

17 than 10 percent of the total number of loans 

18 guaranteed in any fiscal year under this sub19 section may be awarded as part of a pilot pro20 gram which is commenced by the Administrator 

21 on or after January 1, 1994. 

22 ‘‘(B) DOLLAR LIMITATIONS.—

23 ‘‘(i) IN GENERAL.—In the case of any 

24 pilot program established on or after the 

25 date of the enactment of this subparagraph,
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1 no loan shall be made under such program 

2 if such loan would result in the total 

3 amount of loans made during the fiscal 

4 year under all such programs to be in excess 

5 of 5 percent of the total amount of loans 

6 guaranteed in such fiscal year under this 

7 subsection. 

8 ‘‘(ii) CERTAIN PRE-EXISTING PRO9 GRAMS.—In the case of any pilot program 

10 established before the date of the enactment 

11 of this subparagraph, no loan shall be made 

12 under such program if such loan would re13 sult in the total amount of loans made dur14 ing the fiscal year under all such programs 

15 to be in excess of 15 percent of the total 

16 amount of loans guaranteed in such fiscal 

17 year under this subsection. 

18 ‘‘(C) MAXIMUM TERM.—The duration of 

19 any pilot program authorized by this paragraph 

20 shall not exceed 3 years. For purposes of this 

21 subparagraph, a pilot program shall not be 

22 treated as a new pilot program solely on the 

23 basis of a modification or change in a pilot pro24 gram, including the change of its name. With re25 spect to any pilot program in existence on the 
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1 date of the enactment of this subparagraph, this 

2 subparagraph shall apply without regard to any 

3 period ending before such date. 

4 ‘‘(D) REGULATIONS.—With respect to each 

5 pilot program under this subsection, the Admin6 istrator shall—

7 ‘‘(i) promulgate regulations for such 

8 program pursuant to section 553(b) of title 

9 5, United States Code; 

10 ‘‘(ii) provide not less than 60 days for 

11 notice and comment on such regulations; 

12 and 

13 ‘‘(iii) ensure that such regulations are 

14 codified in the Code of Federal Regulations. 

15 In the case of any pilot program established after 

16 the date of the enactment of this subparagraph, 

17 such program shall not go into effect until after 

18 the requirements of this subparagraph are satis19 fied. 

20 ‘‘(E) PILOT PROGRAM.—For purposes of 

21 this paragraph, the term ‘pilot program’ means 

22 any lending program initiative, project, innova23 tion, or other activity not specifically authorized 

24 by law. 
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1 ‘‘(26) CALCULATION OF SUBSIDY RATE.—All fees, 

2 interest, and profits received and retained by the Ad3 ministrator under this subsection shall be included in 

4 the calculations made by the Director of the Office of 

5 Management and Budget to offset the cost (as that 

6 term is defined in section 502 of the Federal Credit 

7 Reform Act of 1990) to the Administrator of pur8 chasing and guaranteeing loans under this Act. 

9 ‘‘(27) LOW DOCUMENTATION LOAN PROGRAM.—

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

11 may issue guarantees under this subsection for 

12 loans of $150,000 or less with less documentation 

13 than would otherwise be required by the Admin14 istrator under this subsection. 

15 ‘‘(B) REGULATIONS.—Not later than 120 

16 days after the date of the enactment of this para17 graph, the Administrator shall promulgate regu18 lations to carry out the provisions of this para19 graph after the opportunity for notice and com20 ment pursuant to section 553(b) of title 5, 

21 United States Code. Such regulations shall be 

22 codified in the Code of Federal Regulations. 

23 ‘‘(28) LEASING.—In addition to such other lease 

24 arrangements as may be authorized by the Adminis25 trator, a borrower may permanently lease to one or 
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1 more tenants not more than 20 percent of any prop2 erty constructed with the proceeds of a loan guaran3 teed under this subsection, if the borrower perma4 nently occupies and uses not less than 60 percent of 

5 the total business space in the property. 

6 ‘‘(29) REAL ESTATE APPRAISALS.—With respect 

7 to a loan under this subsection that is secured by 

8 commercial real property, an appraisal of such prop9 erty by a State licensed or certified appraiser—

10 ‘‘(A) shall be required by the Administrator 

11 in connection with any such loan for more than 

12 $250,000; or 

13 ‘‘(B) may be required by the Administrator 

14 or the lender in connection with any such loan 

15 for $250,000 or less, if such appraisal is nec16 essary for appropriate evaluation of credit17 worthiness. 

18 ‘‘(30) OWNERSHIP REQUIREMENTS.—Ownership 

19 requirements to determine the eligibility of a small 

20 business concern that applies for assistance under any 

21 credit program under this Act shall be determined 

22 without regard to any ownership interest of a spouse 

23 arising solely from the application of the community 

24 property laws of a State for purposes of determining 

25 marital interests.
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1 ‘‘(31) PREFERRED LENDERS PROGRAM.—

2 ‘‘(A) IN GENERAL.—There is a Preferred 

3 Lenders Program. 

4 ‘‘(B) PARTICIPATION.—The Administrator 

5 may designate a preferred lender under this 

6 paragraph only if the lender demonstrates 

7 knowledge of the Small Business Act and the reg8 ulations promulgated thereunder and establishes 

9 to the satisfaction of the Administrator that it—

10 ‘‘(i) has the ability to process, close, 

11 service, and liquidate loans; 

12 ‘‘(ii) has the ability to develop and 

13 analyze complete loan packages; and 

14 ‘‘(iii) has a satisfactory performance 

15 history of participation in the lending pro16 gram established under this subsection as 

17 demonstrated by a default rate that does not 

18 exceed—

19 ‘‘(I) the national average; or 

20 ‘‘(II) in the case any lender which 

21 made at least 20 percent of its loans in 

22 Alaska, Hawaii, State-designated en23 terprise zones, enterprise zones, em24 powerment zones, enterprise commu25 nities, or labor surplus areas as deter-
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1 mined by the Department of Labor, or 

2 to small manufacturers, the national 

3 average plus 2 percentage points. 

4 ‘‘(C) DELEGATED AUTHORITY.—With re5 spect to loans made under this subsection, pre6 ferred lenders shall, without prior approval of 

7 the Administrator: 

8 ‘‘(i) Determine creditworthiness and 

9 eligibility. 

10 ‘‘(ii) Make and close loans with a 

11 guarantee from the Administrator. 

12 ‘‘(iii) Monitor loan performance. 

13 ‘‘(iv) Service and collect the loans. 

14 ‘‘(v) Foreclose and liquidate loans. 

15 ‘‘(D) PROHIBITED ACTIVITIES.—A preferred 

16 lender shall not take any action that creates an 

17 actual or apparent conflict of interest or places 

18 the Federal Government’s guarantee at signifi19 cant risk beyond the risk associated with loan 

20 nonperformance. 

21 ‘‘(E) AREA OF OPERATIONS.—The designa22 tion by the Administrator of a lender to partici23 pate in the program established pursuant to this 

24 paragraph shall authorize the activities described 

25 in subparagraph (C) only with respect to small 
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•HR 2802 RH 

1 business concerns located in areas served by such 

2 office or offices as the Administrator designates 

3 with respect to such lender. 

4 ‘‘(F) DESIGNATION AS NATIONAL PRE5 FERRED LENDERS.—The Administrator, upon 

6 application, may designate a preferred lender as 

7 a national preferred lender. A national preferred 

8 lender may conduct the activities described in 

9 subparagraph (C) with respect to each area 

10 served by an office of the Administrator. The Ad11 ministrator shall not grant such designation un12 less the applicant demonstrates—

13 ‘‘(i) operation as a preferred lender in 

14 at least 5 States or within the territory 

15 served by at least 10 offices of the Adminis16 trator for a period of not less than 3 years; 

17 ‘‘(ii) issuance of a minimum of 50 

18 loans per year as a preferred lender; 

19 ‘‘(iii) centralization of approval, loan 

20 servicing and liquidation functions that 

21 meet such standards as the Administrator 

22 may establish by regulations, which are 

23 promulgated after notice and the oppor24 tunity for public comment not later than 
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1 180 days after the date of the enactment of 

2 this clause; 

3 ‘‘(iv) maintenance of uniform written 

4 policies and procedures on the issuance of 

5 loans guaranteed under this subsection; 

6 ‘‘(v) maintenance of a portfolio of 

7 loans guaranteed under this subsection that 

8 do not exceed the national average default, 

9 currency, and recovery rates for preferred 

10 lenders; and 

11 ‘‘(vi) receipt of a substantially satisfac12 tory compliance review rating from the Ad13 ministrator in its most recent audit and ex14 amination as a preferred lender and a 

15 small business lending company, if applica16 ble, or has received a substantially satisfac17 tory rating as a result of a follow-up re18 view. 

19 ‘‘(G) CORRECTIVE ACTION.—If a national 

20 preferred lender is deficient with respect to any 

21 requirement described in subparagraph (F), the 

22 Administrator shall notify such lender in writ23 ing and shall provide the lender a reasonable pe24 riod of time to conform to such requirements be25 fore taking any corrective action. 
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1 ‘‘(H) SUSPENSION OR REVOCATION.—The 

2 Administrator may, depending upon the severity 

3 of the failure to comply with the standards set 

4 forth in this paragraph, suspend or revoke a 

5 lender’s status as a preferred lender or a na6 tional preferred lender. Any such suspension or 

7 revocation shall not affect any outstanding guar8 antee. 

9 ‘‘(I) LIMITATION ON DELEGATION.—No au10 thority under this paragraph may be delegated 

11 to any employee of the Administration who is 

12 based in a regional or district office. 

13 ‘‘(32) SIMPLIFIED FORM FOR SMALL GUARAN14 TEES.—The Administrator shall develop and allow 

15 participating lenders to solely utilize a uniform and 

16 simplified loan form for loans of $50,000 or less in 

17 guarantees to eligible applicants. 

18 ‘‘(33) SPECIAL RULE ON AFFILIATION.—A busi19 ness concern applying for assistance under this sub20 section shall be considered small for purposes of this 

21 subsection without regard to affiliation with another 

22 business concern if the applicant has no legal recourse 

23 to have its affiliate repay any of its debt obliga24 tions.’’.
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1 (b) DISASTER LOAN PROGRAM.—Subsection (b) of sec2 tion 7 of the Small Business Act (15 U.S.C. 636) is amend3 ed to read as follows: 

4 ‘‘(b) DISASTER LOAN PROGRAM.—

5 ‘‘(1) PHYSICAL LOSS DISASTER LOANS.—

6 ‘‘(A) LOAN AUTHORITY.—Except as to agri7 cultural enterprises, the Administrator may, to 

8 the extent and in such amounts as provided in 

9 advance in appropriation Acts, make such loans 

10 (either directly or in cooperation with banks or 

11 other lending institutions through agreements to 

12 participate on an immediate or deferred (guar13 anteed) basis) as the Administrator may deter14 mine to be necessary or appropriate to repair, 

15 rehabilitate or replace property, real or personal, 

16 damaged or destroyed by or as a result of nat17 ural or other disasters. 

18 ‘‘(B) LOAN AMOUNT.—The amount of any 

19 loan made under this paragraph shall be equal 

20 to 100 percent of the loss except that the amount 

21 of the loan shall be reduced by—

22 ‘‘(i) any amount covered by insurance 

23 or otherwise; or 
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1 ‘‘(ii) in the case of a loan used to refi2 nance a mortgage or other lien, any amount 

3 covered by insurance or otherwise. 

4 ‘‘(C) SPECIAL RULES.—The Administrator 

5 shall not—

6 ‘‘(i) reduce the loan amount on real es7 tate to below $100,000 unless the amount of 

8 loss calculated under subparagraph (B) is 

9 less than $100,000; 

10 ‘‘(ii) reduce the loan amount on per11 sonal property, whether held by a home12 owner or lessee, to below $20,000, unless the 

13 amount of the loss calculated under sub14 paragraph (B) is less than $20,000; 

15 ‘‘(iii) take into account for purposes of 

16 subparagraph (B) any sums made available 

17 for refinancing pursuant to subparagraph 

18 (D); or 

19 ‘‘(iv) require collateral for loans of 

20 $10,000 or less. 

21 ‘‘(D) REFINANCINGS.—Such loans may be 

22 used to refinance any mortgage or other lien 

23 against a totally destroyed or substantially dam24 aged home or business concern except that the 

25 Administrator shall not make any loan or guar-
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1 antee under this paragraph unless the Adminis2 trator finds—

3 ‘‘(i) the applicant is not able to obtain 

4 credit elsewhere; 

5 ‘‘(ii) such property is to be repaired, 

6 rehabilitated, or replaced; and 

7 ‘‘(iii) the amount refinanced shall not 

8 exceed the amount of physical loss sus9 tained. 

10 ‘‘(E) INCREASE FOR MITIGATING MEAS11 URES.—The Administrator may increase the 

12 amount of any loan under this subsection by up 

13 to an additional 20 percent if he determines such 

14 increase to be necessary or appropriate in order 

15 to protect the damaged or destroyed property 

16 from possible future disasters by taking miti17 gating measures, including construction of re18 taining walls and sea walls, grading and 

19 contouring land, relocating utilities and modi20 fying structures. 

21 ‘‘(2) ECONOMIC INJURY DISASTER LOANS.—

22 ‘‘(A) LOAN AUTHORITY.—Except as to agri23 cultural enterprises (other than small agricul24 tural cooperatives), the Administrator may, to 

25 the extent and in such amounts as provided in 
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1 advance in appropriation Acts, make such loans 

2 (either directly or in cooperation with banks or 

3 other lending institutions through agreements to 

4 participate on an immediate or deferred (guar5 anteed) basis as the Administrator may deter6 mine to be necessary or appropriate to any small 

7 business concern or small agricultural coopera8 tive located in an area affected by a disaster 

9 (which shall include all of the county in which 

10 the disaster occurred and counties contiguous to 

11 the county of the disaster as determined by the 

12 President or Administrator), if the Adminis13 trator determines that the concern or the cooper14 ative has suffered a substantial economic injury 

15 as a result of such disaster and if such disaster 

16 constitutes—

17 ‘‘(i) a major disaster, as determined by 

18 the President under the Disaster Relief and 

19 Emergency Assistance Act; or 

20 ‘‘(ii) a natural disaster, as determined 

21 by the Secretary of Agriculture pursuant to 

22 the Consolidated Farmers Home Adminis23 tration Act of 1961 (7 U.S.C. 1961); or 

24 ‘‘(iii) a disaster, as determined by the 

25 Administrator.
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1 ‘‘(B) STATE CERTIFICATION.—If no disaster 

2 declaration has been issued under subparagraph 

3 (A), the Governor of a State in which a disaster 

4 has occurred may certify to the Administrator 

5 that small business concerns or small agricul6 tural cooperatives have suffered economic injury 

7 as a result of such disaster and are in need of 

8 financial assistance which is not available on 

9 reasonable terms in the disaster stricken area. 

10 Upon receipt of such certification, the Adminis11 trator may then make such loans as would have 

12 been available under this paragraph if a disaster 

13 declaration had been issued. 

14 ‘‘(C) UNABLE TO OBTAIN CREDIT ELSE15 WHERE.—No loan or guarantee shall be extended 

16 pursuant to this paragraph unless the Adminis17 trator finds that the applicant is not able to ob18 tain credit elsewhere. 

19 ‘‘(3) ESSENTIAL EMPLOYEES CALLED TO ACTIVE

20 DUTY.—

21 ‘‘(A) DEFINITIONS.—For purposes of this 

22 paragraph: 

23 ‘‘(i) ESSENTIAL EMPLOYEE.—The term 

24 ‘essential employee’ means an individual 

25 who is employed by a small business con-
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1 cern and whose managerial or technical ex2 pertise is critical to the successful day-to3 day operations of that small business con4 cern. 

5 ‘‘(ii) PERIOD OF MILITARY CON6 FLICT.—The term ‘period of military con7 flict’ has the meaning given the term in 

8 subsection (n)(1). 

9 ‘‘(iii) SUBSTANTIAL ECONOMIC IN10 JURY.—The term ‘substantial economic in11 jury’ means an economic harm to a busi12 ness concern that results in the inability of 

13 the business concern—

14 ‘‘(I) to meet its obligations as they 

15 mature; 

16 ‘‘(II) to pay its ordinary and nec17 essary operating expenses; or 

18 ‘‘(III) to market, produce, or pro19 vide a product or service ordinarily 

20 marketed, produced, or provided by the 

21 business concern. 

22 ‘‘(B) LOAN AUTHORITY.—The Adminis23 trator may make such disaster loans (either di24 rectly or in cooperation with banks or other 

25 lending institutions through agreements to par-
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1 ticipate on an immediate or deferred basis) to 

2 assist a small business concern that has suffered 

3 or that is likely to suffer substantial economic 

4 injury as the result of an essential employee of 

5 such small business concern being ordered to ac6 tive military duty during a period of military 

7 conflict. 

8 ‘‘(C) PERIOD OF ELIGIBILITY.—A small 

9 business concern described in subparagraph (B) 

10 shall be eligible to apply for assistance under 

11 this paragraph during the period beginning on 

12 the date on which the essential employee is or13 dered to active duty and ending on the date that 

14 is 90 days after the date on which such essential 

15 employee is discharged or released from active 

16 duty. 

17 ‘‘(D) INTEREST RATE.—Any loan or guar18 antee extended pursuant to this paragraph shall 

19 be made at the same interest rate as economic 

20 injury disaster loans under paragraph (2). 

21 ‘‘(E) MAXIMUM LOAN AMOUNT.—No loan 

22 may be made under this paragraph, either di23 rectly or in cooperation with banks or other 

24 lending institutions through agreements to par25 ticipate on an immediate or deferred basis, if the 
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1 total amount outstanding and committed to the 

2 borrower under this subsection would exceed 

3 $1,500,000, unless the applicant can establish 

4 pursuant to regulations promulgated by the Ad5 ministrator pursuant to paragraph (9) that this 

6 maximum should be waived. 

7 ‘‘(F) NO DISASTER DECLARATION RE8 QUIRED.—For purposes of assistance under this 

9 paragraph, no declaration of a disaster area 

10 shall be required. 

11 ‘‘(4) SPECIAL RULE TO DETERMINE SMALL CON12 CERNS.—For purposes of this subsection, a business 

13 concern and an agricultural cooperative are consid14 ered small if the business concern or agricultural co15 operative has 500 or fewer employees. 

16 ‘‘(5) MAXIMUM TERM.—Except as provided in 

17 paragraph (6), no loan under this subsection, includ18 ing renewals and extensions thereof, may be made for 

19 a period or periods exceeding 30 years. No loan de20 scribed in paragraph (11)(D)(iii) shall be made for a 

21 period or periods exceeding 3 years. 

22 ‘‘(6) SUSPENSION OF PAYMENTS.—

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

24 may consent to a suspension in the payment of 

25 principal and interest charges on, and to an ex-
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1 tension in the maturity of, the Federal share of 

2 any loan under this subsection for a period of 

3 not to exceed 5 years, if—

4 ‘‘(i) the borrower under such loan is a 

5 homeowner or a small business concern; 

6 ‘‘(ii) the loan was made to enable—

7 ‘‘(I) such homeowner to repair or 

8 replace his home; or 

9 ‘‘(II) such concern to repair or re10 place plant or equipment which was 

11 damaged or destroyed as the result of a 

12 disaster described in clause (i) or (ii) 

13 of paragraph (2)(A); and 

14 ‘‘(iii) the Administrator determines 

15 such action is necessary to avoid severe fi16 nancial hardship. 

17 ‘‘(B) PURCHASE OF NON-FEDERAL

18 SHARE.—During any period in which principal 

19 and interest charges are suspended on the Fed20 eral share of any loan under this paragraph, the 

21 Administrator shall, upon the request of any per22 son, firm, or corporation having a participation 

23 in such loan, purchase such participation, or as24 sume the obligation of the borrower, for the bal25 ance of such period, to make principal and in-
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1 terest payments on the non-Federal share of such 

2 loan. No such payments shall be made by the Ad3 ministrator in behalf of any borrower unless—

4 ‘‘(i) the Administrator determines that 

5 such action is necessary in order to avoid a 

6 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 coun20 ties designated pursuant to clause (i), (ii), or (iii) of 

21 paragraph (2)(A). 

22 ‘‘(8) CIVIL PENALTY FOR MISUSE OF LOAN.—

23 Whoever wrongfully misapplies the proceeds of a loan 

24 obtained under this subsection shall be civilly liable
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1 to the Administrator in an amount equal to 150 per2 cent of the original principal amount of the 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 PARTICIPATION.—

12 In agreements to participate in loans on a deferred 

13 basis under this subsection, such participation by the 

14 Administrator shall not be in excess of 90 percent of 

15 the balance of the loan outstanding at the time of dis16 bursement. 

17 ‘‘(11) INTEREST RATE.—The interest rate on the 

18 Federal share of any loan made under paragraph (1) 

19 or (2) shall not exceed the rate of interest which is in 

20 effect at the time of the occurrence of the disaster but 

21 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 rate 

25 determined by the Secretary of the Treasury tak-
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1 ing into consideration the current average mar2 ket yield on outstanding marketable obligations 

3 of the United States with remaining periods to 

4 maturity comparable to the average maturities of 

5 such loan plus an additional charge of not to ex6 ceed 1 percent per year as determined by the Administrator, and adjusted to the nearest 1 7 ⁄8 of 1 

8 percent, but not to exceed 4 percent per year; 

9 ‘‘(B) in the case of a homeowner able to se10 cure credit elsewhere, the rate prescribed by the 

11 Administration but not more than the rate deter12 mined by the Secretary of the Treasury taking 

13 into consideration the current average market 

14 yield on outstanding marketable obligations of 

15 the United States with remaining periods to ma16 turity comparable to the average maturities of 

17 such loans plus an additional charge of not to 

18 exceed 1 percent per year as determined by the 

Administrator, and adjusted to the nearest 1 19 ⁄8 of 

20 1 percent, but not to exceed 8 percent per year; 

21 ‘‘(C) in the case of a business or other con22 cern, including agricultural cooperatives, unable 

23 to obtain credit elsewhere, not to exceed 4 percent 

24 per year; or 
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1 ‘‘(D) in the case of a business concern able 

2 to obtain credit elsewhere, the rate prescribed by 

3 the Administration but not to excess of the lowest 

4 of—

5 ‘‘(i) the rate prevailing in the private 

6 market for similar loans, 

7 ‘‘(ii) the rate prescribed by the Admin8 istration as the maximum interest rate for 

9 deferred participation (guaranteed) loans 

10 under subsection (a), or 

11 ‘‘(iii) 8 percent per year. 

12 ‘‘(12) NOTICE TO BORROWERS.—

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

14 shall ensure that each borrower under this sub15 section receives a notice described in subpara16 graph (B) upon applying for any loan under 

17 this subsection and upon the disbursement of any 

18 loan under this subsection. 

19 ‘‘(B) CONTENTS OF NOTICE.—A notice is 

20 described in this subparagraph if such notice in21 cludes the following information with respect to 

22 loans made under this subsection: 

23 ‘‘(i) A description of the collection 

24 practices of the Administration for such 

25 loans, including a description of any ac-
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1 tions the Administrator may take to collect 

2 a delinquent or non-current loan. 

3 ‘‘(ii) A description of the practices of 

4 the Administration with respect to selling 

5 the rights and interests of the Administra6 tion in such loans, including a description 

7 of the effects of such a sale on the borrower. 

8 ‘‘(iii) A description of the rights of the 

9 borrower with respect to such loan under 

10 applicable Federal laws. 

11 ‘‘(iv) A telephone number for con12 tacting the Administrator regarding such 

13 loan.’’. 

14 (c) EXTENSION OR RENEWAL.—Subsection (c) of sec15 tion 7 of the Small Business Act (15 U.S.C. 636) is amend16 ed to read as follows: 

17 ‘‘(c) EXTENSION OR RENEWAL.—

18 ‘‘(1) IN GENERAL.—The Administrator may fur19 ther extend the maturity of or renew any loan made 

20 pursuant to this section for additional periods not to 

21 exceed 10 years beyond the period stated therein, if 

22 such extension or renewal will aid in the orderly liq23 uidation of such loan. 
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1 ‘‘(2) LIMITATION.—No loan made under sub2 section (b) shall be extended under this subsection if 

3 the loan has a maturity in excess of 20 years.’’. 

4 (d) MICROLOAN PROGRAM.—Subsection (m) of section 

5 7 of the Small Business Act (15 U.S.C. 636) is amended 

6 to read as follows:

7 ‘‘(m) MICROLOAN PROGRAM.—

8 ‘‘(1) PURPOSES.—The purposes of the Microloan 

9 Program are—

10 ‘‘(A) to assist women, low-income, veteran, 

11 and minority entrepreneurs and business owners, 

12 small manufacturers, and other individuals pos13 sessing the capability to operate successful busi14 ness concerns; 

15 ‘‘(B) to assist small business concerns in 

16 those areas suffering from a lack of credit due to 

17 economic downturns; 

18 ‘‘(C) to establish a microloan program to be 

19 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 working
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1 capital or the acquisition of materials, sup2 plies, 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 on 

22 the effectiveness of the microloan program 

23 and the advisability and feasibility of im24 plementing 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 supplementing 

5 the technical assistance grants provided 

6 under this subsection to individuals who are 

7 receiving assistance under the State pro8 gram funded under part A of title IV of the 

9 Social Security Act (42 U.S.C. 601 et seq.), 

10 or under any comparable State funded 

11 means tested program of assistance for low12 income individuals, in order to adequately 

13 assist those individuals in establishing 

14 small businesses and eliminating their de15 pendence on that assistance. 

16 ‘‘(2) ESTABLISHMENT.—There is a Microloan 

17 Program, under which the Administrator may, con18 sistent with the requirements of this subsection—

19 ‘‘(A) make direct loans to eligible inter20 mediaries for the purpose of making short-term, 

21 fixed interest rate microloans to startup, newly 

22 established, and growing small business concerns; 

23 ‘‘(B) in conjunction with such loans make 

24 grants to such intermediaries for the purpose of 

25 providing intensive marketing, management, and 
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1 technical assistance to small business concerns 

2 that are borrowers under this subsection; and 

3 ‘‘(C) make grants to nonprofit entities for 

4 the purpose of providing marketing, manage5 ment, and technical assistance to low-income in6 dividuals seeking to start or enlarge their own 

7 businesses, if such assistance includes working 

8 with the grant recipient to secure loans in 

9 amounts not to exceed $50,000 from private sec10 tor lending institutions, with or without a loan 

11 guarantee from the nonprofit entity. 

12 ‘‘(3) ELIGIBILITY FOR PARTICIPATION.—An 

13 intermediary shall be eligible to receive loans and 

14 grants under subparagraphs (B) and (C) of para15 graph (2) if it has at least 1 year of experience mak16 ing microloans to startup, newly established, or grow17 ing small business concerns and providing, as an in18 tegral part of its microloan program, intensive mar19 keting, management, and technical assistance to its 

20 borrowers or equivalent experience, as determined by 

21 the Administrator provided that the equivalent expe22 rience evidences the capability of the intermediary to 

23 assist microloan borrowers. 
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1 ‘‘(4) INTERMEDIARY APPLICATIONS.—As part of 

2 its application for a loan, each intermediary shall 

3 submit a description to the Administrator of—

4 ‘‘(A) the type of businesses to be assisted; 

5 ‘‘(B) the size and range of loans to be made; 

6 ‘‘(C) the geographic area to be served and 

7 its economic, poverty, and unemployment char8 acteristics; 

9 ‘‘(D) the status of small business concerns 

10 in the area to be served and an analysis of their 

11 credit and technical assistance needs; 

12 ‘‘(E) any marketing, management, and 

13 technical assistance to be provided in connection 

14 with a loan made under this subsection; 

15 ‘‘(F) the local economic credit markets, in16 cluding the costs associated with obtaining credit 

17 locally; 

18 ‘‘(G) the qualifications of the applicant to 

19 carry out the purpose of this subsection; and 

20 ‘‘(H) any plan to involve other technical as21 sistance providers (such as volunteers recruited 

22 under section 12(b) or counselors from small 

23 business development centers) or private sector 

24 lenders in assisting selected business concerns. 
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1 ‘‘(5) SELECTION OF INTERMEDIARIES.—In select2 ing intermediaries to participate in the program es3 tablished under this subsection, the Administrator 

4 shall give priority to those applicants that provide 

5 loans in amounts averaging not more than $10,000 

6 and to those applicants that primarily serve small 

7 manufacturers. 

8 ‘‘(6) INTERMEDIARY CONTRIBUTION.—As a con9 dition of any loan made to an intermediary under 

10 this subsection, the Administrator shall require the 

11 intermediary to contribute not less than 15 percent of 

12 the loan amount in cash from non-Federal sources. 

13 ‘‘(7) LOANS TO INTERMEDIARIES.—

14 ‘‘(A) LOAN LIMITS.—No loan shall be made 

15 under this subsection if the total amount out16 standing and committed to one intermediary 

17 (excluding outstanding grants) from the business 

18 loan and investment fund established by this Act 

19 would, as a result of such loan, exceed $750,000 

20 in the first year of such intermediary’s partici21 pation in the program, and $3,500,000 in the re22 maining years of the intermediary’s participa23 tion in the program.
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1 ‘‘(B) LOAN DURATION.—Loans made by the 

2 Administrator under this subsection shall be for 

3 a term of 10 years. 

4 ‘‘(C) DELAYED PAYMENTS.—The Adminis5 trator shall not require repayment of interest or 

6 principal of a loan made to an intermediary 

7 under this subsection during the first year of the 

8 loan. 

9 ‘‘(D) FEES; COLLATERAL.—Except as other10 wise provided in this subsection, the Adminis11 trator shall not charge any fees or require collat12 eral other than an assignment of the notes receiv13 able of the microloans with respect to any loan 

14 made to an intermediary under this subsection. 

15 ‘‘(E) INTEREST RATES.—

16 ‘‘(i) IN GENERAL.—Loans made by the 

17 Administrator under this subsection to an 

18 intermediary shall bear an interest rate 

19 equal to 1.25 percentage points below the 

20 rate determined by the Secretary of the 

21 Treasury for obligations of the United 

22 States with a period of maturity of 5 years, 

adjusted to the nearest 1 23 ⁄8 of 1 percent. 

24 ‘‘(ii) CERTAIN SMALL LOANS.—Not25 withstanding clause (i), loans made by the 
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1 Administrator to an intermediary that 

2 makes loans to small business concerns and 

3 entrepreneurs averaging not more than 

4 $10,000, shall bear an interest rate that is 

5 2 percentage points below the rate deter6 mined by the Secretary of the Treasury for 

7 obligations of the United States with a pe8 riod of maturity of 5 years, adjusted to the 

nearest 1 9 ⁄8 of 1 percent. 

10 ‘‘(iii) MULTIPLE SITES OR OFFICES.—

11 Clause (ii) shall apply to each separate 

12 loan-making site or office of an inter13 mediary only if such site or office meets the 

14 requirements of that clause. 

15 ‘‘(iv) RATE BASIS.—The applicable 

16 rate of interest under this subparagraph 

17 shall—

18 ‘‘(I) be applied retroactively for 

19 the first year of an intermediary’s par20 ticipation in the program, based upon 

21 the actual lending practices of the 

22 intermediary as determined by the Ad23 ministrator prior to the end of such 

24 year; and 
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1 ‘‘(II) be based in the second and 

2 subsequent years of an intermediary’s 

3 participation in the program, upon the 

4 actual lending practices of the inter5 mediary during the term of the 

6 intermediary’s participation in the 

7 program. 

8 ‘‘(8) LOSS RESERVE OF INTERMEDIARIES.—

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

10 shall, by regulation to be codified in the Code of 

11 Federal Regulations, require each intermediary 

12 to establish a loan loss reserve fund, and to 

13 maintain such reserve fund until all obligations 

14 owed to the Administrator under this subsection 

15 are repaid. 

16 ‘‘(B) AMOUNT OF RESERVE FUND.—The Ad17 ministrator shall require the loan loss reserve 

18 fund of an intermediary to be maintained at a 

19 level equal to 15 percent of the outstanding bal20 ance of the notes receivable owed to the inter21 mediary. 

22 ‘‘(C) REDUCTION OF REQUIRED AMOUNT.—

23 Notwithstanding subparagraph (B), the Admin24 istrator may reduce the annual loan loss reserve 

25 requirement of an intermediary to reflect the ac-
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1 tual average loan loss rate for the intermediary 

2 during the preceding 5-year period, except that 

3 in no case shall the loan loss reserve be reduced 

4 to less than 10 percent of the outstanding bal5 ance of the notes receivable owed to the inter6 mediary. The Administrator may reduce the an7 nual loan loss reserve requirement of an inter8 mediary under this subparagraph only if the 

9 intermediary demonstrates to the satisfaction of 

10 the Administrator that—

11 ‘‘(i) the average annual loss rate for 

12 the intermediary during the preceding 5-

13 year period is less than 15 percent; and 

14 ‘‘(ii) no other factors exist that may 

15 impair the ability of the intermediary to 

16 repay all obligations owed to the Adminis17 trator under this subsection. 

18 ‘‘(D) REVIEW BY ADMINISTRATOR.—After 

19 the initial 5 years of an intermediary’s partici20 pation in the program authorized by this sub21 section, the Administrator shall, at the request of 

22 the intermediary, conduct a review of the annual 

23 loss rate of the intermediary. Any intermediary 

24 that requests a reduction in its loan loss reserve 
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1 shall be reviewed based on the most recent 5-year 

2 period preceding the request. 

3 ‘‘(9) LOANS TO SMALL BUSINESS CONCERNS

4 FROM ELIGIBLE INTERMEDIARIES.—

5 ‘‘(A) IN GENERAL.—An eligible inter6 mediary shall make fixed rate loans to startup, 

7 newly established, and growing small business 

8 concerns from the funds made available to it 

9 under paragraph (7) for working capital and the 

10 acquisition of materials, supplies, furniture, fix11 tures, and equipment. 

12 ‘‘(B) LOAN AMOUNT.—To the extent prac13 ticable, each intermediary that operates a 

14 microloan program under this subsection shall 

15 maintain a microloan portfolio with an average 

16 loan size of not more than $15,000. An inter17 mediary may make a loan under this subsection 

18 of more than $20,000 to a small business concern 

19 only if such small business concern demonstrates 

20 that it is unable to obtain credit elsewhere at 

21 comparable interest rates and that it has good 

22 prospects for success. In no case shall an inter23 mediary make a loan under this subsection of 

24 more than $50,000, or have outstanding or com25 mitted to any 1 borrower more than $50,000.
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1 ‘‘(C) INTEREST LIMIT.—Notwithstanding 

2 any State limitation on the rate or amount of 

3 interest that may be charged, taken, received, or 

4 reserved on a loan, the maximum rate of interest 

5 to be charged on a microloan funded under this 

6 subsection shall not exceed the rate of interest ap7 plicable to a loan made to an intermediary by 

8 the Administrator—

9 ‘‘(i) in the case of a loan of more than 

10 $10,000 made by the intermediary to a 

11 small business concern or entrepreneur by 

12 more than 7.75 percentage points; and 

13 ‘‘(ii) in the case of a loan of not more 

14 than $10,000 made by the intermediary to 

15 a small business concern or entrepreneur by 

16 more than 8.5 percentage points. 

17 ‘‘(D) REVIEW RESTRICTION.—The Adminis18 trator shall not review individual microloans 

19 made by intermediaries prior to approval. 

20 ‘‘(E) ESTABLISHMENT OF CHILD CARE OR

21 TRANSPORTATION BUSINESSES.—In addition to 

22 other eligible small businesses concerns, bor23 rowers under any program under this subsection 

24 may include individuals who will use the loan 

25 proceeds to establish for-profit or nonprofit child 
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1 care establishments or businesses providing for2 profit transportation services. 

3 ‘‘(10) PROGRAM FUNDING FOR MICROLOANS.—

4 ‘‘(A) NUMBER OF PARTICIPANTS.—Under 

5 the program authorized by this subsection, the 

6 Administrator may fund, on a competitive basis, 

7 not more than 300 intermediaries. 

8 ‘‘(B) MINIMUM ALLOCATION.—Subject to the 

9 availability of appropriations, of the total 

10 amount of new loan funds made available for 

11 award under this subsection in each fiscal year, 

12 the Administrator shall make available for 

13 award in each State an amount equal to the sum 

14 of—

15 ‘‘(i) the lesser of—

16 ‘‘(I) $800,000; or 

‘‘(II) 1 17 ⁄55 of the total amount of 

18 new loan funds made available for 

19 award under this subsection for that 

20 fiscal year; and 

21 ‘‘(ii) any additional amount, as deter22 mined by the Administrator. 

23 ‘‘(C) REDISTRIBUTION.—If, at the begin24 ning of the third quarter of a fiscal year, the Ad25 ministrator determines that any portion of the 
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1 amount made available to carry out this sub2 section is unlikely to be made available under 

3 subparagraph (B) during that fiscal year, the 

4 Administrator may make that portion available 

5 for award in any one or more States without re6 gard to subparagraph (B). 

7 ‘‘(11) EQUITABLE DISTRIBUTION OF INTER8 MEDIARIES.—In approving microloan program appli9 cants and providing funding to intermediaries under 

10 this subsection, the Administrator shall select and 

11 provide funding to such intermediaries as will ensure 

12 appropriate availability of loans for small businesses 

13 in all industries located throughout each State, par14 ticularly those located in urban and in rural areas. 

15 ‘‘(12) MARKETING, MANAGEMENT AND TECH16 NICAL ASSISTANCE GRANTS TO INTERMEDIARIES.—

17 The Administrator may make grants described in 

18 paragraph (2)(B) in accordance with the following re19 quirements: 

20 ‘‘(A) GRANT AMOUNTS.—Except as other21 wise provided in subparagraph (C) and subject 

22 to subparagraph (B), each intermediary that re23 ceives a loan under this subsection shall be eligi24 ble to receive a grant to provide marketing, man25 agement, and technical assistance to small busi-
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1 ness concerns that are borrowers under this sub2 section. Except as provided in subparagraph (C), 

3 each intermediary meeting the requirements of 

4 subparagraph (B) may receive a grant of not 

5 more than 25 percent of the total outstanding 

6 balance of loans made to it under this subsection. 

7 ‘‘(B) CONTRIBUTION.—As a condition of 

8 any grant made under subparagraph (A), the 

9 Administrator shall require the intermediary to 

10 contribute an amount equal to 25 percent of the 

11 amount of the grant, obtained solely from non12 Federal sources. In addition to cash or other di13 rect funding, the contribution may include indi14 rect costs or in-kind contributions paid for under 

15 non-Federal programs. 

16 ‘‘(C) ADDITIONAL TECHNICAL ASSISTANCE

17 GRANTS FOR MAKING CERTAIN LOANS.—

18 ‘‘(i) IN GENERAL.—Each intermediary 

19 that has a portfolio of loans made under 

20 this subsection that averages not more than 

21 $10,000 during the period of the 

22 intermediary’s participation in the pro23 gram shall be eligible to receive a grant 

24 equal to 5 percent of the total outstanding 

25 balance of loans made to the intermediary 
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1 under this subsection, in addition to grants 

2 made under subparagraph (A). 

3 ‘‘(ii) PURPOSES.—A grant awarded 

4 under clause (i) may be used to provide 

5 marketing, management, and technical as6 sistance to small business concerns that are 

7 borrowers under this subsection. 

8 ‘‘(iii) CONTRIBUTION EXCEPTION.—

9 The contribution requirements in subpara10 graph (B) do not apply to grants made 

11 under this subparagraph. 

12 ‘‘(D) ELIGIBILITY FOR MULTIPLE SITES OR

13 OFFICES.—The eligibility for a grant described 

14 in subparagraph (A) or (C) shall be determined 

15 separately for each loan-making site or office of 

16 an intermediary. 

17 ‘‘(E) ASSISTANCE TO CERTAIN SMALL BUSI18 NESS CONCERNS.—Each intermediary may ex19 pend grant funds received under this subsection 

20 to provide information and technical assistance 

21 to small business concerns that are prospective 

22 borrowers under this subsection and may enter 

23 into contracts with third parties to provide such 

24 information and assistance.
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1 ‘‘(13) PRIVATE SECTOR BORROWING TECHNICAL

2 ASSISTANCE GRANTS.—Grants described in paragraph 

3 (2)(C) shall be subject to the following requirements: 

4 ‘‘(A) GRANT AMOUNTS.—Subject to the re5 quirements of subparagraph (B), the Adminis6 trator may make not more than 55 grants annu7 ally, each in amounts not to exceed $200,000 for 

8 the purposes specified in paragraph (2)(C). 

9 ‘‘(B) CONTRIBUTION.—As a condition of 

10 any grant made under subparagraph (A), the 

11 Administrator shall require the grant recipient 

12 to contribute an amount equal to 20 percent of 

13 the amount of the grant, obtained solely from 

14 non-Federal sources. In addition to cash or other 

15 direct funding, the contribution may include in16 direct costs or in-kind contributions paid for 

17 under non-Federal programs. 

18 ‘‘(14) GRANTS FOR MANAGEMENT, MARKETING, 

19 TECHNICAL ASSISTANCE, AND RELATED SERVICES.—

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

21 may procure technical assistance for inter22 mediaries participating in the Microloan Pro23 gram to ensure that such intermediaries have the 

24 knowledge, skills, and understanding of micro-
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1 lending practices necessary to operate successful 

2 microloan programs. 

3 ‘‘(B) ASSISTANCE AMOUNT.—The Adminis4 trator shall transfer 7 percent of its annual ap5 propriation for loans and loan guarantees under 

6 this subsection to the Administration’s Salaries 

7 and Expense Account for the specific purpose of 

8 providing 1 or more technical assistance grants 

9 to experienced microlending organizations and 

10 national and regional nonprofit organizations 

11 that have demonstrated experience in providing 

12 training support for microenterprise development 

13 and financing to achieve the purpose set forth in 

14 subparagraph (A). 

15 ‘‘(C) WELFARE-TO-ENTREPRENEURSHIP

16 MICROLOAN INITIATIVE.—Of amounts made 

17 available to carry out the welfare-to-entrepre18 neurship microloan initiative in any fiscal year, 

19 the Administrator may use not more than 5 per20 cent to provide technical assistance, either di21 rectly or through contractors, to welfare-to-entre22 preneurship microloan initiative grantees, to en23 sure that, as grantees, they have the knowledge, 

24 skills, and understanding of microlending and 

25 welfare-to-entrepreneurship transition, and other 
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1 related issues, to operate a successful welfare-to2 entrepreneurship microloan initiative. 

3 ‘‘(15) EVALUATION OF WELFARE-TO-ENTREPRE4 NEURSHIP MICROLOAN INITIATIVE.—On January 31, 

5 1999, and annually thereafter, the Administrator 

6 shall submit to the Committee on Small Business of 

7 the House of Representatives and the Committee on 

8 Small Business and Entrepreneurship of the Senate a 

9 report on the welfare-to-entrepreneurship microloan 

10 initiative, including a description of the amounts 

11 made available to carry out such initiative. 

12 ‘‘(16) DEFINITIONS.—For purposes of this sub13 section—

14 ‘‘(A) INTERMEDIARY.—The term ‘inter15 mediary’ means—

16 ‘‘(i) a private, nonprofit entity; 

17 ‘‘(ii) a private, nonprofit community 

18 development corporation; 

19 ‘‘(iii) a consortium of private, non20 profit organizations or nonprofit commu21 nity development corporations; 

22 ‘‘(iv) a quasi-governmental economic 

23 development entity (such as a planning and 

24 development district), other than a State, 
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1 county, municipal government, or any 

2 agency thereof, if—

3 ‘‘(I) no application is received 

4 from an eligible nonprofit organiza5 tion; or 

6 ‘‘(II) the Administrator deter7 mines that the needs of a region or geo8 graphic area are not adequately served 

9 by an existing, eligible nonprofit orga10 nization that has submitted an appli11 cation; or 

12 ‘‘(v) an agency of or nonprofit entity 

13 established by a Native American Tribal 

14 Government, that seeks to borrow or has 

15 borrowed funds from the Administrator to 

16 make microloans to small business concerns 

17 under this subsection. 

18 ‘‘(B) MICROLOAN.—The term ‘microloan’ 

19 means a fixed rate loan of not more than 

20 $50,000, made by an intermediary to a startup, 

21 newly established, or growing small business con22 cern. 

23 ‘‘(C) RURAL AREA.—The term ‘rural area’ 

24 means any political subdivision or unincor25 porated area—
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1 ‘‘(i) in a nonmetropolitan county (as 

2 defined by the Secretary of Agriculture) or 

3 its equivalent thereof; or 

4 ‘‘(ii) in a metropolitan county or its 

5 equivalent that has a resident population of 

6 less than 20,000 if the Administrator has 

7 determined such political subdivision or 

8 area to be rural.’’. 

9 (e) REPEAL OF CERTAIN PROVISIONS OF SECTION 7 

10 OF THE SMALL BUSINESS ACT.—Section 7 of the Small 

11 Business Act (15 U.S.C. 636) is amended—

12 (1) by striking subsection (d) and inserting the 

13 following: 

14 ‘‘(d) [RESERVED].’’; 

15 (2) by striking subsection (h) and inserting the 

16 following: 

17 ‘‘(h) [RESERVED].’’; 

18 (3) by striking subsection (j) and inserting the 

19 following: 

20 ‘‘(j) [RESERVED].’’; and 

21 (4) by striking subsection (k) and inserting the 

22 following: 

23 ‘‘(k) [RESERVED].’’. 

24 (f) CONTINUATION OF TEMPORARY PREDISASTER MITI25 GATION PROGRAM.—
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1 (1) IN GENERAL.—There is a predisaster mitiga2 tion program under which the Administrator may 

3 make, under section 7(b)(1) of the Small Business Act 

4 (15 U.S.C. 636(b)(1)) such loans (either directly or in 

5 cooperation with banks or other lending institutions 

6 through agreements to participate on an immediate 

7 or deferred (guaranteed) basis), as the Administrator 

8 may determine to be necessary or appropriate, to en9 able small businesses to use mitigation techniques in 

10 support of a formal mitigation program established 

11 by the Federal Emergency Management Agency, ex12 cept that no loan or guarantee may be extended to a 

13 small business under this paragraph unless the Ad14 ministrator finds that the small business is otherwise 

15 unable to obtain credit for the purposes described in 

16 this paragraph. 

17 (2) TERMINATION.—No loan shall be made under 

18 this subsection after September 30, 2004. 

19 (g) EFFECTIVE DATE.—The amendments made under 

20 this section shall apply to loans and grants made, and other 

21 assistance provided, after the date of the enactment of this 

22 Act. 
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1 SEC. 208. GOVERNMENT CONTRACT AND BUSINESS DEVEL2 OPMENT ASSISTANCE FOR SMALL BUSINESS 

3 CONCERNS, ETC. 

4 (a) IN GENERAL.—Section 8 of the Small Business Act 

5 (15 U.S.C. 637) is amended by striking subsections (a), (b), 

6 and (c) and inserting the following new subsections: 

7 ‘‘(a) GOVERNMENT CONTRACT AND BUSINESS DEVEL8 OPMENT ASSISTANCE FOR SMALL BUSINESS CONCERNS.—

9 ‘‘(1) ESTABLISHMENT.—There is within the Ad10 ministration a program to be carried out by the Ad11 ministrator to enhance the competitive viability of 

12 program participants by providing Government con13 tract and business development assistance to program 

14 participants consistent with the requirements of this 

15 section. 

16 ‘‘(2)(A) CONTRACT AUTHORITY.—The Adminis17 trator shall, to the extent that Administrator deter18 mines it to be necessary or appropriate, enter into 

19 any contract with any contracting officer obligating 

20 the Administrator to furnish goods or service to the 

21 Government. 

22 ‘‘(B) NEGOTIATION WITH CONTRACTING OFFI23 CER.—In any case in which the Administrator cer24 tifies to a contracting officer that the Administrator 

25 is competent and responsible to perform any procure26 ment contract to be let by such officer, such officer 
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1 may let such procurement contract to the Adminis2 trator upon such terms and conditions as may be 

3 agreed upon between the Administrator and such offi4 cer. 

5 ‘‘(C) FAIR MARKET PRICE RESTRICTION.—A con6 tracting officer shall not let a contract for goods or 

7 services under this paragraph if the amount of such 

8 contract exceeds the fair market price of such goods 

9 or services. 

10 ‘‘(D) APPEAL OF CONTRACTING OFFICER DECI11 SION.—(i) Whenever the Administrator and a con12 tracting officer fail to agree, the matter shall be sub13 mitted for determination by the Administrator to the 

14 head of the agency of the contracting officer. 

15 ‘‘(ii) Not later than 5 days from the date the Ad16 ministrator is notified of a contracting officer’s ad17 verse decision, the Administrator may notify the con18 tracting officer of the intent to appeal such adverse 

19 decision, and within 15 days of such date the Admin20 istrator shall file a written request for a reconsider21 ation of the adverse decision with head of the agency. 

22 ‘‘(iii) For purposes of this subparagraph, a con23 tracting officer’s adverse decision includes a decision 

24 not to make available for award pursuant to this sub25 section a particular procurement requirement or the 
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1 failure to agree on the terms and conditions of a con2 tract to be awarded noncompetitively under the au3 thority of this subsection. 

4 ‘‘(iv) Upon receipt of the notice of intent to ap5 peal, the head of the agency shall suspend further ac6 tion regarding the procurement until a written deci7 sion on the Administrator’s request for reconsider8 ation has been issued by such agency head, unless the 

9 head of the agency makes a written determination 

10 that urgent and compelling circumstances which sig11 nificantly affect interests of the United States will not 

12 permit waiting for a reconsideration of the adverse 

13 decision. 

14 ‘‘(v) If the Administrator’s request for reconsid15 eration is denied, the head of the agency shall specify 

16 the reasons why the selected firm was determined to 

17 be incapable to perform the procurement requirement, 

18 and the findings supporting such determination, 

19 which shall be made a part of the contract file for the 

20 requirement. 

21 ‘‘(E) DETERMINATION OF UNSUITABILITY.—If a 

22 contracting officer requests the Administrator to make 

23 the certification described in subparagraph (B) with 

24 respect to any contract that the Administrator deter25 mines is not suitable for award under this subsection, 
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1 the Administrator shall notify the contracting officer 

2 of the Administrator’s determination not later than 3 

3 days after the date of such request. 

4 ‘‘(F) SUBCONTRACTING AUTHORITY.—(i) The 

5 Administrator shall, to the extent that the Adminis6 trator determines it to be necessary or appropriate, 

7 arrange for the performance of such procurement con8 tracts by negotiating or otherwise letting subcontracts 

9 to program participants for such goods or services as 

10 may be necessary to enable the Administrator to per11 form such contracts. 

12 ‘‘(ii)(I) Except as authorized by subclause (II) or 

13 (III), no award shall be made pursuant to this section 

14 to other than a small business concern. 

15 ‘‘(II) In determining the size of a small business 

16 concern owned by a socially and economically dis17 advantaged Indian tribe (or a wholly owned business 

18 entity of such tribe), each firm’s size shall be inde19 pendently determined without regard to its affiliation 

20 with the tribe, any entity of the tribal organization, 

21 or any other business enterprise owned by the tribe, 

22 unless the Administrator determines that one or more 

23 such tribally owned business concerns have obtained, 

24 or are likely to obtain, a substantial unfair competi25 tive advantage within an industry category.
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1 ‘‘(III) Any joint venture established under the 

2 authority of section 602(b) of the Business Oppor3 tunity Development Reform Act of 1988 (Public Law 

4 100–656) shall be eligible for award of a contract 

5 pursuant to this section. 

6 ‘‘(G) DELEGATION OF CONTRACT ADMINISTRA7 TION.—(i) The Administrator and the head of the 

8 agency making the procurement shall enter into an 

9 agreement under which a subcontract awarded under 

10 this subsection shall be administered by the head of 

11 the agency making the procurement. 

12 ‘‘(ii) Notwithstanding clause (i), the Adminis13 trator shall negotiate and award any such sub14 contract and shall assist the program participant in 

15 the settlement of any dispute arising from the per16 formance of such subcontract. 

17 ‘‘(iii) Any agreement entered into by the Admin18 istrator with the head of another agency before the 

19 date of the enactment of this clause that allows such 

20 agency head to negotiate or award a contract under 

21 this subsection shall not apply with respect to any 

22 subcontract offered for award after such date. 

23 ‘‘(H) AWARD AFTER GRADUATION.—The Admin24 istrator shall, to the extent that the Administrator de25 termines it to be necessary or appropriate, make an 
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1 award to a small business concern which has com2 pleted its period of program participation as de3 scribed in paragraph (21)(F) if—

4 ‘‘(i) the contract will be awarded as a result 

5 of an offer (including price) submitted in re6 sponse to a published solicitation relating to a 

7 competition conducted pursuant to subparagraph 

8 (H); and 

9 ‘‘(ii) the prospective contract awardee was a 

10 program participant eligible for award of the 

11 contract on the date specified for receipt of offers 

12 contained in the contract solicitation. 

13 ‘‘(I) AWARD THROUGH COMPETITION.—(i) A 

14 subcontract offered for award pursuant to this sub15 section shall be awarded on the basis of competition 

16 restricted to program participants if—

17 ‘‘(I) there is a reasonable expectation that 

18 at least 2 program participants will submit of19 fers and that award can be made at a fair mar20 ket price; and 

21 ‘‘(II) the estimated anticipated award price 

22 of the contract (including options) may exceed 

23 $5,000,000 in the case of a contract opportunity 

24 assigned a North American Industrial Classifica25 tion System code for manufacturing and 
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1 $3,000,000 (including options) in the case of all 

2 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 (I), 

9 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 per13 formance 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 geographic 

23 distribution of sole source contracts awarded pursu24 ant to this subsection. 
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1 ‘‘(3) SURETY BONDS.—Notwithstanding sub2 sections (a) and (c) of the first section of the Act enti3 tled ‘An Act requiring contracts for the construction, 

4 alteration, and repair of any public building or pub5 lic work of the United States to be accompanied by 

6 a performance bond protecting the United States and 

7 by additional bond for the protection of persons fur8 nishing material and labor for the construction, alter9 ation, or repair of said public buildings or public 

10 work,’ approved August 24, 1935 (49 Stat. 793; 40 

11 U.S.C. 270a), no program participant shall be re12 quired to provide any amount of any bond as a con13 dition of receiving any subcontract under this sub14 section 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 measures 

19 as the Administrator considers appropriate for 

20 the protection of persons furnishing materials 

21 and labor to a program participant receiving 

22 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 such 

3 bonds as the Administrator may subsequently re4 quire for the successful completion of any pro5 gram conducted under the authority of this sub6 section; 

7 ‘‘(D) the Administrator finds that such pro8 gram 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 sub11 ject to the guarantee provisions of title IV of the 

12 Small Business Investment Act of 1958; and 

13 ‘‘(E) the program participant is determined 

14 to be a startup concern and such concern has not 

15 been participating in any program conducted 

16 under the authority of this subsection for a pe17 riod exceeding one year. 

18 ‘‘(4) SOLE SOURCE CONTRACT NEGOTIATION.—

19 (A) Any program participant selected by the Admin20 istrator to perform a contract to be let noncompeti21 tively pursuant to this subsection shall, when prac22 ticable, participate in any negotiation of the terms 

23 and conditions of such contract. 

24 ‘‘(B) CALCULATION OF FAIR MARKET PRICE.—(i) 

25 For purposes of paragraph (2)(C), a fair market price
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1 shall be determined by the agency according to clauses 

2 (ii) and (iii) and submitted along with the procure3 ment requirement to the Administrator. The submis4 sion also shall include any data used by the agency 

5 in calculating the fair market price. 

6 ‘‘(ii) The estimate of a current fair market price 

7 for a new procurement requirement, or a requirement 

8 that does not have a satisfactory procurement history, 

9 shall be derived from a price or cost analysis taking 

10 into account prevailing market conditions, commer11 cial prices for similar goods or services, and data 

12 from other Federal agencies. Such analysis shall con13 sider such cost or pricing data as may be timely sub14 mitted by the Administrator. 

15 ‘‘(iii) The estimate of a current fair market price 

16 for a procurement requirement that has a satisfactory 

17 procurement history shall be based on recent award 

18 prices adjusted to insure comparability. Such adjust19 ments shall take into account differences in quan20 tities, performance times, plans, specifications, trans21 portation costs, packaging and packing costs, labor 

22 and materials costs, overhead costs, and any other ad23 ditional costs which may be deemed appropriate. 

24 ‘‘(iv) The agency’s estimate of the current fair 

25 market price (and any supporting data furnished to 
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1 the Administrator) shall not be disclosed to any po2 tential offeror (other than the Administrator). 

3 ‘‘(C) A program participant selected by the Ad4 ministrator to perform or negotiate a contract to be 

5 let pursuant to this subsection may request the Ad6 ministrator to protect the agency’s estimate of the fair 

7 market price for such contract pursuant to paragraph 

8 (2)(A). 

9 ‘‘(5) SOCIAL DISADVANTAGE.—(A) Socially dis10 advantaged individuals are those who have been sub11 jected to racial or ethnic prejudice or cultural bias be12 cause of their identity as a member of a group with13 out regard to their individual qualities. 

14 ‘‘(B) Any determination made pursuant to this 

15 paragraph shall be made by the Administrator and 

16 shall not be delegated. 

17 ‘‘(6) ECONOMIC DISADVANTAGE.—(A)(i) Eco18 nomically disadvantaged individuals are those so19 cially disadvantaged individuals whose ability to 

20 compete in the free enterprise system has been im21 paired due to diminished capital and credit opportu22 nities as compared to others in the same business area 

23 who are not socially disadvantaged. 

24 ‘‘(ii) In determining the degree of diminished 

25 credit and capital opportunities the Administrator 
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1 shall consider the assets and net worth of such socially 

2 disadvantaged individual as it relates to—

3 ‘‘(I) the assets and net worth of a business 

4 owner who is not socially disadvantaged; and 

5 ‘‘(II) the capital needs of the primary in6 dustry in which the owner of the business is en7 gaged. 

8 ‘‘(iii) In determining the economic disadvantage 

9 of an Indian tribe, the Administrator shall consider, 

10 where available, information such as the following—

11 ‘‘(I) the per capita income of members of 

12 the tribe excluding judgment awards; 

13 ‘‘(II) the percentage of the local Indian pop14 ulation below the poverty level; and 

15 ‘‘(III) the tribe’s access to capital markets. 

16 ‘‘(B) For the purpose of this section, an indi17 vidual who has been determined by the Administrator 

18 to be economically disadvantaged at the time of pro19 gram entry shall be deemed to be economically dis20 advantaged for the term of the program, as computed 

21 under paragraph (21). 

22 ‘‘(C) Whenever the Administrator computes per23 sonal net worth for the purpose of program entry, it 

24 shall exclude from such computation—
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1 ‘‘(i) the value of investments that disadvan2 taged owners have in their concerns, except that 

3 such value shall be taken into account under this 

4 paragraph when comparing such concerns to 

5 other concerns in the same business area that are 

6 owned by other than socially disadvantaged per7 sons; and 

8 ‘‘(ii) the equity that disadvantaged owners 

9 have in their primary personal residences. 

10 ‘‘(D) The Administrator shall not establish a 

11 maximum net worth that prohibits program entry 

12 that is less than $750,000. 

13 ‘‘(7) PROGRAM PARTICIPANT.—

14 ‘‘(A) DEFINITION.—For purposes of this sec15 tion, the term ‘program participant’ means a 

16 small business concern which is certified by the 

17 Administrator that it meets the requirements of 

18 subparagraph (B) and—

19 ‘‘(i) which is at least 51 percent un20 conditionally owned by—

21 ‘‘(I) one or more socially and, at 

22 the time of program entry, economi23 cally disadvantaged individuals,
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1 ‘‘(II) an economically disadvan2 taged Indian tribe, (or a wholly owned 

3 business entity of such tribe), or 

4 ‘‘(III) an economically disadvan5 taged Native Hawaiian organization, 

6 or 

7 ‘‘(ii) in the case of any publicly owned 

8 business, at least 51 percent of the stock of 

9 which is unconditionally owned by—

10 ‘‘(I) one or more socially and, at 

11 the time of program entry, economi12 cally disadvantaged individuals, 

13 ‘‘(II) an economically disadvan14 taged Indian tribe (or a wholly owned 

15 business entity of such tribe), or 

16 ‘‘(III) an economically disadvan17 taged Native Hawaiian organization. 

18 ‘‘(B) PROGRAM PARTICIPATION ELIGI19 BILITY.—A program participant meets the re20 quirements of this subparagraph if the manage21 ment and daily business operations of such small 

22 concern are controlled by one or more—

23 ‘‘(i) socially and, at the time of pro24 gram entry, economically disadvantaged in-
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1 dividuals described in subparagraph 

2 (A)(i)(I) or subparagraph (A)(ii)(I), 

3 ‘‘(ii) members of an economically dis4 advantaged Indian tribe described in sub5 paragraph (A)(i)(II) or subparagraph 

6 (A)(ii)(II), or 

7 ‘‘(iii) Native Hawaiian organizations 

8 described in subparagraph (A)(i)(III) or 

9 subparagraph (A)(ii)(III). 

10 ‘‘(C) NATIVE HAWAIIAN ORGANIZATION.—

11 For purposes of this subsection, the term ‘Native 

12 Hawaiian Organization’ means any community 

13 service organization serving Native Hawaiians 

14 in the State of Hawaii which—

15 ‘‘(i) is a nonprofit corporation that has 

16 filed articles of incorporation with the di17 rector (or the designee thereof) of the Ha18 waii Department of Commerce and Con19 sumer Affairs, or any successor agency, 

20 ‘‘(ii) is controlled by Native Hawai21 ians, and 

22 ‘‘(iii) whose business activities will 

23 principally benefit such Native Hawaiians. 

24 ‘‘(D) ANNUAL CERTIFICATION.—Each pro25 gram participant shall certify to the District Di-
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1 rector for the district in which its principal 

2 place of business is located, on an annual basis, 

3 that it meets the requirements of this paragraph 

4 regarding ownership and control by socially dis5 advantaged individuals. 

6 ‘‘(E) CAPABILITY DETERMINATION.—The 

7 term ‘program participant’ shall not include any 

8 concern unless the Administrator determines that 

9 with contract, financial, technical, and manage10 ment support the small business concern will be 

11 able to perform contracts which may be awarded 

12 to such concern under paragraph (2)(F) and has 

13 reasonable prospects for success in competing in 

14 the private sector. 

15 ‘‘(F) SPECIAL RULES ON ELIGIBILITY.—(i) 

16 Except as provided in clause (iii), no individual 

17 who was determined pursuant to this section to 

18 be socially and economically disadvantaged be19 fore the date of the enactment of this subpara20 graph shall be permitted to assert such disadvan21 tage with respect to any other concern making 

22 application for certification after such date. 

23 ‘‘(ii) Except as provided in clause (iii), any 

24 individual upon whom eligibility is based pursu25 ant to paragraph (5) shall be permitted to assert 
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1 such eligibility for only one small business con2 cern. 

3 ‘‘(iii) A socially and economically dis4 advantaged Indian tribe may own more than 

5 one small business concern eligible for assistance 

6 pursuant to this subsection if—

7 ‘‘(I) the Indian tribe does not own an8 other firm in the same industry which has 

9 been determined to be eligible to receive con10 tracts under this program, and 

11 ‘‘(II) the individuals responsible for the 

12 management and daily operations of the 

13 concern do not manage more than two pro14 gram participants. 

15 ‘‘(iv) No program participant, previously 

16 eligible for the award of contracts pursuant to 

17 this subsection, shall be subsequently recertified 

18 for program participation if its prior participa19 tion in the program was concluded for any of the 

20 reasons described in paragraph (10). 

21 ‘‘(v)(I) A program participant eligible for 

22 the award of contracts pursuant to this sub23 section shall remain eligible for such contracts if 

24 there is a transfer of ownership or control of the 

25 program participant that does not alter the eligi-
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1 bility of the program participant as determined 

2 by paragraphs (5), (6), and (7). 

3 ‘‘(II) The program participant shall notify 

4 the Assistant Administrator for Minority Small 

5 Business and Capital Ownership of any such 

6 change in control or ownership and provide the 

7 Assistant Administrator with sufficient informa8 tion to enable the Assistant Administrator to de9 termine that the transfer of ownership and con10 trol does not alter eligibility for participation in 

11 the program. 

12 ‘‘(III) In the event of such a alteration of 

13 ownership or control, the concern, if not termi14 nated or graduated, shall be eligible for a period 

15 of continued participation in the program not to 

16 exceed the time limitations prescribed in para17 graph (27). 

18 ‘‘(8) MANAGEMENT RESTRICTIONS.—(A) The Ad19 ministrator shall not restrict the amount of money 

20 that may be removed from the program participants 

21 by its owners. 

22 ‘‘(B) The Administrator shall not impose any re23 strictions on the management of the company except 

24 insofar as such management would violate other eligi25 bility provisions or Federal procurement law.
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1 ‘‘(C) Notwithstanding this provision, the Admin2 istrator may determine that a program participant is 

3 not capable of performing a specific contract and 

4 may choose not to award a contract to a program 

5 participant. 

6 ‘‘(9) EXPANSION INTO OTHER INDUSTRIES.—

7 Limitations established by the Administrator in its 

8 regulations and procedures restricting the award of 

9 contracts pursuant to this subsection to a limited 

10 number of North American Industry Classification 

11 System codes in an approved business plan shall not 

12 be applied in a manner that inhibits the logical busi13 ness progression by a program participant into areas 

14 of industrial endeavor where such concern has the po15 tential for success. 

16 ‘‘(10) OPPORTUNITY FOR HEARING.—(A) Subject 

17 to the provisions of subparagraph (E), the Adminis18 trator, prior to taking any action described in sub19 paragraph (B), shall provide the program participant 

20 that is the subject of such action, an opportunity for 

21 a hearing on the record after providing written notifi22 cation of an action set forth in paragraph (B), in ac23 cordance with chapter 5 of title 5, United States 

24 Code. 
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1 ‘‘(B) The actions referred to in subparagraph (A) 

2 are—

3 ‘‘(i) denial of program admission based 

4 upon a negative determination pursuant to 

5 paragraph (5), (6), or (7); 

6 ‘‘(ii) a termination pursuant to paragraph 

7 (21)(D); 

8 ‘‘(iii) a graduation pursuant to paragraph 

9 (21)(F); and 

10 ‘‘(iv) the denial of a request to issue a waiv11 er pursuant to paragraph (20)(B). 

12 ‘‘(C) The Administrator’s proposed action, in 

13 any proceeding conducted under the authority of this 

14 paragraph, shall be sustained unless the decision is 

15 not supported by substantial evidence in the record. 

16 ‘‘(D) A decision rendered pursuant to this para17 graph shall be considered final agency action for pur18 poses of chapter 7 of title 5, United States Code. 

19 ‘‘(E) The hearing officer selected to preside over 

20 a proceeding conducted under the authority of this 

21 paragraph shall decline to accept jurisdiction over 

22 any matter that—

23 ‘‘(i) does not, on its face, allege facts that, 

24 if proven to be true, would warrant reversal or 

25 modification of the Administrator’s position; 
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1 ‘‘(ii) is untimely filed; 

2 ‘‘(iii) is not filed in accordance with the 

3 rules of procedure governing such proceedings; 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 au8 thority of this paragraph shall be completed and a de9 cision rendered, insofar as practicable, within 90 

10 days after a written notification of the Administrator 

11 taking an action pursuant to subparagraph (B). 

12 ‘‘(11) OUTREACH EFFORT.—(A) The Adminis13 trator shall develop and implement an outreach pro14 gram to inform and recruit small business concerns 

15 to apply for eligibility for assistance under this sub16 section. 

17 ‘‘(B) Such program shall make a sustained and 

18 substantial effort to solicit applications for certifi19 cation from small business concerns located in areas 

20 of concentrated unemployment or underemployment 

21 or within labor surplus areas and within States hav22 ing relatively few program participants and from po23 tentially eligible program participants in industry 

24 categories that have not substantially participated in 
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1 the award of contracts let under the authority of this 

2 subsection. 

3 ‘‘(12) CONSTRUCTION CONTRACTS.—To the max4 imum extent practicable, construction subcontracts 

5 awarded by the Administrator pursuant to this sub6 section shall be awarded within the county or State 

7 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 sub11 contracts pursuant to this subsection to annually 

12 prepare and submit to the Administrator a ca13 pability 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 business op18 portunity specialist in the district to which the 

19 program participant is assigned. 

20 ‘‘(C) CLASSIFICATION.—The Administrator 

21 shall separate such statements by those program 

22 participants primarily dependent upon local 

23 contract support and those primarily requiring 

24 a national marketing effort. 
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1 ‘‘(D) DISSEMINATION.—Statements pri2 marily dependent upon local contract support 

3 shall be disseminated to appropriate buying ac4 tivities in the marketing area of the concern. The 

5 remaining statements shall be disseminated to 

6 the Directors of Small and Disadvantaged Busi7 ness Utilization for the appropriate agencies who 

8 shall further distribute such statements to buying 

9 activities within such agencies that may pur10 chase the types of items or services described on 

11 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 relevant 

16 business opportunity specialist to indicate the 

17 number, type and approximate dollar value of 

18 contract opportunities that such activities may 

19 be awarding over the succeeding 12-month period 

20 and which may be appropriate to consider for 

21 contracting with the Administrator and subse22 quent subcontracting to those concerns for which 

23 it has received capability statements. 

24 ‘‘(14) CONTRACT FORECAST.—(A) Each executive 

25 agency reporting to the Federal Procurement Data
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1 System contract actions with an aggregate value in 

2 excess of $50,000,000 shall prepare a forecast of ex3 pected contract opportunities or classes of contract op4 portunities for the next and succeeding fiscal years 

5 that small business concerns, including those owned 

6 and controlled by socially and economically disadvan7 taged individuals, are capable of performing. Such 

8 forecast shall be periodically revised during such year. 

9 To the extent such information is available, the agen10 cy forecasts shall specify the following: 

11 ‘‘(i) The approximate number of individual 

12 contract opportunities (and the number of oppor13 tunities within a class). 

14 ‘‘(ii) The approximate dollar value, or 

15 range of dollar values, for each contract oppor16 tunity or class of contract opportunities. 

17 ‘‘(iii) The anticipated time (by fiscal year 

18 quarter) for the issuance of a procurement re19 quest. 

20 ‘‘(iv) The activity responsible for the award 

21 and administration of the contract. 

22 ‘‘(B) FORECAST DISSEMINATION.—The head of 

23 each executive agency subject to the provisions of sub24 paragraph (A) shall within 10 days of completion 

25 furnish such forecasts to the Administrator and the 
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1 Director of the Office of Small and Disadvantaged 

2 Business Utilization established pursuant to section 

3 15(k) of this Act for such agency. 

4 ‘‘(C) LIMITS ON DISSEMINATION.—The informa5 tion reported pursuant to subparagraph (B) may be 

6 limited to classes of items and services for which there 

7 are substantial annual purchases. 

8 ‘‘(D) FORECAST AVAILABILITY.—Such forecasts 

9 shall be available to program participants and all 

10 other small business concerns. 

11 ‘‘(15) PERCENTAGES OF CONTRACT PERFORM12 ANCE BY PROGRAM PARTICIPANTS.—

13 ‘‘(A) SERVICES AND PROCUREMENT.—A 

14 program participant may not be awarded a con15 tract under this subsection unless the program 

16 participant agrees that—

17 ‘‘(i) in the case of a contract for serv18 ices (except construction), at least 50 per19 cent of the cost of contract performance in20 curred for personnel shall be expended for 

21 employees of the concern; and 

22 ‘‘(ii) in the case of a contract for pro23 curement of supplies (other than procure24 ment from a regular dealer in such sup25 plies), the concern will perform work for at 
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1 least 50 percent of the cost of manufac2 turing the supplies (not including the cost 

3 of materials). 

4 ‘‘(B) ALTERATION OF PERCENTAGES.—The 

5 Administrator may change the percentage under 

6 clause (i) or (ii) of subparagraph (A) if the Ad7 ministrator determines that such change is nec8 essary to reflect conventional industry practices 

9 among business concerns that are below the nu10 merical size standard established by the Admin11 istrator pursuant to section 3(a) of this Act for 

12 businesses in that industry category. A percent13 age established under the preceding sentence may 

14 not differ from a percentage established under 

15 section 15(n) of this Act. 

16 ‘‘(C) CONSTRUCTION CONTRACT REGULA17 TIONS.—(i) The Administrator shall establish, by 

18 regulation and after the opportunity for notice 

19 and comment, requirements similar to those 

20 specified in subparagraph (A) to be applicable to 

21 contracts for general and specialty construction 

22 and to contracts for any other industry category 

23 not otherwise subject to the requirements of such 

24 subparagraph. 
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1 ‘‘(ii) The percentage applicable to any such 

2 requirement shall be determined in accordance 

3 with subparagraph (B), except that such a per4 centage may not differ from a percentage estab5 lished under section 15(n) of this Act for the 

6 same industry category. 

7 ‘‘(16) PERFORMANCE EXCEPTION FOR WHOLE8 SALERS AND RETAILERS.—(A) An otherwise respon9 sible program participant that is in compliance with 

10 the requirements of subparagraph (B) shall not be de11 nied the opportunity to submit and have considered 

12 its offer for any procurement contract for the supply 

13 of a product to be let pursuant to this subsection or 

14 section 15(a) solely because such concern is other than 

15 the actual manufacturer or processor of the product to 

16 be supplied under the contract. 

17 ‘‘(B) To be in compliance with the requirements 

18 referred to in subparagraph (A), the program partici19 pant shall—

20 ‘‘(i) be primarily engaged in the wholesale 

21 or retail trade; 

22 ‘‘(ii) be a small business concern under the 

23 size standard for the North American Industrial 

24 Classification System Code assigned to the con-
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1 tract solicitation on which the offer is being 

2 made; 

3 ‘‘(iii) be a regular dealer, as defined pursu4 ant to section 1(a) of the Act entitled ‘An Act to 

5 provide conditions for the purchase of supplies 

6 and the making of contracts by the United 

7 States, and for other purposes’, approved June 

8 30, 1936 (popularly known as the ‘Walsh-Healey 

9 Act’; 41 U.S.C. 35(a)), in the product to be of10 fered the Government or be specifically exempted 

11 from such section by paragraph (24)(C) of this 

12 subsection; and 

13 ‘‘(iv) represent that it will supply the prod14 uct of a small manufacturer as defined in section 

15 3 of this Act, unless a waiver of such require16 ment is granted—

17 ‘‘(I) by the Administrator, after re18 viewing a determination by the contracting 

19 officer that no small manufacturer can rea20 sonably be expected to offer a product meet21 ing the specifications (including period for 

22 performance) required of an offeror by the 

23 solicitation; or 

24 ‘‘(II) by the Administrator for a prod25 uct (or class of products), after determining
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1 that no small manufacturer is available to 

2 participate in the Federal procurement 

3 market. 

4 ‘‘(17) RESTRICTION ON ADMINISTRATION EM5 PLOYEES.—

6 ‘‘(A) IN GENERAL.—No person within the 

7 employ of the Administration shall, during the 

8 term of such employment and for a period of two 

9 years after such employment has been termi10 nated, engage in any activity or transaction 

11 specified in subparagraph (B) with respect to 

12 any program participant if such person partici13 pated personally (either directly or indirectly) in 

14 decision-making responsibilities relating to such 

15 program participant or with respect to the ad16 ministration of any assistance provided to pro17 gram participants generally under this sub18 section, section 8(b), or section 7(a)(20). 

19 ‘‘(B) PROHIBITED TRANSACTIONS.—The ac20 tivities and transactions prohibited by subpara21 graph (A) include—

22 ‘‘(i) the buying, selling, or receiving 

23 (except by inheritance) of any legal or bene24 ficial ownership of stock or any other own-
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1 ership interest or the right to acquire any 

2 such interest; 

3 ‘‘(ii) the entering into or execution of 

4 any written or oral agreement (whether or 

5 not legally enforceable) to purchase or other6 wise obtain any right or interest described 

7 in clause (i); or 

8 ‘‘(iii) the receipt of any other benefit or 

9 right that may be an incident of ownership. 

10 ‘‘(C) EMPLOYEE CERTIFICATION AND PEN11 ALTIES.—(i) The employees designated in clause 

12 (ii) shall annually submit a written certification 

13 to the Administrator regarding compliance with 

14 the requirements of this paragraph. 

15 ‘‘(ii) The employees referred to in clause (i) 

16 are— 

17 ‘‘(I) regional administrators; 

18 ‘‘(II) district directors; 

19 ‘‘(III) the Assistant Administrator for 

20 Minority Small Business and Capital Own21 ership Development; 

22 ‘‘(IV) employees whose principal duties 

23 relate to the award of contracts or the pro24 vision of other assistance pursuant to this 

25 subsection or section 8(b); and 
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1 ‘‘(V) such other employees as the Ad2 ministrator may designate. 

3 ‘‘(iii) Any present or former employee of the 

4 Administration who violates this paragraph 

5 shall be subject to a civil penalty, assessed by the 

6 Attorney General, that shall not exceed 300 per7 cent of the maximum amount of gain such em8 ployee realized or could have realized as a result 

9 of engaging in those activities and transactions 

10 prescribed by subparagraph (B). 

11 ‘‘(iv) In addition to any other remedy or 

12 sanction provided for under law or regulation, 

13 any person who falsely certifies pursuant to 

14 clause (i) shall be subject to a civil penalty 

15 under the Program Fraud Civil Remedies Act of 

16 1986 (31 U.S.C. 3801–3812). 

17 ‘‘(18) PROHIBITION ON POLITICAL ACTIVITY.—

18 ‘‘(A) IN GENERAL.—Any employee of the 

19 Administration who has authority to take, direct 

20 others to take, recommend, or approve any ac21 tion with respect to any program or activity 

22 conducted pursuant to this subsection or section 

23 8(b), shall not, with respect to any such action, 

24 exercise or threaten to exercise such authority on 

25 the basis of the political activity or affiliation of 
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1 any party. Employees of the Administration 

2 shall expeditiously report to the Inspector Gen3 eral of the Administration any such action for 

4 which such employee’s participation has been so5 licited or directed. 

6 ‘‘(B) PENALTIES.—Any employee who will7 fully and knowingly violates subparagraph (A) 

8 shall be subject to disciplinary action which may 

9 consist of separation from service, reduction in 

10 grade, suspension, or reprimand. 

11 ‘‘(C) EXCEPTION.—Subparagraph (A) shall 

12 not apply to any action taken as a penalty or 

13 other enforcement of a violation of any law, rule, 

14 or regulation prohibiting or restricting political 

15 activity. 

16 ‘‘(D) OTHER LAWS NOT AFFECTED.—The 

17 prohibitions of subparagraph (A), and remedial 

18 measures provided for under subparagraphs (B) 

19 and (C) with regard to such prohibitions, shall 

20 be in addition to, and not in lieu of, any other 

21 prohibitions, measures or liabilities that may 

22 arise under any other provision of law. 

23 ‘‘(19) ANNUAL REPORT TO BUSINESS OPPOR24 TUNITY SPECIALIST.—
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1 ‘‘(A) IN GENERAL.—Program participants 

2 shall semiannually report to their assigned busi3 ness opportunity specialist the following: 

4 ‘‘(i) A listing of any agents, represent5 atives, attorneys, accountants, consultants, 

6 and other parties (other than employees) re7 ceiving compensation to assist in obtaining 

8 a Federal contract for such program partic9 ipant. 

10 ‘‘(ii) The amount of compensation re11 ceived by any person listed under clause (i) 

12 during the relevant reporting period and a 

13 description of the activities performed in re14 turn for such compensation. 

15 ‘‘(B) SUBMISSIONS TO PRINCIPAL OFFICE.—

16 The business opportunity specialist shall 

17 promptly review and forward such report to the 

18 Assistant Administrator for Minority Small 

19 Business and Capital Ownership Development. 

20 Any report that raises a suspicion of improper 

21 activity shall be reported immediately to the In22 spector General of the Administration. 

23 ‘‘(C) CAUSE FOR TERMINATION.—The fail24 ure to submit a report pursuant to the require25 ments of this subsection and applicable regula-
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1 tions shall be considered good cause for the initi2 ation of a termination proceeding pursuant to 

3 paragraph (21)(D) of this section. 

4 ‘‘(20) EFFECT OF CHANGE OF OWNERSHIP AND

5 CONTROL.—

6 ‘‘(A) IN GENERAL.—

7 ‘‘(i) Subject to the provisions of sub8 paragraph (B), a contract (including op9 tions) awarded pursuant to this subsection 

10 shall be performed (as performance is de11 fined in paragraphs (15) and (16)) by the 

12 program participant that initially received 

13 such contract. 

14 ‘‘(ii) Notwithstanding the provisions of 

15 clause (i), if the owner or owners upon 

16 whom eligibility was based relinquish own17 ership or control of such concern, or enter 

18 into any agreement to relinquish such own19 ership or control, such contract or option 

20 shall be terminated for the convenience of 

21 the Government, except that no repurchase 

22 costs or other damages may be assessed 

23 against such concerns due solely to the pro24 visions of this subparagraph.
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1 ‘‘(B) WAIVER.—The Administrator may, on 

2 a nondelegable basis, waive the requirements of 

3 subparagraph (A) only if one of the following 

4 conditions exist: 

5 ‘‘(i) When it is necessary for the own6 ers of the concern to surrender partial con7 trol of such concern on a temporary basis in 

8 order to obtain equity financing. 

9 ‘‘(ii) The head of the contracting agen10 cy for which the contract is being performed 

11 certifies that termination of the contract 

12 would severely impair attainment of the 

13 agency’s program objectives or missions. 

14 ‘‘(iii) Ownership and control of the 

15 concern that is performing the contract will 

16 pass to another small business concern that 

17 is a program participant, but only if the 

18 acquiring firm would otherwise be eligible 

19 to receive the award pursuant to this sub20 section. 

21 ‘‘(iv) The individuals upon whom eli22 gibility was based are no longer able to ex23 ercise control of the concern due to inca24 pacity or death. 
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1 ‘‘(v) When, in order to raise equity 

2 capital, it is necessary for the disadvan3 taged owners of the concern to relinquish 

4 ownership of a majority of the voting stock 

5 of such concern, but only if—

6 ‘‘(I) such concern has exited the 

7 program established under this sub8 section; 

9 ‘‘(II) the disadvantaged owners 

10 will maintain ownership of the largest 

11 single outstanding block of voting stock 

12 (including stock held by affiliated par13 ties); and 

14 ‘‘(III) the disadvantaged owners 

15 will maintain control of daily business 

16 operations. 

17 ‘‘(C) TIMING OF WAIVER REQUEST.—The 

18 Administrator may waive the requirements of 

19 subparagraph (A) if—

20 ‘‘(i) in the case of subparagraphs 

21 (B)(i), (ii), and (iii), he is requested to do 

22 so prior to the actual relinquishment of 

23 ownership or control; and 

24 ‘‘(ii) in the case of subparagraph 

25 (B)(iv), he is requested to do so as soon as 
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1 possible after the incapacity or death oc2 curs. 

3 ‘‘(D) NOTIFICATION TO ADMINISTRATOR.—

4 Concerns performing contracts awarded pursu5 ant to this subsection shall be required to notify 

6 the Administration immediately upon entering 

7 an agreement (either oral or in writing) to 

8 transfer all or part of its stock or other owner9 ship interest to any other party. 

10 ‘‘(E) TREATMENT OF SMALL BUSINESS IN11 VESTMENT COMPANY INTEREST.—Notwith12 standing any other provision of law, for the pur13 poses of determining ownership and control of a 

14 concern under this section, any potential owner15 ship interests held by investment companies li16 censed under the Small Business Investment Act 

17 of 1958 shall be treated in the same manner as 

18 interests held by the individuals upon whom eli19 gibility is based. 

20 ‘‘(21) CONDITIONS OF PARTICIPATION.—

21 ‘‘(A) DURATION.—A program participant 

22 shall be permitted to continue participation in 

23 such program for a period of time which is 9 

24 years. Nothing contained in this subparagraph 

25 shall be deemed to prevent the Administrator 
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1 from instituting a termination or graduation 

2 pursuant to subparagraph (F) or (H) for issues 

3 unrelated to the expiration of any time period 

4 limitation. 

5 ‘‘(B) BUSINESS PLAN SUBMISSION.—(i) 

6 Promptly after certification as a participant in 

7 the program established by this section, a pro8 gram participant shall submit a business plan 

9 (hereinafter referred to as the ‘plan’) as described 

10 in clause (ii) of this subparagraph for review by 

11 the Business Opportunity Specialist assigned to 

12 assist such program participant. 

13 ‘‘(ii) The plan may be a revision of a pre14 liminary business plan submitted by the pro15 gram participant or required by the Adminis16 trator as a part of the application for certifi17 cation under this subsection and shall be de18 signed to result in the program participant 

19 eliminating the conditions or circumstances 

20 upon which the Administrator determined eligi21 bility pursuant to paragraph (7) of this section. 

22 ‘‘(iii) Such plan, and subsequent modifica23 tions submitted under clause (v), shall be ap24 proved by the Business Opportunity Specialist 

25 prior to the program participant being eligible 
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1 for award of a contract pursuant to this sub2 section. 

3 ‘‘(iv) The plans submitted under this sub4 paragraph shall include the following: 

5 ‘‘(I) An analysis of market potential, 

6 competitive environment, and other business 

7 analyses estimating the program partici8 pant’s prospects for profitable operations 

9 during the term of program participation 

10 and after graduation. 

11 ‘‘(II) An analysis of the program par12 ticipant’s strengths and weaknesses with 

13 particular attention to correcting any fi14 nancial, managerial, technical, or personnel 

15 conditions which are likely to impede the 

16 program participant from receiving con17 tracts other than those awarded under this 

18 section. 

19 ‘‘(III) Specific targets, objectives, and 

20 goals, for the business development of the 

21 program participant during the next and 

22 succeeding years utilizing the results of the 

23 analyses conducted pursuant to subclauses 

24 (I) and (II).
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1 ‘‘(IV) A transition management plan 

2 outlining specific steps to assure profitable 

3 business operations after graduation (to be 

4 incorporated into the program participant’s 

5 plan during the first year of the transi6 tional stage of program participation). 

7 ‘‘(V) Estimates of contract awards pur8 suant to this subsection and from other 

9 sources, which the program participant will 

10 require to meet the specific targets, objec11 tives, and goals for the years covered by its 

12 plan. 

13 ‘‘(v) Each program participant shall annu14 ally review its currently approved plan with its 

15 Business Opportunity Specialist and modify 

16 such plan as may be appropriate. Any modified 

17 plan shall be submitted to the District Director 

18 for approval. The currently approved plan shall 

19 be considered valid until such time as a modified 

20 plan is reviewed by the Business Opportunity 

21 Specialist and approved by the District Director. 

22 ‘‘(vi) Annual reviews pertaining to years in 

23 the transitional stage of program participation 

24 shall require, as appropriate, a written 

25 verification that such program participant has 
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1 complied with the requirements of paragraph 

2 (21)(G) of this section relating to attaining busi3 ness activity from sources other than contracts 

4 awarded pursuant to this section. 

5 ‘‘(vii) Each program participant shall an6 nually forecast its needs for contract awards 

7 under this section for the next program year and 

8 the succeeding program year during the review 

9 of its business plan, conducted pursuant to 

10 clause (v). Such forecast shall be known as the 

11 ‘section 8(a) contract support level’ and shall be 

12 included in the program participant’s business 

13 plan. Such forecast shall include—

14 ‘‘(I) the aggregate dollar value of con15 tract support to be sought on a noncompeti16 tive basis under this section, reflecting com17 pliance with the requirements of paragraph 

18 (21)(G) relating to attaining business activ19 ity from sources other than contracts 

20 awarded pursuant to this section, 

21 ‘‘(II) the types of contract opportuni22 ties being sought, identified by North Amer23 ican Industrial Classification System Code 

24 or otherwise, 
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•HR 2802 RH 

1 ‘‘(III) an estimate of the dollar value 

2 of the section 8(a) contract support level to 

3 be sought on a competitive basis, and 

4 ‘‘(IV) such other information as may 

5 be requested by the Business Opportunity 

6 Specialist to provide effective business devel7 opment assistance to the program partici8 pant. 

9 ‘‘(C) CONDITIONS FOR DENIAL OF ASSIST10 ANCE.—A program participant shall be denied 

11 all such assistance if such concern—

12 ‘‘(i) voluntarily elects not to continue 

13 participation; 

14 ‘‘(ii) completes the period of Program 

15 participation as prescribed by paragraph 

16 (21)(A); and 

17 ‘‘(iii) is terminated or graduated pur18 suant to proceedings conducted in accord19 ance with paragraph (10). 

20 ‘‘(D) TERMINATION DEFINED.—For pur21 poses of this subsection, the term ‘terminated’ 

22 and the term ‘termination’ means the total de23 nial or suspension of assistance under this para24 graph or under this section prior to the gradua25 tion of the program participant or prior to the 
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1 expiration of the maximum program participa2 tion term. An action for termination shall be 

3 based upon good cause, including—

4 ‘‘(i) the failure by such concern to 

5 maintain its eligibility for program partici6 pation; 

7 ‘‘(ii) the failure of the concern to en8 gage in business practices that will promote 

9 its competitiveness within a reasonable pe10 riod of time as evidenced by, among other 

11 indicators, a pattern of unjustified delin12 quent performance or terminations for de13 fault with respect to contracts awarded 

14 under the authority of this subsection; 

15 ‘‘(iii) a demonstrated pattern of failing 

16 to make required submissions or responses 

17 to Administration officials or employees in 

18 a timely manner; 

19 ‘‘(iv) the willful violation of any rule 

20 or regulation of the Administrator per21 taining to material issues; 

22 ‘‘(v) the debarment of the concern or its 

23 disadvantaged owners by any agency pursu24 ant to subpart 9.4 of title 48, Code of Fed-
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1 eral Regulations (or any successor regula2 tion); or 

3 ‘‘(vi) the conviction of the disadvan4 taged owner or an officer of the concern for 

5 any offense indicating a lack of business in6 tegrity including any conviction for embez7 zlement, theft, forgery, bribery, falsification 

8 or violation of section 16. For purposes of 

9 this clause, no termination action shall be 

10 taken with respect to a disadvantaged 

11 owner solely because of the conviction of an 

12 officer of the concern (who is other than a 

13 disadvantaged owner) unless such owner 

14 conspired with, abetted, or otherwise know15 ingly acquiesced in the activity or omission 

16 that was the basis of such officer’s convic17 tion. 

18 ‘‘(E) INITIATION OF TERMINATION PRO19 CEEDING.—(i) The District Director may ini20 tiate a termination proceeding by recommending 

21 such action to the Assistant Administrator for 

22 Minority Small Business and Capital Owner23 ship Development. 

24 ‘‘(ii) Whenever the Assistant Administrator 

25 determines such termination is appropriate,
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1 within 15 days after making such a determina2 tion the program participant shall be provided 

3 a written notice of intent to terminate, speci4 fying the reasons for such action. 

5 ‘‘(iii) No program participant shall be ter6 minated from the program pursuant to subpara7 graph (D) without first being afforded an oppor8 tunity for a hearing in accordance with para9 graph (10). 

10 ‘‘(iv) If a termination proceeding is initi11 ated against a program participant, such partic12 ipant shall be ineligible from receiving assistance 

13 pursuant to this section until the final disposi14 tion of the termination action. 

15 ‘‘(v) If the program participant is rein16 stated upon final decision by the Administrator 

17 pursuant to paragraph (10), the time during 

18 which the program participant did not receive 

19 assistance shall be added on to the original pro20 gram term end date. 

21 ‘‘(F) GRADUATION DEFINED.—For the pur22 poses of this subsection and subsection 8(b) the 

23 term ‘graduated’ or ‘graduation’ means that the 

24 program participant is recognized as successfully 

25 completing the program by substantially achiev-
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1 ing the targets, objectives, and goals contained in 

2 the concern’s business plan thereby dem3 onstrating its ability to compete in the market4 place without assistance under this section. 

5 ‘‘(G) BUSINESS ACTIVITY TARGETS.—(i) 

6 During the developmental stage of its participa7 tion in the program, a program participant 

8 shall take all reasonable efforts within its control 

9 to attain the targets contained in its business 

10 plan for contracts awarded other than pursuant 

11 to this subsection (hereinafter referred to as 

12 ‘business activity targets.’). 

13 ‘‘(ii) Such efforts shall be made a part of 

14 the business plan and shall be sufficient in scope 

15 and duration to satisfy the Administrator that 

16 the program participant will engage in a reason17 able marketing strategy that will maximize its 

18 potential to achieve its business activity targets. 

19 ‘‘(iii) During the transitional stage of the 

20 program a program participant shall be subject 

21 to regulations regarding business activity targets 

22 that are promulgated by the Administrator. Such 

23 regulations shall: 

24 ‘‘(I) Establish business activity targets 

25 applicable to program participants during 
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1 the fifth year and each succeeding year of 

2 program participation. 

3 ‘‘(aa) Such activity targets shall, 

4 for such period of time, reflect a rea5 sonably consistent increase in contracts 

6 awarded other than pursuant to this 

7 subsection, expressed as a percentage of 

8 total sales. 

9 ‘‘(bb) The Administrator may es10 tablish modified business activity tar11 gets for program participants that 

12 have participated in the program for a 

13 period of longer than 5 years on the 

14 date of the enactment of this Act. 

15 ‘‘(II) Require the program participant 

16 to certify that it has met its business activ17 ity targets or that it is in compliance with 

18 such remedial measures as may have been 

19 ordered pursuant to regulations issued 

20 under subclause (III) prior to the receipt of 

21 any contract awarded pursuant to this sub22 section. 

23 ‘‘(III) Authorize the Administrator to 

24 take appropriate remedial measures with 

25 respect to a program participant that has 
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1 failed to attain a required business activity 

2 target for the purpose of reducing such par3 ticipant’s dependence on contracts awarded 

4 pursuant to this section. 

5 ‘‘(aa) Such remedial actions may 

6 include assisting the program partici7 pant to expand the dollar volume of its 

8 competitive business activity or lim9 iting the dollar volume of contracts 

10 awarded to the program participant 

11 pursuant to this subsection. 

12 ‘‘(bb) Unless the remedial meas13 ures taken pursuant to subclause (aa) 

14 bar the award of contracts to program 

15 participants, no remedial measures 

16 shall be reviewable pursuant to para17 graph (10). 

18 ‘‘(H) ELIGIBILITY REVIEW.—(i) The Ad19 ministrator shall conduct an evaluation of a pro20 gram participant’s eligibility for continued par21 ticipation in the program whenever it receives 

22 specific and credible information alleging that 

23 such program participant no longer meets the re24 quirements for program eligibility. 
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1 ‘‘(ii) Upon making a finding that a pro2 gram participant is no longer eligible, the Ad3 ministrator shall initiate a termination pro4 ceeding in accordance with subparagraphs (D) 

5 and (E). 

6 ‘‘(iii) A program participant’s eligibility 

7 for award of any contract under the authority of 

8 this section may be suspended pursuant to sub9 part 9.4 of title 48, Code of Federal Regulations 

10 (or any successor regulation). 

11 ‘‘(22) CERTIFICATION AND REVIEW BY ADMINIS12 TRATOR.—

13 ‘‘(A) ASSISTANT ADMINISTRATOR COORDINA14 TION.—The Assistant Administrator for Minor15 ity Small Business and Capital Ownership De16 velopment shall be responsible for coordinating 

17 and formulating policies relating to Federal as18 sistance to small business concerns eligible for 

19 assistance under section 7(i) of this Act and pro20 gram participants. 

21 ‘‘(B) DIVISION OF PROGRAM CERTIFICATION

22 AND ELIGIBILITY.—(i) There is established a Di23 vision of Program Certification and Eligibility 

24 (hereinafter referred to in this paragraph as the 

25 ‘Division’) in the Office of Minority Small Busi-
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1 ness and Capital Ownership Development. The 

2 Division shall be headed by a Director who shall 

3 report directly to the Assistant Administrator for 

4 Minority Small Business and Capital Owner5 ship Development. The Division shall establish 

6 field offices within such regional offices of the 

7 Administration as may be necessary to perform 

8 efficiently its functions and responsibilities. 

9 ‘‘(ii) Subject to the provisions of paragraph 

10 (5)(B), the functions and responsibility of the 

11 Division of Program Certification and Eligi12 bility are to—

13 ‘‘(I) receive, review and evaluate appli14 cations for certification pursuant to para15 graphs (5), (6), and (7); 

16 ‘‘(II) advise each program applicant 

17 within 15 days after the receipt of an appli18 cation as to whether such application is 

19 complete and suitable for evaluation and, if 

20 not, what matters must be rectified; 

21 ‘‘(III) render recommendations on such 

22 applications to the Assistant Administrator 

23 for Minority Small Business and Capital 

24 Ownership Development;
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1 ‘‘(IV) review and evaluate financial 

2 statements and other submissions from con3 cerns participating in the program estab4 lished by this subsection to ascertain contin5 ued eligibility to receive subcontracts pursu6 ant to this section; 

7 ‘‘(V) make a request for the initiation 

8 of termination or graduation proceedings, 

9 as appropriate, to the Assistant Adminis10 trator for Minority Small Business and 

11 Capital Ownership Development; 

12 ‘‘(VI) make recommendations to the 

13 Assistant Administrator for Minority Small 

14 Business and Capital Ownership Develop15 ment concerning protests from applicants 

16 that have been denied program admission; 

17 ‘‘(VII) decide protests regarding the 

18 status of a concern as a disadvantaged con19 cern for purposes of any program or activ20 ity conducted under the authority of sub21 section (d), or any other provision of Fed22 eral law that references such subsection for 

23 a definition of program eligibility; and 

24 ‘‘(VIII) implement such policy direc25 tives as may be issued by the Assistant Ad-
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•HR 2802 RH 

1 ministrator for Minority Small Business 

2 and Capital Ownership Development pursu3 ant to subparagraph (E) regarding, among 

4 other things, the geographic distribution of 

5 concerns to be admitted to the program and 

6 the industrial make-up of such concerns. 

7 ‘‘(C) PROGRAM ADMISSION AND CONTRACT

8 OPPORTUNITIES.—An applicant shall not be de9 nied admission into the program established by 

10 this subsection due solely to a determination by 

11 the Division of Program Certification and Eligi12 bility that specific contract opportunities are un13 available to assist in the development of such 

14 concern unless—

15 ‘‘(i) the Government has not previously 

16 procured and is unlikely to procure the 

17 types of products or services offered by the 

18 concern on a prime contract basis; or 

19 ‘‘(ii) the purchases of such products or 

20 services by the Federal Government will not 

21 be in quantities sufficient to support the de22 velopmental needs of the applicant and 

23 other program participants providing the 

24 same or similar items or services. 
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1 ‘‘(D) CERTIFICATION DECISION.—Except as 

2 provided in paragraph 5(B), not later than 90 

3 days after receipt of a completed application for 

4 program certification, the Assistant Adminis5 trator for Minority Small Business and Capital 

6 Ownership Development shall certify a small 

7 business concern as a program participant or 

8 shall deny such application. 

9 ‘‘(E) DIVISION REVIEW.—

10 ‘‘(i) Thirty days before the conclusion 

11 of each fiscal year, the Director of the Divi12 sion of Program Certification and Eligi13 bility shall review all concerns that have 

14 been admitted into the program during the 

15 preceding 12-month period. 

16 ‘‘(ii) The review shall ascertain the 

17 number of entrants, their geographic dis18 tribution, and their industrial classifica19 tion. The Director shall also estimate the ex20 pected growth of the program during the 

21 next fiscal year and the number of addi22 tional Business Opportunity Specialists, if 

23 any, that will be needed to meet the antici24 pated demand for the program. 
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1 ‘‘(iii) The findings and conclusions of 

2 the Director shall be reported to the Assist3 ant Administrator for Minority Small 

4 Business and Capital Ownership Develop5 ment by September 30 of each year. 

6 ‘‘(iv) Based on such report and such 

7 additional data as may be relevant, the As8 sistant Administrator shall, by October 31 

9 of each year, issue rules as that term is de10 fined in section 551(4) of title 5, United 

11 States Code, applicable to such fiscal year 

12 that—

13 ‘‘(I) establish priorities for the so14 licitation of program applications 

15 from underrepresented regions and in16 dustry categories; 

17 ‘‘(II) assign staffing levels and al18 locate other program resources as nec19 essary to meet program needs; and 

20 ‘‘(III) establish priorities in the 

21 processing and admission of new pro22 gram participants as may be necessary 

23 to achieve an equitable geographic dis24 tribution of concerns and a distribu25 tion of concerns across all industry 
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1 categories in proportions needed to in2 crease significantly contract awards to 

3 small business concerns owned and 

4 controlled by socially and economically 

5 disadvantaged individuals. When con6 sidering such increase the Adminis7 trator shall give due consideration to 

8 those industrial categories where Fed9 eral purchases have been substantial 

10 but where the participation rate of 

11 such concerns has been limited. 

12 ‘‘(23) STAGES OF PROGRAM PARTICIPATION.—

13 ‘‘(A) IN GENERAL.—The Capital ownership 

14 Development Program established by this sub15 section shall have a developmental stage and 

16 transitional stage. 

17 ‘‘(B) DEVELOPMENTAL STAGE.—The devel18 opmental stage of program participation shall be 

19 designed to assist the concern in its effort to 

20 overcome its economic disadvantage by providing 

21 such assistance as may be necessary and appro22 priate to access its markets and to strengthen its 

23 financial and managerial skills. 

24 ‘‘(C) TRANSITIONAL STAGE.—The transi25 tional stage of program participation shall be
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1 designed to overcome, insofar as practicable, the 

2 remaining elements of economic disadvantage 

3 and to prepare such concern for graduation from 

4 the program. 

5 ‘‘(24) TYPES OF ASSISTANCE PROVIDED BY THE

6 ADMINISTRATOR.—The Administrator shall make 

7 available during the developmental and transitional 

8 stages the following assistance: 

9 ‘‘(A) Contract support pursuant to this sec10 tion. 

11 ‘‘(B) Financial assistance pursuant to sec12 tion 7(a)(20). 

13 ‘‘(C) A maximum of two exemptions from 

14 the requirements of section 1(a) of the Act enti15 tled ‘An Act to provide conditions for the pur16 chase of supplies and the making of contracts by 

17 the United States, and for other purposes’, ap18 proved June 30, 1936 (popularly known as the 

19 ‘Walsh-Healey Act’; 41 U.S.C. 35(a)), which ex20 emptions shall apply only to contracts awarded 

21 pursuant to this section and shall only be used 

22 to allow for contingent agreements by a small 

23 business concern to acquire the machinery, 

24 equipment, facilities, or labor needed to perform 

25 such contracts. No exemption shall be made pur-
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1 suant to this subparagraph if the contract to 

2 which it pertains has an anticipated value in ex3 cess of $10,000,000. 

4 ‘‘(D)(i) Financial assistance whereby the 

5 Administrator may purchase in whole or in 

6 part, and on behalf of such concerns, skills train7 ing or upgrading for employees or potential em8 ployees of such concerns. 

9 ‘‘(ii) For purposes of this subparagraph the 

10 term ‘training provider’ shall mean an institu11 tion of higher education, a community or voca12 tional college, or an institution eligible to pro13 vide skills training or upgrading under the Job 

14 Training Partnership Act or title I of the Work15 force Investment Act of 1998. 

16 ‘‘(iii) Assistance may be made by direct 

17 payment to the training provider or by reim18 bursing the program participant or the partici19 pant’s employee, if such reimbursement is found 

20 to be reasonable and appropriate. 

21 ‘‘(iv) The Administrator shall, in consulta22 tion with the Secretary of Labor, promulgate 

23 rules and regulations to implement this subpara24 graph that establish acceptable training and up25 grading performance standards and provide for 
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1 such monitoring or audit requirements as may 

2 be necessary to ensure the integrity of the train3 ing effort. 

4 ‘‘(v) No financial assistance shall be grant5 ed under this subparagraph unless the Adminis6 trator determines each of the following: 

7 ‘‘(I) The program participant has doc8 umented that it has first explored the use of 

9 existing cost-free or cost-subsidized training 

10 programs offered by public and private sec11 tor agencies working with programs of em12 ployment and training and economic devel13 opment. 

14 ‘‘(II) No more than 5 employees or po15 tential employees of the program partici16 pant are recipients of any benefits under 

17 this subparagraph at any one time. 

18 ‘‘(III) No more than $2,500 shall be 

19 made available for any one employee or po20 tential employee. 

21 ‘‘(IV) The length of training or up22 grading financed by this subparagraph 

23 shall be no less than 1 month nor more than 

24 6 months. 
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1 ‘‘(V) The program participant has 

2 given adequate assurance it will employ the 

3 trainee or upgraded employee for at least 6 

4 months after the training or upgrading fi5 nanced by this subparagraph has been com6 pleted and each trainee or upgraded em7 ployee has provided a similar assurance to 

8 remain within the employ of such concern 

9 for such period. 

10 ‘‘(aa) If such concern, trainee, or 

11 upgraded employee breaches this agree12 ment, the Administrator shall be enti13 tled to obtain from the violating party 

14 the repayment of all funds expended on 

15 behalf of the violating party. 

16 ‘‘(bb) Such repayment shall be 

17 made to the Administrator together 

18 with such interest and costs of collec19 tion as may be reasonable. 

20 ‘‘(cc) The violating party shall be 

21 barred from receiving any further as22 sistance under this subparagraph. 

23 ‘‘(VI) The training to be financed may 

24 take place either at such concern’s facilities 

25 or at those of the training provider. 
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1 ‘‘(VII) The program participant will 

2 maintain such records as the Administrator 

3 deems appropriate to ensure that the provi4 sions of this paragraph and any other ap5 plicable law have not been violated. 

6 ‘‘(E)(i) The transfer of technology or sur7 plus property owned by the United States to 

8 such a concern. 

9 ‘‘(ii) Activities designed to effect such trans10 fer shall be developed in cooperation with the 

11 heads of Federal agencies and shall include the 

12 transfer by grant, license, or sale of such tech13 nology or property to such a concern. Such prop14 erty may be transferred to program participants 

15 on a priority basis. 

16 ‘‘(iii) Technology or property transferred 

17 under this subparagraph shall be used by the 

18 concern during the normal conduct of its busi19 ness operation and shall not be sold or trans20 ferred to any other party (other than the Govern21 ment) during such concern’s term of participa22 tion in the program and for one year thereafter. 

23 ‘‘(F) Training assistance whereby the Ad24 ministrator shall conduct training sessions to as25 sist individuals and enterprises eligible to receive
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1 contracts under this section in the development 

2 of business principles and strategies to enhance 

3 their ability to successfully compete for contracts 

4 in the marketplace. 

5 ‘‘(G) Joint ventures, leader-follow arrange6 ments, and teaming agreements between the pro7 gram participant and other program partici8 pants and other small business concerns with re9 spect to contracting opportunities. Such activi10 ties shall be undertaken on the basis of programs 

11 developed by the procuring agency with the as12 sistance of the Administration. 

13 ‘‘(H) Transitional management business 

14 planning training and technical assistance. 

15 ‘‘(25) TRANSITIONAL STAGE ASSISTANCE.—Pro16 gram participants in the developmental stage of pro17 gram participation shall be eligible for the assistance 

18 provided by subparagraphs (A), (B), (C), (D), (E), 

19 (F), and (G) of paragraph (24). 

20 ‘‘(26) DEVELOPMENTAL STAGE ASSISTANCE.—

21 Program Participants in the transitional stage of 

22 Program participation shall be eligible for the assist23 ance provided by subparagraphs (A), (B), (F), (G), 

24 and (H) of paragraph (24). 
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1 ‘‘(27) DURATION OF STAGES.—Subject to the 

2 provisions of paragraph (21)(A), a program partici3 pant may receive developmental assistance under this 

4 subsection and contracts under this subsection for a 

5 total period of not longer than 9 years, measured 

6 from the date of its certification under this subsection, 

7 of which—

8 ‘‘(A) no more than 5 years may be spent in 

9 the developmental stage of program participa10 tion; and 

11 ‘‘(B) no more than 4 years may be spent in 

12 the transitional stage of program participation. 

13 ‘‘(28) DATA COLLECTION.—

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

15 shall develop and implement a process for the 

16 systematic collection of data on the operations of 

17 the program established pursuant to this section. 

18 ‘‘(B) REPORT.—Not later than April 30 of 

19 each year, the Administrator shall submit a re20 port to the Committee on Small Business and 

21 Entrepreneurship of the Senate and the Com22 mittee on Small Business of the House of Rep23 resentatives on the program that shall include 

24 the following: 
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1 ‘‘(i) A description and estimate of the 

2 benefits and costs that have accrued to the 

3 economy and the Government in the imme4 diately preceding fiscal year due to the op5 erations of those business concerns that were 

6 performing contracts awarded pursuant to 

7 this section. 

8 ‘‘(ii) A compilation and evaluation of 

9 those business concerns that have exited the 

10 program during the immediately preceding 

11 three fiscal years. Such compilation and 

12 evaluation shall detail the number of con13 cerns actively engaged in business oper14 ations, those that have ceased or substan15 tially curtailed such operations, including 

16 the reasons for such actions, and those con17 cerns that have been acquired by other firms 

18 or organizations owned and controlled by 

19 other than socially and economically dis20 advantaged individuals. 

21 ‘‘(iii) For those businesses that have 

22 continued operations after they exited from 

23 the program, the Administrator shall also 

24 separately detail the benefits and costs that 

25 have accrued to the economy during the im-
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1 mediately preceding fiscal year due to the 

2 operations of such concerns. 

3 ‘‘(iv) A listing of all participants in 

4 the program during the preceding fiscal 

5 year identifying, by State and by region, 

6 for each firm: the name of the concern, the 

7 race or ethnicity, and gender of the dis8 advantaged owners, the dollar value of all 

9 contracts received in the preceding year, the 

10 dollar amount of advance payments received 

11 by each concern pursuant to contracts 

12 awarded under this section, and a descrip13 tion including (if appropriate) an estimate 

14 of the dollar value of all benefits received 

15 pursuant to paragraphs (25) and (26) and 

16 section 7(a)(20) during such year. 

17 ‘‘(v) The total dollar value of contracts 

18 and options awarded during the preceding 

19 fiscal year pursuant to this section and 

20 such amount expressed as a percentage of 

21 total sales of—

22 ‘‘(I) all firms participating in the 

23 program during such year; and 

24 ‘‘(II) firms in each of the nine 

25 years of program participation. 
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1 ‘‘(vi) A description of such additional 

2 resources or program authorities as may be 

3 required to provide the types of services 

4 needed over the next 2-year period to service 

5 the expected portfolio of firms certified pur6 suant to this section. 

7 ‘‘(vii) The total dollar value of con8 tracts and options awarded pursuant to this 

9 section, at such dollar increments as the Ad10 ministrator deems appropriate, for each 6 

11 digit North American Industrial Classifica12 tion System code under which such con13 tracts and options were classified. 

14 ‘‘(b) MANAGEMENT AND TECHNICAL ASSISTANCE.—

15 ‘‘(1) CONTRACTS FOR ASSISTANCE.—The Admin16 istrator shall be required to enter into contracts with 

17 business concerns, not-for-profit entities, and other 

18 persons capable of providing management and tech19 nical assistance, as may be necessary, to participants 

20 in the program established in subsection (a), to firms 

21 described in paragraph (5) or paragraph (6) of that 

22 subsection but are not participants in the program es23 tablished pursuant to that subsection, and to small 

24 business concerns which have loans guaranteed pursu25 ant to section 7(i).
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1 ‘‘(2) SELECTION OF CONTRACTORS.—The Admin2 istrator shall select contractors based on the experi3 ence in advising small business concerns on financial 

4 and business operations, including but not limited to 

5 comprehensive business plans, and other functions 

6 needed to preserve and expand small businesses eligi7 ble for assistance under paragraph (1). To the extent 

8 practical, the Administrator shall select, as contrac9 tors, small business concerns but the primary evalua10 tion criteria shall be the technical ability of the con11 tractor to provide the services set forth in this sub12 section. 

13 ‘‘(3) AUTHORIZATION OF APPROPRIATIONS.—

14 There are authorized to be appropriated to carry out 

15 this subsection $6,000,000 for each of fiscal years 

16 2004 and 2005. Such sums shall remain available 

17 until expended. 

18 ‘‘(c) COORDINATION WITH OTHER AGENCIES.—The 

19 Administrator shall take such steps as may be necessary 

20 and appropriate, in coordination and cooperation with the 

21 heads of Federal agencies to insure that contracts, sub22 contracts, and deposits made by the Federal Government 

23 or with programs aided with Federal funds are placed in 

24 such way as to further the purposes of subsection (a) of this 

25 section and section 7(i).’’. 
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1 (b) COMMERCIAL MARKETING.—Section 8(d)(10) of 

2 the Small Business Act (15 U.S.C. 637(d)(10)) is amended 

3 to read as follows: 

4 ‘‘(10) In the case of contracts within the provi5 sions of paragraphs (4), (5), and (6), the Adminis6 trator is authorized to—

7 ‘‘(A) assign at least one commercial mar8 keting representative per state whose primary re9 sponsibilities shall be to—

10 ‘‘(i) assist Federal agencies and busi11 nesses in complying with their responsibil12 ities under the provisions of this subsection, 

13 including the formulation of subcontracting 

14 plans pursuant to paragraph (4); 

15 ‘‘(ii) review any solicitation for any 

16 contract to be let pursuant to paragraphs 

17 (4) and (5) to determine the maximum 

18 practicable opportunity for small business 

19 concerns, small manufacturers, small busi20 ness concerns owned and controlled by vet21 erans, small business concerns owned and 

22 controlled by service-disabled veterans, 

23 qualified HUBZone small business con24 cerns, small business concerns owned and 

25 controlled by socially and economically dis-
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1 advantaged individuals, small business con2 cerns eligible for participation under section 

3 8(a), and small business concerns owned 

4 and controlled by women to participate as 

5 subcontractors in the performance of any 

6 contract resulting from any solicitation, 

7 and to submit its findings, which shall be 

8 advisory in nature, to the appropriate Fed9 eral agency; 

10 ‘‘(iii) evaluate compliance with subcon11 tracting plans, either on a contract-by-con12 tract basis, or in the case of contractors 

13 having multiple contracts, on an aggregate 

14 basis including recommendations to the con15 tracting officer for an assessment of liq16 uidated damages; 

17 ‘‘(iv) work directly with small busi18 nesses to counsel them on marketing and 

19 subcontracting to large business prime con20 tractors that have contracts with the Fed21 eral Government; 

22 ‘‘(v) identify large business buyers of 

23 small business products and services; 

24 ‘‘(vi) assist small businesses in receiv25 ing timely payment from large business 
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1 prime contractors that have contracts with 

2 the Federal Government; and 

3 ‘‘(vii) perform program reviews of the 

4 small business outreach programs and sub5 contracting programs of large businesses. 

6 ‘‘(B) Not later than September 30, 2004, 

7 each state shall be assigned at least one commer8 cial marketing representative, authorized by 

9 paragraph 10(A) of this section, who must be 

10 physically located in each state. 

11 ‘‘(C) Not later than 120 days after enact12 ment of this Act, the Administrator shall, after 

13 the opportunity for notice and comment, promul14 gate regulations governing the Administrator’s 

15 review of subcontracting plans including the 

16 standards for determining good faith effort of 

17 compliance with the subcontracting plans.’’. 

18 (c) WOMEN-OWNED SMALL BUSINESS CONCERNS; AU19 THORITIES OF ADMINISTRATOR.—Subsections (m) and (n) 

20 of section 8 of the Small Business Act (15 U.S.C. 637 (m) 

21 and (n)) are amended to read as follows: 

22 ‘‘(m) PROCUREMENT PROGRAM FOR WOMEN-OWNED

23 SMALL BUSINESS CONCERNS.—

24 ‘‘(1) DEFINITIONS.—In this subsection, the fol25 lowing definitions apply: 
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1 ‘‘(A) SMALL BUSINESS CONCERN OWNED

2 AND CONTROLLED BY WOMEN.—The term ‘small 

3 business concern owned and controlled by 

4 women’ has the meaning given such term in sec5 tion 3(n), except that ownership shall be deter6 mined without regard to any community prop7 erty law. 

8 ‘‘(2) AUTHORITY TO RESTRICT COMPETITION.—

9 In accordance with this subsection, a contracting offi10 cer may restrict competition for any contract for the 

11 procurement of goods or services by the Federal Gov12 ernment to small business concerns owned and con13 trolled by women, if—

14 ‘‘(A) each of the concerns is not less than 51 

15 percent owned by 1 or more women who are eco16 nomically disadvantaged (and such ownership is 

17 determined without regard to any community 

18 property law); 

19 ‘‘(B) the contracting officer has a reasonable 

20 expectation that 2 or more small business con21 cerns owned and controlled by women will sub22 mit offers for the contract; 

23 ‘‘(C) the contract is for the procurement of 

24 goods or services with respect to an industry
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1 identified by the Administrator pursuant to 

2 paragraph (4); 

3 ‘‘(D) the anticipated award price of the 

4 contract (including options) does not exceed—

5 ‘‘(i) $5,000,000, in the case of a con6 tract assigned an industrial classification 

7 code for manufacturing; or 

8 ‘‘(ii) $3,000,000, in the case of all 

9 other contracts; 

10 ‘‘(E) in the estimation of the contracting of11 ficer, the contract award can be made at a fair 

12 and reasonable price; and 

13 ‘‘(F) each of the concerns—

14 ‘‘(i) is certified by a Federal agency or 

15 a State government as a small business con16 cern owned and controlled by women; 

17 ‘‘(ii) is certified by a national certi18 fying entity approved by the Administrator 

19 as a small business concern owned and con20 trolled by women; or 

21 ‘‘(iii) certifies to the contracting officer 

22 that it is a small business concern owned 

23 and controlled by women and provides ade24 quate documentation in accordance with 
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1 standards established by the Administration 

2 to support such certification. 

3 ‘‘(3) WAIVER.—With respect to a small business 

4 concern owned and controlled by women, the Admin5 istrator may waive subparagraph (2)(A) if the Ad6 ministrator determines that the concern is in an in7 dustry in which small business concerns owned and 

8 controlled by women are substantially underrep9 resented. 

10 ‘‘(4) IDENTIFICATION OF INDUSTRIES.—

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

12 shall conduct a study to identify industries in 

13 which small business concerns owned and con14 trolled by women are underrepresented with re15 spect to Federal procurement contracting. 

16 ‘‘(B) DETERMINATION BY CONTRACTING OF17 FICER.—Until such time as the Administrator 

18 conducts such study, the determination as to 

19 whether an industry is under-represented by 

20 small business concerns owned and controlled by 

21 women shall be made by the contracting officer. 

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

23 after the date of the enactment of this subpara24 graph the Administrator shall—
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1 ‘‘(i) ensure the completion of the study 

2 described in this paragraph; 

3 ‘‘(ii) approve national certifying enti4 ties for the purposes of paragraph 

5 (2)(F)(ii); and 

6 ‘‘(iii) make determinations in accord7 ance with paragraph (3). 

8 ‘‘(5) ENFORCEMENT; PENALTIES.—

9 ‘‘(A) VERIFICATION OF ELIGIBILITY.—In 

10 carrying out this subsection, the Administrator 

11 shall use existing procedures established by the 

12 Office of Hearings and Appeals relating to—

13 ‘‘(i) the filing, investigation, and dis14 position by the Administrator of any chal15 lenge to the eligibility of a small business 

16 concern to receive assistance under this sub17 section (including a challenge, filed by an 

18 interested party, relating to the veracity of 

19 a certification made or information pro20 vided to the Administration by a small 

21 business concern under paragraph (2)(F)); 

22 and 

23 ‘‘(ii) verification by the Administrator 

24 of the accuracy of any certification made or 

25 information provided to the Administration 
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1 by a small business concern under para2 graph (2)(F). 

3 ‘‘(B) EXAMINATIONS.—The procedures es4 tablished under subparagraph (A) may provide 

5 for program examinations (including random 

6 program examinations) by the Administrator of 

7 any small business concern making a certifi8 cation or providing information to the Adminis9 trator under paragraph (2)(F). 

10 ‘‘(C) PENALTIES.—In addition to the pen11 alties described in section 16(d), any small busi12 ness concern that is determined by the Adminis13 trator to have misrepresented the status of that 

14 concern as a small business concern owned and 

15 controlled by women for purposes of this sub16 section, shall be subject to—

17 ‘‘(i) section 1001 of title 18, United 

18 States Code; and 

19 ‘‘(ii) sections 3729 through 3733 of 

20 title 31, United States Code. 

21 ‘‘(6) PROVISION OF DATA.—Upon the request of 

22 the Administrator, the head of any Federal depart23 ment or agency shall promptly provide to the Admin24 istrator such information as the Administrator deter25 mines to be necessary to carry out this subsection. 
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1 ‘‘(n) AUTHORITIES OF ADMINISTRATOR.—In carrying 

2 out its functions under subsections 7(i), 8(a), and 8(b) of 

3 this Act the Administrator may do the following: 

4 ‘‘(1) Utilize, with their consent, the services and 

5 facilities of Federal agencies without reimbursement, 

6 and, with the consent of any State or political sub7 division of a State, accept and utilize the services and 

8 facilities of such State or subdivision without reim9 bursement. 

10 ‘‘(2) Accept voluntary and uncompensated serv11 ices, notwithstanding section 1342 of title 31, United 

12 States Code. 

13 ‘‘(3) Employ experts and consultants or organi14 zations pursuant to the authority in section 6(h). No 

15 individual may be employed under the authority of 

16 this paragraph for more than 100 days in any fiscal 

17 year. No individual employed under this paragraph 

18 may be compensated at rates in excess of the daily 

19 equivalent of the highest rate payable under section 

20 5332 of title 5, United States Code, including travel21 time. Individuals employed under this paragraph 

22 may be allowed, while away from their homes or reg23 ular places of business, travel expenses (including per 

24 diem in lieu of subsistence) as authorized by section 

25 5703 of title 5, United States Code for persons in the
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1 Government service employed intermittently. Con2 tracts for employment under this paragraph may be 

3 renewed annually.’’. 

4 (d) CLERICAL AMENDMENT.—Section 8 of the Small 

5 Business Act (15 U.S.C. 637) is amended by striking ‘‘SEC. 

6 8.’’ inserting the following: 

7 ‘‘SEC. 8. GOVERNMENT CONTRACT AND BUSINESS DEVEL8 OPMENT ASSISTANCE FOR SMALL BUSINESS 

9 CONCERNS, ETC.’’. 

10 SEC. 209. TRAINING AND ASSISTANCE. 

11 Section 12 of the Small Business Act (15 U.S.C. 641) 

12 is amended to read as follows:

13 ‘‘SEC. 12. TRAINING AND ASSISTANCE. 

14 ‘‘(a) ASSISTANCE.—The Administrator shall (through 

15 co-sponsorships, small business development centers, wom16 en’s business centers, the Office of Veterans Affairs, and 

17 other programs as the Administrator determines appro18 priate) provide technical and managerial assistance, advice 

19 and guidance on matters of government procurement (at the 

20 Federal, State, and local levels) and information on the 

21 policies, practices, and principles of good management, 

22 and, when appropriate, distribute publications and other 

23 material on Administration programs to small business 

24 concerns, including all categories of such concerns defined 

25 in section 3 of this Act. 
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1 ‘‘(b) VOLUNTEERS.—

2 ‘‘(1) The Administrator shall recruit executive 

3 volunteers to assist the Administrator in carrying out 

4 this section. 

5 ‘‘(2) The Administrator shall recruit retired and 

6 active executives to form the Service Corps of Retired 

7 Executives and the Active Corps of Executives. Such 

8 executives will be responsible for providing technical 

9 and managerial assistance and advice to small busi10 ness concerns. 

11 ‘‘(3) The Administrator shall recruit retired and 

12 active executives from large and small manufacturers 

13 to form the Service Corps of Retired Manufacturing 

14 Executives and the Active Corps of Manufacturing 

15 Executives. Such executives will advise, assist, and 

16 train small manufacturers. 

17 ‘‘(4) The Administrator may enter into appro18 priate contracts, grants, or cooperative agreements 

19 with the volunteers or corps referred to in this sub20 section in order to provide the services set forth in 

21 this section. 

22 ‘‘(5) The Administrator may maintain the head23 quarters of the corps referred to in this subsection and 

24 assign, at his discretion, Administration personnel to 

25 assist the volunteers. 
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1 ‘‘(6) The volunteers may solicit cash, other per2 sonal property, and in-kind contributions from the 

3 private sector to be used to carry out their functions 

4 under this section. The volunteers may use payments 

5 from the Administrator made pursuant to this sub6 section to assist in such solicitations. 

7 ‘‘(7) The Administrator may permit any indi8 vidual or group of persons participating in the pro9 grams established pursuant to this subsection to use 

10 any facilities of the Administration, including re11 gional and district offices, as well as clerical and 

12 computer services. 

13 ‘‘(8) The volunteers, while carrying out the pur14 poses of this section, shall be deemed Federal employ15 ees for the purposes of the Federal tort claims provi16 sions in title 28, United States Code; and for the pur17 poses of subchapter I of chapter 81 of title 5, United 

18 States Code (relative to compensation to Federal em19 ployees for work injuries) shall be deemed civil em20 ployees of the United States within the meaning of the 

21 term ‘employee’ as defined in section 8101 of title 5, 

22 United States Code, and the provisions of that sub23 chapter shall apply except that in computing com24 pensation benefits for disability or death, the monthly 
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1 pay of a volunteer shall be deemed that received under 

2 the entrance salary for a grade GS–11 employee. 

3 ‘‘(9) The Administrator may reimburse the vol4 unteers for all necessary out-of-pocket expenses inci5 dent to their provision of services under this section, 

6 or in connection with attendance at meetings spon7 sored by the Administrator, or for the cost of mal8 practice insurance, as the Administrator shall deter9 mine, in accordance with regulations which he or she 

10 shall prescribe, and, while they are carrying out such 

11 activities away from their homes or regular places of 

12 business, for travel expenses (including per diem in 

13 lieu of subsistence) as authorized by section 5703 of 

14 title 5, United States Code, for individuals serving 

15 without pay. 

16 ‘‘(10) None of the services made available by vol17 unteers pursuant to this subsection shall be made 

18 available to any person or small business concern who 

19 is delinquent on a loan made pursuant to section 7 

20 of this Act or Title V of the Small Business Invest21 ment Act of 1958 unless such assistance relates solely 

22 to addressing the matter of the delinquency and a spe23 cific request is made in writing to the volunteer (and 

24 a record of such communication is maintained by the 

25 volunteer). 
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1 ‘‘(11) No payment for supportive services or re2 imbursement of out-of-pocket expenses made to per3 sons serving pursuant to this subsection shall be sub4 ject to any tax or charge or be treated as wages or 

5 compensation for the purposes of unemployment, dis6 ability, retirement, public assistance, or similar ben7 efit payments, or minimum wage laws. 

8 ‘‘(12) Under regulations which the Adminis9 trator shall prescribe, counsel may be employed and 

10 counsel fees, court costs, bail, and other expenses inci11 dental to the defense of volunteers may be paid in ju12 dicial or administrative proceedings arising directly 

13 out of the performance of activities pursuant to this 

14 subsection to which volunteers have been made par15 ties. 

16 ‘‘(c) SMALL BUSINESS INSTITUTES.—In carrying out 

17 its functions under this section, the Administrator may 

18 make grants (including contracts or cooperative agree19 ments) to any public or private institution of higher edu20 cation for the establishment and operation of a small busi21 ness institute, which shall be used to provide business coun22 seling and assistance to small business concerns through the 

23 activities of students enrolled at the institution, which stu24 dents shall be entitled to receive educational credits for their 

25 activities. To the extent practicable, the Administrator shall
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1 select applicants that demonstrate the best capability of 

2 serving small manufacturers. 

3 ‘‘(d) BUSINESS GRANTS AND COOPERATIVE AGREE4 MENTS.—

5 ‘‘(1) IN GENERAL.—In accordance with this sub6 section, the Administrator may make grants to and 

7 enter into cooperative agreements with any coalition 

8 of private entities, public entities, or any combination 

9 of private and public entities—

10 ‘‘(A) to expand business-to-business rela11 tionships between large and small businesses 

12 by—

13 ‘‘(i) identifying opportunities for small 

14 business concerns located in areas of high 

15 unemployment or low income; 

16 ‘‘(ii) assisting small business concerns 

17 and small manufacturers in finding oppor18 tunities to supply goods and services to 

19 other businesses, particularly large busi20 nesses that have previously obtained such 

21 goods and services from businesses located 

22 outside of the United States; and 

23 ‘‘(iii) providing such other assistance 

24 as the Administrator may identify; 
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1 ‘‘(B) to maintain a database, to the extent 

2 practicable, of supply chain management oppor3 tunities for small business concerns and small 

4 manufacturers; 

5 ‘‘(C) to provide businesses, directly or indi6 rectly, with online information and a database 

7 of companies that are interested in mentor-pro8 tege programs or community-based, statewide, or 

9 local business development programs; and 

10 ‘‘(D) by providing businesses with informa11 tion on the best practices used by other business 

12 concerns in establishing mentor-protege or other 

13 business development programs and not limited 

14 solely to procurement by Federal, State, or local 

15 governments. 

16 ‘‘(2) MATCHING REQUIREMENT.—The Adminis17 trator may make a grant to a coalition under para18 graph (1) only if the coalition provides for activities 

19 described in paragraph (1) an amount, either in kind 

20 or in cash, equal to the grant amount. 

21 ‘‘(3) DEFINITIONS.—For purposes of this sub22 section, the term ‘supply chain’ means a network of 

23 facilities and distribution options that performs the 

24 functions of procurement of materials, transformation 

25 of these materials into intermediate and furnished 
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1 products, and distribution of the finished products to 

2 customers. 

3 ‘‘(4) AUTHORIZATION OF APPROPRIATIONS.—

4 There is authorized to be appropriated to carry out 

5 this subsection $10,000,000, to remain available until 

6 expended, for each of fiscal years 2004 through 

7 2005.’’.

8 SEC. 210. CONTRACTING ASSISTANCE; ETC. 

9 (a) CERTAIN DISAGREEMENTS SUBMITTED TO

10 OMB.—Section 15(a) of the Small Business Act (15 U.S.C. 

11 644(a)) is amended by striking the sentence beginning 

12 ‘‘Whenever the Administrator and the contracting procure13 ment agency fail to agree,’’ and inserting the following: 

14 ‘‘Whenever the Administration and the contracting procure15 ment agency fail to agree, the Administrator shall submit 

16 the matter to the Director of the Office of Management and 

17 Budget, who shall render his decision regarding the matter 

18 not later than 10 days after receiving the matter. The Direc19 tor may not delegate his duties under the preceding sentence 

20 except to a subordinate official within the Office of Manage21 ment and Budget appointed by the President, by and with 

22 the advice and consent of the Senate.’’. 

23 (b) PROGRAMS FOR BLIND AND HANDICAPPED INDI24 VIDUALS.—Section 15(c) of the Small Business Act (15 

25 U.S.C. 644(c)) is amended to read as follows: 
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1 ‘‘(c) PROGRAMS FOR BLIND AND HANDICAPPED INDI2 VIDUALS.—

3 ‘‘(1) As used in this subsection: 

4 ‘‘(A) The term ‘Committee’ means the Com5 mittee for Purchase From People Who Are Blind 

6 or Severely Disabled established under the first 

7 section of the Act entitled ‘An Act to create a 

8 Committee on Purchases of Blind-made Prod9 ucts, and for other purposes’, approved June 25, 

10 1938 (41 U.S.C. 46). 

11 ‘‘(B) The term ‘public or private organiza12 tion for the disabled’ means any organization—

13 ‘‘(i) which is organized under the laws 

14 of the United States or of any State, oper15 ated in the interest of disabled individuals, 

16 the net income of which does not inure in 

17 whole or in part to the benefit of any share18 holder or other individual; 

19 ‘‘(ii) which complies with any applica20 ble occupational health and safety pre21 scribed by the Secretary of Labor; and 

22 ‘‘(iii) which in the production of com23 modities and in the provision of services 

24 during any fiscal year employs disabled in25 dividuals for not less than 75 percent of the 
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1 man-hours required for the production or 

2 provision of the commodities or services. 

3 ‘‘(C) The term ‘disabled person’ means any 

4 individual who—

5 ‘‘(i) is a service-disabled veteran; or 

6 ‘‘(ii) has a disability (as defined in 

7 section 3 of the Americans with Disabilities 

8 Act of 1990) which limits such individual’s 

9 selection of any type of employment for 

10 which such individual would otherwise be 

11 qualified or qualifiable. 

12 ‘‘(2) The Administrator shall evaluate the place13 ment of products on the procurement list maintained 

14 by the Committee pursuant to section 2 of the Act en15 titled ‘An Act to create a Committee on Purchases of 

16 Blind made Products, and for other purposes’, ap17 proved June 25, 1938 (41 U.S.C. 47) to determine the 

18 impact of such placement on for-profit small business 

19 concerns. 

20 ‘‘(3) The Administrator shall monitor and evalu21 ate the participation of public or private organiza22 tions for the disabled in Federal procurement con23 tracts and shall annually report the results of such 

24 monitoring and evaluation to the Committee on 

25 Small Business of the House of Representatives and
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1 the Committee on Small Business and Entrepreneur2 ship of the Senate not later than March 31st of each 

3 year. This report shall include the impact of such 

4 participation on for-profit small business concerns. 

5 ‘‘(4)(A) Not later than 10 days after the an6 nouncement of a proposed award of a contract by an 

7 agency or department to a public or private organiza8 tion for the disabled, a for-profit small business con9 cern that has experienced or is likely to experience se10 vere economic injury as the result of the proposed 

11 award may file an appeal of the proposed award with 

12 the Administrator. 

13 ‘‘(B) If such a concern files an appeal of a pro14 posed award under subparagraph (A) and the Admin15 istrator, after consultation with the Executive Direc16 tor of the Committee, finds that the concern has expe17 rienced or is likely to experience severe economic in18 jury as the result of the proposed award, not later 

19 than 30 days after the filing of the appeal, the Ad20 ministrator shall require each agency and department 

21 having procurement powers to take such action as 

22 may be appropriate to alleviate economic injury sus23 tained or likely to be sustained by the concern. 

24 ‘‘(5) Each agency and department having pro25 curement powers shall report to the Office of Federal 
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1 Procurement Policy each time a contract subject to 

2 paragraph (2)(A) is entered into, and shall include in 

3 its report the amount of the next highest bid sub4 mitted by a for-profit small business concern. The Of5 fice of Federal Procurement Policy shall collect data 

6 reported under the preceding sentence through the 

7 Federal procurement data system and shall report to 

8 the Administrator who shall notify all such agencies 

9 and departments when the maximum amount of 

10 awards authorized under paragraph (2)(A) has been 

11 made during any fiscal year. 

12 ‘‘(6) For the purposes of this subsection, a con13 tract may be awarded only if at least 75 percent of 

14 the direct labor performed on each item being pro15 duced under the contract in the sheltered workshop or 

16 performed in providing each type of service under the 

17 contract by the sheltered workshop is performed by 

18 disabled individuals. 

19 ‘‘(7) Agencies awarding one or more contracts to 

20 such an organization pursuant to the provisions of 

21 this subsection may use multiyear contracts, if appro22 priate.’’. 

23 (c) MINIMUM SOLICITATION PERIOD.—Section 15(e) of 

24 the Small Business Act (15 U.S.C. 644(e)) is amended by 

25 adding at the end the following new paragraph: 
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1 ‘‘(5) MINIMUM SOLICITATION PERIOD.—In the 

2 case of a solicitation of offers for a bundled contract 

3 that is issued by the head of an agency, small busi4 ness concerns shall be allowed to submit offers for a 

5 period of not less than 60 days beginning on the date 

6 the solicitation is issued.’’. 

7 (d) PROCUREMENT GOALS.—Section 15(g) of the 

8 Small Business Act (15 U.S.C. 644(g)) is amended to read 

9 as follows: 

10 ‘‘(g)(1) The President shall before the close of each fis11 cal year establish new Government-wide procurement goals 

12 for the following fiscal year for procurement contracts 

13 awarded to small business concerns, small business concerns 

14 owned and controlled by service-disabled veterans, qualified 

15 HUBZone small business concerns, small business concerns 

16 owned and controlled by socially and economically dis17 advantaged individuals, and small business concerns owned 

18 and controlled by women. The President shall not simply 

19 readopt the preceding years procurement goals. The Govern20 ment-wide goal for participation by small business concerns 

21 shall be established at not less than 23 percent of the total 

22 value of all prime contract awards for each fiscal year. The 

23 Government-wide goal for participation by small business 

24 concerns owned and controlled by service-disabled veterans 

25 shall be established at not less than 3 percent of the total 
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1 value of all prime contract and subcontract awards for each 

2 fiscal year. The Government-wide goal for participation by 

3 qualified HUBZone small business concerns shall be estab4 lished at not less than 3 percent of the total value of all 

5 prime contract awards. The Government-wide goal for par6 ticipation by small business concerns owned and controlled 

7 by socially and economically disadvantaged individuals 

8 shall be established at not less than 5 percent of the total 

9 value of all prime contract awards and not less than 5 per10 cent of the total value of all subcontract awards for each 

11 fiscal year. The Government-wide goal for participation by 

12 small business concerns owned and controlled by women 

13 shall be established at not less than 5 percent of the total 

14 value of all prime contract awards and not less than 5 per15 cent of the total value of all subcontract awards for each 

16 fiscal year. Notwithstanding the Government-wide goal, 

17 each agency shall have an annual goal that presents, for 

18 that agency, the maximum practicable opportunity for 

19 small business concerns, small manufacturers, small busi20 ness concerns owned and controlled by service-disabled vet21 erans, qualified HUBZone small business concerns, small 

22 business concerns owned and controlled by socially and eco23 nomically disadvantaged individuals, small business con24 cerns participating in the program established by section 

25 8(a) of this Act, and small business concerns owned and 
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1 controlled by women to participate in the performance of 

2 contracts let by such agency. For the purposes of the pre3 ceding sentence, each agency is prohibited from counting 

4 towards its procurement goal for small business concerns 

5 owned and controlled by socially and economically dis6 advantaged individuals any contract awarded to small 

7 business concerns participating in the program established 

8 pursuant to section 8(a) of this Act. The Administrator and 

9 the Administrator of the Office of Federal Procurement Pol10 icy shall, when exercising their authority pursuant to para11 graph (2), insure that the cumulative annual prime con12 tract goals for all agencies meet or exceed the annual Gov13 ernment-wide prime contract goal established by the Presi14 dent pursuant to this paragraph. 

15 ‘‘(2) The head of each Federal agency shall, after con16 sultation with the Administrator, establish goals for the 

17 participation by small business concerns, small manufac18 turers, small business concerns owned and controlled by 

19 service-disabled veterans, qualified HUBZone small busi20 ness concerns, small business concerns owned and controlled 

21 by socially and economically disadvantaged individuals, 

22 small business concerns participating in the program estab23 lished pursuant to section 8(a) of this Act, and small busi24 ness concerns owned and controlled by women in procure25 ment contracts of such agency having a value of $25,000
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1 or more. For the purposes of the preceding sentence, each 

2 agency is prohibited from counting towards its procurement 

3 goal for small business concerns owned and controlled by 

4 socially and economically disadvantaged individuals any 

5 contract awarded to small business concerns participating 

6 in the program established pursuant to section 8(a) of this 

7 Act. Goals established under this subsection shall be jointly 

8 established by the Administrator and the head of each Fed9 eral agency and shall realistically reflect the potential of 

10 small business concerns, small manufacturers, small busi11 ness concerns owned and controlled by service-disabled vet12 erans, qualified HUBZone small business concerns, small 

13 business concerns owned and controlled by socially and eco14 nomically disadvantaged individuals, small business con15 cerns participating in the program established pursuant to 

16 section 8(a) of this Act, and small business concerns owned 

17 and controlled by women to perform subcontracts under 

18 such contracts. For the purposes of the preceding sentence, 

19 each agency is prohibited from counting towards its pro20 curement goal for small business concerns owned and con21 trolled by socially and economically disadvantaged individ22 uals any contract awarded to small business concerns par23 ticipating in the program established pursuant to section 

24 8(a) of this Act. Whenever the Administrator and the head 

25 of any Federal agency fail to agree on established goals, 
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1 the disagreement shall be submitted to the Administrator 

2 of the Office of Federal Procurement Policy for final deter3 mination. For the purpose of establishing goals under this 

4 subsection, the head of each Federal agency shall make con5 sistent efforts to annually expand participation by small 

6 business concerns from each industry category in procure7 ment contracts of the agency, including participation by 

8 small business concerns owned and controlled by service9 disabled veterans, qualified HUBZone small business con10 cerns, small business concerns owned and controlled by so11 cially and economically disadvantaged individuals, small 

12 business concerns participating in the program established 

13 pursuant to section 8(a), small business concerns owned 

14 and controlled by women, and small manufacturers. For 

15 the purposes of the preceding sentence, each agency is pro16 hibited from counting towards its procurement goal for 

17 small business concerns owned and controlled by socially 

18 and economically disadvantaged individuals any contract 

19 awarded to small business concerns participating in the 

20 program established pursuant to section 8(a) of this Act. 

21 The head of each Federal agency, in attempting to attain 

22 such participation, shall consider—

23 ‘‘(A) contracts awarded as the result of unre24 stricted competition; and 
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1 ‘‘(B) contracts awarded after competition re2 stricted to eligible small business concerns under this 

3 section and under the program established under sec4 tion 8(a).’’. 

5 (e) REPORTS.—Section 15(h) of the Small Business 

6 Act (15 U.S.C. 644(h)) is amended to read as follows: 

7 ‘‘(h)(1) At the conclusion of each fiscal year, the head 

8 of each Federal agency shall report to the Administrator 

9 on the extent of participation by small business concerns, 

10 small manufacturers, small business concerns owned and 

11 controlled by veterans (including service-disabled veterans), 

12 qualified HUBZone small business concerns, small business 

13 concerns owned and controlled by socially and economically 

14 disadvantaged individuals, small business concerns partici15 pating in the program established pursuant to section 8(a) 

16 of this Act, and small business concerns owned and con17 trolled by women in procurement contracts of such agency. 

18 Such reports shall contain appropriate justifications for 

19 failure to meet the goals established under subsection (g) 

20 of this section. Additionally, such reports shall contain suf21 ficient justification if goals established for the most recent 

22 fiscal year end were established lower than the same goals 

23 for the previous fiscal year. 

24 ‘‘(2) The Administrator shall annually compile and 

25 analyze the reports submitted by the individual agencies 
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1 pursuant to paragraph (1) and shall submit them to the 

2 President and the Congress. The Administrator’s submis3 sion to the President shall include the following: 

4 ‘‘(A) The Government-wide goals for participa5 tion by small business concerns, small business con6 cerns owned and controlled by service-disabled vet7 erans, qualified HUBZone small business concerns, 

8 small business concerns owned and controlled by so9 cially and economically disadvantaged individuals, 

10 small business concerns participating in the program 

11 established pursuant to section 8(a) of this Act, and 

12 small business concerns owned and controlled by 

13 women and the performance in attaining such goals. 

14 ‘‘(B) The goals in effect for each agency and the 

15 agency’s performance in attaining such goals. 

16 ‘‘(C) An analysis of any failure to achieve the 

17 Government-wide goals or any individual agency 

18 goals and the actions planned by such agency (and 

19 approved by the Administrator) to achieve the goals 

20 in the succeeding fiscal year. 

21 ‘‘(D) The number and dollar value of prime con22 tracts awarded to small business concerns, small 

23 manufacturers small business concerns owned and 

24 controlled by service-disabled veterans, qualified 

25 HUBZone small business concerns, small business 
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1 concerns owned and controlled by socially and eco2 nomically disadvantaged individuals, small business 

3 concerns participating in the program established 

4 pursuant to section 8(a) of this Act, and small busi5 ness concerns owned and controlled by women. For 

6 each agency and on a government-wide basis, number 

7 and dollar value of contracts issued through—

8 ‘‘(i) noncompetitive negotiation; 

9 ‘‘(ii) competition restricted to small busi10 ness concerns owned and controlled by socially 

11 and economically disadvantaged individuals; 

12 ‘‘(iii) competition restricted to small busi13 ness concerns participating in the program es14 tablished by section 8(a) of this Act; 

15 ‘‘(iv) competition restricted to small busi16 ness concerns; and 

17 ‘‘(v) unrestricted competitions. 

18 ‘‘(E) The number and dollar value of sub19 contracts awarded to small business concerns, small 

20 manufacturers, small business concerns owned and 

21 controlled by service-disabled veterans, qualified 

22 HUBZone small business concerns, small business 

23 concerns owned and controlled by socially and eco24 nomically disadvantaged individuals, small business 

25 concerns participating in the program established
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1 pursuant to section 8(a) of this Act, and small busi2 ness concerns owned and controlled by women. 

3 ‘‘(3) The President shall include the information re4 quired by paragraph (2) in each annual report to the Con5 gress on the state of small business prepared pursuant to 

6 section 303(a) of the Small Business Economic Policy Act 

7 of 1980 (15 U.S.C. 631b(a)). 

8 ‘‘(4) For the purpose of this subsection, the term ‘small 

9 disadvantaged business’ means any small business concern 

10 that is certified as a ‘small disadvantaged business’ by the 

11 Administrator.’’. 

12 (f) RESTRICTED COMPETITION.—Section 15(j) of the 

13 Small Business Act (15 U.S.C. 644(j)) is amended to read 

14 as follows: 

15 ‘‘(j)(1) Each contract for the purchase of goods and 

16 services that has an anticipated value greater than $2,500 

17 but not greater than $1,000,000 shall be reserved exclusively 

18 for small business concerns unless the contracting officer is 

19 unable to obtain offers from two or more small business con20 cerns that are competitive with market prices and are com21 petitive with regard to the quality and delivery of the goods 

22 or services being purchased. 

23 ‘‘(2) In carrying out paragraph (1), a contracting offi24 cer shall consider a responsive offer timely received from 

25 an eligible small business offeror. 
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1 ‘‘(3) Nothing in paragraph (1) shall be construed as 

2 precluding an award of a contract with a value not greater 

3 than $1,000,000 under the authority of section 8(a) of this 

4 Act, section 2323 of title 10, United States Code, section 

5 712 of the Business Opportunity Development Reform Act 

6 of 1988 (Public Law 100–656; 15 U.S.C. 644 note), or sec7 tion 7102 of the Federal Acquisition Streamlining Act of 

8 1994.’’. 

9 (g) ASSIGNMENT OF PROCUREMENT CENTER REP10 RESENTATIVES.—Section 15(l) of the Small Business Act 

11 (15 U.S.C. 644(l)) is amended to read as follows: 

12 ‘‘(l)(1) The Administrator shall assign to each major 

13 procurement center a procurement center representative 

14 with such assistance as may be appropriate. The procure15 ment center representative shall carry out the activities de16 scribed in paragraph (2), and shall be an advocate for the 

17 breakout of items for procurement through full and open 

18 competition, whenever appropriate, while maintaining the 

19 integrity of the system in which such items are used, and 

20 an advocate for the use of full and open competition, when21 ever appropriate, for the procurement of supplies and serv22 ices by such center. Any procurement center representative 

23 assigned under this subsection shall be in addition to the 

24 representative referred to in subsection (k)(6). 
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1 ‘‘(2) A procurement center representative is authorized 

2 to—

3 ‘‘(A) work directly with small businesses to coun4 sel them on the Federal market and contracting with 

5 the Federal Government; 

6 ‘‘(B) identify Federal agency buyers of small 

7 business products and services; 

8 ‘‘(C) attend any provisioning conference or simi9 lar evaluation session during which determinations 

10 are made as to whether requirements are to be pro11 cured through other than full and open competition 

12 and make recommendations with respect to such re13 quirements to the members of such conference or ses14 sion; 

15 ‘‘(D) review, at any time, restrictions on com16 petition previously imposed on items through acquisi17 tion method coding or similar procedures, and rec18 ommend to personnel of the appropriate activity the 

19 prompt reevaluation of such limitations; 

20 ‘‘(E) review restrictions on competition arising 

21 out of restrictions on the rights of the United States 

22 in technical data, and, when appropriate, recommend 

23 that personnel of the appropriate activity initiate a 

24 review of the validity of such an asserted restriction; 
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1 ‘‘(F) obtain from any governmental source, and 

2 make available to personnel of the appropriate activ3 ity, technical data necessary for the preparation of a 

4 competitive solicitation package for any item of sup5 ply or service previously procured noncompetitively 

6 due to the unavailability of such technical data; 

7 ‘‘(G) have access to procurement records and 

8 other data of the procurement center commensurate 

9 with the level of such representative’s approved secu10 rity clearance classification; and 

11 ‘‘(H) receive unsolicited engineering proposals 

12 and, when appropriate—

13 ‘‘(i) either—

14 ‘‘(I) conduct a value analysis of such 

15 proposal to determine whether such pro16 posal, if adopted, will result in lower costs 

17 to the United States without substantially 

18 impeding legitimate acquisition objectives 

19 and forward to personnel of the appropriate 

20 activity recommendations with respect to 

21 such proposal; or 

22 ‘‘(II) forward such proposals without 

23 analysis to personnel of the activity respon24 sible for reviewing such proposals and who 

25 shall furnish the breakout procurement cen-
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1 ter representative with information regard2 ing the disposition of any such proposal; 

3 and 

4 ‘‘(ii) review the systems that account for the 

5 acquisition and management of technical data 

6 within the procurement center to assure that 

7 such systems provide the maximum availability 

8 and access to data needed for the preparation of 

9 offers to sell to the United States those supplies 

10 to which such data pertain which potential 

11 offerors are entitled to receive. 

12 ‘‘(3) A procurement center representative is authorized 

13 to appeal the failure to act favorably on any recommenda14 tion made pursuant to paragraph (2). Such appeal shall 

15 be filed and processed in the same manner and subject to 

16 the same conditions and limitations as an appeal filed by 

17 the Administrator pursuant to subsection (a). 

18 ‘‘(4) The Administrator shall assign and co-locate at 

19 least two small business technical advisers to each major 

20 procurement center in addition to such other advisers as 

21 may be authorized from time to time. The sole duties of 

22 such advisers shall be to assist the procurement center rep23 resentative for the center to which such advisers are as24 signed in carrying out the functions described in paragraph 

25 (2) and the representatives referred to in subsection (k)(6).
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1 ‘‘(5)(A) The procurement center representatives and 

2 technical advisers assigned pursuant to this subsection shall 

3 be—

4 ‘‘(i) full-time employees of the Administration; 

5 and 

6 ‘‘(ii) fully qualified, technically trained, and fa7 miliar with the supplies and services procured by the 

8 major procurement center to which they are assigned. 

9 ‘‘(B) In addition to the requirements of subparagraph 

10 (A), each procurement center representative, and at least 

11 one technical adviser assigned to such representative, shall 

12 be an accredited engineer. 

13 ‘‘(C) The Administrator shall establish personnel posi14 tions for procurement representatives and advisers assigned 

15 pursuant to this subsection which are classified at a grade 

16 level of the General Schedule sufficient to attract and retain 

17 highly qualified personnel. 

18 ‘‘(6) For purposes of this subsection, the term ‘major 

19 procurement center’ means a procurement center that, in 

20 the opinion of the Administrator, purchases substantial dol21 lar amounts of other than commercial items and which has 

22 the potential to incur significant savings as the result of 

23 the placement of a procurement center representative. 

24 ‘‘(7)(A) At such times as the Administrator deems ap25 propriate, the procurement center representative shall con-
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1 duct familiarization sessions for contracting officers and 

2 other appropriate personnel of the procurement center to 

3 which such representative is assigned. Such sessions shall 

4 acquaint the participants with the provisions of this sub5 section and shall instruct them in methods designed to fur6 ther the purposes of such subsection. 

7 ‘‘(B) The procurement center representative shall pre8 pare and personally deliver an annual briefing and report 

9 to the head of the procurement center to which such rep10 resentative is assigned. Such briefing and report shall detail 

11 the past and planned activities of the representative and 

12 shall contain such recommendations for improvement in the 

13 operation of the center as may be appropriate. The head 

14 of such center shall personally receive such briefing and re15 port and shall, within sixty calendar days after receipt, re16 spond, in writing, to each recommendation made by such 

17 representative.’’. 

18 (h) OTHER DUTIES OF ADMINISTRATOR.—Section 15 

19 of the Small Business Act (15 U.S.C. 644) is amended by 

20 adding at the end the following new subsection: 

21 ‘‘(q)(1) The Administrator shall obtain information as 

22 to methods and practices which Government prime contrac23 tors utilize in letting subcontracts and to take action to en24 courage the letting of subcontracts by prime contractors to 
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1 small business concerns and small manufacturers at prices 

2 and on conditions and terms which are fair and equitable. 

3 ‘‘(2) The Administrator shall determine within any in4 dustry the concerns, firms, persons, corporations, partner5 ships, cooperatives, or other business enterprises which are 

6 to be designated as small business concerns or small manu7 facturers for the purpose of effectuating the provisions of 

8 this Act. To carry out this purpose the Administrator, when 

9 requested to do so, shall issue in response to each such re10 quest an appropriate certificate certifying an individual 

11 concern as a small business concern or small manufacturer 

12 in accordance with criteria expressed in this Act. Any such 

13 certificate shall be subject to revocation when the concern 

14 covered thereby ceases to be a small business concern or 

15 small manufacturer. Offices of the Government having pro16 curement or lending powers, or engaging in the disposal 

17 of Federal property or allocating materials or supplies, or 

18 promulgating regulations affecting the distribution of mate19 rials or supplies, shall accept as conclusive the Administra20 tion’s determination as to which enterprises are to be des21 ignated as small business concerns or small manufacturers, 

22 as authorized and directed under this paragraph. 

23 ‘‘(3)(A) The Administration shall certify to Govern24 ment procurement officers, and officers engaged in the sale 

25 and disposal of Federal property, with respect to all ele-
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1 ments of responsibility, including, but not limited to, capa2 bility, competency, capacity, credit, integrity, perseverance, 

3 and tenacity, of any small business concern or group of such 

4 concerns to receive and perform a specific Government con5 tract. A Government procurement officer or an officer en6 gaged in the sale and disposal of Federal property may not, 

7 for any reason specified in the preceding sentence, preclude 

8 any small business concern or group of such concerns from 

9 being awarded such contract without referring the matter 

10 for a final disposition to the Administration. 

11 ‘‘(B) If a Government procurement officer finds that 

12 an otherwise qualified small business concern may be ineli13 gible due to the provisions of section 35(a) of the Act enti14 tled ‘An Act to provide conditions for the purchase of sup15 plies and the making of contracts by the United States, and 

16 for other purposes’, approved June 30, 1936 (popularly 

17 known as the ‘Walsh-Healey Act’; 41 U.S.C. 35(a)), he shall 

18 notify the Administration in writing of such finding. The 

19 Administration shall review such finding and shall either 

20 dismiss it and certify the small business concern to be an 

21 eligible Government contractor for a specific Government 

22 contract or if it concurs in the finding, forward the matter 

23 to the Secretary of Labor for final disposition, in which 

24 case the Administration may certify the small business con-
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1 cern only if the Secretary of Labor finds the small business 

2 concern not to be in violation. 

3 ‘‘(C) In any case in which a small business concern 

4 or group of such concerns has been certified by the Adminis5 trator pursuant to (A) or (B) to be a responsible or eligible 

6 Government contractor as to a specific Government con7 tract, the officers of the Government having procurement 

8 or property disposal powers are directed to accept such cer9 tification as conclusive, and shall let such Government con10 tract to such concern or group of concerns without requiring 

11 it to meet any other requirement of responsibility or eligi12 bility. Notwithstanding the first sentence of this subpara13 graph, the Administrator may not establish an exemption 

14 from referral or notification or refuse to accept a referral 

15 or notification from a Government procurement officer 

16 made pursuant to subparagraph (A) or (B) of this para17 graph, but nothing in this paragraph shall require the proc18 essing of an application for certification if the small busi19 ness concern to which the referral pertains declines to have 

20 the application processed. 

21 ‘‘(4) The Administrator shall obtain from any Federal 

22 department, establishment, or agency engaged in procure23 ment or in the financing of procurement or production such 

24 reports concerning the letting of contracts and subcontracts
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1 and the making of loans to business concerns as it may 

2 deem pertinent in carrying out its functions under this Act. 

3 ‘‘(5) The Administrator shall obtain from any Federal 

4 department, establishment, or agency engaged in the dis5 posal of Federal property such reports concerning the solici6 tation of bids, time of sale, or otherwise as it may deem 

7 pertinent in carrying out its functions under this Act. 

8 ‘‘(6) The Administrator shall obtain from suppliers of 

9 materials information pertaining to the method of filling 

10 orders and the bases for allocating their supply, whenever 

11 it appears that any small business is unable to obtain mate12 rials from its normal sources. 

13 ‘‘(7) The Administrator shall make studies and rec14 ommendations to the appropriate Federal agencies to insure 

15 that a fair proportion of the total purchases and contracts 

16 for property and services for the Government be placed with 

17 small-business concerns, to insure that a fair proportion of 

18 Government contracts for research and development be 

19 placed with small-business concerns, to insure that a fair 

20 proportion of the total sales of Government property be 

21 made to small-business concerns, and to insure a fair and 

22 equitable share of materials, supplies, and equipment to 

23 small-business concerns. 

24 ‘‘(8) The Administrator shall consult and cooperate 

25 with all Government agencies for the purpose of insuring 
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1 that small-business concerns shall receive fair and reason2 able treatment from such agencies.’’. 

3 (i) PRIORITY OF SMALL BUSINESS PROCUREMENT

4 PREFERENCES.—Section 15 of the Small Business Act (15 

5 U.S.C. 644) is further amended by adding at the end the 

6 following new subsection: 

7 ‘‘(r) PRIORITY OF SMALL BUSINESS PROCUREMENT

8 PREFERENCES.—

9 ‘‘(1) IN GENERAL.—A contracting officer may 

10 not make a procurement from a source on the basis 

11 of a preference provided under any provision of this 

12 Act referred to in paragraph (2) unless the con13 tracting officer has determined that such procurement 

14 cannot be made on the basis of a preference provided 

15 under another provision of this Act with a higher pri16 ority under such subsection. 

17 ‘‘(2) ORDER OF PRIORITY.—For purposes of this 

18 subsection, the following provisions of this Act are 

19 listed in order of priority from highest to lowest: 

20 ‘‘(A) Section 8(a). 

21 ‘‘(B) Section 31(b)(2)(B). 

22 ‘‘(C) Section 31(b)(2)(A). 

23 ‘‘(D) Section 8(m). 

24 ‘‘(3) PRIORITY OF CERTAIN OTHER PROCURE25 MENT PREFERENCES.—A procurement may not be 
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1 made from a source on the basis of a preference pro2 vided under any provision of this Act referred to in 

3 paragraph (2) if the procurement would otherwise by 

4 made from a different source under section 4124 or 

5 4125 of title 18, United States Code, or the Act enti6 tled ‘An Act to create a Committee on Purchases of 

7 Blind made Products, and for other purposes’, ap8 proved June 25, 1938 (41 U.S.C. 47).’’. 

9 (j) PROCUREMENT PROGRAM FOR VERY SMALL BUSI10 NESS CONCERNS.—Section 15 of the Small Business Act (15 

11 U.S.C. 644) is further amended by adding at the end the 

12 following new subsection: 

13 ‘‘(s) PROCUREMENT PROGRAM FOR VERY SMALL BUSI14 NESS CONCERNS.—

15 ‘‘(1) ESTABLISHMENT.—The Administrator shall 

16 establish and carry out a program in accordance with 

17 the requirements of this subsection to provide im18 proved access to Federal contract opportunities for 

19 very small business concerns. 

20 ‘‘(2) PROCUREMENT CONTRACTS.—

21 ‘‘(A) IDENTIFICATION OF CONTRACTS.—The 

22 Administrator shall identify procurement con23 tracts of Federal agencies for award under the 

24 program. 
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1 ‘‘(B) CONTRACT AWARDS.—Under the pro2 gram established pursuant to this subsection, the 

3 award of a procurement contract of a Federal 

4 agency identified by the Administrator pursuant 

5 to subparagraph (A) shall be made by the agency 

6 to a very small business concern selected, and de7 termined to be responsible, by the agency. 

8 ‘‘(C) COMPETITION.—All contract opportu9 nities offered for award under the program shall 

10 be awarded on the basis of competition among 

11 very small business concerns. A contracting offi12 cer may rely in good faith on a written certifi13 cation that a small business concern is a very 

14 small business concern. 

15 ‘‘(3) FINANCIAL ASSISTANCE.—In order to assist 

16 very small business concerns receiving contract 

17 awards under the program, the Administrator shall 

18 establish a preauthorization program for such con19 cerns for the purpose of receiving financial assistance 

20 under section 7(a). 

21 ‘‘(4) VERY SMALL BUSINESS CONCERN.—For 

22 purposes of this subsection, the term ‘very small busi23 ness concern’ means a small business concern that has 

24 not more than 15 employees and—
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1 ‘‘(A) in the case of a small manufacturer, 

2 annual gross receipts of not more than 

3 $2,000,000; or 

4 ‘‘(B) in any other case, annual gross re5 ceipts of not more than $500,000. 

6 ‘‘(5) REGULATIONS.—The Administrator shall—

7 ‘‘(A) issue proposed regulations to carry out 

8 this subsection not later than 180 days after the 

9 date of enactment of this subsection; and 

10 ‘‘(B) issue final regulations to carry out 

11 this subsection not later than 270 days after the 

12 date of enactment of this subsection.’’. 

13 (k) OTHER AMENDMENTS TO SECTION 15.—

14 (1) Section 15(e)(1) of the Small Business Act 

15 (15 U.S.C. 644(e)(1)) is amended by inserting ‘‘in the 

16 following order’’ after ‘‘concerns’’. 

17 (2) Section 15(e)(4) of the Small Business Act 

18 (15 U.S.C. 644(e)(4)) is amended by striking ‘‘bun19 dled’’. 

20 (3) Section 15(k)(9) of the Small Business Act 

21 (15 U.S.C. 644(k)(9)) is amended by striking ‘‘Ad22 ministration’’ and inserting ‘‘Administrator’’. 

23 (4) Section 15(p)(4)(A) of the Small Business 

24 Act (15 U.S.C. 644(p)(4)(A)) is amended by striking 

25 ‘‘Administration’’ and inserting ‘‘Administrator’’.
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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 there6 after, there are authorized to be appropriated such sums 

7 as may be necessary and appropriate, to remain available 

8 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 ex11 ceed the annual funding level, as specified in section 

12 21(j)(7); 

13 ‘‘(B) to pay the expenses of the National Small 

14 Business Development Center Advisory Board, as pro15 vided in section 21(m)(1); 

16 ‘‘(C) to pay the expenses of the information shar17 ing 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 rent2 als, or other amounts due under qualified contracts and 

3 other types of financial assistance and enter into commit4 ments to purchase debentures and preferred securities and 

5 to guarantee sureties against loss pursuant to programs 

6 under this Act and the Small Business Investment Act of 

7 1958, in the full amounts provided by law subject only to—

8 ‘‘(i) the availability of qualified applications; 

9 and 

10 ‘‘(ii) limitations contained in appropriations 

11 Acts. 

12 ‘‘(B) Nothing in this paragraph authorizes the Admin13 istrator to reduce or limit its authority to enter into such 

14 commitments. 

15 ‘‘(3) Subject to approval in appropriations Acts, 

16 amounts authorized for preferred securities, debentures or 

17 participating securities under title III of the Small Busi18 ness Investment Act of 1958 may be obligated in one fiscal 

19 year and disbursed or guaranteed in any 1 or more of the 

20 4 subsequent fiscal years. 

21 ‘‘(4) The amount of deferred participation loans au22 thorized in this section—

23 ‘‘(A) shall mean the net amount of the loan prin24 cipal guaranteed by the Administrator (and does not 

25 include any amount which is not guaranteed); and 
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1 ‘‘(B) shall be available for a national program, 

2 except as otherwise provided in section 7(a). 

3 ‘‘(b) There are authorized to be appropriated to the 

4 Administration for each fiscal year such sums as may be 

5 necessary to carry out the provisions of this Act and the 

6 Small Business Investment Act of 1958. There also are here7 by authorized to be appropriated such sums as may be nec8 essary and appropriate for the carrying out of the provi9 sions and purposes, including administrative expenses, of 

10 sections 7(b) of this Act; and there are authorized to be 

11 transferred from such sums as may be necessary and appro12 priate for such administrative expenses. 

13 ‘‘(c) FISCAL YEAR 2004.—

14 ‘‘(1) PROGRAM LEVELS.—The following program 

15 levels are authorized for fiscal year 2004: 

16 ‘‘(A) For the programs authorized by this 

17 Act, the Administrator is authorized to make—

18 ‘‘(i) $70,000,000 in technical assist19 ance grants, as provided in section 7(m); 

20 and 

21 ‘‘(ii) $100,000,000 in direct loans, as 

22 provided in section 7(m). 

23 ‘‘(B) For the programs authorized by this 

24 Act, the Administrator is authorized to make 

25 $22,000,000,000 in deferred participation loans 
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1 and other financings. Of such sum, the Adminis2 tration is authorized to make—

3 ‘‘(i) $16,000,000,000 in general busi4 ness loans as provided in section 7(a); 

5 ‘‘(ii) $5,500,000,000 in financings as 

6 provided in section 7(a)(13) of this Act and 

7 section 504 of the Small Business Invest8 ment Act of 1958; and 

9 ‘‘(iii) $500,000,000 in loans as pro10 vided in section 7(a)(21). 

11 ‘‘(C) For the programs authorized by title 

12 III of the Small Business Investment Act of 

13 1958, the Administrator is authorized to make—

14 ‘‘(i) $5,000,000,000 in purchases of 

15 participating securities; and 

16 ‘‘(ii) $4,000,000,000 in guarantees of 

17 debentures. 

18 ‘‘(D) For the programs authorized by part 

19 B of title IV of the Small Business Investment 

20 Act of 1958, the Administration is authorized to 

21 enter into guarantees not to exceed 

22 $6,000,000,000, of which not more than 50 per23 cent may be in bonds approved pursuant to sec24 tion 411(a)(3) of that Act. 
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1 ‘‘(E) There is authorized to be appropriated 

2 $7,000,000 to carry out section 12(b). 

3 ‘‘(2) ADDITIONAL AUTHORIZATIONS.—

4 ‘‘(A) There are authorized to be appro5 priated to the Administration for fiscal year 

6 2004 such sums as may be necessary to carry out 

7 this Act not elsewhere provided for, including ad8 ministrative expenses and necessary loan capital 

9 for disaster loans pursuant to section 7(b), and 

10 to carry out the Small Business Investment Act 

11 of 1958, including salaries and expenses of the 

12 Administration. 

13 ‘‘(B) Notwithstanding any other provision 

14 of this paragraph, for fiscal year 2004—

15 ‘‘(i) no funds are authorized to be pro16 vided to carry out the loan program author17 ized by section 7(a)(21) except by transfer 

18 from another Federal department or agency 

19 to the Administration, unless the program 

20 level authorized for general business loans 

21 under paragraph (1)(B)(i) is fully funded; 

22 and 

23 ‘‘(ii) the Administrator may not ap24 prove loans on behalf of the Administration 

25 or on behalf of any other department or
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1 agency, by contract or otherwise, under 

2 terms and conditions other than those spe3 cifically authorized under this Act or the 

4 Small Business Investment Act of 1958, ex5 cept that he may approve loans under sec6 tion 7(a)(21) of this Act in gross amounts 

7 of not more than $1,250,000. 

8 ‘‘(d) FISCAL YEAR 2005.—

9 ‘‘(1) PROGRAM LEVELS.—The following program 

10 levels are authorized for fiscal year 2005: 

11 ‘‘(A) For the programs authorized by this 

12 Act, the Administrator is authorized to make—

13 ‘‘(i) $$75,000,000 in technical assist14 ance grants as provided in section 7(m); 

15 and 

16 ‘‘(ii) $105,000,000 in direct loans, as 

17 provided in section 7(m). 

18 ‘‘(B) For the programs authorized by this 

19 Act, the Administrator is authorized to make 

20 $23,000,000,000 in deferred participation loans 

21 and other financings. Of such sum, the Adminis22 tration is authorized to make—

23 ‘‘(i) $16,500,000,000 in general busi24 ness loans as provided in section 7(a); 
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1 ‘‘(ii) $6,000,000,000 in financings as 

2 provided in section 7(a)(13) of this Act and 

3 section 504 of the Small Business Invest4 ment Act of 1958; and 

5 ‘‘(iii) $500,000,000 in loans as pro6 vided in section 7(a)(21). 

7 ‘‘(C) For the programs authorized by title 

8 III of the Small Business Investment Act of 

9 1958, the Administration is authorized to 

10 make—

11 ‘‘(i) $5,500,000,000 in purchases of 

12 participating securities; and 

13 ‘‘(ii) $4,500,000,000 in guarantees of 

14 debentures. 

15 ‘‘(D) For the programs authorized by part 

16 B of title IV of the Small Business Investment 

17 Act of 1958, the Administration is authorized to 

18 enter into guarantees not to exceed 

19 $6,000,000,000, of which not more than 50 per20 cent may be in bonds approved pursuant to sec21 tion 411(a)(3) of that Act. 

22 ‘‘(E) There is authorized to be appropriated 

23 $7,000,000 to carry out section 12(b). 

24 ‘‘(2) ADDITIONAL AUTHORIZATIONS.—
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1 ‘‘(A) There are authorized to be appro2 priated to the Administration for fiscal year 

3 2005 such sums as may be necessary to carry out 

4 this Act not elsewhere provided for, including ad5 ministrative expenses and necessary loan capital 

6 for disaster loans pursuant to section 7(b), and 

7 to carry out the Small Business Investment Act 

8 of 1958, including salaries and expenses of the 

9 Administration. 

10 ‘‘(B) Notwithstanding any other provision 

11 of this paragraph, for fiscal year 2005—

12 ‘‘(i) no funds are authorized to be pro13 vided to carry out the loan program author14 ized by section 7(a)(21) except by transfer 

15 from another Federal department or agency 

16 to the Administration, unless the program 

17 level authorized for general business loans 

18 under paragraph (1)(B)(i) is fully funded; 

19 and 

20 ‘‘(ii) the Administrator may not ap21 prove loans on behalf of the Administration 

22 or on behalf of any other department or 

23 agency, by contract or otherwise, under 

24 terms and conditions other than those spe25 cifically authorized under this Act or the 
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1 Small Business Investment Act of 1958, ex2 cept that he may approve loans under sec3 tion 7(a)(21) of this Act in gross amounts 

4 of not more than $1,250,000.’’. 

5 SEC. 212. SMALL BUSINESS DEVELOPMENT CENTERS. 

6 (a) IN GENERAL.—Section 21 of the Small Business 

7 Act (15 U.S.C. 648) is amended to read as follows: 

8 ‘‘SEC. 21. SMALL BUSINESS DEVELOPMENT CENTER PRO9 GRAM. 

10 ‘‘(a) ESTABLISHMENT OF PROGRAM.—The Adminis11 trator is authorized to make grants to any eligible appli12 cant to establish the network of small business development 

13 centers proposed in the plan submitted by such applicant 

14 under subsection (b). 

15 ‘‘(b) SELECTION OF GRANTEES.—

16 ‘‘(1) APPLICATION.—An eligible applicant may 

17 apply for a grant under subsection (a) by submitting 

18 to the Administrator for approval a plan for estab19 lishing a network of small business development cen20 ters. 

21 ‘‘(2) SELECTION.—The Administrator shall select 

22 the applicant that demonstrates it has the budgetary 

23 and other resources to ensure that it will provide the 

24 most comprehensive and coordinated assistance 

25 throughout the State. The Administrator shall require 
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1 the grantee to have a separate budget for the purpose 

2 of operating its network of small business development 

3 centers and to primarily utilize institutions of higher 

4 education and women’s business centers operating 

5 pursuant to section 29 to provide for the operation of 

6 the small business development centers. The Adminis7 trator may approve, conditionally approve, or reject, 

8 a plan or combination of plans submitted under this 

9 section. The Administrator may not delegate the au10 thority to select grantees under this section except to 

11 the Deputy Administrator. 

12 ‘‘(3) LIMITATION BY STATE.—

13 ‘‘(A) IN GENERAL.—Except as otherwise 

14 provided in this paragraph, the Administrator 

15 shall select one grantee from each State to serve 

16 the entire State. 

17 ‘‘(B) UNAVAILABILITY EXCEPTION.—The 

18 Administrator may select 2 grantees to serve a 

19 State if no eligible applicant submits an appli20 cation to serve the entire State. With respect to 

21 any such State, the Administrator, at the end of 

22 the 2-year period beginning on the date of the se23 lection of such grantees, shall seek applications 

24 under this subsection for the purpose of replacing
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1 such grantees with a single grantee to serve the 

2 entire State. 

3 ‘‘(C) HISTORICAL EXCEPTION.—Subpara4 graph (A) shall not apply with respect to any 

5 State if multiple grantees served such State dur6 ing calendar year 2000 or 2001. 

7 ‘‘(D) CERTAIN TERRITORIES.—In the case 

8 that no eligible applicant from a qualified terri9 tory applies for a grant under this section, the 

10 Administrator may select a grantee from any 

11 State to serve such qualified territory. For pur12 poses of the preceding sentence, the term ‘quali13 fied territory’ means Guam, the United States 

14 Virgin Islands, American Samoa, and the Com15 monwealth of the Northern Mariana Islands. 

16 ‘‘(4) ELIGIBLE APPLICANT.—For purposes of this 

17 section, the term ‘eligible applicant’ means—

18 ‘‘(A) any institution of higher education; 

19 ‘‘(B) any women’s business center operating 

20 pursuant to section 29; or 

21 ‘‘(C) in the case of an entity that was re22 ceiving a grant under this section on December 

23 31, 1990, any of the following: 

24 ‘‘(i) Any State government or any 

25 agency thereof. 
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1 ‘‘(ii) Any regional entity. 

2 ‘‘(iii) Any State-chartered develop3 ment, credit or finance corporation. 

4 ‘‘(iv) Any entity formed by two or 

5 more of the entities described in this para6 graph. 

7 ‘‘(5) REQUIREMENT TO SEEK APPLICATIONS.—If 

8 for any reason a grant under this section is termi9 nated or not renewed, the Administrator shall seek 

10 applications from eligible applicants with respect to 

11 such grant. 

12 ‘‘(c) GRANT PROVISIONS.—

13 ‘‘(1) AGREEMENT BETWEEN GRANTEE AND AD14 MINISTRATOR.—The Administrator and the grantee 

15 shall jointly develop, negotiate, and agree upon the 

16 terms and conditions of the grant. The grantee shall 

17 also consult with the district office or offices within 

18 the State to determine the special services and assist19 ance that are needed by the community or commu20 nities served by the grantee’s small business develop21 ment centers. 

22 ‘‘(2) REQUIREMENTS.—Each grant shall—

23 ‘‘(A) allow the grantee to serve portions of 

24 the State by subcontracting the operation of a 

25 small business development center to another en-
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1 tity, provided that such small business develop2 ment centers shall, to the extent feasible, be lo3 cated at institutions of higher education or 

4 Women’s Business Centers established pursuant 

5 to section 29 of this Act; 

6 ‘‘(B) ensure that the grantee provides serv7 ices as close as possible to small business con8 cerns by providing extension services and uti9 lizing satellite facilities, including those of any 

10 subcontractor; 

11 ‘‘(C) ensure that the grantee provides facili12 ties and staff for each small business develop13 ment center to provide maximum accessibility 

14 and benefit to small business concerns; 

15 ‘‘(D) ensure that the grantee is utilizing the 

16 resources of other Federal agencies in providing 

17 the services and assistance set forth in subsection 

18 (f); and 

19 ‘‘(E) allow the grantee to enter into a con20 tract described in subsection (g)(2). 

21 ‘‘(3) PROHIBITION ON DELEGATION TO DISTRICT

22 OFFICES.—The Administrator shall not delegate any 

23 authority under paragraph (1) to any employee of the 

24 Administration located in a regional or district office. 
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1 ‘‘(4) FORM OF GRANT AGREEMENTS.—For pur2 poses of this section, the term ‘grant’ includes any 

3 contract or cooperative agreement. 

4 ‘‘(5) PROHIBITION ON CERTAIN GRANT REQUIRE5 MENTS.—The Administrator shall not require, and a 

6 grant agreement shall not include a requirement, that 

7 the grantee serve a particular number of small busi8 ness concerns with respect to loans under section 7 of 

9 this Act or title V of the Small Business Investment 

10 Act of 1958. 

11 ‘‘(d) TERM, RENEWAL, AND TERMINATION OF

12 GRANTS.—

13 ‘‘(1) TERM OF GRANTS.—Each grant made 

14 under this section shall be made on the basis of a cal15 endar year or the Federal fiscal year, as determined 

16 by the Administrator. 

17 ‘‘(2) AUTOMATIC RENEWAL.—Unless the Admin18 istrator for cause terminates the grant or the grantee 

19 decides not to seek renewal of the grant, the Adminis20 trator and the grantee shall renew the agreement and 

21 may make mutually satisfactory modifications to the 

22 agreement. The renewal shall take effect on the date 

23 of termination of the old agreement. 

24 ‘‘(3) STANDARDS FOR TERMINATION.—After the 

25 opportunity for notice and comment and consultation 
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1 with the association authorized by subsection (k), the 

2 Administrator shall promulgate standards for deter3 mining when cause exists to terminate a grantee. 

4 Such standards shall be codified in the Code of Fed5 eral Regulations and shall take into account the 

6 grantee’s compliance with the standards set forth in 

7 the grant agreement, any budgetary restrictions faced 

8 by the grantee, the overall economic climate in the 

9 State served by the grantee, and the accreditation of 

10 the grantee’s small business development centers 

11 (whether operated by the grantee or through a subcon12 tractor) under the program established pursuant to 

13 subsection (l). 

14 ‘‘(4) NOTICE OF TERMINATION.—If the Adminis15 trator determines that cause exists to terminate a 

16 grant agreement under this section, the Administrator 

17 shall provide the grantee with written notification set18 ting forth the reasons therefor and affording the ap19 plicant an opportunity for a hearing pursuant to sec20 tions 554, 556, and 557 of title 5, United States Code. 

21 ‘‘(e) MANAGEMENT OF SMALL BUSINESS DEVELOP22 MENT CENTERS BY GRANTEES.—

23 ‘‘(1) APPOINTMENT OF GRANTEE DIRECTOR.—

24 Each Grantee shall appoint a full-time director to 

25 oversee the operations of the grant, the subcontractors
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1 to the grantee, and the small business development 

2 centers operated by the grantee. The grantee’s director 

3 shall be responsible for accounting for any Federal 

4 funds used by the grantee to carry out the require5 ments of this section. The grantee shall have the sole 

6 discretion of selecting the director without requiring 

7 the approval of the Administrator, except that the Ad8 ministrator may terminate the employment of the 

9 grantee’s director if the Administrator determines 

10 that the grantee’s director is unfit for the position be11 cause of a prior conviction for a felony. 

12 ‘‘(2) SMALL BUSINESS DEVELOPMENT CENTER

13 STAFF.—Each small business development center shall 

14 have a staff, which shall be full-time, part-time, or on 

15 a contract basis, as the grantee may determine. 

16 ‘‘(3) EXPENDITURES.—Expenditures of funds by 

17 the grantee shall not require the approval of the Ad18 ministrator except that the Administrator may pro19 hibit an expenditure using Federal funds if, after con20 sultation with the General Counsel, the Administrator 

21 determines that such expenditure violates Federal law. 

22 ‘‘(f) SERVICES PROVIDED BY THE GRANTEE THROUGH

23 SMALL BUSINESS DEVELOPMENT CENTERS.—

24 ‘‘(1) IN GENERAL.—Each grantee and its sub25 contractors shall assist small business concerns in 
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1 solving problems concerning operations, manufac2 turing, engineering, technology exchange and develop3 ment, personnel administration, marketing, sales, 

4 merchandising, finance, accounting, business strategy 

5 development, and other disciplines required for small 

6 business growth and expansion, innovation, increased 

7 productivity, and management improvement, and for 

8 decreasing industry economic concentrations. Small 

9 Business Development Centers shall, in providing as10 sistance to small manufacturers, coordinate such as11 sistance and utilize the resources of the Manufac12 turing Extension Partnership of the National Insti13 tutes of Standards and Technology. 

14 ‘‘(2) PERIODIC MODIFICATION.—Each grantee or 

15 its subcontractors shall continue to upgrade and mod16 ify its services, as needed, in order to meet the chang17 ing and evolving needs of the small business commu18 nity and those of small manufacturers in particular. 

19 ‘‘(3) ACCESS TO PROFESSIONALS.—Each grantee 

20 shall ensure that small business development centers 

21 provide access to: 

22 ‘‘(A) Business analysts to counsel, assist, 

23 and inform small business clients. 

24 ‘‘(B) Technology transfer agents to provide 

25 state of art technology to small business concerns 
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1 through coupling with national and regional 

2 technology data sources. 

3 ‘‘(C) Information specialists to assist in 

4 providing information searches and referrals to 

5 small business concerns. 

6 ‘‘(D) Part-time professional specialists to 

7 conduct research or to provide counseling assist8 ance whenever the need arises. 

9 ‘‘(E) Laboratory and adaptive engineering 

10 facilities. 

11 ‘‘(4) SERVICES.—Each grantee shall ensure that 

12 the services provided by its network of small business 

13 development centers include—

14 ‘‘(A) furnishing one-to-one individual coun15 seling to small business concerns, including—

16 ‘‘(i) working with individuals to in17 crease awareness of basic credit practices 

18 and credit requirements; 

19 ‘‘(ii) working with individuals to de20 velop business plans, financial packages, 

21 credit applications, and contract proposals; 

22 ‘‘(iii) working with the Administration 

23 to develop and provide informational tools 

24 for use in working with individuals on pre-
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1 business startup planning, existing business 

2 expansion, and export planning; and 

3 ‘‘(iv) working with individuals referred 

4 by the district offices of the Administration 

5 and Administration participating lenders; 

6 ‘‘(B) assisting in technology transfer, re7 search and development, including applied re8 search, and coupling from existing sources to 

9 small business concerns, including—

10 ‘‘(i) working to increase the access of 

11 small business concerns to the capabilities of 

12 automated flexible manufacturing systems; 

13 ‘‘(ii) working through existing net14 works and developing new networks for 

15 technology transfer that encourage partner16 ship between the small business and aca17 demic communities to help commercialize 

18 university-based research and development 

19 and introduce university-based engineers 

20 and scientists to their counterparts in small 

21 technology-based firms and small manufac22 turers; 

23 ‘‘(iii) exploring the viability of devel24 oping shared production facilities, under 

25 appropriate circumstances; and 
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1 ‘‘(iv) assisting small manufacturers in 

2 developing more efficient operations, includ3 ing coordination of assistance with the 

4 Manufacturing Extension Partnership of 

5 the National Institutes of Standards and 

6 Technology; 

7 ‘‘(C) in cooperation with the Department of 

8 Commerce, the entities providing services pursu9 ant to section 12(d), and other relevant Federal 

10 agencies, actively assisting small business con11 cerns in exporting by identifying and developing 

12 potential export markets, facilitating export 

13 transactions, developing linkages between United 

14 States small business concerns and prescreened 

15 foreign buyers, assisting small business concerns 

16 to participate in international trade shows, as17 sisting small business concerns in obtaining ex18 port financing, assisting small manufacturers in 

19 identifying supply chain management opportu20 nities, and facilitating the development or reori21 entation of marketing and production strategies; 

22 where appropriate, the grantee and the Adminis23 trator may work in cooperation with the State 

24 to establish a State international trade center for 

25 these purposes;
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1 ‘‘(D) developing a program in conjunction 

2 with the Export-Import Bank and local and re3 gional Administration offices that will enable 

4 Small Business Development Centers to serve as 

5 an information network and to assist small busi6 ness applicants for Export-Import Bank financ7 ing programs, and otherwise identify and help to 

8 make available export financing programs to 

9 small business concerns; 

10 ‘‘(E) working closely with the small business 

11 community, small business consultants, State 

12 agencies, universities and other appropriate 

13 groups to make translation services more readily 

14 available to small business concerns doing busi15 ness, or attempting to develop business, in for16 eign markets; 

17 ‘‘(F) in providing assistance under this sub18 section, grantees shall cooperate with the Depart19 ment of Commerce and other relevant Federal 

20 agencies to increase access to available export 

21 market information systems such as the CIMS 

22 system; 

23 ‘‘(G) assisting small business concerns to 

24 develop and implement strategic business plans 

25 to timely and effectively respond to the planned 
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1 closure (or reduction) of a Department of Defense 

2 facility within the community, or actual or pro3 jected reductions in such firms’ business base due 

4 to the actual or projected termination (or reduc5 tion) of a Department of Defense program or a 

6 contract in support of such program—

7 ‘‘(i) by developing broad economic as8 sessments of the adverse impacts of—

9 ‘‘(I) the closure (or reduction) of 

10 the Department of Defense facility on 

11 the small business concerns providing 

12 goods or services to such facility or to 

13 the military and civilian personnel 

14 currently stationed or working at such 

15 facility; and 

16 ‘‘(II) the termination (or reduc17 tion) of a Department of Defense pro18 gram (or contracts under such pro19 gram) on the small business concerns 

20 participating in such program as a 

21 prime contractor, subcontractor or sup22 plier at any tier; 

23 ‘‘(ii) by developing, in conjunction 

24 with appropriate Federal, State, and local 

25 governmental entities and other private sec-
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1 tor organizations, the parameters of a tran2 sition adjustment program adaptable to the 

3 needs of individual small business concerns; 

4 ‘‘(iii) by conducting appropriate pro5 grams to inform the affected small business 

6 community regarding the anticipated ad7 verse impacts identified under clause (i) 

8 and the economic adjustment assistance 

9 available to such firms; and 

10 ‘‘(iv) by assisting small business con11 cerns to develop and implement an individ12 ualized transition business plan; 

13 ‘‘(H) maintaining current information con14 cerning Federal, State, and local regulations that 

15 affect small business concerns and counsel small 

16 business concerns on methods of compliance. 

17 Counseling and technology development shall be 

18 provided when necessary to help small business 

19 concerns find solutions for complying with envi20 ronmental, energy, health, safety, and other Fed21 eral, State, and local regulations; 

22 ‘‘(I) coordinating and conducting research 

23 into technical and general small business prob24 lems for which there are no ready solutions; 
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1 ‘‘(J) providing and maintaining a com2 prehensive library that contains current infor3 mation and statistical data needed by small 

4 business concerns; 

5 ‘‘(K) maintaining a working relationship 

6 and open communications with the financial 

7 and investment communities, legal associations, 

8 local and regional private consultants, and local 

9 and regional small business groups and associa10 tions in order to help address the various needs 

11 of the small business community; 

12 ‘‘(L) conducting in-depth surveys for local 

13 small business groups in order to develop general 

14 information regarding the local economy and 

15 general small business strengths and weaknesses 

16 in the locality; 

17 ‘‘(M) in cooperation with the Department of 

18 Commerce, the Administration and other rel19 evant Federal agencies, actively assisting rural 

20 small business concerns, including rural small 

21 manufacturers, in exporting by identifying and 

22 developing potential export markets for rural 

23 small business concerns, facilitating export 

24 transactions for rural small business concerns, 

25 developing linkages between United States rural 
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1 small business concerns and prescreened foreign 

2 buyers, assisting rural small business concerns to 

3 participate in international trade shows, assist4 ing rural small business concerns in obtaining 

5 export financing and developing marketing and 

6 production strategies; 

7 ‘‘(N) assisting rural small business concerns 

8 in developing marketing and production strate9 gies that will enable them to better compete in 

10 the domestic market by providing technical as11 sistance needed by rural small business concerns, 

12 by making available managerial assistance to 

13 rural small business concerns, and by providing 

14 information and assistance in obtaining financ15 ing for business startups and expansion; 

16 ‘‘(O) in conjunction with the United States 

17 Travel and Tourism Administration, assist rural 

18 small business concerns in developing the tour19 ism potential of rural communities by—

20 ‘‘(i) identifying the cultural, historic, 

21 recreational, and scenic resources of such 

22 communities; 

23 ‘‘(ii) providing assistance to small 

24 business concerns in developing tourism
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1 marketing and promotion plans relating to 

2 tourism in rural areas; and 

3 ‘‘(iii) assisting small business concerns 

4 to obtain capital for starting or expanding 

5 businesses primarily serving tourists; 

6 ‘‘(P) maintaining lists of local and regional 

7 private consultants to whom small business con8 cerns can be referred; 

9 ‘‘(Q) providing information to small busi10 ness concerns regarding compliance with regu11 latory requirements; 

12 ‘‘(R) developing informational publications, 

13 establishing resource centers of reference mate14 rials, and distributing compliance guides pub15 lished under section 312(a) of the Small Business 

16 Regulatory Enforcement Fairness Act of 1996; 

17 ‘‘(S) providing small business concerns with 

18 access to a wide variety of export-related infor19 mation by establishing on-line computer linkages 

20 between small business development centers and 

21 an international trade data information network 

22 with ties to the Export Assistance Center pro23 gram; 
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1 ‘‘(T) providing information and assistance 

2 to small business concerns with respect to estab3 lishing drug-free workplace programs; 

4 ‘‘(U) in the case of a small business develop5 ment center located at an institution of higher 

6 learning, hosting semi-annually a procurement 

7 conference to which the grantee (or its sub8 contractors) invites small business concerns, in9 cluding small manufacturers, to meet with the 

10 procurement officials of such institution in an 

11 effort to increase procurement by such institution 

12 from small business concerns and small manu13 facturers; 

14 ‘‘(V) providing comprehensive plans (devel15 oped in cooperation with relevant State and Fed16 eral agencies) relating to the export potential of 

17 small business concerns, including small manu18 facturers; and 

19 ‘‘(W) assisting small business concerns to 

20 develop and implement strategic business plans 

21 to timely and effectively respond to the closure of 

22 a large business concern that has a significant 

23 adverse impact on the community—
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1 ‘‘(i) by developing broad economic as2 sessments of the adverse impacts of such clo3 sure; 

4 ‘‘(ii) by developing, in conjunction 

5 with appropriate Federal, State, and local 

6 governmental entities and other private sec7 tor organizations, the parameters of a tran8 sition adjustment program adaptable to the 

9 needs of individual small business concerns; 

10 ‘‘(iii) by conducting appropriate pro11 grams to inform the affected small business 

12 community regarding the adverse impacts 

13 identified under clause (i) and the economic 

14 adjustment assistance available to such 

15 firms; 

16 ‘‘(iv) by assisting small business con17 cerns to develop and implement an individ18 ualized transition business plan; and 

19 ‘‘(v) by assisting unemployed individ20 uals in establishing a small business con21 cern. 

22 ‘‘(g) SPECIAL RULES RELATING TO SMALL BUSINESS

23 DEVELOPMENT CENTERS.—

24 ‘‘(1) SERVICES TO OUT-OF-STATE SMALL BUSI25 NESS CONCERNS.—The Administrator may allow a 
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1 small business development center to serve small busi2 ness concerns located outside the State in which such 

3 center is located (or, in the case of a State with more 

4 than one grantee, outside the area served by the 

5 grantee) to the extent such business concerns are lo6 cated within close geographical proximity to the small 

7 business development center as determined by the Ad8 ministrator. 

9 ‘‘(2) CONTRACTS WITH OTHER AGENCIES.—Sub10 ject to the restrictions set forth in this paragraph, a 

11 grantee (or its subcontractors, with the grantee’s ap12 proval) may contract with a Federal Department or 

13 agency to provide specific assistance to small business 

14 concerns through its network of small business devel15 opment centers. Before bidding on a contract de16 scribed in this paragraph, a grantee shall receive ap17 proval from the Administrator. Before granting ap18 proval, the Administrator shall consider the subject 

19 and scope of the contract and the extent to which per20 formance of the contract would provide assistance to 

21 small business and not impair the performance of the 

22 grantee’s obligations under this section. A contract for 

23 assistance under this paragraph shall not count to24 ward the achievement of any contracting goal under 

25 section 15(g). 
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1 ‘‘(3) SMALL BUSINESS VENDORS.—Each grantee 

2 shall ensure, to the extent practicable, that its network 

3 of small business development centers utilize and com4 pensate qualified small business vendors, including 

5 private management consultants, private consulting 

6 engineers, and private testing laboratories, to provide 

7 services under this section to small business concerns. 

8 To the extent appropriate for the community served 

9 by the small business development center, such quali10 fied small business vendors should include at least one 

11 such vendor with expertise in manufacturing and as12 sisting small manufacturers. 

13 ‘‘(4) COORDINATION WITH DISTRICT OFFICES, 

14 ETC.—The grantees shall ensure that the small busi15 ness development centers shall work in close coopera16 tion with the Administration’s regional and district 

17 offices, the local small business community, and ap18 propriate State and local agencies. No action by a 

19 grantee or its subcontractors or staff shall require the 

20 approval of any employee in a regional or district of21 fice of the Administration. Any such employee shall, 

22 after consultation with district counsel, notify the As23 sistant Administrator for Small Business Develop24 ment Centers if such employee believes that the grant25 ee or its subcontractors or staff has taken action that
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1 violates the law or jeopardizes the legal position of 

2 the United States. 

3 ‘‘(5) ASSISTANCE FROM STATE INTERNATIONAL

4 TRADE OFFICES.—The grantee may use funds pro5 vided by State international trade offices and co-lo6 cate employees of such offices at small business devel7 opment centers. 

8 ‘‘(6) COORDINATION WITH ADMINISTRATION.—

9 On an annual basis, the grantee, after consultation 

10 with the district director, shall review and coordinate 

11 public and private partnerships and cosponsorships 

12 with the Administrator for the purpose of more effi13 ciently leveraging available resources on a national 

14 and a State basis. Should the grantee be unable to 

15 consult with the district director, the grantee shall 

16 consult with the Assistant Administrator for Small 

17 Business Development Centers. 

18 ‘‘(7) PROHIBITION ON CERTAIN FEES.—Each 

19 grantee shall ensure that small business development 

20 centers shall not impose or otherwise collect a fee or 

21 other compensation in connection with the provision 

22 of counseling services under this section. 

23 ‘‘(8) PRIVACY REQUIREMENTS.—

24 ‘‘(A) IN GENERAL.—Each grantee shall en25 sure that small business development centers 
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1 shall not disclose the name or address of any in2 dividual or small business concern receiving as3 sistance under this section without the consent of 

4 such individual or small business concern, except 

5 that—

6 ‘‘(i) the Administrator shall require 

7 such disclosure if ordered to do so by a 

8 court in any civil or criminal action; and 

9 ‘‘(ii) if the Administrator considers it 

10 necessary while undertaking a financial 

11 audit of a small business development center 

12 or the grantee’s network of small business 

13 development centers, the Administrator shall 

14 require such disclosure for the sole purpose 

15 of undertaking such audit. 

16 ‘‘(B) REGULATIONS.—After notice and com17 ment and not later than 180 days after the date 

18 of the enactment of this subparagraph, the Ad19 ministrator shall issue regulations to establish 

20 standards for requiring disclosures during a fi21 nancial audit under subparagraph (A)(ii). 

22 ‘‘(h) ADDITIONAL GRANTS.—

23 ‘‘(1) IN GENERAL.—Any grantee may apply to 

24 the Administrator for an additional grant to be used 

25 solely to assist—
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1 ‘‘(A) with the development and enhancement 

2 of exports by small business concerns; 

3 ‘‘(B) in technology transfer; 

4 ‘‘(C) with outreach, development, and en5 hancement of minority-owned small business 

6 startups or expansions, HUBZone small business 

7 concerns, veteran-owned small business startups 

8 or expansions, and women-owned small business 

9 startups or expansions, in communities affected 

10 by base closings or military or corporate 

11 downsizing, or in rural or underserved commu12 nities; and 

13 ‘‘(D) small manufacturers. 

14 ‘‘(2) CERTAIN RULES TO APPLY.—Except as oth15 erwise provided in this subsection, any additional 

16 grant under this subsection shall be subject to rules 

17 similar to the rules that apply to grants made under 

18 subsection (a). 

19 ‘‘(3) GRANT AMOUNT.—A grant shall not be 

20 made under this subsection if such grant which would 

21 exceed the grantee’s pro rata share of a $15,000,000 

22 program based upon the populations to be served by 

23 the grantee as compared to the total population of the 

24 United States. The minimum amount of eligibility 

25 for any State shall be $100,000. Any additional grant 
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1 made under this section shall not be taken into ac2 count for purposes of the dollar program limitations 

3 specified in subsection (j). 

4 ‘‘(4) REALLOCATION OF UNUSED FUNDS.—If the 

5 Administrator has not received an application for an 

6 additional grant from a grantee pursuant to this sub7 section within 90 days after the Administrator and 

8 the grantee have signed an agreement pursuant to 

9 subsection (c) or within 60 days after the grantee and 

10 Administrator has renewed an agreement pursuant to 

11 subsection (c), the Administrator may make such 

12 grant to any eligible applicant (determined without 

13 regard to so much of subsection (b)(4)(C) as precedes 

14 ‘1990,’) in that State to carry out the activities speci15 fied in this subsection subject to the requirements of 

16 paragraphs (2) and (3). 

17 ‘‘(i) MATCHING FUNDS.—

18 ‘‘(1) IN GENERAL.—The Administrator shall re19 quire as a condition of any grant (or amendment or 

20 modification thereof) made to a grantee under this 

21 section, that a matching amount equal to the amount 

22 of such grant be provided from sources other than the 

23 Federal Government, to be comprised of not less than 

24 50 percent cash and not more than 50 percent of in25 direct costs and in-kind contributions. 
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1 ‘‘(2) RESTRICTION.—The matching amount de2 scribed in paragraph (1) shall not include—

3 ‘‘(A) any indirect costs or in-kind contribu4 tions derived from any Federal program; and 

5 ‘‘(B) any amount received under a contract 

6 described in subsection (g)(2). 

7 ‘‘(j) FUNDING FORMULA.—

8 ‘‘(1) IN GENERAL.—Subject to paragraph (3), the 

9 amount of funds to be made available to the grantee 

10 or grantees within a State under this subsection shall 

11 be equal to an amount determined in accordance with 

12 the following formula: 

13 ‘‘(A) The annual amount made available 

14 for the Small Business Development Center Pro15 gram under section 20(a), less any reductions 

16 made for expenses authorized by paragraph (5), 

17 shall be divided on a pro rata basis, based on the 

18 percentage of the population of each State, as 

19 compared to the population of the United States. 

20 ‘‘(B) If the pro rata amount calculated 

21 under subparagraph (A) for any State is less 

22 than the minimum funding level under para23 graph (3), the Administrator shall determine the 

24 aggregate amount necessary to achieve that min25 imum funding level for each such State.
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1 ‘‘(C) The aggregate amount calculated 

2 under subparagraph (B) shall be deducted from 

3 the amount calculated under subparagraph (A) 

4 for States eligible to receive more than the min5 imum funding level. The deductions shall be 

6 made on a pro rata basis, based on the popu7 lation of each such State, as compared to the 

8 total population of all such States. 

9 ‘‘(D) The aggregate amount deducted under 

10 subparagraph (C) shall be added to the funds of 

11 those States that are not eligible to receive more 

12 than the minimum funding level in order to 

13 achieve the minimum funding level for each such 

14 State, except that the eligible amount of funds 

15 made available to any State under this sub16 section shall not be reduced to an amount below 

17 the minimum funding level. 

18 ‘‘(2) FUNDS AVAILABILITY DETERMINATION.—

19 The amount of funds that one or more grantees with20 in a State are eligible to receive under this subsection 

21 shall be the amount determined under paragraph (1), 

22 subject to any modifications required under para23 graph (3), and shall be based on the amount available 

24 for the fiscal year in which performance of the grant 

25 commences, but not including amounts distributed in 
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1 accordance with paragraph (4). The amount of funds 

2 received by one or more grantees in any State under 

3 any provision of this subsection shall not exceed the 

4 amount of matching funds from sources other than the 

5 Federal Government, as required under subsection (i). 

6 ‘‘(3) MINIMUM FUNDING LEVEL.—The amount of 

7 the minimum funding level for each State shall be de8 termined for each fiscal year based on the amount 

9 made available for that fiscal year to carry out this 

10 section, as follows: 

11 ‘‘(A) If the amount made available is not 

12 less than $81,500,000 and not more than 

13 $90,000,000, the minimum funding level shall be 

14 $500,000. 

15 ‘‘(B) If the amount made available is less 

16 than $81,500,000, the minimum funding level 

17 shall be the remainder of $500,000 minus a per18 centage of $500,000 equal to the percentage 

19 amount by which the amount made available is 

20 less than $81,500,000. 

21 ‘‘(C) If the amount made available is more 

22 than $90,000,000, the minimum funding level 

23 shall be the sum of $500,000 plus a percentage 

24 of $500,000 equal to the percentage amount by 
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1 which the amount made available exceeds 

2 $90,000,000. 

3 ‘‘(4) DISTRIBUTIONS.—Subject to paragraph (3), 

4 if one or more grantees within a State do not apply 

5 for, or use, their full funding eligibility for a fiscal 

6 year, the Administration shall distribute the remain7 ing funds as follows: 

8 ‘‘(A) If the grant to any State is less than 

9 the amount received by that State in fiscal year 

10 2000, the Administrator shall distribute such re11 maining funds, on a pro rata basis, based on the 

12 percentage of shortage of each such State, as 

13 compared to the total amount of such remaining 

14 funds available, to the extent necessary in order 

15 to increase the amount of the grant to the 

16 amount received by that State in fiscal year 

17 2000, or until such funds are exhausted, which18 ever first occurs. 

19 ‘‘(B) If any funds remain after the applica20 tion of subparagraph (A), the remaining amount 

21 may be distributed as supplemental funds to a 

22 grantee or grantees in any State, as the Admin23 istrator determines, in its discretion, to be ap24 propriate, after consultation with the association 

25 referred to in subsection (k). 
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1 ‘‘(5) USE OF AMOUNTS.—Of the amounts made 

2 available in any fiscal year to carry out this section 

3 not more than $500,000 may be used by the Adminis4 trator to pay expenses enumerated in subparagraphs 

5 (B) through (D) of section 20(a)(1). 

6 ‘‘(6) EXCLUSIONS.—Funds made available to one 

7 or more grantees within a State provided by the Ad8 ministrator or another Federal agency to carry out 

9 subsection (f)(4), (g)(2), (h), or (o) or for supple10 mental grants set forth in paragraph (4)(B), shall not 

11 be included in the calculation of maximum funding 

12 to be made available to one or more grantees within 

13 the State under paragraph (2). 

14 ‘‘(7) AUTHORIZATION OF APPROPRIATIONS.—

15 There is authorized to be appropriated to carry out 

16 this section $135,000,000 for fiscal year 2004 and 

17 $145,000,000 for fiscal year 2005. The authority to 

18 award grants under this section shall be in effect for 

19 each fiscal year only to the extent and in the amounts 

20 as are provided in advance in appropriations Acts. 

21 ‘‘(k) FORMATION OF ASSOCIATION.—The grantees’ di22 rectors are authorized to form an association to pursue mat23 ters of common concern. If more than a majority of the 

24 grantees’ directors are members of such an association, the 

25 Administrator is authorized and directed to recognize the 
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1 existence and activities of such an association and to con2 sult with it and develop documents—

3 ‘‘(1) announcing the annual scope of activities 

4 pursuant to this section; 

5 ‘‘(2) requesting proposals to deliver assistance as 

6 provided in this section; and 

7 ‘‘(3) governing the general operations and ad8 ministration of the Small Business Development Cen9 ter Program, specifically including the development of 

10 regulations and a uniform negotiated grant agree11 ment for use on an annual basis when entering into 

12 agreements with grantees. 

13 ‘‘(l) PROGRAM EXAMINATION AND ACCREDITATION.—

14 ‘‘(1) EXAMINATION.—The Administrator shall 

15 develop and implement a biennial programmatic and 

16 financial examination of each network of small busi17 ness development centers established pursuant to this 

18 section. The biennial examination shall be conducted 

19 by the Assistant Administrator for Small Business 

20 Development Centers. 

21 ‘‘(2) ACCREDITATION.—The Administrator shall 

22 provide financial support, by contract or otherwise, to 

23 the association authorized by subsection (k) for the 

24 purpose of developing and implementing a small busi25 ness development center accreditation program.
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1 ‘‘(3) EXTENSION OR RENEWAL OF COOPERATIVE

2 AGREEMENTS.—

3 ‘‘(A) IN GENERAL.—In renewing a grant or 

4 cooperative agreement or contract of a grantee, 

5 the Administrator shall consider the results of 

6 the examination and accreditation program con7 ducted pursuant to paragraphs (1) and (2). 

8 ‘‘(B) ACCREDITATION REQUIREMENT.—The 

9 Administrator may not renew any grant under 

10 this section unless the grantee’s small business 

11 development centers have been accredited under 

12 the program conducted pursuant to this sub13 section, except that the Assistant Administrator 

14 for Small Business Development Centers may 

15 waive such accreditation requirement if the As16 sistant Administrator determines that the grant17 ee is making a good faith effort to obtain accred18 itation for each of the grantee’s small business 

19 development centers. 

20 ‘‘(m) SMALL BUSINESS DEVELOPMENT CENTER ADVI21 SORY BOARDS.—

22 ‘‘(1) NATIONAL SMALL BUSINESS DEVELOPMENT

23 CENTER ADVISORY BOARD.—

24 ‘‘(A) ESTABLISHMENT.—There is estab25 lished a National Small Business Development 
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1 Center Advisory Board (herein referred to as 

2 ‘Board’) which shall consist of nine members ap3 pointed from civilian life by the Administrator 

4 and who shall be persons of outstanding quali5 fications known to be familiar and sympathetic 

6 with small business needs and problems. No more 

7 than three members shall be from universities or 

8 their affiliates and six shall be from small busi9 ness concerns or associations representing small 

10 business concerns. At the time of the appoint11 ment of the Board, the Administrator shall des12 ignate one-third of the members and at least one 

13 from each category whose term shall end in two 

14 years from the date of appointment, a second 

15 third whose term shall end in three years from 

16 the date of appointment, and the final third 

17 whose term shall end in four years from the date 

18 of appointment. Succeeding Boards shall have 

19 three-year terms, with one-third of the Board 

20 changing each year. 

21 ‘‘(B) OPERATION.—The Board shall elect a 

22 Chairman and advise, counsel, and confer with 

23 the Assistant Administrator for Small Business 

24 Development Centers in carrying out the duties 

25 described in this section. The Board shall meet at 
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1 least semiannually and at the call of the Chair2 man of the Board. Each member of the Board 

3 shall be entitled to be compensated at the rate 

4 not in excess of the per diem equivalent of the 

5 highest rate of pay for individuals occupying the 

6 position under GS–18 of the General Schedule 

7 for each day engaged in activities of the Board 

8 and shall be entitled to be reimbursed for ex9 penses as a member of the Board. 

10 ‘‘(2) LOCAL SMALL BUSINESS DEVELOPMENT

11 CENTER ADVISORY BOARDS.—Each grantee’s director 

12 shall establish an advisory board for the grantee’s net13 work of small business development centers. The dis14 trict director shall have no authority to approve or 

15 disapprove the members of the advisory board selected 

16 by the grantee’s director. 

17 ‘‘(n) ADMINISTRATION OF PROGRAM.—

18 ‘‘(1) IN GENERAL.—Except as otherwise provided 

19 in this section, the program established by this section 

20 shall be administered by the Administrator, acting 

21 through the Assistant Administrator for Small Busi22 ness Development Centers with such oversight by the 

23 Associate Administrator for Enterprise Outreach and 

24 Training as the Administrator determines to be ap25 propriate. 
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1 ‘‘(2) DUTIES OF ASSISTANT ADMINISTRATOR FOR

2 SMALL BUSINESS DEVELOPMENT CENTERS.—The du3 ties of the Assistant Administrator for Small Business 

4 Development Centers shall include recommending the 

5 annual program budget, reviewing the annual budgets 

6 submitted by each grantee, establishing appropriate 

7 funding levels therefore, advising the Administrator 

8 on the selection of grantees to participate in the pro9 gram, implementing the provisions of this section, 

10 maintaining a clearinghouse to provide for the dis11 semination and exchange of information between 

12 grantees and their subcontractors and conducting au13 dits of recipients of grantees under this section. 

14 ‘‘(3) CONSULTATION REQUIREMENTS.—In car15 rying out the duties described in paragraph (2), the 

16 Assistant Administrator shall confer with and seek 

17 the advice of the advisory boards established pursuant 

18 to subsection (m) and the heads of the regional and 

19 district offices of the Administration. 

20 ‘‘(o) ESTABLISHMENT OF INFORMATION SHARING SYS21 TEM.—

22 ‘‘(1) IN GENERAL.—The Administrator, in con23 sultation with the grantees, their subcontractors, and 

24 the association authorized by this section shall develop 
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1 and implement an information sharing system. Such 

2 system shall—

3 ‘‘(A) allow small business development cen4 ters to exchange information about their pro5 grams; 

6 ‘‘(B) provide information central to tech7 nology transfer; and 

8 ‘‘(C) provide information central to in9 creased utilization by United States businesses of 

10 sourcing their procurement requirements with 

11 small manufacturers. 

12 ‘‘(2) GRANT AUTHORITY.—The Administrator 

13 may make grants to one or more grantees to carry out 

14 the provisions of this subsection. Such grants shall be 

15 awarded for a period of not to exceed 5 years. The 

16 matching funds requirements of subsection (i) shall 

17 not be applicable to grants made under this sub18 section. 

19 ‘‘(p) COOPERATION WITH FEDERAL SCIENCE RE20 SEARCH FACILITIES AND AGENCIES.—

21 ‘‘(1) IN GENERAL.—Laboratories operated and 

22 funded by the Federal Government are authorized and 

23 directed to cooperate with the Administrator in devel24 oping and establishing programs to support small 

25 business development centers by making facilities and
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1 equipment available; providing experiment station ca2 pabilities in adaptive engineering; providing library 

3 and technical information processing capabilities; 

4 and providing professional staff for consulting. The 

5 Administrator is authorized to reimburse the labora6 tories for such services. 

7 ‘‘(2) NATIONAL SCIENCE FOUNDATION.—The Na8 tional Science Foundation is authorized and directed 

9 to cooperate with the Administrator in developing 

10 and establishing programs to support small business 

11 development centers. 

12 ‘‘(3) NATIONAL AERONAUTICS AND SPACE AD13 MINISTRATION.—The National Aeronautics and Space 

14 Administration and regional technology transfer cen15 ters supported by the National Aeronautics and Space 

16 Administration are authorized and directed to cooper17 ate with grantees and their small business develop18 ment centers. 

19 ‘‘(q) REGULATIONS.—In promulgating regulations to 

20 carry out this section, the Administration shall identify, 

21 and require grantee compliance with, the provisions in22 cluded in uniform requirements of Office of Management 

23 and Budget (OMB) Circulars which govern audits, cost 

24 principles and administrative requirements for Federal 

25 grants, and contracts and cooperative agreements.’’. 
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1 (b) CONFORMING AMENDMENT.—Paragraph (2) of sec2 tion 27(g) of the Small Business Act (15 U.S.C. 654(g)) 

3 is amended by striking ‘‘section 21(c)(3)(T)’’ and inserting 

4 ‘‘section 21(f)(4)(T)’’. 

5 (c) EFFECTIVE DATE.—

6 (1) IN GENERAL.—Except as provided in para7 graph (2), the amendments made by this section shall 

8 take effect on the date of the enactment of this Act. 

9 (2) GRANTS.—To the extent that the amendment 

10 made by subsection (a) applies with respect to grants, 

11 such amendment shall apply to grants made, renewed, 

12 or terminated after the date of the enactment of this 

13 Act. 

14 (d) TRANSITION RULES.—

15 (1) MULTIPLE GRANTEES REPLACED WITH SIN16 GLE GRANTEE.—In the case of a State which is served 

17 by two or more grantees under section 21 of the Small 

18 Business Act on the date of the enactment of this Act, 

19 the Administrator shall be required to select a new 

20 grantee for such State following the selection process 

21 set forth in such section (as in effect on the day after 

22 the date of the enactment of this Act) if the grantees 

23 serving such State on the date of the enactment of this 

24 Act were selected after January 1, 2002. 
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1 (2) SMALL BUSINESS DEVELOPMENT CENTER AD2 VISORY BOARDS.—Each member of the National 

3 Small Business Development Center Advisory Board 

4 and each member serving on a local small business 

5 development center advisory board on the day before 

6 the date of the enactment of this Act shall continue 

7 to so serve until the end of such member’s term. 

8 SEC. 213. ASSIGNMENT OF EMPLOYEES OF THE OFFICE OF 

9 INTERNATIONAL TRADE. 

10 Section 22 of the Small Business Act (15 U.S.C. 649) 

11 is amended by adding at the end the following new sub12 section: 

13 ‘‘(h) In carrying out this section, the Administrator 

14 shall ensure that the number of full-time equivalent employ15 ees of the Office assigned to the one-stop shops referred to 

16 in section 2301(b) of the Omnibus Trade and Competitive17 ness Act of 1988 (15 U.S.C. 4721(b)) is not less than the 

18 number of such employees so assigned on January 1, 

19 2003.’’. 

20 SEC. 214. SUPERVISORY AND ENFORCEMENT AUTHORITY 

21 FOR SMALL BUSINESS LENDING COMPANIES. 

22 Section 23 of the Small Business Act (15 U.S.C. 650) 

23 is amended to read as follows:
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1 ‘‘SEC. 23. SUPERVISORY AND ENFORCEMENT AUTHORITY 

2 FOR SMALL BUSINESS LENDING COMPANIES. 

3 ‘‘(a) IN GENERAL.—The Administrator is author4 ized—

5 ‘‘(1) to supervise the safety and soundness of 

6 small business lending companies and non-Federally 

7 regulated lenders; 

8 ‘‘(2) with respect to small business lending com9 panies to set capital standards to regulate, to exam10 ine, and to enforce laws governing such companies, in 

11 accordance with the purposes of this Act; and 

12 ‘‘(3) with respect to non-Federally regulated 

13 lenders to regulate, to examine, and to enforce laws 

14 governing the lending activities of such lenders under 

15 section 7(a) in accordance with the purposes of this 

16 Act. 

17 ‘‘(b) CAPITAL DIRECTIVE.—The Administrator may 

18 determine that failure of a small business lending company 

19 to maintain capital at the minimum level established by 

20 the Administrator is an unsafe and unsound practice. In 

21 addition to any other action authorized by law, the Admin22 istrator may issue a directive to a small business lending 

23 company that does not comply with the minimum capital 

24 requirement requiring the small business lending company 

25 to increase capital to level established by the Administrator. 
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1 ‘‘(c) CIVIL ACTION.—If a small business lending com2 pany violates this Act, the Administrator may institute a 

3 civil action in an appropriate district court to terminate 

4 the rights, privileges, and franchises of the company under 

5 this Act. 

6 ‘‘(d) REVOCATION OR SUSPENSION OF LOAN AUTHOR7 ITY.—

8 ‘‘(1) The Administrator may revoke or suspend 

9 the authority of a small business lending company or 

10 a non-Federally regulated lender to make, service or 

11 liquidate business loans authorized by section 7(a) of 

12 this Act—

13 ‘‘(A) for false statements knowingly made in 

14 any written submission required under this Act; 

15 ‘‘(B) for omission of a material fact from 

16 any written submission required under this Act; 

17 ‘‘(C) for willful or repeated violation of this 

18 Act; 

19 ‘‘(D) for willful or repeated violation of any 

20 condition imposed by the Administrator with re21 spect to any application, request, or agreement 

22 under this Act; or 

23 ‘‘(E) for violation of any cease and desist 

24 order of the Administrator under this section.
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1 ‘‘(2) The Administrator may revoke or suspend 

2 authority under paragraph (1) only after a hearing 

3 under subsection (f). The Administrator may delegate 

4 power to revoke or suspend authority under para5 graph (1) only to the Deputy Administrator and only 

6 if the Administrator is unavailable to take such ac7 tion. 

8 ‘‘(A) The Administrator, after finding ex9 traordinary circumstances and in order to pro10 tect the financial or legal position of the United 

11 States, may issue a suspension order without 

12 conducting a hearing pursuant to subsection (f). 

13 If the Administrator issues a suspension under 

14 the preceding sentence, the Administrator shall 

15 within two business days follow the procedures 

16 set forth in subsection (f). 

17 ‘‘(B) Any suspension under paragraph (1) 

18 shall remain in effect until the Administrator 

19 makes a decision pursuant to subparagraph (4) 

20 to permanently revoke the authority of the small 

21 business lending company or non-Federally regu22 lated lender, suspend the authority for a time 

23 certain, or terminate the suspension. 

24 ‘‘(3) The small business lending company or 

25 non-Federally regulated lender must notify borrowers 
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1 of a revocation and that a new entity has been ap2 pointed to service their loans. The Administrator or 

3 an employee of the Administration designated by the 

4 Administrator may provide such notice to the bor5 rower. 

6 ‘‘(4) Any revocation or suspension under para7 graph (1) shall be made by the Administrator except 

8 that the Administrator shall delegate to an adminis9 trative law judge as that term is used in section 3105 

10 of title 5, United States Code the authority to conduct 

11 any hearing required under subsection (f). The Ad12 ministrator shall base the decision to revoke on the 

13 record of the hearing. 

14 ‘‘(e) CEASE AND DESIST ORDER.—

15 ‘‘(1) Where a small business lending company, a 

16 non-Federally regulated lender, or other person vio17 lates this Act or is engaging or is about to engage in 

18 any acts or practices which constitute or will con19 stitute a violation of this Act, the Administrator may 

20 order, after the opportunity for hearing pursuant to 

21 subsection (f), the company, lender, or other person to 

22 cease and desist from such action or failure to act. 

23 The Administrator may delegate the authority under 

24 the preceding sentence only to the Deputy Adminis-
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1 trator and only if the Administrator is unavailable to 

2 take such action. 

3 ‘‘(2) The Administrator, after finding extraor4 dinary circumstances and in order to protect the fi5 nancial or legal position of the United States, may 

6 issue a cease and desist order without conducting a 

7 hearing pursuant to subsection (f). If the Adminis8 trator issues a cease and desist order under the pre9 ceding sentence, the Administrator shall within two 

10 business days follow the procedures set forth in sub11 section (f). 

12 ‘‘(3) The Administrator may further order such 

13 small business lending company or non-Federally reg14 ulated lender or other person to take such action or 

15 to refrain from such action as the Administrator 

16 deems necessary to insure compliance with this Act. 

17 ‘‘(4) A cease and desist order under this sub18 section may also provide for the suspension of author19 ity to lend in subsection (d). 

20 ‘‘(f) PROCEDURE FOR REVOCATION OR SUSPENSION OF

21 LOAN AUTHORITY AND FOR CEASE AND DESIST ORDER.—

22 ‘‘(1) Before revoking or suspending authority 

23 under subsection (d) or issuing a cease and desist 

24 order under subsection (e), the Administrator shall 

25 serve an order to show cause upon the small business 
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1 lending company, non-Federally regulated lender, or 

2 other person why an order revoking or suspending the 

3 authority or a cease and desist order should not be 

4 issued. The order to show cause shall contain a state5 ment of the matters of fact and law asserted by the 

6 Administrator and the legal authority and jurisdic7 tion under which a hearing is to be held, and shall 

8 set forth that a hearing will be held before an admin9 istrative law judge at a time and place stated in the 

10 order. Such hearing shall be conducted pursuant to 

11 the provisions of sections 554, 556, and 557 of title 

12 5, United States Code. If after hearing, or a waiver 

13 thereof, the Administrator determines that an order 

14 revoking or suspending the authority or a cease and 

15 desist order should be issued, the Administrator shall 

16 promptly issue such order, which shall include a 

17 statement of the findings of the Administrator and the 

18 grounds and reasons therefor and specify the effective 

19 date of the order, and shall cause the order to be 

20 served on the small business lending company, non21 Federally regulated 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 rev2 ocation issued by the Administrator, after the hearing 

3 under this subsection is final agency action for pur4 poses of chapter 7 of title 5, United States Code. An 

5 adversely aggrieved party shall have 20 days from the 

6 date of issuance of the cease and desist order, suspen7 sion or revocation, to seek judicial review in an ap8 propriate district court. 

9 ‘‘(g) REMOVAL OR SUSPENSION OF MANAGEMENT OF10 FICIAL.—

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 the 

16 management of the affairs of the company’s or lend17 er’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, the management official—

24 ‘‘(i) willfully and knowingly commits 

25 a substantial violation of—
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1 ‘‘(I) this Act; 

2 ‘‘(II) any regulation issued under 

3 this Act; 

4 ‘‘(III) a final cease-and-desist 

5 order under this Act; or 

6 ‘‘(IV) any agreement by the man7 agement official, the small business 

8 lending company or non-Federally reg9 ulated lender under this Act; or 

10 ‘‘(ii) willfully and knowingly commits 

11 a substantial breach of a fiduciary duty of 

12 that person as a management official and 

13 the violation or breach of fiduciary duty is 

14 one involving personal dishonesty on the 

15 part of such management official. 

16 ‘‘(B) CONTENTS OF NOTICE.—A notice 

17 under subparagraph (A) shall contain a state18 ment of the facts constituting grounds therefor 

19 and shall fix a time and place at which a hear20 ing, conducted pursuant to sections 554, 556, 

21 and 557 of title 5, United States Code, will be 

22 held thereon. 

23 ‘‘(C) HEARING.—

24 ‘‘(i) TIMING.—A hearing under sub25 paragraph (B) shall be held not earlier than 
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1 30 days and later than 60 days after the 

2 date of service of notice of the hearing, un3 less an earlier or a later date is set by the 

4 Administrator at the request of—

5 ‘‘(I) the management official, and 

6 for good cause shown; or 

7 ‘‘(II) the Attorney General. 

8 ‘‘(ii) CONSENT.—Unless the manage9 ment official appears at a hearing under 

10 this paragraph in person or by a duly au11 thorized representative, the management of12 ficial shall be deemed to have consented to 

13 the issuance of an order of removal under 

14 subparagraph (A). 

15 ‘‘(D) ORDER OF REMOVAL.—

16 ‘‘(i) IN GENERAL.—In the event of con17 sent under subparagraph (C)(ii), or if upon 

18 the record made at a hearing under this 

19 subsection, the Administrator finds that any 

20 of the grounds specified in the notice of re21 moval has been established, the Adminis22 trator may issue such orders of removal 

23 from office as the Administrator deems ap24 propriate. 
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1 ‘‘(ii) EFFECTIVENESS.—An order 

2 under clause (i) shall—

3 ‘‘(I) take effect 30 days after the 

4 date of service upon the subject small 

5 business lending company or non-Fed6 erally regulated lender and the man7 agement official concerned (except in 

8 the case of an order issued upon con9 sent as described in subparagraph 

10 (C)(ii), which shall become effective at 

11 the time specified in such order); and 

12 ‘‘(II) remain effective and enforce13 able, except to such extent as it is 

14 stayed, modified, terminated, or set 

15 aside by action of the Administrator or 

16 a reviewing court in accordance with 

17 this section. 

18 ‘‘(3) AUTHORITY TO SUSPEND OR PROHIBIT PAR19 TICIPATION.—

20 ‘‘(A) IN GENERAL.—In order to protect a 

21 small business lending company, a non-Federally 

22 regulated lender or the interests of the Adminis23 tration or the United States, the Administrator 

24 may suspend from office or prohibit from further 

25 participation in any manner in the management 
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1 or conduct of the affairs of a small business lend2 ing company or a non-Federally regulated lender 

3 a management official by written notice to such 

4 effect served upon the management official. Such 

5 suspension or prohibition may prohibit the man6 agement official from making, servicing, review7 ing, approving, or liquidating any loan under 

8 section 7(a) of this Act.–

9 ‘‘(B) EFFECTIVENESS.—A suspension or 

10 prohibition under subparagraph (A)—

11 ‘‘(i) shall take effect upon service of no12 tice under paragraph (2); and 

13 ‘‘(ii) unless stayed by a court in pro14 ceedings authorized by subparagraph (C), 

15 shall remain in effect—

16 ‘‘(I) pending the completion of the 

17 administrative proceedings pursuant to 

18 a notice of intention to remove served 

19 under paragraph (2); and 

20 ‘‘(II) until such time as the Ad21 ministrator dismisses the charges speci22 fied in the notice, or, if an order of re23 moval or prohibition is issued against 

24 the management official, until the ef25 fective date of any such order. 
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1 ‘‘(C) JUDICIAL REVIEW OF SUSPENSION

2 PRIOR TO HEARING.—Not later than 10 days 

3 after a management official is suspended or pro4 hibited from participation under subparagraph 

5 (A), the management official may apply to an 

6 appropriate district court for a stay of the sus7 pension or prohibition pending the completion of 

8 the administrative proceedings pursuant to a no9 tice of intent to remove served upon the manage10 ment official under paragraph (2). 

11 ‘‘(4) AUTHORITY TO SUSPEND ON CRIMINAL

12 CHARGES.—

13 ‘‘(A) IN GENERAL.—If a management offi14 cial is charged in any information, indictment, 

15 or complaint authorized by a United States at16 torney, with a felony involving dishonesty or 

17 breach of trust, the Administrator may, by writ18 ten notice served upon the management official, 

19 suspend the management official from office or 

20 prohibit the management official from further 

21 participation in any manner in the management 

22 or conduct of the affairs of the small business 

23 lending company or non-Federally regulated 

24 lender.
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1 ‘‘(B) EFFECTIVENESS.—A suspension or 

2 prohibition under subparagraph (A) shall re3 main in effect until the information, indictment, 

4 or complaint is finally disposed of, or until ter5 minated by the Administrator or upon an order 

6 of a district court. 

7 ‘‘(C) AUTHORITY UPON CONVICTION.—If a 

8 judgment of conviction with respect to an offense 

9 described in subparagraph (A) is entered against 

10 a management official, then at such time as the 

11 judgment is not subject to further judicial review 

12 (and for purposes of this subparagraph shall not 

13 include any petition for a writ of habeas cor14 pus), the Administrator may issue and serve 

15 upon the management official an order removing 

16 the management official, effective upon service of 

17 a copy of the order upon the small business lend18 ing company or non-Federally regulated lender. 

19 ‘‘(D) AUTHORITY UPON DISMISSAL OR

20 OTHER DISPOSITION.—A finding of not guilty or 

21 other disposition of charges described in subpara22 graph (A) shall not preclude the Administrator 

23 from instituting proceedings under subsection (e) 

24 or (f). 
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1 ‘‘(5) NOTIFICATION TO SMALL BUSINESS LEND2 ING COMPANY OR A NON-FEDERALLY REGULATED

3 LENDER.—Copies of each notice required to be served 

4 on a management official under this section shall also 

5 be served upon the small business lending company or 

6 non-Federally regulated lender involved. 

7 ‘‘(6) FINAL AGENCY ACTION AND JUDICIAL RE8 VIEW.—

9 ‘‘(A) ISSUANCE OF ORDERS.—After a hear10 ing under this subsection, and not later than 30 

11 days after the Administrator notifies the parties 

12 that the case has been submitted for final deci13 sion, the Administrator shall render a decision 

14 in the matter (which shall include findings of 

15 fact upon which its decision is predicated), and 

16 shall issue and cause to be served upon each 

17 party to the proceeding an order or orders con18 sistent with this section. The decision of the Ad19 ministrator shall constitute final agency action 

20 for purposes of chapter 7 of title 5, United States 

21 Code. 

22 ‘‘(B) JUDICIAL REVIEW.—An adversely ag23 grieved party shall have 20 days from the date 

24 of issuance of the order to seek judicial review in 

25 an appropriate district court. 
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1 ‘‘(h) APPOINTMENT OF RECEIVER.—

2 ‘‘(1) In any proceeding under subsection (f)(4) or 

3 subsection (g)(6)(C), the court may take exclusive ju4 risdiction of a small business lending company or a 

5 non-Federally regulated lender and appoint a receiver 

6 for assets of the company or lender. 

7 ‘‘(2) Upon request of the Administrator, the 

8 court may appoint the Administrator as a receiver 

9 under paragraph (1). 

10 ‘‘(i) POSSESSION OF ASSETS.—

11 ‘‘(1) If a small business lending company or a 

12 non-Federally regulated lender is not in compliance 

13 with capital requirements or is insolvent, the Admin14 istrator may take possession of the portfolio of loans 

15 guaranteed by the Administrator and sell such loans 

16 to a third party by means of a receiver appointed 

17 under subsection (h). 

18 ‘‘(2) If a small business lending company or a 

19 non-Federally regulated lender is not in compliance 

20 with capital requirements or is insolvent or otherwise 

21 operating in an unsafe and unsound condition, the 

22 Administrator may take possession of servicing ac23 tivities of loans that are guaranteed by the Adminis24 trator and sell such servicing rights to a third party 
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1 by means of a receiver appointed under subsection 

2 (h). 

3 ‘‘(j) PENALTIES AND FORFEITURES.—

4 ‘‘(1) Except as provided in paragraph (2), a 

5 small business lending company or a non-Federally 

6 regulated lender which violates any regulation or 

7 written directive issued by the Administrator regard8 ing the filing of any regular or special report shall 

9 pay to the United States a civil penalty of not more 

10 than $100 for each day of the continuance of the fail11 ure to file such report, unless it is shown that such 

12 failure is due to reasonable cause and not due to will13 ful neglect. The civil penalties under this subsection 

14 may be enforced in a civil action brought by the Ad15 ministrator. The penalties under this subsection shall 

16 not apply to any affiliate of a small business lending 

17 company that procures at least 10 percent of its an18 nual purchasing requirements from small manufac19 turers. 

20 ‘‘(2) The Administration may by rules and regu21 lations that shall be codified in the Code of Federal 

22 Regulations, after an opportunity for notice and com23 ment, or upon application of an interested party, at 

24 any time previous to such failure, by order, after no25 tice and opportunity for hearing which shall be con-
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1 ducted pursuant to sections 554, 556, and 557 of title 

2 5, United States Code, exempt in whole or in part, 

3 any small business lending company or non-Federally 

4 regulated lender from paragraph (1), upon such terms 

5 and conditions and for such period of time as it 

6 deems necessary and appropriate, if the Administra7 tion finds that such action is not inconsistent with 

8 the public interest or the protection of the Adminis9 tration. The Administration may for the purposes of 

10 this section make any alternative requirements appro11 priate to the situation.’’. 

12 SEC. 215. REAUTHORIZATION OF PAUL D. COVERDELL 

13 DRUG-FREE WORKPLACE PROGRAM. 

14 Paragraph (1) of section 27(g) of the Small Business 

15 Act (15 U.S.C. 654(g)) is amended by striking ‘‘$5,000,000 

16 for each of fiscal years 2001 through 2003’’ and inserting 

17 ‘‘$2,000,000 for each of fiscal years 2003 through 2005’’. 

18 SEC. 216. WOMEN’S BUSINESS CENTER PROGRAM. 

19 Section 29 of the Small Business Act (15 U.S.C. 656) 

20 is amended to read as follows:

21 ‘‘SEC. 29. WOMEN’S BUSINESS CENTER PROGRAM. 

22 ‘‘(a) DEFINITIONS.—For purposes of this section: 

23 ‘‘(1) The term ‘private nonprofit organization’ 

24 means an entity that is described in section 501(c) of
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1 the Internal Revenue Code of 1986 and exempt from 

2 taxation under section 501(a) of such Code. 

3 ‘‘(2) The term ‘women’s business center site’ 

4 means the location of—

5 ‘‘(A) a women’s business center; or 

6 ‘‘(B) 1 or more women’s business centers, es7 tablished in conjunction with another women’s 

8 business center in another location within a 

9 State or region—

10 ‘‘(i) that reach a distinct population 

11 that would otherwise not be served; 

12 ‘‘(ii) whose services are targeted to 

13 women; and 

14 ‘‘(iii) whose scope, function, and ac15 tivities are similar to those of the primary 

16 women’s business center or centers in con17 junction with which it was established. 

18 ‘‘(b) AUTHORITY.—The Administrator may provide fi19 nancial assistance to private nonprofit organizations to 

20 conduct projects which will receive Federal funding for 5 

21 years and those that receive extensions for funding under 

22 the conditions set forth in this section for the benefit of 

23 small business concerns owned and controlled by women. 

24 The projects shall provide—
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1 ‘‘(1) financial assistance, including training and 

2 counseling in how to apply for and secure business 

3 credit and investment capital, preparing and pre4 senting financial statements, and managing cash flow 

5 and other financial operations of a business concern; 

6 ‘‘(2) management assistance, including training 

7 and counseling in how to plan, organize, staff, direct, 

8 and control each major activity and function of a 

9 small business concern; and 

10 ‘‘(3) marketing assistance, including training 

11 and counseling in identifying and segmenting domes12 tic and international market opportunities, preparing 

13 and executing marketing plans, developing pricing 

14 strategies, locating contract opportunities, negotiating 

15 contracts, and utilizing varying public relations and 

16 advertising techniques. 

17 ‘‘(c) SUBMISSION OF 5-YEAR PLANS.—

18 ‘‘(1) In response to solicitations made by the Ad19 ministrator requesting applications for grants to op20 erate women’s business centers, each applicant orga21 nization initially shall submit a 5-year plan to the 

22 Administrator detailing the budget required to pro23 vide the services set forth in subsection (b), the serv24 ices that will be provided, the target population, and 
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1 the proposed fundraising activities to meet the non2 Federal contributions mandated by this section. 

3 ‘‘(2)(A) Notwithstanding any other provision of 

4 law, the Administrator may use such expedited meth5 ods of solicitation and award as the Administrator 

6 determines to be appropriate to carry out this section. 

7 ‘‘(B) Any expedited procedures utilized by the 

8 Administrator shall ensure that all small business 

9 sources are provided a reasonable opportunity to sub10 mit applications. 

11 ‘‘(d) CRITERIA.—The Administrator shall evaluate 

12 and rank applicants in accordance with predetermined se13 lection criteria that shall be stated in terms of relative im14 portance. Such criteria and their relative importance shall 

15 be made publicly available and stated in each solicitation 

16 for applications made by the Administrator. The criteria 

17 shall include—

18 ‘‘(1) the experience of the applicant in con19 ducting programs or ongoing efforts designed to im20 part or upgrade the business skills of women business 

21 owners or potential owners; 

22 ‘‘(2) the present ability of the applicant to com23 mence a project within a minimum amount of time; 

24 ‘‘(3) the ability of the applicant to provide train25 ing and services to a representative number of women 
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1 who are both socially and economically disadvan2 taged; and 

3 ‘‘(4) the location for the women’s business center 

4 site proposed by the applicant. 

5 ‘‘(e) SELECTION OF GRANTEES.—Assuming other 

6 ranking factors to be equal, the Administrator shall make 

7 selection of grantees in the following order of preference: 

8 ‘‘(1) The Administrator shall select from the ap9 plications those that demonstrate the greatest ability 

10 to serve women who are socially and economically 

11 disadvantaged whether located in standard metropoli12 tan statistical areas or rural areas and without re13 gard to the location of an existing center. 

14 ‘‘(2) If, in the opinion of the Administrator, 2 

15 or more applicants have the same rank with respect 

16 to service of socially and economically disadvantaged 

17 women, the Administrator shall prefer the applicant 

18 that proposes to serve part of a State in a State that 

19 was served by a higher number of women’s business 

20 centers at any time in the last 5 years than the num21 ber of such centers that serve such State at the time 

22 of selection. 

23 ‘‘(3) If no application has been received under 

24 which an award can be made pursuant to paragraph 

25 (2), the Administrator then shall select an applicant 
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1 that proposes to serve a standard metropolitan statis2 tical area that was served by a higher number of 

3 women’s business centers at any time in the last 5 

4 years than the number of such centers that serve such 

5 area at the time of selection. 

6 ‘‘(f) ADMINISTRATOR FUNDING OF GRANTEES.—The 

7 Administrator, except as otherwise provided by subsection 

8 (m), shall provide funding according to the following for9 mula: 

10 ‘‘(1) During the first and second years of oper11 ation, two dollars in Federal funds for each dollar in 

12 matching funds as required by subsection (g). 

13 ‘‘(2) During the third, fourth, and fifth years, 

14 one dollar in Federal funds for each dollar in match15 ing funds as required by subsection (g). 

16 ‘‘(3) The grant agreement shall provide for the 

17 mechanism of disbursement of Federal funds by the 

18 Administrator including payment in lump sum or 

19 installments, in advance, or by way of reimburse20 ment. The Administrator may disburse up to 25 per21 cent of each year’s Federal share to a grantee before 

22 the non-Federal sector matching funds are obtained. 

23 ‘‘(4) If a grantee fails to obtain the required 

24 non-Federal contribution at any time during the life 

25 of the grant, such grantee shall not be eligible there-
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1 after for advance disbursements pursuant to para2 graph (3) during the remainder of the term of the 

3 grant, or for any other women’s business center which 

4 it operates or for which it has applied to establish. 

5 ‘‘(5) Prior to approving assistance to a grantee 

6 for any other projects, the Administrator shall specifi7 cally determine whether the Administrator believes 

8 that the grantee will be able to obtain the requisite 

9 non-Federal funding and enter a written finding set10 ting forth the reasons for making such determination. 

11 ‘‘(6) The authority of the Administrator to pro12 vide funding pursuant to this section shall only be in 

13 effect for each fiscal year and only to the extent and 

14 in amounts as are provided for in advance of appro15 priations Acts. 

16 ‘‘(g) MATCHING FUNDS.—

17 ‘‘(1) Except as provided by subsection (n), each 

18 grantee, shall be required to obtain matching con19 tributions according to the formula set forth in sub20 section (f). 

21 ‘‘(2) No more than one-half of such contributions 

22 may be in the form of in-kind contributions that are 

23 budget line items only, including office equipment 

24 and office space.
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1 ‘‘(3) The restriction in paragraph (2) shall 

2 apply to all grantees under this section. 

3 ‘‘(h) CONTRACT AUTHORITY.—A women’s business 

4 center may enter into a contract with a Federal department 

5 or agency to provide specific assistance to women and other 

6 underserved small business concerns. Performance of such 

7 contract should not hinder the women’s business centers in 

8 carrying out the terms of the grant received by the women’s 

9 business centers from the Administrator. 

10 ‘‘(i) ANNUAL PROGRAM EXAMINATION.—

11 ‘‘(1) The Administrator shall—

12 ‘‘(A) develop and implement an annual 

13 programmatic and financial examination of 

14 each women’s business center established pursu15 ant to this section, pursuant to which each such 

16 center shall provide to the Administrator—

17 ‘‘(i) an itemized cost breakdown of ac18 tual expenditures for costs incurred during 

19 the preceding year; 

20 ‘‘(ii) documentation regarding the 

21 amount of matching assistance from non22 Federal sources obtained and expended by 

23 the center during the preceding year in 

24 order to meet the requirements of subsection 

25 (g) and, with respect to any in-kind con-
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1 tributions described in that subsection that 

2 were used to satisfy the matching require3 ments, verification of the existence and 

4 valuation of those contributions; and 

5 ‘‘(iii) a review of the grantee’s success 

6 in fundraising plan and whether that needs 

7 revision to ensure that the grantee can sus8 tain operations after five years; and 

9 ‘‘(B) analyze the results of each such exam10 ination and, based on that analysis, make a de11 termination regarding the programmatic and fi12 nancial viability of each women’s business cen13 ter. 

14 ‘‘(2) In conducting such annual examination, the 

15 Administrator shall limit the total number of site vis16 its to a particular women’s business center to no more 

17 than 2 per year, unless the Administrator determines 

18 that extraordinary circumstances, as defined in regu19 lations promulgated by the Administrator, requires 

20 more than 2 such visits. 

21 ‘‘(j) RENEWAL OF FUNDING AND TERMINATION.—

22 ‘‘(1) On an annual basis, commencing with the 

23 end of the grantee’s second year of operation of a 

24 women’s business center, the Administrator, based on 

25 the program review made pursuant to subsection (i), 
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1 shall determine whether to continue funding the 

2 grantee according to the formula set forth in sub3 section (f). In determining whether to renew funding 

4 during any year of the life of the project operated by 

5 the grantee, the Administrator—

6 ‘‘(A) shall consider the results of each an7 nual examination of the center under subsection 

8 (i); and 

9 ‘‘(B) may withhold funding for the fol10 lowing year or years, if the Administrator deter11 mines that—

12 ‘‘(i) the grantee has failed to provide 

13 for any women’s business center which it 

14 operates any information required to by the 

15 Administrator to perform the annual pro16 gram examination required under sub17 section (i), or the information is deemed to 

18 be inadequate to conduct the annual exam19 ination under subsection (i); 

20 ‘‘(ii) the center has failed to provide 

21 any information required to be provided by 

22 the center for purposes of the report of the 

23 Administrator under subsection (l), or the 

24 information provided by the center is inad25 equate; or 
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1 ‘‘(iii) the Administrator determines, 

2 pursuant to regulations adopted by the Ad3 ministrator and codified in the Code of Fed4 eral Regulations, that the grantee has failed 

5 to deliver the services required by subsection 

6 (b) taking into account current economic 

7 conditions and the target population served 

8 by the grantee. 

9 ‘‘(2) The Administrator shall not require, as a 

10 condition of initial or continued funding, and a 

11 grant agreement shall not include a requirement that 

12 a women’s business center operated by the grantee 

13 serve a particular number of women with respect to 

14 loans under section 7 of this Act or title V of the 

15 Small Business Investment Act of 1958. 

16 ‘‘(3) The Administrator shall not fund a grantee 

17 for the operation of a women’s business center that 

18 has been in operation for 5 years unless it applies for 

19 and receives an extension of Federal funding pursu20 ant to subsection (m) or the grantee reapplies as a 

21 new applicant pursuant to subsection (c) and the Ad22 ministrator selects the grantee pursuant to subsections 

23 (d) and (e). 

24 ‘‘(4) If the Administrator makes a determination 

25 pursuant to subparagraph (1)(B)(iii), prior to the 
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1 withholding of any funds, the Administrator shall 

2 provide the grantee with a written notification of the 

3 reasons and shall provide the grantee with the oppor4 tunity for a hearing pursuant to sections 554, 556, 

5 and 557 of title 5, United States Code. 

6 ‘‘(5) The Administrator shall make a final deci7 sion based on the record of the hearing and such deci8 sion shall be made within 60 days of the notification 

9 provided in paragraph (4). 

10 ‘‘(k) MANAGEMENT REPORT.—

11 ‘‘(1) The Administrator shall prepare and sub12 mit to the Committee on Small Business of the House 

13 of Representatives and the Committee on Small Busi14 ness and Entrepreneurship of the Senate a report on 

15 the effectiveness of all projects, including those oper16 ated pursuant to extensions of Federal funding, con17 ducted under this section. 

18 ‘‘(2) Each report submitted under paragraph (1) 

19 shall include information concerning, with respect to 

20 each women’s business center established pursuant to 

21 this section—

22 ‘‘(A) the number of individuals receiving 

23 assistance; 

24 ‘‘(B) the number of startup business con25 cerns formed;
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1 ‘‘(C) the gross receipts of assisted concerns; 

2 ‘‘(D) the employment increases or decreases 

3 of assisted concerns; 

4 ‘‘(E) to the maximum extent practicable, 

5 increases or decreases in profits of assisted con6 cerns; 

7 ‘‘(F) the number of hours of counseling and 

8 training provided and workshops conducted; and 

9 ‘‘(G) the most recent analysis, as required 

10 under subsection (i)(1)(B), and the subsequent 

11 determination made by the Administrator under 

12 that subsection. 

13 ‘‘(l) AUTHORIZATION OF APPROPRIATIONS.—

14 ‘‘(1) There is authorized to be appropriated—

15 ‘‘(A) $ 16,000,000 for fiscal year 2004; and 

16 ‘‘(B) $ 17,500,000 for fiscal year 2005. 

17 ‘‘(2)(A) Except as provided in subparagraph 

18 (B), amounts made available under this subsection for 

19 each fiscal year, may only be used for grant awards 

20 and may not be used for costs incurred by the Admin21 istrator in connection with the management and ad22 ministration of the program under this section. 

23 ‘‘(B) Of the amount made available under this 

24 subsection for a fiscal year, 1.75 percent shall be 
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1 available for costs associated with selection, moni2 toring, and oversight. 

3 ‘‘(3)(A) Subject to subparagraph (B), 30.2 per4 cent of the funds authorized pursuant to this sub5 section shall be reserved to provide extensions of Fed6 eral funding to grantees that meet the standards set 

7 forth in subsection (m). 

8 ‘‘(B) If the Administrator does not distribute all 

9 funds reserved for extensions of Federal funding pur10 suant to subsection (m), the Administrator shall uti11 lize the unawarded funds to grantees according to the 

12 priorities set forth in paragraphs (1), (2), and (3) of 

13 subsection (e). 

14 ‘‘(m) EXTENSIONS OF FEDERAL FUNDING AFTER FIVE

15 YEARS.—

16 ‘‘(1) The Administrator is authorized to extend 

17 Federal funding to any grantee for 5 years after the 

18 term of the original grant ends. 

19 ‘‘(2) In order to receive an extension of Federal 

20 funding, the grantee shall submit an application in 

21 the fourth year of its operation of a women’s business 

22 center and has met all of the criteria set by the Ad23 ministrator for continued funding in its fifth year. 

24 ‘‘(n) SELECTION OF GRANTEES FOR EXTENSIONS OF

25 FEDERAL FUNDING.—
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1 ‘‘(1) The Administrator shall review each appli2 cation submitted under paragraph (2) and select 

3 grantees for extensions of Federal funding who have—

4 ‘‘(A) a demonstrated record of serving pre5 dominantly socially and economically disadvan6 taged women; and 

7 ‘‘(B) are unable to meet their matching 

8 fund requirements due to their target popu9 lations. 

10 ‘‘(2) If the Administrator does not receive any 

11 applications that meet the standards of subparagraph 

12 (A), the Administrator shall select grantees under this 

13 subsection according to the following preferences: 

14 ‘‘(A) Those that meet the matching require15 ments in subsection (f)(2). 

16 ‘‘(B) If there are no applicants that meet 

17 that standard in subparagraph (A) then based 

18 on criteria developed by the Administrator to 

19 rank applicants for extensions of Federal fund20 ing. 

21 ‘‘(3) The Administrator shall maintain a copy of 

22 each application submitted under this subsection for 

23 not less than 10 years. 

24 ‘‘(4) In awarding an extension of Federal fund25 ing, the Administrator may condition such award on 
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1 the grantee obtaining a match requirement at least 

2 equal to 2 non-Federal dollars for each dollar of Fed3 eral funding except that grantees meeting the stand4 ards of paragraph (1)(A) shall only be required to 

5 match each Federal dollar with a non-Federal dol6 lar.’’. 

7 SEC. 217. HUBZONE PROGRAM. 

8 Section 31 of the Small Business Act (15 U.S.C. 657a) 

9 is amended to read as follows: 

10 ‘‘SEC. 31. HUBZONE PROGRAM. 

11 ‘‘(a) IN GENERAL.—There is established within the 

12 Administration a program to be carried out by the Admin13 istrator to provide for Federal contracting assistance to 

14 qualified HUBZone small business concerns in accordance 

15 with this section. 

16 ‘‘(b) ELIGIBLE CONTRACTS.—

17 ‘‘(1) AUTHORITY OF CONTRACTING OFFICER.—

18 ‘‘(A) A contracting officer may award sole 

19 source contracts under this section to any quali20 fied HUBZone small business concern, if—

21 ‘‘(i) the qualified HUBZone small 

22 business concern is determined to be a re23 sponsible contractor with respect to per24 formance of such contract opportunity, and 

25 the contracting officer does not have a rea-
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1 sonable expectation that 2 or more qualified 

2 HUBZone small business concerns will sub3 mit offers for the contracting opportunity; 

4 ‘‘(ii) the anticipated award price of the 

5 contract (including options) will not ex6 ceed—

7 ‘‘(I) $5,000,000, in the case of a 

8 contract opportunity assigned a stand9 ard industrial classification code for 

10 manufacturing; or 

11 ‘‘(II) $3,000,000, in the case of all 

12 other contract opportunities; and 

13 ‘‘(iii) in the estimation of the con14 tracting officer, the contract award can be 

15 made at a fair and reasonable price. 

16 ‘‘(B) A contract opportunity may be award17 ed pursuant to this section on the basis of com18 petition restricted to qualified HUBZone small 

19 business concerns if the contracting officer has a 

20 reasonable expectation that not less than 2 quali21 fied HUBZone small business concerns will sub22 mit offers and that the award can be made at a 

23 fair market price. 

24 ‘‘(2) PRICE EVALUATION PREFERENCE IN FULL

25 AND OPEN COMPETITIONS.—
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1 ‘‘(A) IN GENERAL.—In any case in which a 

2 contract is to be awarded on the basis of full and 

3 open competition, the price offered by a qualified 

4 HUBZone small business concern shall be 

5 deemed as being lower than the price offered by 

6 another offeror (other than another small busi7 ness concern), if the price offered by the qualified 

8 HUBZone small business concern is not more 

9 than 10 percent higher than the price offered by 

10 the otherwise lowest, responsive, and responsible 

11 offeror. 

12 ‘‘(B) FULL AND OPEN COMPETITION.—For 

13 purposes of this paragraph, the term ‘full and 

14 open competition’ has the meaning given that 

15 term in section 4 of the Office of Federal Pro16 curement Policy Act (41 U.S.C. 403). 

17 ‘‘(3) RELATIONSHIP TO OTHER CONTRACTING

18 PREFERENCES.—A procurement may not be made 

19 from a source on the basis of a preference provided in 

20 paragraph (1) or (2), if the procurement would other21 wise be made from a different source under section 

22 4124 or 4125 of title 18, United States Code, or the 

23 Javits-Wagner-O’Day Act (41 U.S.C. 46 et seq.). 

24 ‘‘(c) ENFORCEMENT; PENALTIES.—
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1 ‘‘(1) VERIFICATION OF ELIGIBILITY.—In car2 rying out this section, the Administrator shall estab3 lish procedures relating to—

4 ‘‘(A) the filing, investigation, and disposi5 tion by the Administration of any challenge to 

6 the eligibility of a small business concern to re7 ceive assistance under this section (including a 

8 challenge, filed by an interested party, relating 

9 to the veracity of a certification made or infor10 mation provided to the Administration by a 

11 small business concern under section 3(p)(5); 

12 and 

13 ‘‘(B) verification by the Administrator of 

14 the accuracy of any certification made or infor15 mation provided to the Administration by a 

16 small business concern under section 3(p)(5). 

17 ‘‘(2) EXAMINATIONS.—The procedures established 

18 under paragraph (1) may provide for program ex19 aminations (including random program examina20 tions) by the Administrator of any small business 

21 concern making a certification or providing informa22 tion to the Administrator under section 3(p)(5). 

23 ‘‘(3) PROVISION OF DATA.—Upon the request of 

24 the Administrator, the Secretary of Labor, the Sec25 retary of Housing and Urban Development, and the 
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1 Secretary of the Interior (or the Assistant Secretary 

2 for Indian Affairs), shall promptly provide to the Ad3 ministrator such information as the Administrator 

4 determines to be necessary to carry out this sub5 section. 

6 ‘‘(4) PENALTIES.—In addition to the penalties 

7 described in section 16(d), any small business concern 

8 that is determined by the Administrator to have mis9 represented the status of that concern as a ‘HUBZone 

10 small business concern’ for purposes of this section, 

11 shall be subject to—

12 ‘‘(A) section 1001 of title 18, United States 

13 Code; and 

14 ‘‘(B) sections 3729 through 3733 of title 31, 

15 United States Code. 

16 ‘‘(d) LIST OF QUALIFIED SMALL BUSINESS CON17 CERNS.—The Administrator shall establish and maintain 

18 a list of qualified HUBZone small business concerns, which 

19 list shall, to the extent practicable—

20 ‘‘(1) once the Administrator has made the certifi21 cation required by subsection 3(p)(5)(A)(i) of this Act 

22 regarding a qualified HUBZone small business con23 cern and has determined that subsection 3(p)(5)(B) 

24 does not apply to that concern, include the name, ad-
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1 dress, and type of business with respect to each such 

2 small business concern; 

3 ‘‘(2) be updated by the Administrator not less 

4 than annually; and 

5 ‘‘(3) be provided upon request to any Federal 

6 agency or other entity. 

7 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There is 

8 authorized to be appropriated to carry out the program es9 tablished by this section $5,000,000 for each of fiscal years 

10 2004 through 2005.’’. 

11 SEC. 218. OTHER REPEALS AND REORGANIZATIONS. 

12 (a) SEVERABILITY CLAUSE MOVED TO END OF SMALL

13 BUSINESS ACT.—Section 36 of the Small Business Act is 

14 amended to read as follows: 

15 ‘‘SEC. 36. SEVERABILITY. 

16 ‘‘If any provision of this Act, or the application thereof 

17 to any person or circumstances, is held invalid, the remain18 der of this Act, and the application of such provision to 

19 other persons or circumstances, shall not be affected there20 by.’’. 

21 (b) REPEALS.—

22 (1) Section 19 of the Small Business Act (15 

23 U.S.C. 631 note) is amended to read as follows:
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1 ‘‘SEC. 19. [RESERVED].’’. 

2 (2) Section 24 of the Small Business Act (15 

3 U.S.C. 651) is amended to read as follows: 

4 ‘‘SEC. 24. [RESERVED].’’. 

5 (3) Section 25 of the Small Business Act (15 

6 U.S.C. 652) is amended to read as follows: 

7 ‘‘SEC. 25. [RESERVED].’’. 

8 (4) Section 26 of the Small Business Act (15 

9 U.S.C. 653) is amended to read as follows: 

10 ‘‘SEC. 26. [RESERVED].’’. 

11 (5) Section 28 of the Small Business Act (15 

12 U.S.C. 655) is amended to read as follows: 

13 ‘‘SEC. 28. [RESERVED].’’. 

14 SEC. 219. RULES OF CONSTRUCTION. 

15 (a) REFERENCES.—A reference to a provision of law 

16 replaced by this title, including a reference in a regulation, 

17 rule, order, or other law, is deemed to refer to the cor18 responding provision enacted by this Act. 

19 (b) CONTINUING EFFECT.—Unless otherwise provided 

20 in this Act or in an amendment made by this Act, any 

21 regulation, rule, or order in effect under a provision of law 

22 replaced by this title shall continue in effect under the cor23 responding provision enacted by this title until repealed, 

24 amended, or superseded. 

25 (c) INFERENCES OF REPEAL.—The repeal of a provi26 sion of law by this title shall not be construed as a legisla-
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1 tive inference that the provision was or was not in effect 

2 before its repeal. 

3 TITLE III—OTHER PROVISIONS 

4 SEC. 301. REPORT REGARDING NATIONAL DATABASE OF 

5 SMALL MANUFACTURERS. 

6 (a) STUDY AND REPORT.—The Administrator, in con7 sultation with the association of small business development 

8 centers authorized by section 21(k) of the Small Business 

9 Act, shall—

10 (1) study the feasibility of creating a national 

11 database of small manufacturers that institutions of 

12 higher education could access for purposes of meeting 

13 procurement needs; and 

14 (2) not later than one year after the date of the 

15 enactment of this Act, transmit a report to the Con16 gress regarding the findings and conclusions of such 

17 study. 

18 (b) COST ESTIMATE.—The report referred to in sub19 section (a)(2) shall include an estimate of the cost of cre20 ating and maintaining the database described in subsection 

21 (a). 

22 SEC. 302. WORKFORCE TRANSFORMATION PLAN. 

23 (a) REORGANIZATION.—The Administrator shall, to 

24 the extent permitted by law, reorganize the structure of the 

25 Administration and reassign employees in order to—
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1 (1) increase outreach to small business concerns; 

2 (2) improve coordination with Federal con3 tracting officers in an effort to increase prime con4 tract awards to small business concerns; 

5 (3) enable small business concerns to obtain bet6 ter access to capital; 

7 (4) expand assistance provided to small manu8 facturers; and 

9 (5) meet goals in this section and the Small 

10 Business Act for procurement center representatives 

11 and commercial market representatives. 

12 (b) REQUIRED COST SAVINGS.—In carrying out sub13 section (a), the Administrator shall achieve a 1 percent sav14 ings in the overall cost of operating the agency. 

15 (c) INCREASED NUMBER OF PROCUREMENT CENTER

16 REPRESENTATIVES AND COMMERCIAL MARKETING REP17 RESENTATIVES.—In carrying out subsection (a), the Ad18 ministrator shall ensure—

19 (1) that the following number of procurement 

20 center representatives are employed by the Adminis21 tration: 

22 (A) 75 by September 30, 2004; and 

23 (B) 100 by September 30, 2005; and 
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1 (2) that the following number of commercial 

2 marketing representatives are employed by the Ad3 ministration: 

4 (A) 25 by September 30, 2004; and 

5 (B) 50 by September 30, 2005. 

6 (d) AUTHORIZATION OF APPROPRIATIONS.—There are 

7 authorized to be appropriated such sums as may be nec8 essary to carry out this section. 

9 (e) REPORT TO CONGRESS.—Not later than 1 year 

10 after the date of the enactment of this Act, the Adminis11 trator shall transmit a report to the Congress describing 

12 the steps taken by the Administrator to carry out this sec13 tion. Such report shall contain—

14 (1) a detailed analysis of how the transformation 

15 has—

16 (A) increased contact with small business 

17 concerns; 

18 (B) expanded dollar financings to small 

19 business concerns; 

20 (C) increased the total number of prime and 

21 subcontracting dollars awarded to small business 

22 concerns, including increases in each contracting 

23 program established pursuant to sections 8 and 

24 15 of this Act; and 
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1 (D) increased assistance provided to small 

2 manufacturers; and 

3 (2) the Administrator’s assessment of further ac4 tions needed to transform the workforce to meet the 

5 objectives described in paragraph (1). 

6 SEC. 303. REPEAL OF CERTAIN PROVISIONS OF THE DIS7 ASTER RELIEF ACT OF 1970. 

8 (a) IN GENERAL.—Section 237 of the Disaster Relief 

9 Act of 1970 (15 U.S.C. 636d) is hereby repealed. 

10 (b) NO EFFECT ON OUTSTANDING LOANS.—The repeal 

11 made by this section shall not affect any loan made before 

12 the date of the enactment of this Act. 

13 SEC. 304. REGULATIONS ON SIZE STANDARDS OF 

14 FRANCHISEES. 

15 (a) PROMULGATION.—Not later than 180 days after 

16 the date of the enactment of this Act, the Administrator 

17 shall repeal section 121.103(g) of title 13, Code of Federal 

18 Regulations (as in effect on the date of the enactment of 

19 this Act) and promulgate a new regulation, after oppor20 tunity for notice and comment, taking into account whether 

21 the franchisee or licensee—

22 (1) retains the majority of its profits but not less 

23 than 51 percent; 

24 (2) bears the burdens of its losses;
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1 (3) shares no common ownership or management 

2 personnel with the franchisor or licensor; 

3 (4) maintains daily control of its operations in4 cluding determining who its customers will be; and 

5 (5) is subject to excessive restrictions on the sale 

6 of its business given the interest of the franchisor or 

7 licensor in protecting the goodwill of its trademarks, 

8 tradenames, or service marks. 

9 (b) FAILURE TO PROMULGATE NEW STANDARD.—If 

10 the Administrator fails to comply with subsection (a), any 

11 franchisee or licensee shall be treated as small for purposes 

12 of the Small Business Act until the Administrator has 

13 issued a final regulation as required under subsection (a). 

14 SEC. 305. TEMPORARY SMALL BUSINESS DEVELOPMENT 

15 CENTER ASSISTANCE TO INDIAN TRIBE MEM16 BERS, NATIVE ALASKANS, AND NATIVE HA17 WAIIANS. 

18 (a) IN GENERAL.—The Administrator of the Small 

19 Business Administration may award a grant under this 

20 section to any grantee under section 21 of the Small Busi21 ness Act. A grant under this section shall be used solely 

22 to provide services described in section 21(f)(4) of the Small 

23 Business Act to assist with outreach, development, and en24 hancement on Indian lands of small business startups and 
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1 expansions owned by Indian tribe members, Native Alas2 kans, and Native Hawaiians. 

3 (b) LIMITATION.—A grant shall not be made to a 

4 grantee under this section unless the area served by such 

5 grantee has a combined population of Indian tribe mem6 bers, Natives Alaskans, and Native Hawaiians that com7 prises at least 1 percent of the area’s total population, as 

8 shown by the latest available census. 

9 (c) GRANT APPLICATIONS.—An applicant for a grant 

10 under this section shall submit to the Administrator an ap11 plication that is in such form as the Administrator may 

12 require. The application shall include information regard13 ing the applicant’s goals and objectives for the services to 

14 be provided using the grant, including—

15 (1) the capability of the applicant to provide 

16 training and services to Indian tribe members, Native 

17 Alaskans, and Native Hawaiians; 

18 (2) the locations of the small business develop19 ment centers that would provide the assistance de20 scribed in subsection (a); 

21 (3) the required amount of grant funding needed 

22 by the applicant to implement the program; and 

23 (4) the extent to which the applicant has con24 sulted with local tribal councils. 
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1 (d) APPLICABILITY OF GRANT REQUIREMENTS.—An 

2 applicant for a grant under this section shall comply with 

3 all of the requirements applicable to a grantee under section 

4 21 of the Small Business Act, except that the matching 

5 funds requirements of subsection (i) of such section shall 

6 not apply. 

7 (e) MAXIMUM AMOUNT OF GRANTS.—A grantee shall 

8 not receive more than $300,000 in grants under this section 

9 in a fiscal year. 

10 (f) ADVICE OF LOCAL TRIBAL COUNSELS.—A grantee 

11 under this section shall request the advice of local tribal 

12 councils regarding how best to provide assistance to Indian 

13 tribe members, Native Alaskans, and Native Hawaiians 

14 and where to locate centers to provide such assistance. 

15 (g) REGULATIONS.—After providing notice and an op16 portunity for comment and after consulting with the asso17 ciation recognized by the Administrator under section 21(k) 

18 of the Small Business Act (but not later than 180 days after 

19 the date of the enactment of this Act), the Administrator 

20 shall issue final regulations to carry out this section, in21 cluding regulations that establish—

22 (1) standards relating to educational, technical, 

23 and support services to be provided by grantees under 

24 this section; and 
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1 (2) standards relating to any work plan that the 

2 Administrator may require a grantee under this sec3 tion to develop. 

4 (h) DEFINITIONS.—For purposes of this section: 

5 (1) INDIAN LANDS.—The term ‘‘Indian lands’’ 

6 has the meaning given the term ‘‘Indian country’’ in 

7 section 1151 of title 18, United States Code, the 

8 meaning given the term ‘‘Indian reservation’’ in sec9 tion 151.2 of title 25, Code of Federal Regulations (as 

10 in effect on the date of the enactment of this Act), and 

11 the meaning given the term ‘‘reservation’’ in section 

12 4 of the Indian Child Welfare Act of 1978 (25 U.S.C. 

13 1903). 

14 (2) INDIAN TRIBE.—The term ‘‘Indian tribe’’ has 

15 the meaning given such term in section 4(e) of the In16 dian Self-Determination and Education Assistance 

17 Act. 

18 (3) INDIAN TRIBE MEMBER.—The term ‘‘Indian 

19 tribe member’’ means a member of an Indian tribe 

20 (other than a Native Alaskan). 

21 (4) NATIVE ALASKAN.—The term ‘‘Native Alas22 kan’’ has the meaning given the term ‘‘Native’’ in sec23 tion 3(b) of the Alaska Native Claims Settlement Act 

24 (43 U.S.C. 1602(b)). 
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1 (5) NATIVE HAWAIIAN.—The term ‘‘Native Ha2 waiian’’ means any individual who is a descendant 

3 of the aboriginal people who, prior to 1778, occupied 

4 and exercised sovereignty in the area that now con5 stitutes the State of Hawaii. 

6 (i) AUTHORIZATION OF APPROPRIATIONS.—There is 

7 authorized to be appropriated to carry out this section 

8 $7,000,000 for each of fiscal years 2004 through 2006. 

9 (j) NONAPPLICABILITY OF CERTAIN LIMITATIONS.—

10 Funding under this section shall not be taken into account 

11 under subsections (h), (i), and (j) of section 21 of the Small 

12 Business Act. 

13 (k) LIMITATION ON USE OF FUNDS.—The Adminis14 trator may carry out this section only with amounts appro15 priated specifically to carry out this section. 

16 (l) EVALUATION OF PROGRAM.—Not later than March 

17 31, 2006, the Administrator shall transmit to the Congress 

18 a report containing an evaluation of the grant program 

19 carried out under this section. 

20 SEC. 306. TEMPORARY SMALL BUSINESS DEVELOPMENT 

21 CENTER ASSISTANCE FOR VOCATIONAL AND 

22 TECHNICAL ENTREPRENEURSHIP DEVELOP23 MENT. 

24 (a) IN GENERAL.—The Administrator may award a 

25 grant under this section to any grantee under section 21
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1 of the Small Business Act. A grant under this section shall 

2 be used solely to provide, on a statewide basis, technical 

3 assistance to secondary schools, or to postsecondary voca4 tional or technical schools, for the development and imple5 mentation of curricula designed to promote vocational and 

6 technical entrepreneurship. 

7 (b) MINIMUM GRANT.—The Administrator shall not 

8 make a grant under this section in an amount less than 

9 $200,000. 

10 (c) APPLICATION.—Each applicant for a grant under 

11 this section shall submit to the Administrator an applica12 tion in such form as the Administrator may require. The 

13 application shall include information regarding the appli14 cant’s goals and objectives for the educational programs to 

15 be assisted. 

16 (d) REPORT TO ADMINISTRATOR.—The Administrator 

17 shall make a condition of each grant under the program 

18 that not later than 18 months after the receipt of the grant 

19 the grantee shall transmit to the Administrator a report 

20 describing how the grant funds were used. 

21 (e) COOPERATIVE AGREEMENTS AND CONTRACTS.—

22 The Administrator may enter into a cooperative agreement 

23 or contract with any grantee under this section to provide 

24 additional assistance that furthers the purposes of this sec25 tion. 
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1 (f) APPLICABILITY OF GRANT REQUIREMENTS.—An 

2 applicant for a grant under this section shall comply with 

3 all of the requirements applicable to a grantee under section 

4 21 of the Small Business Act, except that the matching 

5 funds requirements of subsection (i) of such section shall 

6 not apply. 

7 (g) EVALUATION OF PROGRAM.—Not later than March 

8 31, 2006, the Administrator shall transmit to the Congress 

9 a report containing an evaluation of the grant program 

10 carried out under this section. 

11 (h) CLEARINGHOUSE.—The association recognized by 

12 the Administrator under section 21(k) of the Small Business 

13 Act shall act as a clearinghouse of information and exper14 tise regarding vocational and technical entrepreneurship 

15 education programs. In each fiscal year in which grants 

16 are made under the program, the Administrator shall pro17 vide additional assistance to such association to carry out 

18 the functions described in this subsection. 

19 (i) AUTHORIZATION OF APPROPRIATIONS.—There are 

20 authorized to be appropriated to carry out this section 

21 $7,000,000 for each of fiscal years 2004, 2005, and 2006. 

22 (j) NONAPPLICABILITY OF CERTAIN LIMITATIONS.—

23 Funding under this section shall not be taken into account 

24 under subsections (h), (i), and (j) of section 21 of the Small 

25 Business Act. 
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1 (k) LIMITATION ON USE OF FUNDS.—The Adminis2 trator may carry out this section only with amounts appro3 priated specifically to carry out this section. 

4 SEC. 307. VERY SMALL BUSINESS CONCERN CONTRACT 

5 DATA COLLECTION. 

6 The Administrator and the Administrator of General 

7 Services, acting jointly, shall create, within the data collec8 tion capabilities of the Federal Procurement Data System, 

9 a data element that identifies contract awards to very small 

10 business concerns, under section 15(t) of the Small Business 

11 Act. In carrying out the preceding sentence, the Adminis12 trators shall ensure that the data element is in use by all 

13 Federal entities with respect to such awards not later than 

14 90 days after the date of the enactment of this Act. 

15 SEC. 308. VERY SMALL BUSINESS CONCERN PILOT PRO16 GRAM FOR COMPETITION AWARD TO HOME17 BASED BUSINESS. 

18 (a) IN GENERAL.—The Administrator shall establish 

19 a pilot program that ensures that at least one award to 

20 a very small business concern resulting from competition 

21 under section 15(t)(2)(C) of the Small Business Act is made 

22 to a home-based business. 

23 (b) DEFINITION.—As used in this section, the term 

24 ‘‘home-based business’’ means a small business, the head-
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1 quarters, main office, and records of which are located at 

2 the primary residence of the majority owner. 

3 (c) TERM OF PILOT PROGRAM.—The pilot program 

4 shall begin not later than 90 days after the date of the en5 actment of this Act and shall end on September 30, 2007. 

6 SEC. 309. SOCIALLY AND ECONOMICALLY DISADVANTAGED 

7 BUSINESS. 

8 Section 7102(c) of the Federal Acquisition Stream9 lining Act of 1994 (Public Law 103–355; 15 U.S.C. 644 

10 note) is amended by striking ‘‘September 30, 2003’’ and in11 serting ‘‘September 30, 2005’’. 

12 SEC. 310. STUDY AND REPORT ON EFFECTIVENESS OF AG13 GREGATE LIMITATIONS ON AMOUNT OF AS14 SISTANCE TO ANY SINGLE ENTERPRISE. 

15 (a) STUDY.—The Administrator shall conduct a study 

16 of whether the aggregate amount limitation under section 

17 306(a) of the Small Business Investment Act of 1958 (15 

18 U.S.C. 686(a)) is an impediment to investment in small 

19 manufacturers. In conducting the study, the Administrator 

20 shall consult licensees and small manufacturers. 

21 (b) REPORT.—Not later than one year after the date 

22 of the enactment of this Act, the Administrator shall report 

23 the results of the study to the Committee on Small Business 

24 of the House of Representatives and the Committee on 

25 Small Business and Entrepreneurship of the Senate. 
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1 SEC. 311. STUDY AND REPORT ON COORDINATION OF NEW 

2 MARKETS VENTURE CAPITAL PROGRAM WITH 

3 NEW MARKETS TAX CREDIT PROGRAM. 

4 (a) IN GENERAL.—The Administrator shall conduct a 

5 study to identify an approach to better coordinate the ad6 ministration of the New Markets Venture Capital Program 

7 under part B of title III of the Small Business Investment 

8 Act of 1958 (15 U.S.C. 689 et seq.) with the New Markets 

9 Tax Credit under section 45D of the Internal Revenue Code 

10 of 1986. 

11 (b) REPORT.—Not later than 90 days after the date 

12 of the enactment of this Act, the Administrator shall report 

13 the results of the study to the Committee on Small Business 

14 of the House of Representatives and the Committee on 

15 Small Business and Entrepreneurship of the Senate. 

16 SEC. 312. STUDY AND REPORT ON PREMIER CERTIFIED 

17 LENDERS PROGRAM. 

18 (a) IN GENERAL.—The Administrator shall enter into 

19 a contract with a Federal agency experienced in community 

20 development lending and financial regulation or with a 

21 member of the Federal Financial Institutions Examina22 tions Council to conduct a study and prepare a report re23 garding—

24 (1) the extent to which statutory requirements 

25 have caused overcapitalization in the loss reserves 

26 maintained by certified development companies par-
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1 ticipating in the Premier Certified Lenders Program 

2 under section 508 of the Small Business Investment 

3 Act of 1958 (15 U.S.C. 697e); and 

4 (2) alternatives for establishing and maintaining 

5 loss reserves that are sufficient to protect the Govern6 ment from the risk of loss associated with loans guar7 anteed under that Program. 

8 (b) TRANSMISSION OF REPORT.—Not later than 180 

9 days after the date of the enactment of this Act, the Admin10 istrator shall transmit the report to the Committee on Small 

11 Business of the House of Representatives and the Committee 

12 on Small Business and Entrepreneurship of the Senate. 

13 (c) LIMITATION.—The amount of the contract under 

14 subsection (a) shall not exceed $75,000. 

15 SEC. 313. DATA COLLECTION CAPABILITIES.

16 The Administrator shall work with the Administrator 

17 of General Services to establish within the data collection 

18 capabilities of the Federal Procurement Data System a 

19 data element capable of identifying contract awards made 

20 as a result of section 7102(c) of the Federal Acquisition 

21 Streamlining Act of 1994 (Public Law 103–355; 15 U.S.C. 

22 644 note). Such data element shall be established and popu23 lated by Federal agencies awarding contracts as a result 

24 of section 7102(c) of the Federal Acquisition Streamlining
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1 Act of 1994 (Public Law 103–355; 15 U.S.C. 644 note) 

2 within 90 days of the date of the enactment of this Act.

3 SEC. 314. RESUBMISSION OF DISASTER LOAN APPLICA4 TIONS FOR BUSINESSES AFFECTED BY SEP5 TEMBER 11, 2001, TERRORIST ATTACKS. 

6 (a) RESUBMISSION OF APPLICATIONS.—Until 90 days 

7 after the date of the enactment of this Act, a small business 

8 concern may resubmit an application for a loan under sec9 tion 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) 

10 may be resubmitted if the following conditions are met: 

11 (1) ORIGINAL APPLICATION.—The small business 

12 concern submitted the original application in re13 sponse to an injury due, in whole or in part, to the 

14 terrorist attacks of September 11, 2001 in New York, 

15 New York or Arlington, Virginia. 

16 (2) LOCATION.—On September 11, 2001, and on 

17 the date of the resubmission, a facility of the small 

18 business concern is located in any of the following: 

19 (A) Bronx, Kings, Nassau, New York, 

20 Queens, Richmond, or Westchester county in New 

21 York. 

22 (B) Bergen, Hudson, Middlesex, or Union 

23 county in New Jersey. 

24 (C) Arlington or Fairfax county or the city 

25 of Alexandria in Virginia. 
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1 (D) The District of Columbia. 

2 (E) Montgomery county in Maryland. 

3 (3) INABILITY TO OPERATE.—Without regard to 

4 physical damage to a facility, the applicant was un5 able to operate at a facility referred to in paragraph 

6 (2) because of—

7 (A) use of the facility, in whole or in part, 

8 for any purpose, by or on behalf of, Federal, 

9 State, or local authorities for more than 20 days, 

10 beginning on or after September 11, 2001; or 

11 (B) prohibition of use of the facility, in 

12 whole or in part, by an order of a Federal agen13 cy for more than 20 days, beginning on or after 

14 September 11, 2001. 

15 (b) STANDARDS FOR APPROVAL.—The Administrator 

16 shall approve a loan with respect to an application resub17 mitted under subsection (a), if the applicant has a ratio 

18 of net operating income to debt service of not less than 1.15. 

19 In calculating the ratio, the Administrator shall exclude 

20 any Federal or State tax lien or obligation. 

21 (c) SPECIAL RULE.—The Administrator shall resolve 

22 any reasonable doubt of likelihood of repayment of an ap23 plication resubmitted under subsection (a) in favor of the 

24 applicant. 
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1 SEC. 315. NATIONAL SMALL BUSINESS INCUBATOR PRO2 GRAM. 

3 (a) PURPOSE.—It is the purpose of the National Small 

4 Business Incubator Program to: 

5 (1) Promote economic development and the cre6 ation of wealth and job opportunity in low-income ge7 ographic areas and parts of the country with declin8 ing manufacturing bases and among individuals liv9 ing in such areas through business incubation centers. 

10 (2) Develop a business incubation program with 

11 the mission of providing focused assistance to aid in 

12 the development of small businesses. 

13 (3) Make grants to economic development organi14 zations and other entities for the purpose of providing 

15 business incubation services to small businesses. 

16 (4) Revitalize and reuse industrial sites for eco17 nomic growth. 

18 (b) GRANT PROGRAM.—

19 (1) IN GENERAL.—In accordance with the re20 quirements of this subsection, the Administrator may 

21 make a 5-year grant to each of 10 eligible organiza22 tions to establish and operate a small business incu23 bator program. 

24 (2) APPLICATIONS.—To be eligible to receive a 

25 grant under this subsection, an eligible organization 

26 shall submit an application to the Administrator at 
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1 such time and in such form and manner as the Ad2 ministrator may require. Each such application shall 

3 include the grantee’s plan for establishing and oper4 ating a small business incubator program. 

5 (3) SELECTION OF GRANTEES.—In selecting the 

6 10 grantees under this subsection, the Administrator 

7 shall evaluate and rank applicants in accordance 

8 with predetermined selection criteria that will be stat9 ed in terms of relevant importance of such criteria. 

10 The relative importance of the criteria shall be made 

11 publicly available and stated in each solicitation for 

12 applicants made by the Administrator. The criteria 

13 shall include the following: 

14 (A) The experience of the applicant in con15 ducting business development. 

16 (B) The experience of the applicant in tech17 nology and manufacturing. 

18 (C) The extent to which the incubator will 

19 assist in the development of low-income, women, 

20 or minority business, or the revitalization of de21 pressed manufacturing areas. 

22 (D) The extent to which the proposed site is 

23 in an area of high unemployment and will result 

24 in the reuse of a previously used industrial site. 
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1 (E) The extent to which the applicant has 

2 a management team in place with experience in 

3 running a business incubator or relevant busi4 ness development experience. 

5 (F) The extent to which the applicant’s plan 

6 will result in the economic development of low7 income communities or high-unemployment 

8 areas. 

9 (G) The ability of the applicant to success10 fully establish and operate a small business incu11 bator program. 

12 (H) The ability of the applicant to enter 

13 into cooperative agreements with lending institu14 tions to provide a streamlined process for busi15 ness concerns utilizing the small business incu16 bator program to obtain financial assistance, in17 cluding loans under subsection (c). 

18 (I) The ability of the applicant to provide 

19 the services of licensed professionals. 

20 (J) The extent to which the applicant’s plan 

21 for establishing and operating a small business 

22 incubator program will do the following:

23 (i) Enhance small business develop24 ment. 
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1 (ii) Meet the needs and goals of the 

2 community in which the incubator is to be 

3 located. 

4 (iii) Serve as a catalyst for further de5 velopment. 

6 (iv) Involve the rehabilitation of a 

7 warehouse, factory, or building which has 

8 fallen into disrepair. 

9 (v) Assist in redeveloping a disadvan10 taged area. 

11 (vi) Target minority and women entre12 preneurs. 

13 (vii) Focus on the development of man14 ufacturing and technology. 

15 (viii) Retain or create jobs. 

16 (ix) Include assistance regarding mar17 keting, financial management, human re18 sources development, and access to capital 

19 (both debt and equity). 

20 (4) GRANT REQUIREMENTS.—Each grantee shall 

21 use the grant funds to establish a small business incu22 bator program, which shall make the following assist23 ance available (on a shared or unshared basis, as the 

24 grantee may determine) to businesses participating in 

25 such program: 
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1 (A) Office space. 

2 (B) Office equipment, including computers, 

3 facsimile machines, photocopiers, access to tele4 communications services (including broadband 

5 services), and manufacturing equipment. 

6 (C) Administrative and technical staff. 

7 (D) Training in the areas of marketing, fi8 nancial management, human resources, and con9 tracting. 

10 (E) Assistance in obtaining loans, including 

11 loans under subsection (c). 

12 (F) Assistance in locating investors and 

13 networking with local business organizations. 

14 (G) Individualized reviews of marketing, fi15 nancial, and business plans, which shall occur 

16 monthly for such period as the Administrator 

17 may determine and quarterly thereafter. 

18 (H) Legal, accounting, and marketing serv19 ices. 

20 (I) Mentoring program with established, 

21 successful, large businesses to last the duration of 

22 the business’ stay in the incubator. 

23 (5) ADDITIONAL ASSISTANCE.—A grantee may 

24 use grant funds to provide child care services to par-
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1 ticipating business and any other assistance which is 

2 approved by the Administrator. 

3 (6) ADDITIONAL PROGRAM REQUIREMENTS.—

4 (A) PARTICIPATING BUSINESSES.—Each 

5 grantee shall select the businesses which will par6 ticipate in the grantee’s small business incuba7 tion program. The grantee shall select businesses 

8 which are not yet well established but which have 

9 the potential to be self-sustaining. Each grantee 

10 shall require participating businesses to partici11 pate in the training described in paragraph 

12 (4)(D), to submit marketing, financial, and busi13 ness plans and to participate in the review of 

14 such plans described in paragraph (4)(G). 

15 (B) COOPERATIVE AGREEMENTS WITH

16 LENDERS.—Each grantee shall enter into a coop17 erative agreement with one or more lenders to 

18 provide a streamlined process by which partici19 pating businesses may obtain loans, including 

20 loans under subsection (c). 

21 (C) FEES.—Each grantee may charge par22 ticipating businesses a fee for the assistance pro23 vided to such business by the grantee. The 

24 amount of such fee shall be determined under a 

25 sliding scale based on the financial success of the 
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1 participating business. The grantee may not 

2 charge a participating business a fee for the first 

3 2 years of such businesses participation in the 

4 incubator. 

5 (7) NON-FEDERAL MATCHING FUNDS.—The Ad6 ministrator shall not make available any grant funds 

7 under this subsection until the grantee has contrib8 uted non-Federal matching funds in an amount equal 

9 to 50 percent of the amount of such grant funds. 

10 (8) ELIGIBLE ORGANIZATIONS.—For purposes of 

11 this section, the term ‘‘eligible organization’’ means 

12 any of the following: 

13 (A) An organization described in section 

14 501(c)(3) of the Internal Revenue Code of 1986 

15 and exempt from tax under section 501(a) of 

16 such Code. 

17 (B) A business league, chamber of com18 merce, or board of trade described in section 

19 501(c)(6) of the Internal Revenue Code of 1986 

20 and exempt from tax under section 501(a) of 

21 such Code. 

22 (C) A local development agency that is 

23 chartered, established, or otherwise sanctioned by 

24 a State or local government. 
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1 (D) A small business development center 

2 (within the meaning of section 21 of the Small 

3 Business Act). 

4 (E) A college or university. 

5 (F) A unit of State or local government. 

6 (9) FEDERAL COORDINATION.—The Adminis7 trator, in consultation with the Economic Develop8 ment Administration and the Minority Business De9 velopment Agency, shall—

10 (A) undertake efforts to coordinate and en11 hance Federal programs that relate to small 

12 business incubation programs; and 

13 (B) invite State and local governments, 

14 lending institutions, and other appropriate pub15 lic and private organizations to serve as inter16 mediaries in outreach efforts related to small 

17 business incubation programs. 

18 (10) TERMINATION.—The Administrator shall 

19 not make any new 5-year grants under this subsection 

20 after the end of the 180-day period beginning on the 

21 date that funds are first made available to carry out 

22 this subsection.

23 (11) REPORTS.—

24 (A) INITIAL REPORT.—One year after the 

25 first grant is made under this subsection, the Ad-
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1 ministrator shall transmit to the Congress a pre2 liminary report regarding the National Small 

3 Business Incubator Program conducted under 

4 this section. 

5 (B) FINAL REPORT.—Four years after the 

6 first grant is made under this subsection, the Ad7 ministrator shall transmit to the Congress a 

8 final report regarding the National Small Busi9 ness Incubator Program conducted under this 

10 section. Such report shall include any rec11 ommendations of the Administrator regarding 

12 ways to improve such program and the rec13 ommendation of the Administrator as to whether 

14 such program should be extended. 

15 (12) AUTHORIZATION OF APPROPRIATIONS.—

16 There are authorized to be appropriated to carry out 

17 this subsection $25,000,000 for each of fiscal years 

18 2004 and 2005, which amounts shall remain avail19 able until expended. 

20 (c) LOAN PROGRAM.—

21 (1) IN GENERAL.—The Administrator may make 

22 loans under section 7(a) of the Small Business Act to 

23 small business concerns (as defined pursuant to sec24 tion 3 of the Small Business Act) participating in a 
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1 small business incubation program described in sub2 section (b). 

3 (2) LOAN TERMS.—

4 (A) IN GENERAL.—Except as provided in 

5 subparagraph (B), the rules which apply under 

6 the Small Business Act to loans made under sec7 tion 7(a) shall apply with respect to loans made 

8 under this subsection. 

9 (B) SPECIAL RULES FOR DEFERRED PAR10 TICIPATION LOANS.—In the case of an agreement 

11 to participate on a deferred basis in any such 

12 loan: 

13 (i) Such participation by the Adminis14 tration shall be equal to 90 percent of the 

15 balance of the financing outstanding at the 

16 time of the disbursement of the loan. 

17 (ii) The Administrator shall collect 

18 (except in the case of a loan that is repay19 able in 1 year or less) a guarantee fee, 

20 which shall be payable by the participating 

21 lender and may be charged to the borrower 

22 as follows: 

23 (I) A guarantee fee equal to 0.5 

24 percent of the deferred participation 
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1 share of a total loan amount that is 

2 not more than $150,000. 

3 (II) A guarantee fee equal to 1.5 

4 percent of the deferred participation 

5 share of a total loan amount that is 

6 more than $150,000, but not more than 

7 $700,000. 

8 (III) A guarantee fee equal to 2 

9 percent of the deferred participation 

10 share of a total loan amount that is 

11 more than $700,000. 

12 (iii) The annual fee assessed and col13 lected on any such loan shall not exceed an 

14 amount equal to 0.15 percent of the out15 standing balance of the deferred participa16 tion share of the loan. 

17 (iv) The Administrator may make such 

18 loans without regard to the ability of a 

19 small business concern to obtain credit else20 where. 

21 (v) The Administrator shall make such 

22 loans without regard to the availability of 

23 collateral to secure such loans. 
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1 (vi) The Administrator may charge in2 terest on any such loan. Such charge may 

3 not exceed a rate of 4 percent per year. 

4 (3) REGULATIONS.—Not later than 120 days 

5 after the date of enactment of this Act, the Adminis6 trator shall issue interim final rules and guidelines to 

7 implement this subsection. 

8 (4) AUTHORIZATION OF APPROPRIATIONS.—

9 There are authorized to be appropriated for fiscal 

10 year 2004 such sums as may be necessary to carry 

11 out this subsection, which sums shall remain available 

12 until expended. 

13 SEC. 316. REPORT REGARDING EFFECTS OF SALE OF DIS14 ASTER LOANS ON BORROWERS. 

15 Not later than 1 year after the date of the enactment 

16 of this Act, the Chief Counsel for Advocacy of the Small 

17 Business Administration shall report to the Congress re18 garding the sale by the Administrator of loans made under 

19 section 7(b) of the Small Business Act. Such report shall 

20 include the following: 

21 (1) A description of the effects of such sales on 

22 borrowers. 

23 (2) A description of the effects that prohibiting 

24 such sales would have on the operations of the Admin25 istration. 
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1 (3) Any recommendations of the Chief Counsel 

2 for Advocacy for reducing the effects of such sales on 

3 borrowers.

4 SEC. 317. SUSPENSION AND EXTENSION OF CERTAIN DIS5 ASTER LOANS RELATED TO THE TERRORIST 

6 ATTACKS OF SEPTEMBER 11, 2001. 

7 (a) IN GENERAL.—With respect to any loan made 

8 under section 7(b) of the Small Business Act to a qualified 

9 small business concern as a result of the terrorist attacks 

10 against the United States that occurred on September 11, 

11 2001, the Administrator shall, upon application by such 

12 concern during the 2-year period beginning on the date of 

13 the enactment of this Act, suspend the payment of principal 

14 and interest charges on, and extend the maturity of, the 

15 Federal share of such loan for a period of not less than 2 

16 years and not more than 5 years. 

17 (b) QUALIFIED SMALL BUSINESS CONCERN.—For pur18 poses of this section, the term ‘‘qualified small business con19 cern’’ means, with respect to any loan made to such concern 

20 under section 7(b) of the Small Business Act, a small busi21 ness concern that—

22 (1) was located in an area described in section 

23 314(a)(2) on September 11, 2001; and 
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1 (2) would suffer substantial economic injury if 

2 required to make the scheduled payments under such 

3 loan. 

4 (c) SUBSTANTIAL ECONOMIC INJURY.—For purposes of 

5 this section, the term ‘‘substantial economic injury’’ has the 

6 meaning given such term in section 7(b)(3)(A)(iii) of the 

7 Small Business Act. 

8 SEC. 318. DEFINITIONS. 

9 For purposes of this title: 

10 (1) ADMINISTRATOR.—The term ‘‘Adminis11 trator’’ means the Administrator of the Small Busi12 ness Administration. 

13 (2) ADMINISTRATION.—The term ‘‘Administra14 tion’’ means the Small Business Administration. 

15 (3) SMALL BUSINESS CONCERN.—The term 

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

17 term pursuant to section 3(a) of the Small Business 

18 Act.

Union Calendar No. 249

108TH CONGRESS 

2D SESSION H. R. 2802

[Report No. 108–325, Part I] 

A BILL

To reauthorize the Small Business Act and the 

Small Business Investment Act of 1958, and for other purposes. 

OCTOBER 21, 2003

Reported with an amendment and referred to the Committee on Government Reform for a period ending not 

later than October 31, 2003, for consideration of such provisions of the bill and amendment as fall within the jurisdiction of that committee pursuant to clause 1(h), rule X 

MARCH 2, 2004

Referral to the Committee on Government Reform extended for a period ending not later than March 8, 

2004

MARCH 8, 2004

Committee on Government Reform discharged; committed to the Committee of the Whole House on the 

State of the Union and ordered to be printed